HHS Seeks to Reorient Obamacare Innovation Center

Even as the Trump administration works to repeal the Affordable Care Act, it is taking advantage of one of the 2010 law's provisions to advance its own take on health system innovation.

Seema Verma, administrator of the Centers for Medicare and Medicaid Services, on Sept. 20 announced plans to redirect the six-year-old Center for Medicare and Medicaid Innovation within the Health and Human Services Department. Its mission is to test new approaches or models to pay for and deliver high-quality health care more efficiently.

“We will move away from the assumption that Washington can engineer a more efficient health-care system from afar—that we should specify the processes health-care providers are required to follow,” Verma wrote in a Wall Street Journal op-ed. “We are analyzing all Innovation Center models to determine what is working and should continue, and what isn’t and shouldn’t,” she added. “The complexity of many of the current models might have encouraged consolidation within the health-care system, leading to fewer choices for patients.”

On Sept. 20, CMS published a Request for Information seeking “feedback on a new direction to promote patient-centered care and test market-driven reforms that empower beneficiaries as consumers, provide price transparency, increase choices and competition to drive quality, reduce costs and improve outcomes.” Suggestions for innovations are invited from clinicians, patients, entrepreneurs, state officials and others “on the front lines.”

Verma, who was brought to CMS by President Trump and Vice President Mike Pence after she revamped health programs in Indiana, appeared to accept some, but not all, of the principles of the Affordable Care Act’s encouragement of experiments in paying medical providers for value rather than by the procedure. “We must shift away from a fee-for-service system that reimburses only on volume and move toward a system that holds providers accountable for outcomes and allows them to innovate,” she said. But she then added, “Our goal is to increase flexibility by providing more waivers from current requirements.”

She discouraged “central planning,” and encouraged consumer choice. “We need to empower patients with information to seek value and quality as they shop for services,” Verma wrote. “They also need incentives to be cost-conscious. Patients can define value better than the federal government can.”

Just a month earlier, the Trump approach was characterized by Obama White House Council of Economic Advisers Chairman Jason Furman as “re-embracing the old fee-for-service model. In six months, the Department of Health and Human Services has gone from driving innovation to dragging health care backward,” he wrote with Obama health care adviser Dr. Bob Kocher on Aug. 31.

The director of the center for most of its tenure, Dr. Patrick Conway, left in August to head Blue Cross Blue Shield of North Carolina.

Dr. Donald Berwick, the CMS Administrator under Obama, told Government Executive that he found the Trump direction on innovation confusing. “The move away from fee for service and toward paying for value or outcomes has been largely bipartisan since its inception,” he said. “The decision by CMS to slow down or backpedal on bundled payment mechanisms is not consistent with the evidence that there are smarter ways to pay for health care.”

The center for innovation is already one of the most important energy centers for innovation in the country, and the law already allows successful approaches to be replicated, added Berwick, now a senior fellow at the Institute for Healthcare Improvement in Cambridge, Massachusetts. Verma has a reputation for “shifting more costs to patients, such as co-payments and deductibles. That trend should not be accelerated—patients need more help paying the bills, not less,” Berwick said.

No matter where the Trump HHS takes health innovation, he said, “I hope they don’t lose the idea of using evidence. We don’t want witchcraft, we want evidence.”