CMS Innovation Center: Where we are, How Models are Developed and the Next Steps in Value
Today’s edition of the CMS: Beyond the Policy Podcast will focus on the CMS Innovation Center. The CMS Innovation Center acts as a developer and testing ground for innovative payment and service delivery models to improve quality of care for Medicare, Medicaid, and CHIP beneficiaries, and to save taxpayer money. The episode features a discussion on the direction of the CMS Innovation Center with the CMS Administrator, Seema Verma and the CMS Innovation Center Director, Adam Boehler moderated by Tom Corry, the CMS Director of the Office of Communications.
Male Speaker: Today's edition of the CMS Beyond the Policy podcast will focus on the CMS Innovation Center. The CMS Innovation Center acts as a developer and testing ground for innovative payment and service delivery models to improve quality of care for Medicare, Medicaid and CHIP beneficiaries, and to save taxpayer money. Today, Tom Corry, director of the Office of Communications will have a conversation with CMS leadership on the new direction for the CMS Innovation Center.
Male Speaker: There are at least two big issues in the healthcare system. The first is that we have largely built our healthcare system on fee for service, meaning what we do is pay per sick visit, or thing we do to people. And not surprisingly, what we get is more things done to people, as opposed to actually paying for outcomes. The goal of the healthcare system ought to be to improve people's health and keep them out of trouble and lower the cost of healthcare, not do the opposite.
Number two is we've built our system, in the United States really top-down. We focus on acute care and fixing problems once they happen, as opposed to bottom up, focusing on primary care, which allows us to engage patients and manage chronic disease and help them navigate the system.
Female Speaker: The ACO models under CMMI have changed the way that our markets behaved. We've been allowed to implement waivers that aren't traditionally offered. And we've been really encouraged to focus on social determinants of care. For example, we had a patient that was going to the emergency room several times a week. Because we were responsible for that patient, we were able to find out and go visit that patient in the home. We really realized that she was just lonely; and so, what we started to do was work with her provider and call her every day and have a social conversation with her. And she no longer goes to the emergency room.
Tom Corry: So, those are just a couple of voices from the field who are working with us to help change the face of healthcare. Today we're fortunate to have in one room two very busy healthcare leaders, the CMS administrator, Seema Verma, and the CMS Innovation Center director, Adam Boehler. We're getting to talk about CMS Innovation Center and where they've been and where they are going. Thank you for taking the time, and we look forward to your insights.
Seema, let's start with you. Early on in your tenure, you did a Request for Information to collect ideas on a new direction for the Innovation Center to promote patient-centered care and to test market-driven reforms. What were your key take-aways based on the responses and how have you acted on these?
Seema Verma: Thanks, Tom. So, our efforts around the Innovation Center are about trying to do something about the unsustainable costs of healthcare. By 2026, we know that Americans will be spending one in every $5 on healthcare. At least that's what our actuaries predict. And that's going to crowd out other spending, whether that's roads or schools or other priorities for the nation. And as we know, all Americans are just feeling that pain when they go to the pharmacy counter, paying higher deductibles, higher premiums. And so our job at the Agency is not only to run the Medicare Medicaid program and the exchanges -- which is about 130 million Americans, but to also think about ways that we can make healthcare more affordable and put the country on a more sustainable path.
So, the CMMI, or our Innovation Center, was established by Congress. And the idea here was to use the Innovation Center as a developer and a testing ground for new ways of paying for healthcare, to improve quality of care and lower cost. And essentially, their job is to focus on moving the entire system to value. And what that means is that right now the way that we're set up is to pay for the volume of services, so we pay doctors the more that they do. And we need to rethink that. We need to think about how we pay our providers so that they can focus on preventing disease, promoting health, and improving quality. And so that's everything that we are working on, and the Innovation Center plays a very pivotal role with that. We started our term at the administration with the administration looking back at the models that we have in place to see what was working, what wasn't working.
