Press release

Speech: Remarks by CMS Administrator Seema Verma at the American Medical Association National Advocacy Conference

Remarks by CMS Administrator Seema Verma at the American Medical Association National Advocacy Conference

(As prepared for delivery – February 11, 2020)

Good morning. I want to thank all of you for taking time out of your busy practices to come to D.C.  Nice of you to visit the swamp…. It is true, DC is built on a swamp….and I saw a mouse trap in our offices this morning, so we know the rats are still here.

I know it’s not easy for you to take time, but it’s important for policymakers to hear from the doctors that are manning the front lines of our healthcare system.  There’s no substitute for getting a boots-on-the ground perspective from the people living with the policies we craft.

As we all know, the role of government in healthcare is a frequent topic of discussion. The Trump Administration believes that one of the government’s core responsibilities is to ensure the stability our health care system and that our safety net programs are sustainable.  And in order to do so, we have to address the underlying issues that are driving up the cost of care. Decades of prescriptive, top-down regulations have not addressed cost drivers, and actuaries predict that by 2026 one in five dollars will be spent on healthcare.  

Americans are concerned about ever growing health care costs, afraid of being uninsured, and afraid their healthcare bills will drive them into bankruptcy.  So the Trump Administration is not just throwing more government money at the problem and increasing taxes.  Instead, we are trying to solve the underlying problems that are making health care too expensive.  Our approach is to empower patients, promote  competition, spur innovation, and deliver a high-quality, affordable system of care for every American.

Unfortunately, too many refuse to learn the lessons taught by years of failed government solutions and are proposing yet more radical government takeovers of the entire health system. We’re fooling ourselves if we think even more government is the answer. As providers, you know that government rates are far lower than private payors.  Ask yourself this important question: can your practice survive, if you were paid at Medicaid or Medicare rates? Your answer to that question gives you a glimpse of life under Medicare for All or a public option.

Medicare for All isn’t just bad for doctors – it’s bad for patients. By stripping 180 million Americans of their private insurance, Medicare for All would supersize our existing program past its breaking point, eliminating choice and decreasing quality.  Medicare is barely sustainable for American seniors under current conditions, and we need to protect the program for current and future beneficiaries. Extending Medicare to the entire population would be destructive of its core mission.

The so-called moderate alternative, the “public option,” is no better: it’s a Trojan Horse with single-payer hiding inside. Just as we don’t let referees play in the game they oversee, government should not be permitted to actively compete against the market it regulates.

Furthermore, government has no incentive to control costs or improve quality and therefore, taxpayers would be on the hook for covering a public option’s shortfalls.  Instead of using innovative techniques to lower cost, it would use government rate setting to lower provider reimbursement. Rates similar to those in Medicare and Medicaid would pervade the entire system and shift costs to private competitors. This would exacerbate our beneficiaries’ existing access problems – and extend them to the entire market.  We know that Medicare for All would increase taxes but so would a public option. A recent Hoover Institution study showed that a public option would cost an additional 700 billion dollars over ten years. 

There is a better way to address the problems in our health care system. The Trump Administration has demonstrated the enormous potential of a patient-centered approach… of a more sustained focus on deregulation, promoting competition, and policies that promote innovation and loosen, rather than tighten, Washington’s vice-like grip on the healthcare system. The fruits of those efforts can be seen across our programs – especially in the individual market.

In the individual market, Obamacare increased access to coverage for many people, but for millions of others it increased costs. Ultimately it has failed to lower the cost of care. Premiums doubled and even tripled in some states, and choices decreased as issuers left the market. Even people who get subsidies still face unaffordable deductibles.  And since its passage, we have witnessed the rise of a new category of uninsured among the middle class. Millions of people who make too much to qualify for subsidies simply can’t afford to pay Obamacare’s premiums. If Americans who don’t get subsidies can’t afford their premiums, the promise of coverage for preexisting conditions rings hollow.  And let me be clear: as the President has clearly said, we are committed to protecting people with pre-existing conditions.

The Trump Administration is doing everything possible to keep what’s working and fix what’s broken. We tightened the standards governing individual market open enrollment periods, as well as shortening them – just as we do in Medicare – to prevent people from waiting until they get sick to get coverage.

We have reduced the costs of running the Exchanges which has led to reductions in user fees.

