June 11, 2019 — Centers for Medicare and Medicaid Services (CMS) Administrator Seema Verma addressed the American Medical Association (AMA) Annual Meeting of the House of Delegates, which ran June 8-12 in Chicago. In her remarks, Verma addressed current efforts by the Trump Administration to enact healthcare reform. The following is a transcript of her remarks:
On my way here, I was reminded of a famous speech Teddy Roosevelt gave in Chicago. It was 50 pages long…and he had it folded in half in his breast pocket. On his way to the event, someone took a shot at him and he was wounded. The doctors later determined that the speech had significantly slowed the bullet — and essentially saved his life. That must be the first and only time in history that a patient’s life was actually saved by paperwork.
The United States healthcare system is in many ways the best in the world – we have centers of excellence that attract patients from around the globe, and we are the leading hub of private sector biomedical innovation.
And because of that, we stand at the cusp of a new era in medicine that is opening exciting windows on prevention and new doors to treatment. Robotic surgeries, telehealth and artificial intelligence (AI) are leveraging technology to help us improve outcomes and expand access. Treatments are being designed for a patient’s unique genetic profile — and for the first time, we can even cure certain conditions by modifying a patient’s genetic code.
But, while we have one of the best health systems in the world, we pay more than any other country. CMS actuaries predict that by 2026, we will spend one in every five dollars on healthcare.
But despite our ever-increasing spending, we have more avoidable hospital admissions than any other developed country, and our quality outcomes are inconsistent.
New challenges continue to emerge and others remain, from our higher rates of maternal mortality and chronic disease, to rural hospital closures. And 29 million Americans remain uninsured and there are growing numbers of underinsured individuals that are unable to afford rising deductibles and out-of-pocket costs.
Much of what ails our system can be attributed to the underlying flaws in government policy that have contributed to rising costs.
Many government policies intended to solve our nation’s healthcare problems are contributing to and in some cases exacerbating them. In fact, the last decade has seen a historic intrusion of government into the delivery and care and the practice of medicine. As physicians on the front lines, you are stuck in the middle of all of this. You witness firsthand the limitations and unintended consequences of well-intentioned government policies.
A great example of this is that the paperwork required to comply with government regulations often pulls you away from the important work of patient care, driving administrative costs even higher. A study found that for every hour providers spend seeing patients, they spend nearly two additional hours on paperwork.1
It should come as little surprise that physician burnout, or moral injury, is at an all-time high, and it is having reverberating effects throughout our entire healthcare system.2 It’s getting harder for physicians to finish their training, hang their shingle and deliver care to their communities. Faced with the growing complexity of government regulations, independent physicians are increasingly selling their practices to hospital systems, and new physicians are more often beginning their careers as employees of larger health systems. This consolidation has unfortunate implications for American healthcare. We have seen many examples of anti-competitive behavior by large systems, including efforts to thwart price transparency and use monopoly status to drive up prices. This is why CMS has been working toward site-neutral payments and other policies, like 340b to level the playing field for independent practices.
Everything we do at CMS is aimed at ensuring that all Americans have access to high-quality, affordable healthcare. We are using our role as the nation’s largest insurer to address the underlying drivers of healthcare costs to ensure that we have a sustainable safety net for our most vulnerable, and to promote a competitive market that delivers choice, quality and accessibility to all Americans.
CMS has over 16 initiatives driving toward this vision, from strengthening Medicaid and protecting Medicare, to tackling the high costs of prescription drugs, ensuring choice and affordability in the individual market, and developing innovative payment models to drive our system away from fee-for-service to a value-based one. Now I won’t go into all of them today, but I do want to specifically address a few that directly impact physicians.
In 2017, following the leadership of President Trump’s “Cut the Red Tape” effort, we created the Patients over Paperwork initiative. It’s a historic effort that began with a nationwide listening tour and resulted in over 1,300 providers identifying outdated and unnecessary regulations that cause undue burden and lead to higher healthcare costs.
CMS is working to untangle government regulations, and this effort that has already delivered results. Patients over Paperwork has yielded savings to all providers at an estimated 5.7 billion dollars — with a reduction of 40 million burden hours through 2021.
We are not done and we’re working to develop new ways for your voice to be heard.
As part of Patients over Paperwork, we are focusing on three government programs that have created major pain points for doctors — MACRA [Medicare Access & CHIP Reauthorization Act], E&M [evaluation and management] codes and interoperability.
