    [House Hearing, 114 Congress]
    [From the U.S. Government Publishing Office]

        MEDICARE ACCESS AND CHIP REAUTHORIZATION ACT OF 2015: EXAMINING
                   IMPLEMENTATION OF MEDICARE PAYMENT REFORMS

    =======================================================================

                                    HEARING

                                   BEFORE THE

                             SUBCOMMITTEE ON HEALTH

                                     OF THE

                        COMMITTEE ON ENERGY AND COMMERCE
                            HOUSE OF REPRESENTATIVES

                        ONE HUNDRED FOURTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                                 MARCH 17, 2016

                                   __________

                               Serial No. 114-127

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

          Printed for the use of the Committee on Energy and Commerce

                            energycommerce.house.gov

                                 _________

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                        COMMITTEE ON ENERGY AND COMMERCE

                              FRED UPTON, Michigan
                                     Chairman
    JOE BARTON, Texas                    FRANK PALLONE, Jr., New Jersey
      Chairman Emeritus                    Ranking Member
    ED WHITFIELD, Kentucky               BOBBY L. RUSH, Illinois
    JOHN SHIMKUS, Illinois               ANNA G. ESHOO, California
    JOSEPH R. PITTS, Pennsylvania        ELIOT L. ENGEL, New York
    GREG WALDEN, Oregon                  GENE GREEN, Texas
    TIM MURPHY, Pennsylvania             DIANA DeGETTE, Colorado
    MICHAEL C. BURGESS, Texas            LOIS CAPPS, California
    MARSHA BLACKBURN, Tennessee          MICHAEL F. DOYLE, Pennsylvania
      Vice Chairman                      JANICE D. SCHAKOWSKY, Illinois
    STEVE SCALISE, Louisiana             G.K. BUTTERFIELD, North Carolina
    ROBERT E. LATTA, Ohio                DORIS O. MATSUI, California
    CATHY McMORRIS RODGERS, Washington   KATHY CASTOR, Florida
    GREGG HARPER, Mississippi            JOHN P. SARBANES, Maryland
    LEONARD LANCE, New Jersey            JERRY McNERNEY, California
    BRETT GUTHRIE, Kentucky              PETER WELCH, Vermont
    PETE OLSON, Texas                    BEN RAY LUJAN, New Mexico
    DAVID B. McKINLEY, West Virginia     PAUL TONKO, New York
    MIKE POMPEO, Kansas                  JOHN A. YARMUTH, Kentucky
    ADAM KINZINGER, Illinois             YVETTE D. CLARKE, New York
    H. MORGAN GRIFFITH, Virginia         DAVID LOEBSACK, Iowa
    GUS M. BILIRAKIS, Florida            KURT SCHRADER, Oregon
    BILL JOHNSON, Ohio                   JOSEPH P. KENNEDY, III,
    BILLY LONG, Missouri                     Massachusetts
    RENEE L. ELLMERS, North Carolina     TONY CARDENAS, California
    LARRY BUCSHON, Indiana
    BILL FLORES, Texas
    SUSAN W. BROOKS, Indiana
    MARKWAYNE MULLIN, Oklahoma
    RICHARD HUDSON, North Carolina
    CHRIS COLLINS, New York
    KEVIN CRAMER, North Dakota
                             Subcommittee on Health

                         JOSEPH R. PITTS, Pennsylvania
                                     Chairman
    BRETT GUTHRIE, Kentucky              GENE GREEN, Texas
      Vice Chairman                        Ranking Member
    ED WHITFIELD, Kentucky               ELIOT L. ENGEL, New York
    JOHN SHIMKUS, Illinois               LOIS CAPPS, California
    TIM MURPHY, Pennsylvania             JANICE D. SCHAKOWSKY, Illinois
    MICHAEL C. BURGESS, Texas            G.K. BUTTERFIELD, North Carolina
    MARSHA BLACKBURN, Tennessee          KATHY CASTOR, Florida
    CATHY McMORRIS RODGERS, Washington   JOHN P. SARBANES, Maryland
    LEONARD LANCE, New Jersey            DORIS O. MATSUI, California
    H. MORGAN GRIFFITH, Virginia         BEN RAY LUJAN, New Mexico
    GUS M. BILIRAKIS, Florida            KURT SCHRADER, Oregon
    BILLY LONG, Missouri                 JOSEPH P. KENNEDY, III,
    RENEE L. ELLMERS, North Carolina         Massachusetts
    LARRY BUCSHON, Indiana               TONY CARDENAS, California
    SUSAN W. BROOKS, Indiana             FRANK PALLONE, Jr., New Jersey (ex
    CHRIS COLLINS, New York                  officio)
    JOE BARTON, Texas
    FRED UPTON, Michigan (ex officio)

                                 C O N T E N T S

                                  ----------
                                                                       Page
    Hon. Joseph R. Pitts, a Representative in Congress from the
      Commonwealth of Pennsylvania, opening statement................     1
        Prepared statement...........................................     2
    Hon. Gene Green, a Representative in Congress from the State of
      Texas, opening statement.......................................     3
    Hon. Michael C. Burgess, a Representative in Congress from the
      State of Texas, opening statement..............................     5
    Hon. Frank Pallone, Jr., a Representative in Congress from the
      State of New Jersey, opening statement.........................     6
        Prepared statement...........................................     7

                                   Witnesses

    Patrick Conway, MD, Acting Principal Deputy Administrator, Deputy
      Administrator for Innovation and Quality, and Chief Medical
      Officer, Centers for Medicare & Medicaid Services..............     9
        Prepared statement...........................................    12
        Answers to submitted questions...............................    68

                               Submitted Material

    Statement of the American Hospital Association, submitted by Mr.
      Pitts..........................................................    44
    Statement of the American Academy of Dermatology Association,
      submitted by Mr. Pitts.........................................    50
    Statement of the American Society of Clinical Oncology, submitted
      by Mr. Pitts...................................................    54
    Statement of the College of Healthcare Information Management
      Executives, submitted by Mr. Pitts.............................    62
    Statement of the Healthcare Leadership Council \1\...............    65

    ----------
    \1\ The attachments to this document can be found at: http://
      docs.house.gov/meetings/if/if14/20160317/104683/hhrg-114-if14-
      20160317-sd008.pdf.

