April 12, 2018

What the New CMMI Director Should Do Next

by Chas Roades

THE GIST

As new leadership takes the reins at the Center for Medicare & Medicaid Innovation, we offer eight suggestions for the work of the center moving forward

THE FACTS

  • The Trump administration announced the appointment of Adam Boehler to the position of Director of the Center for Medicare & Medicaid Innovation (CMMI)
  • Boehler comes to the post from Landmark Health, a home-based care company that he helped launch
  • Boehler was initially reported as the nominee to head CMMI late last year, but his appointment was delayed while he divested assets to avoid violating conflict-of-interest rules

OUR ANALYSIS

1. CMMI is the most important, least known legacy of the Affordable Care Act

The Affordable Care Act (ACA), whatever its ultimate fate, will largely be judged for its impact on health insurance coverage in the US—and the political flashpoints around which debate still continues. The law did much less to “bend the cost curve” in healthcare; in fact, the continued slowdown in Medicare spending growth has likely been a function of the steady shift of enrollees into privately-managed Medicare Advantage (MA) plans—no small irony given the anti-MA rhetoric that prevailed at the time of the ACA’s passage.

Much less heralded has been the quiet but powerful role of another creation of the ACA: the Center for Medicare & Medicaid Innovation (CMMI). This small operation—just a $10B line item in a $1T piece of legislation—has had a profound impact on the healthcare provider sector across the eight years of its existence.

The mission of CMMI—to pilot new approaches to payment in the public insurance programs—was not a new one. Medicare had been conducting “demonstration projects” for many years. What made CMMI different was the authority Congress gave it to implement reforms judged to be promising via regulatory fiat, without the need for additional legislation. This authority ensured that CMMI’s pilot programs could not just be ignored by resistant industry incumbents. Instead, the creation of CMMI opened up the possibility of meaningful, rapid change in the “fee-for-service” framework of government reimbursement.

While the success of CMMI’s initial payment reform pilots, including ACOs, bundled payments and primary care redesign—and indeed, the larger ambition of “accountable care”—has been limited at best, there’s no doubt that the center has set the tone for strategy and investment in US healthcare. The prospect of Medicare shifting reimbursement closer to a capitation-like framework sparked a wave of efforts by hospital systems, large medical groups, postacute providers, and even small physician practices to get into the business of “population health.” Billions have been spent on analytical tools, provider integration, and care management capabilities, and an army of consultants, entrepreneurs, and financiers have rushed toward the new opportunities created by CMMI’s pilots.

With the change of administrations, however, it looked as if the entire enterprise of payment reform might be abandoned, and CMMI shuttered. Trump’s first Secretary of Health and Human Services (HHS), former orthopedic surgeon (and hapless traveler) Tom Price, signaled his intention to de-fang the center, whose authority he had long criticized as a Congressman. Along with rolling back the most aggressive of the bundled payment pilots, Medicare began to explore a plan to redirect the work of the center, possibly toward different aims than had been initially pursued.

Creating CMMI was one of the wisest things the authors of the ACA did

2. Eight pieces of advice for the new CMMI director

After a length interregnum at CMMI, and with the installation of a new Secretary at HHS, new leadership has been appointed to continue the center’s work. We’ve spent years working with hospitals, doctors and others as they’ve evaluated, participated in and (sometimes) dropped out of CMMI’s various pilots. We’ve had the opportunity to participate in CMMI-sponsored, state-level pilot programs in Rhode Island, Virginia, and Kentucky, and the pleasure of meeting frequently with staff at CMS and CMMI, including the center’s brilliant former leader Dr. Pat Conway. Based on this front-row vantage point on the work of CMMI over the years, we’d offer the following eight (unsolicited) suggestions to Adam Boehler, the new director of the center:

1. Push providers more aggressively toward downside risk

As we’ve argued elsewhere, the central reason accountable care has failed to generate savings is that most providers participating in the Medicare ACO program chose to remain in “upside-only” (Track 1) risk. While the realities of the broader payer landscape explain much of the reticence to take on risk, another challenge has been the complexity of more aggressive forms of shared savings, and the outsized impact of a participant’s benchmark on ability to achieve bonuses. For providers to voluntarily take on downside risk—critical for ACOs to generate a return for Medicare—the deal on the table must be more attractive. CMMI should re-examine methodologies for attribution, benchmarking accountability, and sharing of savings, with an eye toward attracting more participants into the downside-risk programs.

As to the bundled payment program, CMMI should return to the approach of “mandatory bundles” when it is shown that a bundled payment results in more appropriate utilization at a lower spending rate. Continuing to succumb to industry pushback on the pace of implementation of true downside-risk programs will leave Medicare with little to show for its investments in payment reform. Providers would also be better off with more risk and more certainty in the direction of reform, rather than weak incentives and the constant concern that Medicare might change course.

2. Use Medicare Advantage and managed Medicaid to make payment reform a multi-payer effort

Medicare doesn’t exist in a vacuum. Providers set strategy and balance investments based on a diverse array of policies and approaches from other payers. It has made little sense for providers to move forward aggressively toward population health management in a world where commercial insurers haven’t followed CMMI in the development of ACOs and bundled payments.

While the government may not be able to compel insurers to change the way they structure contracts in the commercial market, they certainly can strongly encourage Medicare Advantage plans, Medicaid managed care plans, and carriers that participate in government markets to harmonize their incentives with the overall direction that CMMI is leading. Bringing private carriers more fully into the mix will move the market more quickly to a tipping point, beyond which providers will no longer be pulled in opposite directions by the incentives of different payers.