The other thing we did was put out the RFI that you mentioned, because I think the best ideas don't come from Washington, necessarily, and we wanted to hear from providers and practitioners that were on the front lines -- trying to get a sense of what innovations we could try and model. And a lot of the feedback that we've gotten from innovators on the ground level is informing a lot of the work that Adam is working on.
Tom: Great, thank you Seema. Adam, Seema referenced value-based care. What does that mean to you in the Innovation Center?
Adam Boehler: I think in its simplest format, value-based care is improving cost and improving quality, so lowering cost and improving quality. And I think there's two main components to get us there. One, as the Administrator mentioned, it's taking a system that pays for services, and paying based on results. I always believe you get what you pay for, and here we pay for volume so we're getting volume. So, I think that shift is critical in incentives.
The second thing I think is about the government empowering people instead of disempowering. And so, when we're looking at our regulations, our quality metrics, we're, we're trying to isolate things that really make a difference and kind of step away from those things that interfere with clinicians' decisions or their ability to provide great clinical care. So, I think those two components come in quite a bit.
Tom: Great. This administration's putting the Innovation Center to work. Over the past few years a number of Innovation Center models and initiatives have shown favorable impacts on cost and/or quality. So, Adam, can you share some lesson learned based on this experience?
Adam: Yeah, so Tom I think we have pretty myopic focus on taking cost out and improving quality. It's how we analyze every model. And so, we've gone through our portfolio over time and said what are the particular characteristics that drive lower cost and improve quality? One of them is accountability. We found that the models where we asked clinicians to take accountability through their -- for their population, are those models where you see the biggest differences in lowering costs and improving quality. The other thing we've seen are models that provide predictability and transparency.
And so a lot of what you'll see in our efforts will be how can we provide clear data to our participants so that they can perform in our models? The final thing I'll highlight is the ability to collaborate together. Our best models are those models that don't just look at Medicare. They look at Medicare, they look at Medicaid, they involve private payers, and we all kind of collaborate together. So, you'll see some more focus on teamwork across various payer classes.
Tom: Great. Thanks Adam. Seema, from a CMS perspective, what's your take on this work?
Seema: Well we've taken a lot of the lessons learned that Adam mentioned and are bringing it into a lot of the programing that we have in place. I think the best example of this was sort of our overhaul of the ACO program. We created something and a lot of individuals were concerned that we would see providers drop out of the program under the new parameters. But what we saw is that that wasn't the case. Providers are committed to pursuing value and are very interested in this.
So, 90 percent of eligible ACOs with agreements that would have ended on December 1st have actually elected to extend their agreement period, and 85 percent of those ACOs applied to join. And we're offering a second application this summer -- a second application cycle. So, I think the idea here is that providers really are interested in this and once we change those parameters to give them some new options, but essentially requiring them -- if they're going to stay in the program they needed to take on risk at a certain point. And, you know, again we've seen great success and some interest in this really building on the lessons learned.
Tom: So, tell us more about the stakeholder feedback and how you would incorporate that in the models. What is the model development process? Our listeners would be interested and this is a really big deal for the marketplace.
Adam: Yeah, and one thing that the Administrator said earlier on that I'd echo is that he best ideas don't come -- in the government or internal often. And that's something from my private market experience I always found, is it's really important to evaluate ideas from a lot of sources. And so, from a CMMI perspective, I'll give you a couple examples of where we source ideas. One is through the RFI process, as we did before. A second is through stakeholder meetings. We do hundreds and hundreds of stakeholder meetings, whether that be patients, patient advocacy groups, health systems, providers, plans, and we really try to listen and take as many great ideas as we can. Congress is a major stakeholder, both members, their staff, committees. And then I would also call out advisory councils like PTAC, Physician Technical Advisory Committee. You know, their job on the physician side is to provide advice for us and some of their suggestions have been very integral in some of our model development.
And then when we look at prioritization, because what you'll find on some of this is there are a lot of ideas, so how do you sort through and in an objective way identify what has the most potential? We kind of look at three things. One is the ability to impact cost. The second is the ability to improve quality. And then the third is what I would call degree of difficulty. How much of a fundamental shift is this and how long would it take to get to that? And that's what we do to kind of objectively go through and prioritize.