Let’s start with MACRA. It was a good thing that Congress finally repealed the SGR [Sustainable Growth Rate], but I wonder if the cure was worse than the disease.
The program has laudable goals. When providers have responsibility for managing a budget and their reimbursement is tied to outcomes, they are incentivized to find innovative ways to keep people healthy and lower costs.
But our progress toward a more value-based healthcare system has been too slow, and it’s left many providers on the sidelines. Today, only 10 percent of clinicians in Medicare are taking on significant levels of risk. To this end, CMS has spent the last year 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. We are also providing a new level of regulatory flexibility, allowing more telehealth and reducing program integrity requirements as providers take on additional accountability. The new direct primary care models we just announced are an example of this. These models test making payments to practices through a simplified total monthly payment plus flat per visit fees. This allows clinicians to focus on caring for patients rather than tracking their revenue cycle.
As we design models, we are deploying learning networks to help physicians succeed in a world of value-based payment and providing more data to clinicians about their patients, and we’re working with other payers to align our models because ideally, providers that are participating in models are doing so not only for their Medicare patients, but for all of their patients.
And while we continue our work on developing value-based models, we recognize that the MIPS [Merit-based Incentive Payment System] program is the only option for many doctors. And to be frank, I myself have found MIPS to be very complex and difficult to understand, and we have been listening to your recommendations.
We are working toward a new vision for MIPS, a more practical, simpler and cohesive program for every clinician — regardless of specialty or practice size. We want to create a program that allows physicians to pick a set of measures that clearly relates to your specialty or the type of patients that you see.
We’re cutting measures that aren’t relevant or are difficult to report, and we’re focusing on measures that assess outcomes, not meaningless process measures.
To make measures easier to report, we’re exploring new solutions that use artificial intelligence to pull clinical data directly from EHRs [electronic health records] for quality measurement. In an ideal world, doctors wouldn’t have to do much more than press a button, and the system would generate quality data.
We also recognize that underlying government policy flaws that affect physician billing have had a negative impact on our healthcare system, which brings me to our work on E&M codes. Recognizing their importance and influence, we tackled E&M reform to reduce administrative burden and ensure that payments reflect the critical thinking involved in managing the care of complex patients.
Last year, for the first time in 20 years, the Trump Administration undertook truly historic changes by proposing to simplify how doctors must document E&M visits for the purpose of billing Medicare.
We received extensive feedback — over 10,000 comments on our proposed rule. We heard you loud and clear, and we realize that not everyone agreed with our approach.
But our proposal was never intended to be the end of the discussion, but a beginning and a demonstration of our sincere commitment to reducing burden for physicians. AMA’s recent work to simplify the CPT [Current Procedural Terminology] code set has a major impact on the CMS changes that are scheduled to go into effect in 2021, and so we are working with the AMA and others on how we may further update and improve our policies to incorporate the CPT improvements into the overall E&M changes.
But our work on E&M reform doesn’t end with reducing burden. The practice of medicine has greatly changed over time. Physicians must now spend time managing patients with multiple comorbidities while assessing genetic information, evaluating the social determinants of health and coordinating care.
But as more procedural codes have been added, I’m concerned that the value placed on E&M has actually decreased, even though the complexity of managing patient care has increased. We need to be sure that we strike the right balance in how we pay physicians to ensure that we are rewarding doctors appropriately for the services they provide.
E&M code values should reward the time all doctors are spending caring for complex patients. By considering the revaluation of E&M codes, we are investing in the critical thinking required during patient visits, and our reform efforts will impact how current and future doctors practice medicine.
We appreciate the efforts of the AMA and the RUC [Relative Value Scale Update Committee] to revalue these codes, by surveying over 50 physician specialties. We’re reviewing all of the data, and I’m hopeful that our collaboration will get us across the finish line.
We’re also focusing on the issue of electronic health records and data sharing, or interoperability within the health system. Here, government programs have created huge problems again. We’ve spent over $36 billion, forcing doctors to use systems that just weren’t built to facilitate high-quality, patient-centered care.
And now you have to spend too much of your day looking at a screen, with your hands on a keyboard, instead of using that time and energy engaging with patients.
Again, government policies are well intentioned. Electronic health data could have the power to transform healthcare, contributing to greater efficiency and providing data to spawn more evidence based treatment guidelines, research and new cures. Instead of just throwing money at the problem or trying to centrally plan the solution, our job is to make sure we have a free market, where records and health data follow a patient wherever they go and are theirs to share with providers across the health system.