We gave states more flexibility to innovate on their own to stabilize their markets and approved 12 reinsurance waivers. Each of these waivers drove premiums down, in most cases by double digits.

The Trump agenda has delivered and the result of these reforms is clear.  Instead of double digit rate increases in 2020, average premiums for plans dropped for the second consecutive year. And this year, the percent of counties with just one issuer dropped to 24 percent, down from 51 percent just two years ago.

The reality is we are implementing policies that are having a demonstrated positive impact, and we are seeing similar improvements across our other programs as well, including in Medicare. Across traditional Medicare and Medicare Advantage, we’ve expanded access to telehealth services and new innovative treatments. Last year, Medicare started paying for virtual visits, so a patient can check in with their doctor by phone or video.

In Medicare Advantage, we instituted historic reforms to strengthen competition. The result was 1,200 new plans added over two years with exciting new benefits.  And these extra benefits came with a historic 28 percent decrease in premiums, their lowest level in thirteen years. Likewise, Part D prescription drug premiums have dropped over 13 percent since 2017 to their lowest level in seven years. Combined, these premium reductions over the last three years saved beneficiaries over two and a half billion dollars and taxpayers six billion dollars.

In fee-for-service Medicare, we’ve ditched anticompetitive policies that made it impossible for smaller providers to compete on a level playing field. By fixing distortions in Medicare payments, patients now have increased choice as to where to obtain their care, whether at a hospital, a doctor’s office, or a surgery center. We have taken on tough issues, like rural health, fixing Medicare’s wage index to increase payments to help save rural hospitals. The resulting market fairness and competition promises to allow doctors to remain independent, provide more choices, and lower costs for our beneficiaries.

Increasing competition is one piece of the puzzle; unleashing innovation by reducing burden is another. I don’t have to tell you that decades of overregulation are crushing doctors: for every hour spent treating patients, you spend almost two hours on paperwork. My college-age daughter recently told me she is interested in going to medical school.   The practice of medicine is a noble calling, but I doubt her dreams involve sitting at a computer doing data entry.

The Trump Administration is listening to your concerns. Our Patients over Paperwork Initiative is slashing costly, duplicative, and burdensome regulations that stand like a brick wall between you and your patients. The initiative began with a wide-ranging Request for Information that yielded several thousand suggestions. We have acted on over 80 percent of them. We’ve tackled major regulatory issues like the Stark Law, medical student documentation, and burdensome provider audits….and the list goes on.   All told, Patients over Paperwork has saved providers an estimated $6.6 billion and 42 million burden hours through 2021.

We’re addressing physician burnout by untangling government’s web of quality measures through our Meaningful Measures Initiative and our historic reforms of the MIPS program. Under Meaningful Measures, we’ve eliminated 18 percent of all measures for a projected savings of 128 million dollars and 3.3 million burden hours through 2020. Through our new MIPS Value Pathways, physicians will be able to pick a set of measures that clearly relates to their specialty or the type of patients they see. We’re cutting measures that aren’t relevant or are difficult to report, and we’re focusing on measures that assess outcomes, not process minutiae.

In partnership with the AMA, we fixed 20 year-old distortions in the E&M codes to reduce administrative burden and ensure that payments reflect the time spent with patients and the high-level of skill and dedication it takes to care for them.

Our focus on innovation also means leveraging technology to deliver efficiencies that can lower costs and improve quality.  That’s why the Trump administration is doubling down on efforts to create a truly interoperable system.  We’ve moved away from meaningful use requirements to policies that make it clear that patients own their data and it must travel with them seamlessly, privately, and securely as they move throughout the health care system. Doctors can deliver high quality, coordinated care when they have a complete medical history, and rich and complete patient data allows researchers to spur the next generation of innovative treatments and cures.

This year, our efforts around innovation and reducing burden will involve another long standing problem in the health care system…. prior authorization. The prior authorization process became indefensible years ago. Patients are frustrated and doctors are sick of pointlessly wrangling with insurance companies. Prior authorization requirements are a primary driver of physician burnout, and even more importantly, patients are experiencing needless delays in care that are negatively impacting the quality of care they receive.  While prior authorization is an important utilization management tool, we believe we can use automation to make the process more efficient. This is a priority for us. We have conducted 35 listening sessions, and elicited over 2,000 stakeholder comments. We appreciate all of your input.  The Trump Administration is once again ready to take action to support doctors and patients. We will reduce administrative waste, increase patient safety, and free physicians to spend time caring for their patients.