Tom: Thank you that's -- it's really impressive. So, what's next for the Innovation Center?
Seema: Well one thing to echo I think Adam and his team have done a really great job on the stakeholder input piece. They have lots of different meetings and I know as I travel across the country and hear from folks, they're -- they really appreciate that type of outreach and the opportunity to have input and help us think about these models. So, one of the things that I've asked the Innovation Center to look at is in terms of prioritizing models is to look at some of the areas of spending in the program we know are very high cost. Whether that be our individuals with end stage renal disease, kidney care, individuals that are very seriously ill, cancer care. The other area of focus that we're working on are new models for rural health care. We know that one in six Americans live in a rural area, and statistically residents of rural communities tended to have worse health status than those living in urban areas.
So, it's time to rethink rural healthcare. We have a larger initiative at CMS around this. We've been taking -- doing some work around the wage index, and so that's one part of it, but the other part of it that CMMI's going to help us with is looking to develop new models so that local communities can think about moving to value and also thinking about what's going to work best in their communities in terms of their whole system of care. So, we're very excited about that. I think the other challenge that we have is while we're putting out new models, that's clearly very important to give options for providers. And we want to make sure that all providers have an opportunity to participate in some type of model. And I think the work that Adam has done is not just putting out models, but giving providers lots of different choices within the models. Some providers are more willing to take on risk and capitation than others. But we think that there's, you know, many different ways to have providers participate on the road to value.
The other thing we're very focused on is adoption. As we're putting out models, we're thinking about how do we get more providers involved around value. So, we're thinking about ways not only to provide technical assistance and support for providers that are in models, but actually trying to support providers who are even thinking about getting into models. So, we're thinking, how can we provide more data for them? One of the things that we recently did for our ACOs was to provide data to them -- claims data, so that they could understand a little bit more about the background of their patients. And so that's something that we're going to continue to work on, to improve our adoption strategy.
So, it's not just that we're attracting big, large health systems, but we can provide opportunities for even small providers, rural providers, solo practitioners. And I think Adam will talk a little bit more about his work in that -- in that particular area. The other, last area I would mention is the Medicaid portion of our portfolio. A lot of the models really focused on Medicare, and one of the things that we've asked CMMI to do is as we're putting out models to think about how can we incorporate the Medicaid program into this. So, as we’re putting out new models, they're thinking about a Medicaid component. So, we would invite states to participate.
And I think this has a lot of power to drive our whole system towards value, because if a provider, you know, is making changes in their practice and they're working towards reducing costs and improving quality, they're not just doing that then for their Medicare patients, but they're also doing it for their Medicaid patients. And we've also done a lot of work to include private insurers and make them aware of the models. And hopefully, they will use some of our models as well, and so providers aren't having to deal with lots of different payers and lots of different models, they can participate in one and all of their payers are participating in it.
Tom: Great. You mentioned the new models in primary care. The announcement of the CMS Primary Cares initiative has gotten a lot of attention. Adam can you give us some more details on that initiative?
Adam: Sure, so one of the reasons, Tom, we started focusing on primary care is that they represent, you know, in Medicare 2 to 3 percent of expense, but orient toward controlling much more expense. And so it was an area for us with a lot of leverage -- an area for us where we know the great work that primary care does, and we want to invest more in our physicians. So, that's kind of what attracted us to the area in the first place. And what we wanted to do -- and one thing I mentioned and the Administrator mentioned earlier in this is moving off of fee for service and moving to outcomes.
And, you know, how do you do that? And what we wanted to do is we wanted to create a path that was for everybody. It wasn't just for a big physician group or a small physician group, where everybody could participate in outcomes. And so Primary Care models that kind of organize in two groups. The first is there are large physician groups that are ready to take full accountability for their patient set. And if that's the case, and they do that today in a number of other plans, we want to be able to give them that ability to do what's right for their patients. So, that option is called direct contracting.
