At a congressional hearing on June 13, Elizabeth Fowler, Ph.D., JD, director of the Center for Medicare and Medicaid Innovation (CMMI), was pressed to explain why so few of the payment models CMMI alternatives have produced cost savings.
At a meeting of the Health Subcommittee of the U.S. House Energy and Commerce Committee, Cathy McMorris Rodgers (R-Wash.), chairwoman of the House Energy and Commerce Committee, began by outlining her concerns.
CMMI was created to help improve the way Medicare and Medicaid pay for health care and to be a driver in our push toward value-based care, Rogers said. “CMMI was given a 10-year, $10 billion budget and extremely broad-ranging authorities with limited built-in oversight from Congress. The only directives Congress gave CMMI were to achieve two goals: reduce the cost of providing care and improve patient outcomes.”
Over the past decade and a half, CMMI has tested more than 50 models to achieve both goals. When CMMI was created, the savings it was projected to generate would be used to offset Affordable Care Act spending, Rogers continued. Originally, CBO estimated that CMMI would save $1.3 billion over its first decade of operation. That same model also projected that CMMI would save up to $77.5 billion in its second decade from 2020 to 2023. “However, when CBO analyzed the actual results in a September 2023 report, the disparity between those expectations and reality proved be amazing. . Instead of reducing spending by $1.3 billion in the first decade, CMMI increased spending by $5.4 billion. For the second decade, instead of saving $77.5 billion, the CBO now projects that CMMI will increase spending by $1.3 billion. I find it hard to believe that any objective observer could look at the results so far and describe CMMI as a success. So how do we move forward?”
Rep. Anna Eshoo (D-Calif.) asked Fowler directly why CMMI is not generating savings. “Could you share with us what metrics CMMI uses to determine if a model is successful and not just limited to savings?”
Fowler responded by saying: “First of all, I would say that we have learned something from every model we have tested. And I would also say that the innovation process itself is sometimes unpredictable. One factor that has affected our ability to generate savings is the fact that most of our models are voluntary, and this was an area also noted by the Congressional Budget Office. And when you have a voluntary model where providers can come in, if they think the conditions look favorable, or they can leave if they think the conditions may turn against them, or if they didn’t perform as well as they thought, they can leave the model. And that has led to risk selection, which has undermined our capacity.”
Fowler said CMMI considers all of its models to be successful in a sense that CMMI is learning something regardless of the final evaluation. “We have also spent a lot of time thinking about the impact on quality and have laid out a whole quality path. The statute gives us authority to examine both the quality of care provided and the impact on savings, and we’re really leaning toward the quality improvement angle, particularly when it comes to patient-reported outcomes and the patient experience. patient care. And we are trying to learn more from this approach to think more broadly about quality.”
When it was his turn to ask questions, Rogers noted that in his keynote address, he discussed how far CMMI’s projected impact has compared to reality in terms of saving our healthcare systems money.
Here’s a summary of the exchange between Rogers and Fowler.
Rogers: “Dr. Fowler, do you agree that reducing costs is critical to CMMI’s mission?
Fowler: That is a statutory mission described in the statute that created the Innovation Center.
Rogers: Thank you. Despite having increased spending by more than $5 billion during the first decade of existence, in the CMMI 2021 strategic update and in recent articles and op-eds and especially in the recent launch of the so-called quality pathway, it seems There will be an explicit shift in focus away from trying to reduce spending. Where does spending reduction rank in terms of your priority list?
Fowler: Reducing spending is our statutory mission and we remain committed to that objective. Each model we test goes through a rigorous review, evaluation and authorization process in which our actuaries take a close look at what we propose. We wouldn’t try anything that didn’t have the potential to save money up front, while we’re making those announcements and rolling out the model.
Rogers: Many have suggested that most, if not all, of the new models CMMI has released since 2021 are unlikely to save money based on their designs. Are you willing to commit to shutting down any model that shows no signs of net savings after its first two years so we can correct CMMI’s failed fiscal track record?
Fowler: It’s a great question. And when we get information about a model’s performance, roughly mid-year, we make adjustments accordingly. And on a couple of occasions since I took on this role, we’ve had to close models early. In the triage, transport, and emergency treatment model we didn’t have enough participants and it didn’t look like it would generate those savings. Another model was the Medicare Part D modernization model, which we also, unfortunately, had to end early.
U.S. Rep. Michael Burgess, M.D. (R-Texas), said he also serves on the Budget Committee and is working with the CBO to understand how the target was missed so dramatically. He asked Fowler: “From his perspective, what would be a reasonable savings goal for CMMI over the next decade of CMMI’s existence?
Fowler responded that she’s not sure she can make an estimate. “I think it depends on the release of the models and who enters. And as I mentioned before, I think the nature of innovation can sometimes be unpredictable. “So we’re starting with the optimistic assumption that we will generate savings and we fully expect that the models we’ve announced will do that.”
Burgess responded: “Everyone knows what their funding will be. It is mandatory financing. Even if we don’t pass an appropriations bill, you’ll still get your $10 billion for the decade. What do you think is a reasonable return on CMMI’s upcoming $10 billion investment?
Fowler said that, again, “this goes back to everything that we are learning from the models and that we go out into the field with the expectation of saving. “We have a plan to spend the money that has been allocated to CMMI and we hope to see positive results in the models we are testing.”