3. Reduce complexity and metric overload

A common refrain among doctors and hospital leaders is the complexity and cost associated with quality reporting and metric management. While the move to information-powered healthcare is welcome, and reliable data to manage performance is critical to ensuing value in healthcare, we’ve surely overshot the mark. This issue is reaching a fever pitch in debates on the future of MACRA, which has seen meaningful implementation of its physician performance measures and incentives delayed. While the design of quality and cost measurements in MACRA is overwhelmingly complex, the program serves as a critical catalyst to align physician payment with the larger movement to risk. Measurement complexity threatens to remove this critical incentive.

CMMI should propose a standardized, narrowed, national set of evidence-based performance metrics that could be used by all Medicare payment programs, and ultimately all payers and employers, and should promote the use of that metric set across healthcare. 

We are still a long way from understanding which payment models are most effective

4. Ramp up evaluation of non-traditional approaches to care

One of the most striking features of the ACO program is how utterly doctor-centric it is. It’s not an overstatement to say that the program was built around the vision of the primary care physician as “quarterback” of the team, holding accountability for managing care delivery and cost across a wide array of other care settings—and avoiding “overuse” of specialty and hospital care.

Even in the short lifespan of CMMI, innovative approaches and new technologies have taken root in the private market—and in many cases states and commercial payers have outstripped Medicare in testing and supporting their adoption. CMMI should craft pilots around other approaches to care: telemedicine, pharmacist-driven population health, the home as health hub, and so forth. Perhaps allowing innovators in the private market to propose their own pilots, with CMMI oversight, would be a strategy to consider.

5. Catalyze and test efforts to reduce rising drug spending

 Notably absent from the agenda of CMMI during its formative years was the issue of pharmaceutical costs. For the most part, drugs were excluded from calculations of total cost of care in both the ACO and bundled payment pilots (with the exception of one oncology-related pilot). Using CMMI to pilot innovative approaches to managing pharma spending makes a lot of sense, and it provides an avenue to engage pharma companies in a collaborative effort to address the issue, rather than treating them as scapegoats. Some drug companies have begun to pilot “value-based pricing” models with their commercial payers; this might provide an ideal launching point for a CMMI-managed project as well.

6. Deal the states back in

The State Innovation Models (SIM) program was a terrific early investment by CMMI to seed innovation at the state level. In many ways, states are the ideal laboratories for payment reform. It’s more manageable to get all the relevant state stakeholders in a room and working together to identify new ideas. Yet in most instances, the SIM grants resulted only in a handful of state “innovation plans” which then often sat unused as implementation funding was not forthcoming from Medicare.

With the new administration’s focus on using waivers to enable state-by-state changes to Medicaid and insurance market regulations, it’s an ideal time to reinvigorate the SIM program as laboratories of local innovation and payer alignment. To this end, we’d urge the new director to collaborate with former CMS Administrator Andy Slavitt’s new, state-focused reform initiative, the United States of Care.

7. Bring consumers into the effort

Consumer-focused plan design has moved at a brisk pace in commercial plans (perhaps too fast, given the growth of deductibles and coinsurance levels nationwide). But most Medicare payment reform programs have been designed to be invisible to beneficiaries, with patients having little understanding of their physicians’ participation. This misses an important opportunity to engage patients in their care and align their incentives with providers. CMMI should test whether consumer-focused benefit and network design provides an effective lever to make patients true partners in their care.

8. Be a better business partner

One of the most frequent complaints we’ve heard from hospital leaders and physician executives over the past few years, as they’ve worked to implement ACOs and other CMMI-related projects, is that working with CMMI is like…working with the Federal government. It’s slow-moving, unresponsive, and bureaucratic. Data is perpetually late in coming, rules are byzantine and difficult to navigate, and CMMI staff are overtaxed and under-resourced. On top of that, unexpected changes to rules or metrics can and do happen, even causing some participants to disengage entirely from the programs.

As Boehler takes charge at the center, he should bring the same flexibility and urgency to CMMI that he surely brought as a founder of Landmark Health. He’d be well-advised to begin with a listening tour of current and former provider participants in the pilot programs his center administers, and to take note of their observations on CMMI as a business partner.

3. The next era of CMMI will be vital—moving faster to ensure Medicare sustainability

 Creating CMMI, carving it out from the rest of the Medicare bureaucracy, and providing it with the authority to drive innovation into policy was one of the wisest things the authors of the ACA did. Beyond providing a platform for meaningful experimentation with payment reforms, the existence of CMMI marked a subtle but critical step toward a necessary evolution of the broader Medicare and Medicaid programs.

In its first iteration CMMI has been a testing ground for payment reform models that tried to accommodate providers of all sizes and design. We are still a long way from understanding exactly which payment models are most effective in reducing costs and most sustainable for providers. But as 80M Baby Boomers spend their next twenty-five years on the Medicare rolls, the program will need to be more than just a passive, everyone-gets-their-perfect-model testing ground.

CMMI will have to assess, promote and implement the models that work—and seek to “fail fast” with those that don’t. It will need to be a real steward of our Federal spending, ensuring that incentives, metrics, and policies all align to make healthcare a sustainable endeavor for our nation. For that to happen, we need continuous, targeted, effective innovation in Medicare and Medicaid—precisely the charge of CMMI.

(This post was co-authored with Lisa Bielamowicz, MD.)