Oct 31, 2019

Halloween Special: Night of the Living Regs!​​​​​​​

Seema Verma
Administrator, Centers for Medicare & Medicaid Services
Halloween Special: Night of the Living Regs!

Halloween Special: Night of the Living Regs!

Today, it’s starting to feel like Night of the Living Regulations here in Washington D.C.  It’s no secret that much of what haunts our healthcare system can be tied back to flaws in government policies intended to solve our nation’s problems, but created more tricks than treats.  These graveyards of complex regulations, accumulated over decades, could be compared to the living dead, putting our world-class healthcare system at risk and creating a horror show of administrative costs and burdens that suck the life out of innovation and competition in healthcare.

The best horror films tend to have common themes that unsettle viewers and include the element of fear—characters often find themselves powerless and trapped.  Unfortunately, major debates around our health care systems seem to follow a similar cinematic formula.

Double, Bubble, Trust-Fund Trouble

Double, Bubble, Trust-Fund Trouble

Like a coven of seers, the Medicare Trustees have continuously warned that the Medicare Trust Fund will run out by 2026, threatening the program for current and future generations of seniors. When Medicare was first signed into law, there were only 19 million beneficiaries. Today, that number has tripled to almost 61 million and we are adding 10,000 people every day.

Despite basic math, there are people calling for Medicare for All -, a proposal that would strip 180 million[1] people of their private health insurance and cost taxpayers $32 trillion[2]. A looming cost crisis will destroy the U.S. economy. You can almost hear the scary escalating music.

Our choices are clear: we can choose Medicare for All, doubling down on a one-size-fits-all, socialist approach, complete with government price setting. That choice threatens our world-class system of innovation and top-notch care and replaces it with long lines and rationing. As Ronnie said in the movie The Fly, “Be afraid… be very afraid.”

We can choose to put patients first by moving to a system of competition and value, giving them the choice and control they want, the affordability they need, and the quality they deserve. I much prefer this ending to the alternative.

Bills that Say “Boo!” Know the price for healthcare services up front

Bills that Say “Boo!”

It’s 2019; do you know your healthcare costs? In all likelihood, the answer is no, which is simply ridiculous in this era of information and innovation. Could you imagine having to buy all of your Halloween candy without knowing how much it costs until well after the trick-or-treaters have gone home with their hauls? The whole scenario sounds like an episode of the Twilight Zone. I can almost hear Rod Serling’s voice in my head: “Ordinary people find themselves in extraordinarily astounding situations, which they each try to solve in a remarkable manner.’ Sadly, that’s exactly the position many people find themselves every day when they receive their medical bill.

It doesn’t make sense that very few of us ever know the first thing about price or quality before receiving a healthcare service. This opacity stymies competition; it drives up costs; it leaves patients feeling powerless and exploited. It is unacceptable.  

Patients have the right to know what they will be charged. That’s why earlier this summer President Trump signed an Executive Order directing CMS to make that right a reality. As described in recent proposals, CMS is empowering consumers to know the price for healthcare services up front, increasing competition, and driving down costs. Now, pharmaceutical companies must disclose the list price of drugs in direct-to-consumer ads. For its part as payer, CMS released a “Procedure Price Lookup” tool that allows consumers to compare the Medicare payments and copayments for procedures that are performed in both hospital outpatient departments and ambulatory surgical centers.

This transparent approach is long overdue. The status quo denies patients the ability to make value-based health decisions based on out-of-pocket costs. By contrast, a system characterized by transparency will empower consumers with information needed to drive cost down and quality up by forcing players in our healthcare system to compete for their business.

Stopping the Frankensteins of Fraud

Frankenstein of Fraud

Medicare spending accounts for 15 percent of the entire federal budget, and criminal entities are working around the clock to steal millions of taxpayer dollars from the program. Fraudsters file false claims, steal money, and disappear into complex, hard-to-track webs of criminal entities – and then re-emerge under different corporate names. This is not the teaser for a new movie, it’s a scheme called “fraud” and it’s happening too often.

The government – chasing these criminals down one by one – is forced to play an expensive and inefficient game of ‘whack-a-mole’. If this was a scene in a movie, this would be the part where the hero thinks the bad guys have finally been defeated, only to learn they’re back! These criminals engage in the same behaviors repeatedly. Part of the problem is the fundamental design of many of our most important program integrity tools remains rooted in the past – that is, in the fee-for-service (FFS) payment system upon which Medicare was first established in 1965. Rapid change and growth in the program over the years have raised the stakes. Taxpayers have more to lose than ever before from those who would, whether by negligence or by intent, improperly seek payment from our programs.

Spoiler alert: For the first time, CMS has the tools to stop criminals before they can steal from taxpayers. CMS locked the door to the vault and took a first-of-its-kind action to stop fraudsters before they are paid, protecting the integrity of programs that millions rely on. We recently added several new revocation, denial, and affiliations authorities to bolster CMS’s efforts to stop waste, fraud, and abuse. Using audits and other program integrity tools, we’re ensuring that the right payments are made at the right time to the right beneficiary for covered, reasonable, and medically necessary services.

Program integrity is real-life cops and robbers. It requires that we protect the resources entrusted to our nation’s healthcare programs while also protecting the health and well-being of beneficiaries – that’s exactly what we’re doing.

I hope you enjoyed reading this post! In the words of Sheriff Leigh Brackett (Halloween 1978): “It’s Halloween, everyone’s entitled to one good scare.”


[1] https://www.census.gov/library/publications/2019/demo/p60-267.html

[2] https://www.mercatus.org/bridge/commentary/medicare-all-32-trillion-new-costs-or-2-trillion-savings