        MEDICARE ACCESS AND CHIP REAUTHORIZATION ACT OF 2015: EXAMINING
                   IMPLEMENTATION OF MEDICARE PAYMENT REFORMS

                                  ----------

                            THURSDAY, MARCH 17, 2016

                      House of Representatives,
                                Subcommittee on Health,
                              Committee on Energy and Commerce,
                                                        Washington, DC.
        The subcommittee met, pursuant to call, at 10:00 a.m., in
    room 2322 Rayburn House Office Building, Hon. Joe Pitts
    (chairman of the subcommittee) presiding.
        Members present: Representatives Pitts, Guthrie, Shimkus,
    Murphy, Burgess, Blackburn, Lance, Griffith, Bilirakis,
    Ellmers, Bucshon, Brooks, Collins, Green, Capps, Schakowsky,
    Butterfield, Castor, Sarbanes, Matsui, Kennedy, and Pallone (ex
    officio).
        Staff present: Rebecca Card, Assistant Press Secretary;
    James Paluskiewicz, Professional Staff Member; Graham Pittman,
    Legislative Clerk; Adrianna Simonelli, Legislative Associate,
    Health; Heidi Stirrup, Health Policy Coordinator; Christine
    Brennan, Minority Press Secretary; Jeff Carroll, Minority Staff
    Director; Kyle Fischer, Minority Health Fellow; Tiffany
    Guarascio, Minority Deputy Staff Director and Chief Health
    Advisor; Samantha Satchell, Minority Policy Analyst; Andrew
    Souvall, Minority Director of Communications, Outreach and
    Member Services; and Arielle Woronoff, Minority Health Counsel.

    OPENING STATEMENT OF HON. JOSEPH R. PITTS, A REPRESENTATIVE IN
             CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA

        Mr. Pitts. The subcommittee will come to order. The chair
    recognizes himself for an opening statement.
        Today's hearing will provide an opportunity for the Health
    Subcommittee to review the implementation and progress of the
    Medicare payment reforms as included in the historic
    legislation which repealed the Sustainable Growth Rate, the
    SGR, and replaced it with new payment models and other reforms.
        And I say historic, because my colleagues know well we
    worked over many years to address problems associated with the
    SGR and impending yearly payment cuts to doctors that
    inevitably were avoided thanks to short term, temporary
    patches, 17 in all.
        Many were interested in finding a solution, but not until
    the Medicare Access and CHIP Reauthorization Act 2015, MACRA,
    was enacted with overwhelming bipartisan support in the House
    and Senate did we finally achieve reforms for physician
    payments while also promoting high quality care for patients.
        Through a variety of incentives, physicians are encouraged
    to engage in activities to improve quality. Existing quality
    reporting programs are consolidated and streamlined into a new
    Merit-based Incentive Payment System, MIPS. Strong incentives
    are created for physicians to participate in the qualified
    Alternative Payment Models, APM, and I would like to speak to
    one such APM, patient-centered medical homes, which are an
    innovative model of care that has been shown to improve
    outcomes, patient experience, and reduce costs.
        Physicians in qualified medical homes will get the highest
    possible score for the practice improvement category in the new
    MIPS program. Medical homes that have demonstrated to the U.S.
    Department of Health and Human Services the capability to
    improve quality without increasing costs, or lower costs
    without harming quality, will not have to accept direct
    financial risk.
        Physicians in qualified APMs will receive a five percent
    bonus from 2019 to 2024. Technical support is provided for
    smaller practices funded at $20 million per year from 2016 to
    2020 to help them participate in APMs, or the new MIPS program.
    Funding is also provided for quality measured development at
    $15 million per year from 2015 to 2019, and physicians will
    retain their role in developing quality standards.
        Along with these physician payment reforms, MACRA also
    reauthorized the National Health Service Corps, community
    health centers, teaching health centers and Children's Health
    Insurance Programs, CHIP, all of which will help to ensure
    patient access to primary care.
        Today's hearing will be focused exclusively on the Medicare
    payment reforms and with our expert witness from the Centers
    for Medicare & Medicaid Services, CMS. Members will have an
    opportunity to learn about CMS' work to leverage performance
    measures with new payment models to build a better system that
    improves overall care for our seniors while also reducing
    costs.
        I will now yield to the vice chair of the full committee,
    Mrs. Blackburn.
        [The statement of Mr. Pitts follows:]

                   Prepared statement of Hon. Joseph R. Pitts

        The Subcommittee will come to order.
        The Chairman will recognize himself for an opening
    statement.
        Today's hearing will provide an opportunity for the Health
    Subcommittee to review the implementation progress of the
    Medicare payment reforms as included in the historic
    legislation which repealed the Sustained Growth Rate (SGR) and
    replaced it with new payment models and other reforms.
        I say `historic' because as my colleagues know well, we
    worked over many years to address the problems associated with
    the SGR and impending yearly payment cuts to doctors that
    inevitably were avoided thanks to short-term, temporary
    patches--17 in all.
        Many were interested in finding a solution, but not until
    the Medicare Access and CHIP Reauthorization Act of 2015
    (MACRA) was enacted--with overwhelming bipartisan support in
    the House and Senate--did we finally achieve reforms for
    physician payments while also promoting high quality care for
    patients. Through a variety of incentives, physicians are
    encouraged to engage in activities to improve quality. Existing
    quality reporting programs are consolidated and streamlined
    into a new Merit-based Incentive Payment System (MIPS).
        Strong incentives are created for physicians to participate
    in qualified Alternative Payment Models (APM) and I would like
    to speak to one such APM, Patient Centered Medical Homes
    (PCMHs), which are an innovative model of care that has been
    shown to improve outcomes, patient experience, and reduce
    costs. Physicians in qualified PCMHs will get the highest
    possible score for the practice improvement category in the new
    MIPS program. PCMHs that have demonstrated to the U.S.
    Department of Health & Human Services the capability to improve
    quality without increasing costs, or lower costs without
    harming quality, will not have to accept direct financial risk.
        Physicians in qualified APMs will receive a 5 percent bonus
    from 2019-2024. Technical support is provided for smaller
    practices, funded at $20 million per year from 2016 to 2020 to
    help them participate in APMs or the new MIPS program. Funding
    is also provided for quality measure development at $15 million
    per year from 2015 to 2019 and physicians will retain their
    role in developing quality standards.
        Along with these physician payment reforms, MACRA also
    reauthorized the National Health Service Corps, Community
    Health Centers, Teaching Health Centers and the Children's
    Health Insurance Program (CHIP) all of which will help to
    ensure patient access to primary care.
        Today's hearing will be focused exclusively on the Medicare
    payment reforms and with our expert witness from the Centers
    for Medicare and Medicaid Services (CMS), Members will have an
    opportunity to learn about CMS' work to leverage performance
    measures with new payment models to build a better system that
    improves overall care for our seniors while also reducing
    costs.
        I will now yield to ------------------------------------.

        Mrs. Blackburn. Thank you, Mr. Chairman. Dr. Conway,
    welcome. We are delighted to see you here.
        And as I have been about in my district the last several
    days, one of the things I have heard from health care providers
    and heard at one of my health care town halls over in Bolivar,
    Tennessee, is that population health tools are useful, they
    want to utilize these, and in the Nashville area they want to
    see continued innovation in this arena.
        We are kind of the Silicon Valley, if you will, of health
    care informatics and utilization with all the hospital
    management companies that are there. They have a problem and
    this is that meaningful use has become meaningless in many
    instances, because you have got a few big players in the space
    and in order for innovation to continue there has to be a way
    to address interoperability and the sharing of this and allow
    some of these smaller utilizers and smaller vendors into this
    space so that the APM model can continue.
        So we look forward to visiting with you today. We thank you
    for being here and we will look forward to addressing these
    issues on behalf of our constituents. I yield back.
        Mr. Pitts. The chair thanks the gentlelady. I now recognize
    the ranking member of the subcommittee, Mr. Green, 5 minutes
    for an opening statement.