The Trump Administration is also bringing transformational change to the Medicaid program.  Medicaid is the number one or two budget item for states, crowding out other priorities like public safety and education. It’s already the nation’s largest payer of long-term care, and as the nation’s baby boomers age, costs are expected to rise 500 percent by 2050.

Yet, for all that spending, health outcomes today on Medicaid are mediocre and many patients have difficulty accessing care.

I know some in this room have concerns about our recent Medicaid announcement. But the reality is that much of the criticism that has been aimed at the Healthy Adult Opportunity is directed at a policy that doesn’t exist. We believe it’s important that this debate rest on facts – not scare tactics.

First and foremost, the Healthy Adult Opportunity is voluntary. No state is required to participate. And the claims of some notwithstanding, the Healthy Adult Opportunity does not cut Medicaid funding to states that do choose to participate. It continues federal funding to states based on their historical spending with a reasonable growth rate. Only in Washington can capping the rate of spending growth be frantically decried as a cut.

What the Healthy Adult Opportunity does do is to finally tackle structural problems in Medicaid that decades of prescriptive regulations have failed to solve.  The Administration is offering states the upfront flexibility to design a program that works for the unique needs of their able-bodied adult populations, whether that is chronic diseases, mental health issues, or both.  These policies do not impact the traditional Medicaid population.

At the same time, we recognize the federal government has a duty to hold states to high standards. Medicaid has never done that, but the Healthy Adult Opportunity includes rigorous accountability that will ensure participating states are using their new flexibility to deliver results for beneficiaries by requiring a set of quality and access measures that are currently optional. So in exchange for flexibility, states have to demonstrate to CMS that patients have unfettered access to high quality care that delivers better health outcomes.

The Healthy Adult Opportunity fits into a pattern for the Trump Administration that by now, three years in, is predictable. We are tackling long-standing issues in the healthcare system that prior administrations have allowed to fester for decades – outdated regulations, drug pricing, site neutral payments, kidney care, organ donation, interoperability, and now, price transparency.

The Trump Administration is shining a bright light on prices, so patients can finally know the cost of healthcare services before they obtain them. Price transparency is arguably the most consequential change to the health system in decades. As doctors, you want to be able to order a test or prescribe a treatment without unwittingly impoverishing your patients… you want to make referrals based on cost and quality.  It’s impossible to justify keeping you and your patients in the dark about pricing. Under the leadership of President Trump, large hospital systems and insurance companies won’t be allowed to obscure these prices for much longer.

But innovation involves moving to a value based payment system.  Today, only 20 percent of clinicians in Medicare are taking on significant levels of risk. To this end, CMS has been developing a new cadre of payment models and a strategy to increase provider participation. Recognizing that not every provider is comfortable taking full risk, we are offering new opportunities that ease providers into value-based agreements and deliver options that work for them.  Clinicians should be allowed to focus on caring for patients rather than tracking their revenue cycle. We look forward to working with the AMA on how we can support providers in moving towards value based care.

In closing, I want to remind us all of how we got here. For decades, lawmakers and regulators have dreamed that they could run the healthcare system better than the people who compose it.. They have micro-managed, intruded, over-promised – and ultimately, they have wildly under-delivered.

The Trump Administration is abandoning this failed approach of government intervention. We will fiercely resist any attempt to revive it in the form of Medicare for All or the public option. And we will continue to solve problems previous administrations have ignored… we will continue to transform the healthcare system by promoting innovation, reducing decades of burden, boosting competition, and empowering patients to be consumers through price and quality transparency and interoperability.

Now, it’s no secret that special interests have had no scruples about weaponizing the legal system to thwart our efforts and preserve business as usual – which in many cases has become quite profitable for them.  I’m confident that such efforts are the last gasps of a dying status quo.

Whether its Medicaid reforms, interoperability, price transparency, site neutral payments, we will stand up for what is right for patients and doctors.

The input of providers and those on the front lines has already proven crucial in bringing about our long overdue transformation. Doctors have a unique vantage point that has too often been ignored. I thank all of you and the AMA for your active engagement and for working with us to transform the healthcare system. Thank you.