The second avenue is called Primary Care First; obviously, with the name reflecting our view of primary care in the health care system. And there, what we're saying is even if you're a single physician, we want the ability for you to shift off of fee for service and be rewarded for taking care of your patients. So, there -- what that model does is it pays the physician in a budget-neutral way, a simple per visit and monthly fee for taking care of their patients. Then it gives them some accountability. If their patients stay healthy at home, they do financially much better. And if their patients go to the hospital a lot and they're very sick, and we've risk-adjusted this, then they're going to have some cost or some risk associated. It's limited, but some. And so what I really like about this model is it lets physicians focus on the patients that need care, instead of doing a churn and burn to see lots of patients.
I think one thing we heard a lot in our learning sessions from physicians is they didn't go to medical school to churn and burn and see a patient every five minutes. They went to medical school to take care of people. It lets them focus less on paperwork, we're really trying to eliminate, and let them spend time with patients. That's what they want. And it rewards them for outcomes. And so I think that we've had a lot of interest in the community there because it reflects more of the reason why people went into practice in the first place.
Tom: Thanks, Adam. In addition to these models, there's been discussion around requiring providers to participate in models. Will all of the models be optional?
Adam: I think that -- well, so first, no, all of the models probably will not be optional. I will say that when you think about requiring participation, it's a higher bar, and I'll give you a sense of when we look for that. One is when we really want to transform an industry quickly. It's very much in need of it. The second time we do this is when we get feedback, I mentioned before that our models save money and improve quality. And we have each of them independently looked at by our Office of the Actuary. And one of the concerns when you don't have required participation in a model is called selection bias. And what that basically means is that only those folks that would benefit financially from the model would enter into the optional model. And those that wouldn't, wouldn't.
And as a result, it almost becomes impossible to achieve lower cost and higher quality. And so when we get that feedback we look closely. The other thing we do when we think about a required model is we do focus significantly on our feedback. I think it's very important to listen to all stakeholders, so very often we will go out with a very specific RFI -- out and get formal feedback, given the importance of that.
Seema: I think also to add to that is we're in these types of models to think about what kinds of protections can we put in place, you know, we do -- we try to evaluate protections for patients first, and also protections for providers to make sure that there's not a significant negative impact on providers and their practices. So, that's also something that we're giving a lot of consideration to.
Tom: Thanks. That's really helpful to understand in that context. So, Adam you've been here a year. You've done a lot of work, you and your team. What are you most proud of?
Adam: So, when I started, one of the things that somebody said to me is, you know, if you could characterize in one thing what you'd want to be remembered for in the role, what would it be? And I hadn't thought about it in taking the role. And I thought for me, it would be really catalyzing this shift and ending fee for service. And that, you know, you're never going to do that all in a defined period of time, but if somebody could trace that back or have that make a difference. And so, I think I'm very proud of the models and, you know, we've introduced now 11 to date. They span a lot of things, whether it's emergency services, primary care, what we do in expanded ability to invest in social, transportation, food, housing for health plans, taking care of moms at risk, opioid abuse, so really a whole -- a group of things that are really meant to address value and movement to outcomes. And so, I think that's really important. The other thing I've very proud about is the work that we've done with our teams.
You know I mentioned the 11 models and what we're doing. You know, I occupy personally a role, but I am where I am and where we are -- what we have accomplished because of all the great people at CMMI. So, I'm very proud of the ability to work with them, of their accomplishments, how we've added to the team, but even more, how we've invested in people to grow them. And so, I think that's a really important component as well.
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Female Speaker: The CMMI Centers for Medicare and Medicaid Innovation, since its founding, has really been on the edge of new payment models. It's been interesting to watch their evolution from some of the bundled payment models through the Accountable Care Organization models, and I have always found them to be very open to feedback and that they want to learn and they want to understand.
And when you're trying to manage something across every ZIP code in the country for every, you know, beneficiary in a particular program, that's a daunting task. And the only way that you can really get there is by asking questions and incorporating that feedback and evolving the programs as the situations dictate. I have always found CMMI to be in a listening mode at the same time that they've been in an innovation mode. It's really very refreshing.
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