       OPENING STATEMENT OF HON. GENE GREEN, A REPRESENTATIVE IN
                    CONGRESS FROM THE STATE OF TEXAS

        Mr. Green. Thank you, Chairman, and I thank Dr. Conway for
    being here this morning.
        As we know, the Medicare Access and CHIP Reauthorization
    Act, or MACRA, repealed the flawed Sustainable Growth Rate,
    SGR, formula to provide long term stability to Medicare
    Physician Fee Schedule. It was critically important that
    Congress institute a reasonable and responsible payment policy
    for physicians and reward value over volume.
        The SGR was a budget gimmick which caused unnecessary
    uncertainty for Medicare beneficiaries and doctors. Congress
    had to enact short term patches to prevent physician payment
    cuts called for by the SGR 17 times. These short term SGR
    patches cost taxpayers more than $170 billion and did not
    contain real payment reform.
        Now that the historic achievement of finally repealing or
    replacing SGR has been made, staunch oversight over the
    implementation of MACRA is critical. This will ensure that we
    do not make the same mistakes of the past and that a system is
    set up that is fair, smart, and sophisticated enough to meet
    the unique challenges and variabilities of providers
    participating in the Medicare system.
        As we know, MACRA provides stable updates for 5 years and
    ensures no changes are made to the current payment system for 4
    years. In 2018, it establishes a streamlined and improved
    incentive payment program that will focus a fee-for-service
    system on providing value and quality.
        The incentive payment program referred to as the Merit-
    based Incentive Payment System, or MIPS--we all have these
    abbreviations; it is really interesting--consolidates the three
    existing incentive programs continuing the focus on quality,
    resource use and meaningful electronic health record use, but
    is a cohesive program that avoids redundancies.
        Further, this section provides financial incentives for the
    professionals to participate in tests of alternative payment
    models, APMs. It is the intent of Congress that the specific
    quality metric used to be tailored to different provider
    specialties and each eligible professional will receive a
    composite quality score.
        The challenge is with constructing a system that fully
    accounts for the variabilities in providers and the type of
    care they are trained to provide and patient mix as how to
    meaningful evaluate quality or significance, but I believe it
    can be accomplished.
        To do so, the Centers for Medicare & Medicaid Services,
    CMS, has initiated the rulemaking process. And I thank the
    agency for their diligent attention and hope to see continued
    stakeholder engagement and collaboration in a transparent and
    public process throughout the course of the implementation.
    MACRA has also provided another route to incentivize the moving
    away from the volume based payments by giving financial bonuses
    to providers who participate in alternative payment methods.
    APMs hold great promise, but their variability and
    effectiveness require sophisticated construction and
    implementation.
        I look forward to hearing from the agency through this
    process about its vision of the APMs, specifically how the
    models will be designed so they are relevant to different
    specialties, different sizes of practice and in line with the
    state based initiatives and private insurance models.
        In order to both streamline and fill in current gaps in
    quality measures, the Secretary is required to create and
    publish a quality measure development plan to be used in both
    MIPS and APs with the input from stakeholders by May 1st of
    this year. This plan should prioritize outcome measures,
    patient experience measures, care coordination measures,
    measures of appropriate use of services, and should also
    consider gaps in quality measurement and applicability of
    measures across the health care setting.
        Interoperability, or lack thereof, has plagued the health
    care system since the enactment of the HITECH Act. It is
    important to know that MIPS and thus electronic health record
    meaningful use, even more tied to provider payment, the
    importance of getting to an interoperable system has never been
    greater--interoperability essential to the care, coordination
    and integration, the heart of the move toward a system that
    rewards value over volume and provides cost effective quality
    care to beneficiaries. MIPS is still around the corner and time
    for action is now.
        I look forward to continuing to work with my colleagues. I
    want to thank Chairman Upton, Ranking Member Pallone,
    Representative Burgess, for their partnership and leadership on
    the issue, and thank our chairman for calling this hearing
    today and Dr. Conway for being here. I look forward to hearing
    and continuing engagement with CMS through the process, and I
    yield back 32 seconds.
        Mr. Pitts. The chair thanks the gentleman and now
    recognizes Dr. Burgess, 5 minutes, filling in for the chair of
    the committee.

    OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A REPRESENTATIVE
                  IN CONGRESS FROM THE STATE OF TEXAS

        Mr. Burgess. Thank you, Chairman Pitts. And I will confess
    it is a little bit surreal to be here discussing the
    implementation of this Medicare provider payment reform. So
    many times we were here worrying about how we were going to
    keep the dire wolf away from the door yet one more time to stop
    a substantial double-digit cut to our doctors under the
    Sustainable Growth Rate formula.
        Repeal of the Sustainable Growth Rate formula was one of
    the reasons that I ran for Congress, and coupled with that was
    a sincere desire to help my profession and to help the
    country's patients and to strengthen the state of health care
    in this country. When I ran for Congress and through the years
    that I have served here, the Sustainable Growth Rate formula
    was public enemy number one.
        So we worked for 13 years after I got here to get the SGR
    repealed, and now with the passage of the Medicare Access and
    Chip Reauthorization Act of 2015, having crossed that major
    milestone I also recognize that our work is not done and this
    is going to require a significant amount of care and feeding as
    this program gets started and the implementation continues.
        I just will make the commitment to you, Mr. Chairman, and
    to you, Dr. Conway, at the agency that this will remain my
    highest priority for the time that I remain in Congress.The
    Medicare Access and CHIP Reauthorization Act does represent a
    fundamental change in the health care payment system, a health
    care payment system that had remained static for many years.
        In one of our other subcommittees in Energy and Commerce on
    the Commerce, Manufacturing, and Trade Subcommittee, we are
    focused on what is called the Disrupter Series. I would submit
    that this is disruptive, the MACRA is disruptive in the payment
    system space and it is disruptive by design. MACRA creates an
    unprecedented amount of flexibility and it will allow federal
    policies to keep pace with the speed of innovation and change,
    which we all know is just, it is breathtaking.
        To balance that flexibility there are guardrails placed on
    the roadside that will ensure that implementation is
    responsible, and mostly that it is driven by the needs of
    doctors and their patients and it doesn't follow a political
    agenda or be sidetracked by what might be characterized as
    bureaucratic inertia.
        The Medicare Access and CHIP Reauthorization Act has been
    bipartisan from the start. Two numbers that we all ought to
    bear in mind this morning, 392 aye votes in the House and 92
    aye votes in the Senate in a time of divided government that
    was unprecedented, and it simply, I think, reflects the strong
    desire of certainly members of this committee where, after all,
    is really what kicked this all off was the Energy and Commerce
    Committee, the sincere desire of this committee to see that
    this is done correctly. A common theme in the bill was to put
    doctors and their patients in the driver's seat, and certainly
    I am grateful for the ability for provider and patient groups
    to be able to enter their comments on the Web site at CMS. And
    I have spent, I haven't read all 463 responses, but your
    request for information I thought was timely and it is
    certainly instructive, and we encourage members to look at
    those responses that you have received so far.
        And Dr. Conway, I do want to say that I appreciate the time
    you spend with this committee. I appreciate the time you spent
    coming to my office to talk about this implementation. I
    appreciate your continued commitment. There will be days
    obviously where tempers grow short and friction may be evident,
    but underlying I think we all recognize we have got a major job
    to do for our doctors and patients in this country, and I for
    one intend to see it through. It is critically important that
    we get it right, no less than the future depends upon it.
        This subcommittee, or this committee and this subcommittee
    has worked very hard on the Cures Initiative. We need somebody
    there to deliver the cures when we get them and this is a major
    down payment on keeping doctors involved in delivering care for
    patients. And for that I am so very grateful for the committee
    for having worked hard on it and I am grateful for the agency
    to continuing to put it as a number one priority. I am looking
    forward to hearing about your work so far.
        Mr. Chairman, I will yield back the balance of my time.
        Mr. Pitts. The chair thanks the gentleman and now
    recognizes the ranking member of the full committee, Mr.
    Pallone, 5 minutes for opening statement.

    OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE
                IN CONGRESS FROM THE STATE OF NEW JERSEY

        Mr. Pallone. Thank you, Mr. Chairman, and thank you, Dr.
    Conway, for being here and for all the important work you do at
    CMS.
        We are here today to discuss one of the great bipartisan
    success stories of this committee during this Congress, the
    Medicare Access and CHIP Reauthorization Act of 2015, also
    known as MACRA. Though it seems like just yesterday, it has
    already been nearly a year since MACRA passed the House with
    overwhelming bipartisan support.
        The primary goal of MACRA was to resolve the issue of the
    Sustainable Growth Rate, or SGR, an issue that had haunted
    Congress for years. Created in '97, the SGR had tied the growth
    of Medicare physician payments to growth in gross domestic
    product. However, it wasn't long before Congress realized that
    the SGR was far from sustainable. In order to avoid massive
    payment cuts to physicians in the Medicare program, Congress
    had to temporarily fix the flawed SGR nearly 20 times since it
    was enacted, and these constant doc fixes came at a high price.
         Since 2002, Congress spent more than $170 billion on these
    short term fixes, but none of these short term patches did
    anything to fix the underlying issue. The fee-for-service
    system is broken, incentives were misaligned, Medicare was
    rewarding volume over value and quantity over quality.
        And that is why I am so proud that this body was able to
    work together last year to finally come up with a solution that
    both repealed the SGR and put our health care financing system
    on a path toward rewarding value over volume or quality over
    quantity.
        MACRA put in place a dual track system for providers.
    Providers who chose to remain in fee-for-service are able to do
    so. Instead of the patchwork of quality reporting systems that
    providers currently use, they will instead use the Merit-Based
    Incentive Payment System, or MIPS, and MIPS will streamline
    quality reporting for providers and incentivize high quality
    efficient care.
        Providers can also choose to use alternative payment
    models, or APMs. APMs have proven to increase quality and lower
    costs. Providers who receive a significant portion of their the
    revenue from APMs will be eligible for a five percent bonus.
    And I am especially interested in the potential for
    telemedicine in the new system, both as a clinical practice and
    proven activity in MIPS and as part of alternative payment
    models.
        While I am proud that our committee is such an integral
    part of the passage of this historic bipartisan bill, I know
    that our work isn't done here and that is why I am pleased that
    we are holding this hearing today to check in on the
    Administration's implementation of this law and assess what
    steps we should take to build on its success.
        I now would like to yield the remainder of my time to Ms.
    Matsui.
        [The statement of Mr. Pallone follows:]

                 Prepared statement of Hon. Frank Pallone, Jr.

        Good morning. Thank you Mr. Chairman for holding this
    important hearing today, and thank you Dr. Conway for being
    here and for all the important work you do at CMS.
        We're here today to discuss one of the great bipartisan
    success stories of this Committee during this Congress, the
    Medicare Access and CHIP Reauthorization Act of 2015, also
    known as MACRA. Though it seems like just yesterday, it's
    already been nearly a year since MACRA passed the House with
    overwhelming bipartisan support.
        The primary goal of MACRA was to resolve the issue of the
    sustainable growth rate (SGR), an issue that had haunted
    Congress for years. Created in 1997, the SGR tied the growth in
    Medicare physician payments to growth in Gross Domestic Product
    (GDP). However, it wasn't long before Congress realized that
    the SGR was far from sustainable. In order to avoid massive
    payment cuts to physicians in the Medicare program, Congress
    had to temporarily fix the flawed SGR nearly twenty times since
    it was enacted, and these constant ``doc fixes'' came at a high
    price. Since 2002, Congress spent more than $170 billion on
    these short-term fixes. But none of these short-term patches
    did anything to fix the underlying issue-the fee-for-service
    system was broken. Incentives were misaligned. Medicare was
    rewarding volume over value. Quantity over quality.
        That's why I'm so incredibly proud that this body was able
    to work together last year to finally come up with a solution
    that both repealed the SGR and put our health care financing
    system on a path towards rewarding value over volume. Quality
    over quantity.
        MACRA put in place a dual track system for providers.
    Providers who choose to remain in fee-for-service are able to
    do so. Instead of the patchwork of quality reporting systems
    that providers currently use, they will instead use the Merit-
    Based Incentive Payment System or MIPS. MIPS will streamline
    quality reporting for providers and incentivize high-quality
    efficient care. Providers can also choose to use Alternative
    Payment Models or APMs. APMs have proven to increase quality
    and lower costs. Providers who receive a significant portion of
    their revenue from APMs will be eligible for a five percent
    bonus. I am especially interested in the potential for
    telemedicine in the new system-both as a clinical practice
    improvement activity in MIPS and as part of alternative payment
    models.
        While I am so proud that our committee was such an integral
    part of the passage of this historic bipartisan bill, I know
    that our work isn't done here. That's why I'm pleased that we
    are holding this hearing today to check in on the
    administration's implementation of this law and assess what
    steps we should take to build on its success.
        Thank you, I look forward to today's discussion.