As a physician, your systems should allow you to track a patient’s medical history from birth throughout their life, bringing together information from each visit, as well as claims data and information created through wearable technology.
This information should be readily available to you at the point of care — ensuring that you’re not repeating tests or treatments and you have the information you need to ensure safety and to use your clinical judgement as effectively as possible.
Achieving true interoperability is critical to promoting greater efficiency, competition and innovation. And this administration is doubling down on efforts to make this a reality with our new interoperability rules.
Our administration is laser-focused on supporting and partnering with physicians, to create programs and policies that will help you lower costs, improve quality and outcomes for your patients,
But let’s look at the larger picture. Government policies have long set the standard in America’s healthcare system. Outdated government payment polices and central planning have stifled the competitive forces that bring down cost and improve quality.
We all know our current system is not sustainable and because of it, many American’s can’t afford care and our existing safety net programs are already on shaky financial ground. Recent projections indicate that the Medicare’s Hospital Trust Fund is set to run out of money by 2026 and the Medicaid program is one of the largest budget items for every state, competing with roads and schools. Simply said, we can barely afford the programs we have.
We all know that the approach we have taken for generations to fix what ails our healthcare system is to regulate its every sector, and that has failed. That’s why, as the head of the Medicare program, I’m deeply concerned about proposals for Medicare for All. Medicare for All would enlarge our existing program, threatening its promise of health and hope for America’s seniors, who have paid into it their entire lives. This is neither fair nor compassionate.
Medicare for All would strip private health insurance from 180 million people, take away choices and force them into a one-size fits-all government program — with innumerable rules, regulations and rubrics. You have all experienced the harmful impact of well-meaning government policies on the practice of medicine.
The impact of Medicare for All on physicians would be particularly detrimental. I know our system isn’t perfect, but it does afford you some ability to choose which payers you want to do business with, and what payment terms you’re willing to accept. Medicare for All would take away that choice.
Further, we all know that Medicare payment rates are already much lower than private payer rates. And analyses of Medicare for All indicate it would lead to lower physician reimbursement, some showing reductions on the order of 40 percent.3 This could lead to major access problems for all Americans, as some doctors may choose not to participate.
The cost of Medicare for All would be enormous, increasing taxes for all Americans. This cost growth could lead to rationing, as it has in other countries and would prevent physicians from accessing the therapies their patients need, because we all know government systems are slow to recognize and pay for new innovations in care, and that government bureaucracy leads to longer wait times.
Others are proposing a "public plan" option, but this concept is also troublesome. A public plan is a government plan and it would rely on the same cost control levers as Medicare or Medicaid – cutting provider payment rates.
By now, it should be clear that this administration is not in favor of preserving the status quo in our healthcare system. But our solution is to address the underlying drivers of healthcare costs, so that all Americans have access to high-quality care. We need a healthcare system that provides Americans with security and peace of mind; choice and control; affordability and convenience. And, let me be clear we are deeply committed to helping those who need it. But, while doing that, we must put the patient and their doctors in the driver’s seat to make decisions about their care, not the government. This administration stands committed to addressing these issues, including by ensuring that people with pre-existing conditions have the protections they need and all Americans have access to affordable, high-quality care.
We believe market forces can most effectively address the underlying cost drivers in our healthcare system. Simply having the government take over healthcare and pay for everything won’t do that. We can only transform our healthcare system through a competitive free market — one that fosters and nurtures innovation, that promotes an environment where providers compete on the basis of cost and quality, and patients have choices and make decisions about their care
We absolutely need fundamental reforms. But doubling down on failing government interventions to enact a complete takeover of the healthcare system is not a solution and will threaten all that makes the American system the best in the world.
Instead, I hope that you will work with us to improve our healthcare system to make it more efficient, competitive and innovative.
I can think of few causes as worthy as what all of you do, each and every day, to help your patients enjoy longer lives…and better lives. And to those of you in the room, that go above and beyond your day-to-day responsibilities to help policy makers with your ideas and your thoughts, thank you. Doctors have a unique vantage point, and your participation in the public policy debate is crucial. Policy makers need to hear from you and your colleagues.
CMS is committed to reducing provider burden to make the programs we have work more effectively and efficiently and to do everything we can to help you and future generations of doctors be able to practice medicine the way you intended when you started down this noble path.
For more information: www.cms.gov