        Ms. Matsui. Thank you very much, Mr. Pallone, and thank
    you, Dr. Conway, for joining us here today. I am pleased that
    the committee came together last year to replace the broken SGR
    system with a new system that should provide CMS with new tools
    to continue on the path of rewarding physicians for value and
    quality rather than volume of services. I look forward to
    hearing today some of your ideas about what will work, and we
    look forward to working with you as we move ahead with the
    implementation.
        I am particularly interested in ways that CMS can
    incorporate telemedicine into these value based systems. This
    is such an important opportunity to leverage existing and
    emerging technology to improve care and reduce costs.
    Telemedicine can accelerate our ability to coordinate and
    integrate care, facilitate population health management, and
    increase access to needed services.
        Mr. Chairman, I would like to ask unanimous consent to
    introduce into the record a letter written this week to CMS
    from the Energy and Commerce Telehealth Working Group which
    highlights these points. We look forward to working with the
    agency to utilize innovation to achieve the goals of delivery
    system reform. Thank you, and I yield to anyone else the
    remaining time.
        Mr. Pitts. Without objection, that will be in the record.
        [The information was unavailable at the time of printing.]
        Mr. Pitts. I also have UC requests. I would like to submit
    the following documents for the record: statements from the
    American Hospital Association, American Academy of Dermatology
    Association, American Society of Clinical Oncology, the College
    of Healthcare Information Management Executives, and the
    Healthcare Leadership Council \1\, without objection. Without
    objection, so ordered.
    ---------------------------------------------------------------------------
        \1\ The full statement can be found at: http://docs.house.gov/
    meetings/if/if14/20160317/104683/hhrg-114-if14-20160317-sd008.pdf.
    ---------------------------------------------------------------------------
        [The information appears at the conclusion of the hearing.]
        Mr. Pitts. That concludes our opening statements, and as
    usual the written opening statements of all members will be
    made part of the record.
        I would like to thank Dr. Conway for coming today. He is
    the Deputy Administrator for Innovation and Quality and Chief
    Medical Officer, Centers for Medicare & Medicare Services.
        Your written testimony will be made a part of the record.
    You will be given 5 minutes to summarize your testimony, and
    thank you very much for coming this morning. Dr. Conway, you
    are recognized for 5 minutes.

       STATEMENT OF PATRICK CONWAY, MD, ACTING PRINCIPAL DEPUTY
    ADMINISTRATOR, DEPUTY ADMINISTRATOR FOR INNOVATION AND QUALITY,
      AND CHIEF MEDICAL OFFICER, CENTERS FOR MEDICARE & MEDICAID
                                SERVICES

        Dr. Conway. Chairman Pitts, Ranking Member Green, and
    members of the subcommittee, thank you for the invitation to
    discuss CMS' work to implement the Medicare Access and CHIP
    Reauthorization Act, or MACRA. We greatly appreciate your
    leadership in passing this important law which provides an
    opportunity for CMS to leverage performance measurement and new
    payment models as a key driver to further our shared goals to
    build a system that achieves better care, smarter spending and
    healthier people, and puts empowered and engaged consumers at
    the center of their care.
        Today, almost 60 million Americans are covered by Medicare
    and 10,000 become eligible for Medicare every day. For many
    years, Medicare was primarily a fee-for-service payment system
    that paid health care providers based on the volume of services
    they delivered.
        Earlier this month, the Administration announced that it
    had reached its goal of tying 30 percent of traditional
    Medicare payments to alternative payment models, 11-plus months
    ahead of schedule. An alternative payment model is a model that
    holds providers accountable for quality and total cost of care
    that they deliver to the population of patients they serve.
    These models provide a financial incentive to coordinate care
    for patients and to achieve better health outcomes.
        Whereas, several years ago, Medicare essentially paid zero
    dollars through these alternative payment models, today 30
    percent of Medicare payments are made through these models.
    This represents approximately $117 billion in payments and is a
    major milestone in the continued effort towards improving
    quality and care coordination. We also reached our goal of
    having at least 85 percent of Medicare payments with a link to
    quality or value.
        MACRA combines three existing quality programs: the
    Physician Quality Reporting System, the Physician Value-Based
    Payment Modifier, and the Medicare Electronic Health Record
    Incentive Program into one aligned, new program, the Merit-
    Based Incentive program, or MIPS, beginning with payments in
    2019.
        Physicians and other clinicians will be evaluated under
    MIPS based upon a single composite score which will factor in
    performance on four weighted categories: quality, resource use,
    clinical practice improvement, and meaningful use of EHR
    technology. We are in the process of developing a scoring
    methodology that is meaningful, understandable and flexible.
    Our goal is for the program to be meaningful both to physicians
    and clinicians and the patients they serve and help shape our
    system for the better.
        In implementing MIPS, we are committed to building a
    program that fulfills the goals of advancing quality and value
    while being adaptive to the needs of each clinician's
    individual practice and patient population. CMS is in the
    process of gathering or viewing feedback from patients,
    physicians, providers, payers, government, businesses, and
    other stakeholders regarding many of these topics.
        In particular, we have been working side by side with the
    physician and consumer communities to address needs and
    concerns about the Medicare EHR Incentive Program as we
    transition it to MIPS. We aim to develop policies that will
    reward providers for the outcomes technology helps them achieve
    with their patients, provide flexibility to customize health
    technology to individual practice needs, and increase
    interoperability and promote innovation by encouraging the flow
    of data necessary to meet the needs of patients.
        With a large majority of physicians and other clinicians
    who will be required to participate in the MIPS program,
    Congress did establish exceptions in certain situations
    including those clinicians participating in eligible
    alternative payment models, or APMs.
        Professionals who meet certain thresholds of participation
    in these eligible APMs will be exempt from MIPS and receive a
    five percent incentive payment. While the statute establishes a
    high bar for these eligible APMs such as more than nominal
    risk, we will continuously search for opportunities to expand
    the range of options for participation in eligible APMs within
    the contours of the statute.
        It is our intent to align MIPS and APM components of the
    new payment system allowing maximum flexibility for clinicians
    who are not ready or choose not to participate in an eligible
    APM and instead choose to participate in the MIPS program. Both
    MIPS and APMs are viable choices for physicians and other
    clinicians, and our goal is to enable that choice. MACRA will
    help Medicare move towards rewarding value and quality of
    physician service not just the quantity of such services.
        As a practicing physician who has also led quality
    improvement efforts in health systems, I know the importance of
    quality measurement improvement. I have led work to improve
    quality and safety across the health system, such as measuring
    patient outcomes or rapidly implementing best practices.
        We are at a critical juncture. We must demonstrate to
    clinicians and patients both the value of these new payment
    programs established by MACRA and the opportunity to save the
    health system of the future. The program must be meaningful,
    clearly focused on improved patient outcomes, contain
    achievable measures, engage physicians and other clinicians,
    and enable improvement over time.
        Moving forward we will continue to pursue a patient-
    centered approach that leads to better care, smarter spending,
    and improved patient outcomes. The program must be meaningful,
    understandable and flexible for participating clinicians. It is
    our role and responsibility to help lead this change and to
    continue partnering with lawmakers, physicians and other
    providers, consumers and other stakeholders across the nation
    to make a transformed and improved health system a reality for
    all Americans. We all want the best care possible.
        We look forward to working with you as we continue to
    implement this seminal piece of legislation which we thank you
    for, and Happy St. Patrick's Day. Thanks.
        [The statement of Dr. Conway follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Pitts. Thank you very much for that. We are now voting
    on the floor, so we are going to start the questioning and then
    recess and come back. I will begin the questioning and
    recognize myself 5 minutes for that purpose.
        Dr. Conway, MACRA provided great flexibility in its effort
    to streamline the three major physician quality reporting
    systems. It did this by sunsetting and reconstituting them into
    a single reporting system, MIPS, Merit-based Incentive program.
    This provides CMS an opportunity to reevaluate these programs
    and make changes to them that furthers the legislative goals of
    coordination and ease of reporting. Administrator Slavitt has
    made comments regarding meaningful use, for example, that
    appear to recognize this flexibility.
        Question, will CMS embrace this flexibility to eliminate
    duplicity, reduce redundancy, and increase effectiveness and
    simplicity in physician reporting?
        Dr. Conway. We will embrace this flexibility. If it is OK I
    will add just a bit more. Specifically, we have tried to align
    various programs on the back end, if you will, of this statute.
    One of the beauties of the statute is it puts them all, as you
    said, in one program focused on quality and value.
        Specifically, we are looking at each area and how we make
    it flexible and meaningful to physicians and patients, and on
    the meaningful use arena we do think the statute gives
    additional flexibility to really focus on interoperability,
    outcomes for patients, simplifying the program and making it as
    meaningful as possible to physicians, clinicians, and the
    patients they serve.
        Mr. Pitts. Would you expand on CMS' plan to develop
    appropriate awareness among providers of what is required to
    succeed in MIPS and the APMs.
        Dr. Conway. Yes. We think this is a critical factor in
    terms of awareness and engagement of physicians and clinicians
    both in shaping the program and then ultimately being
    successful.
        I will give you a few of the aspects that we are focused on
    and working on. One, we want to thank you for the technical
    assistance funding that you provided especially focused on
    small rural practices and practices that serve underserved
    populations. So we think that technical assistance funding will
    help us support physicians and clinicians to be successful.
        We are also broadly, through our QIO program and a
    Transforming Clinical Practice Initiative, which is over a $650
    million investment over 4 years, trying to support physicians
    and clinicians to improve quality and lower costs. In addition,
    I met with AMA yesterday, and we meet with specialty societies
    all the time about how do we leverage these societies and
    organizations that physicians and clinicians trust and work
    with, to work with whether it is GI physicians or
    ophthalmologists or whatever the special society, really to
    deeply engage their own set of physicians and clinicians so
    they understand the program and can be successful.
        Mr. Pitts. In the short term, would you describe CMS'
    approach to quality as more focused on ensuring providers are
    ready to transition to qualified APM or in simply getting more
    providers in the value based payment arrangements?
        Dr. Conway. That is a good question. I think it is both,
    and then let me describe. So, one, the good news on quality
    reporting is that many years ago when I started we had a
    fairly, we had a minority of physicians and clinicians
    reporting quality. We now in 2014 had over 800,000 eligible
    professionals, physicians and clinicians reporting in the
    Physician Quality Reporting System.
        This statute allows us to move that to the next stage, if
    you will, to really have a whole program, as you said, focused
    on quality and value. The goal is to have not only the vast,
    have the vast majority as close to all physicians and
    clinicians as possible to be reporting and reporting
    successfully and then measuring their value and improving over
    time.
        In addition, as you mentioned, for those physicians and
    clinicians that want to move to eligible alternative payment
    models, we want to help them make that transition. And we are
    really engaging deeply with physician and specialty societies
    and encouraging them to develop the alternative payment models
    that may be most relevant to that specialty, bringing those
    forward to the--sorry to use more acronyms--PTAC committee that
    was part of the legislation so that they could then make
    recommendations to CMS.
        So we think that deep physician/clinician engagement and
    enabling those physicians and clinicians when they are ready to
    make that choice to move into an eligible alternative payment
    model is a goal. But some physicians and clinicians may choose
    to stay in MIPS, and that is OK. It is a choice to be made by
    those physicians and clinicians.
        Mr. Pitts. Just very quickly, have physician groups
    expressed to CMS that they are satisfied with the interaction
    so far with CMS on MACRA development?
        Dr. Conway. So I would say we interact significantly with
    physician and clinician groups. I also think you almost can't
    do too much. So with any request for an interaction we do have
    that interaction. I still, to get--it is over a million
    physicians and clinicians across America, so I think we will
    need to continue to work on this to really engage down to the
    front line.
        Mr. Pitts. Thank you. We have got 8 minutes left on the
    floor vote. The chair recognizes Mr. Green, 5 minutes for
    questions.
        Mr. Green. Thank you, Chairman. And we are here almost a
    year after the passage of MACRA. Although it has only been a
    year, it is important we take a moment to remember how we
    arrived at this moment. As we know, MACRA Medicare providers
    were subject to the Sustainable Growth Rate formula, the SGR.
    Dr. Conway, can you explain the basics of the SGR and why it
    wasn't working, so we don't repeat it again?
        Dr. Conway. Yes. So the basic says, where certain targets
    weren't met, then you were going to have what became more and
    more dramatic reductions in payments that were a blunt tool. I
    think the beauty of the legislation is you put in place an
    overall quality and value program in MIPS and an ability to
    incentivize quality and value and also the eligible alternative
    payment models for population health management.
        Mr. Green. Well, my next question is why was it that
    Congress deemed necessary to provide a total of 17 temporary
    patches between 2003 and 2014? I can tell you that because
    Congressman Burgess and I were here. It was because we wanted
    doctors to actually serve Medicare patients and that is the
    fear of it. How do you foresee that MACRA fixing this perennial
    issue?
        Dr. Conway. Yes. I think the MACRA statute does, as you
    say, is a major steps forward in fixing this issue. I think,
    specifically, the MIPS program is much more understandable. We
    will need to think about branding and how we communicate with
    less acronyms if possible.
        But I think when I--I was just talking to a group of GI
    physicians last week. I think one program makes much more sense
    to them than individual separate programs. Two, a stable
    predictable future makes much more sense to them than not
    knowing what the next year or the next several months might
    hold in terms of payments.
        And then I do think the eligible alternative payment
    models, we have been excited about the number of physicians and
    clinicians beginning to think about what is the alternative
    payment model for their specialty, for their area of practice,
    and are hopeful that they come forward with many great ideas on
    eligible alternative payment models.
        Mr. Green. I think what CMS is doing to reach out to the
    specialties and of course everyone to get their input in how we
    can do it. Practice transformation is an expensive and time-
    consuming process for small practices and few of them have
    resources to tackle it. Challenges invariably in these
    practices differ greatly whether the practice is independent or
    only have one or two physicians and is part of a larger system
    with physicians as employees. The problems are different for
    practices that are rural, where the available technical and
    support resources are scarce, or urban where these resources
    are so expensive. And what is CMS considering in setting up
    this program of technical assistance to support small clinical
    practices for effective participation in both MIPS and APs?
        Dr. Conway. Yes. So I think you hit on a key issue. This
    technical support is critical. I actually grew up in not a
    large town in Texas cared for by a family practice, and many of
    my family members are in private practice across the U.S.
        First, on the funding that was provided, we will look to
    utilize that funding as described to focus on small rural
    practices plus practices that serve underserved patient
    populations, because we think that is a critical set of
    practices to work with. We will likely do the funding in a way
    similar to how we have done other funding, where we fund
    entities and networks that have a history of working with these
    practices and working with them successfully and are trusted
    partners.
        So things like Partnership for Patients we funded networks
    that work with hospitals. We are looking at likely funding,
    putting out an RFP that would fund networks working with these
    practices that are trusted partners to help them be successful
    in these programs. And those could be state, regional or
    national focused on a given specialty area.
        Mr. Green. Mr. Chairman, I am proud our committee did the
    work to repeal the SGR, but I also know I am hopefully to have
    these continual hearings and get reports back from CMS to
    support systems that CMS envisions and how to ensure that
    information feedback provided to clinicians and practices are
    clear and actionable. So, but anyway, and I will yield back my
    time.
         Mr. Pitts. The chair thanks the gentleman. We still have a
    couple minutes left on the floor vote, so if it is all right
    with you we will take a brief recess. We will be right back.
    The committee stands in recess for floor votes.
        [Whereupon, at 10:35 a.m., the subcommittee recessed, to
    reconvene at 10:56 a.m., the same day.]
        Mr. Pitts. We will reconvene the subcommittee hearing, and
    the chair recognizes Dr. Burgess, 5 minutes, for questions.
        Mr. Burgess. Thank you, Mr. Chairman. Again, thank you, Dr.
    Conway, for being here.
        Can I just ask you a brief question about the Physician
    Technical Advisory Committee and how you see that interfacing
    with the CMMI stuff, the center for Medicare and Medicaid
    improvement? As I understand, with the Physician Technical
    Advisory Committee there is an obligation to evaluate those
    things that are brought forward and that the agency is required
    to respond. Is that correct?
        Dr. Conway. That is correct.
        Mr. Burgess. So in the request for information that you
    have had so far, has anything that would trigger the PTAC, has
    that come up?
        Dr. Conway. No. So the Physician Technical Advisory
    Committee, or PTAC, has been established, as you know, and a
    set of members that very well qualified experts across
    physicians and non-physicians. We look forward to models being
    sent forward to the Physician Technical Advisory Committee from
    physicians, specialty organizations, and others, and then as
    you say, the PTAC, the advisory committee evaluating those
    models and then making recommendations to CMS and then we would
    respond to those recommendations.
        But we think that process could yield some excellent models
    for us to implement. And I think the first stage, which I know
    we have talked about, but the first stage of that process is
    critical. The physicians and specialty sides, when I interact
    with them now I encourage them to start working on what they
    think those models would be so that they can send them forward
    to the PTAC for consideration.
        Mr. Burgess. And when, just so I will know, when do you
    expect that to start occurring?
        Dr. Conway. Yes. So the Physician Technical Advisory
    Committee, the Assistant Secretary for Planning and Evaluation
    is the lead, internally, in the department for convening that
    committee. What the department has said is that they expect to
    finalize criteria in the fall and then will be asking for
    models at that point.
        I also, when I meet with physicians, specialty societies
    and others, I say CMS and CMI can always take input. So we
    interact on models with groups often, so we are happy to take
    ideas prior to that time as well.
        Mr. Burgess. Well, as I referenced in my opening statement,
    I mean, no rollout is perfect and there is always going to be
    points of friction. Recently, I had an opportunity to go
    through the Inspector General's report on healthcare.gov, so it
    was like a walk through memory lane for me.
        But with ICD-10 a lot of things that I worried about the
    implementation of ICD-10, that from what I can tell those
    problems have been manageable. But one of the takeaways, I
    think, from the Inspector General's report was the ability to
    have contingency plans, the ability to have a system that will
    work in place of the big system if it doesn't work.
        So what are we looking at during your transitioning period?
    What sort of contingencies are you building into the system?
        Dr. Conway. It is a great question. Mr. Slavitt and myself
    are working, have a management structure very similar to what
    we did in ICD-10 where we identify it is a high priority arena.
    On MACRA implementation we have, literally, weekly meetings,
    with work in between those meetings with Dashboards, et cetera,
    to go through where we are in the process and the structure,
    both the policy and the operations.
        Also to your point with contingency plans on if certain
    aspects of implementation have difficulty what is our
    contingency plan. As you alluded to, we agree with you that
    this is a critical, important piece of high priority
    legislation, so we will manage it that way. I think the last
    thing--sorry--just to mention similar to ICD-10 we are doing
    engagement now with physician and clinician groups to help us
    with the implementation.
        Mr. Burgess. One of the things that is so critical that
    doctors get into the correct merit-based incentive payment
    schedule or the eligible alternative payment method, and so you
    are aware of the fact that you need people to get to where they
    need to go even if they may not understand how it is they need
    to get there?
        Dr. Conway. Yes. I should mention Mandy Cohen is also
    positioned very active in the management. Yes, we are aware. I
    think we need to interact in a bidirectional, communicative
    manner to help outline the pathway and also help people succeed
    along that pathway, including for eligible alternative payment
    models if that is the path they choose.
        Mr. Burgess. Mr. Green made fun of the fact that there were
    so many TLAs--that is three-letter acronyms--in the bill.
        Dr. Conway. Yes.
        Mr. Burgess. I regret that it was necessary, but sometimes
    for the economy of language you just have to pursue those,
    hence, your agency being called CMS, when in fact it is the
    Center for Medicare & Medicaid Services.
        Thank you, Mr. Chairman. I will yield back.
        Mr. Pitts. Thank you. The chair recognizes the gentlelady
    from California, Mrs. Capps, 5 minutes for questions.
        Mrs. Capps. Thank you, Mr. Chairman. It will be hard for me
    to top that one. But I appreciate you being here today and for
    your testimony, and thank you, Chairman Pitts and Ranking
    Member Pallone, for holding this important hearing.
        The passage--well, here goes the acronym--MACRA was the
    culmination of many years of work to move beyond the flawed
    SGR. It was an important compromise that showed how well this
    committee can work when we put aside our differences and focus
    on a common goal. MACRA passage was a notable achievement that
    put this on the path to rewarding quality and value instead of
    just quantity and volume of care.
        The only way to truly move to a more quality based system
    that is accessible to all who need it is to ensure that we have
    the health care workforce available and engaged in providing
    the care. And that means we need the engagement of physicians
    and nonphysician health care providers alike. And I am
    referring in my questions especially to nurses.
        When we think about the delivery of health care and all the
    innovations taking place in this area, terms such as
    coordination, patient-centered, integration are often used.
    These ideas that we are finally starting to realize in the
    broader health care system have long been the tenets of nursing
    practice. Patient-centered care, continuity, coordination in
    cross settings, disease management, patient education, the list
    goes on. Nurses, especially advanced practice nurses are, by
    nature of their training and licensure, leaders in these areas.
        Dr. Conway, can you elaborate on why it is so important
    that non-physician providers like nurse practitioners are
    included, not replacing but included in the delivery care
    system reform?
        Dr. Conway. Yes. Thank you for the question. I think the
    integration of nurses and advanced practice nurses and the
    whole care team is critical for this success. I can tell you,
    and it sounds like you know very well that what we are seeing,
    for example, in our accountable care organizations, our
    advanced primary care medical homes, they truly operate as an
    integrated care team, so physicians, nurses, medical
    assistants, and sometimes community health workers and others
    across the medical neighborhood focused on population health
    management.
        Both from being married to a nurse and still working with
    nurses and other health care professionals, that care team
    aspect and coordination across the care team and leveraging the
    talents of the entire team are going to be critical to the
    success in these alternative payment models.
        Mrs. Capps. Thank you. Nurses, it is my conviction at least
    that nurses are the backbone of the health care delivery
    system. Nurses do health care delivery with more than 2.7
    million qualified professionals providing care to America's
    patients, including our nation's servicemen and women.
        And more than any other health care provider, nurses spend
    time at their patient's side whether in the public setting,
    home setting or acute care, and they monitor the full scope of
    their care. So they are a critical part of the patient's care
    team in a variety of settings, as I mentioned earlier,
    including the emergency room, the health clinic, the long-term
    care setting, anywhere you might find someone needing medical
    care, health services, you will be requiring this team
    approach. That is one of the best parts of what we are
    discussing today, in my opinion.
        So what are some of the ways that nurses are being
    incorporated into the new innovations that are occurring as a
    result of MACRA?
        Dr. Conway. Terrific question. I will just give you a few
    examples.
        Mrs. Capps. Sure.
        Dr. Conway. Our bundled payment initiatives, you have
    nurses both in hospitals and long-term care settings and others
    as the primary care coordinator. So we have examples, including
    successful entities on bundled payment for things like
    surgeries or medical procedures, where their critical
    intervention is nurse care management both in the hospital and
    then outside the hospital and into the home, so home health
    nursing, et cetera, as well.
        Our Comprehensive Primary Care Initiative practice in rural
    Arkansas where the physician leadership will talk about the
    nurse care managers and their nursing care is the critical
    success factor in their primary care medical home. I could tell
    you more stories in accountable care organizations than others,
    but this, the whole health care team, and I think especially
    nurses, are critical parts of success in these models.
        Mrs. Capps. And there are some specialized positions within
    nursing. It is not just one entity. It is a broad spectrum of
    entities that some come from management, some from delivery of
    service. It is a very complex model, but also one that with the
    right kind of coordination is very possible to deliver and cuts
    down on duplication in so many areas. So we are talking the
    same language, it sounds like, and I will yield back to the
    chairman.
        Mr. Pitts. The chair thanks the gentlelady and now
    recognizes the vice chair of the subcommittee, Mr. Guthrie, 5
    minutes for questions.
        Mr. Guthrie. Thank you. Thank you, Mr. Chairman, and I
    thank you, Dr. Conway, for coming today. I appreciate it.
        Recently the agency announced that 30 percent of payments
    were tied to quality. However, the definition used does not
    necessarily comport to the definition of qualified alternative
    payment models under MACRA. So the question is, or a series of
    questions here.
        Do you envision all of these programs as qualified APMs? If
    not, how many might qualify? And conversely, what are the major
    issues you see in having these quality linked payment programs
    qualify as eligible APMs and for the bonus payments provided by
    the statute?
        Dr. Conway. Yes. So the definition that the agency has used
    for eligible alternative payment models is that the provider is
    accountable for quality and total cost of care for a
    population, either an ACO could be for year or a bundled
    payment for an episode of care.
        The Health Care Payment Learning and Action Network,
    actually, which is a public-private partnership including many
    payers, providers, et cetera, adopted a very similar definition
    with some subcategories--sorry for the long answer--and one of
    those subcategories talks about the level of financial risk.
        So I think the key, there are some key phrases in the
    statute that the CMS will have to propose how to define, so one
    of those in eligible APMs is more than nominal risk. So we will
    have to define what more than nominal risk means from the
    statute. We are going to make a proposal on that and we will
    seek comment on that. That will be a factor in how many of the
    current alternative payment models, some of which are ones are
    one-sided risk, currently, so the question will be how do we
    define more than nominal risk, will be an example of one of the
    key questions.
        Mr. Guthrie. OK. And also under MACRA, the first APM
    payment update is scheduled for 2019. What will CMS identify as
    the performance period for assessing whether a physician is a
    qualifying APM participant for the 2019 APM payment update?
        Dr. Conway. Yes. So a number of the requests for
    information comments, and the agency is dealing with this now,
    and as I think you know we will put out a proposed rule this
    spring, so we are working on that expeditiously now.
        Historically, what we have done is had a performance period
    that is 12 months, then often providers have wanted 3 or 4
    months to finish reporting on quality measures, et cetera. So
    right now, there is a performance period for Physician Quality
    Reporting System which was 2015, and providers are reporting
    their quality measures through about the middle of April.
        Then there is claims processing, et cetera, to make the
    payments what ends up being 12 months after the end of the
    performance period, about eight months after the end of the
    finishing reporting quality measures, et cetera. We are looking
    at that now and determining is that the right structure.
        I will say, a few years ago we asked physician and
    clinician groups did they want to do quarterly reporting like
    hospitals which allows for more rapid feedback. We heard at
    that time people did not want to do that. They wanted an annual
    reporting cycle. But we will be making a proposal on the
    performance period and look forward to your feedback and others
    about that.
        Mr. Guthrie. OK. Thanks. And also, some physicians also
    make us aware that instead of actually driving quality practice
    and furthering medical information exchange, sometimes
    Medicare's quality efforts have served to turn providers into
    click and check data clerks. I think you have heard that as
    well. What is CMS doing to ensure MIPS is designed with an eye
    towards driving quality that is relevant to all individual
    practices?
        Dr. Conway. Yes. So our goal is for the quality measure
    programs to enable measurement that is meaningful, and
    improvement. I will give you an example where I think we are, I
    was with the GI physicians last week speaking at a conference.
    Participation in these programs have gone up dramatically. They
    are using a qualified clinical data registry which they
    developed and it includes outcome measures that they feel are
    meaningful for their specialty. And we have deemed that is a
    qualified data registry and can meet criteria for our programs.
        Their participation in that room, 70 to 80 percent of the
    people, actually, probably 80-plus in that room, nationally a
    huge percentage of the GI doctors using that registry, and what
    they reported is that to them it feels seamless. They do
    clinical care. They do clinical care the way they would with
    any patient.
        It is measuring outcomes, it is giving them feedback, and
    it is being used for reporting. We need more examples.
    Ophthalmology, similar, has done that. We need more examples
    where we work with specialty societies to have measures that
    are meaningful to them and their physicians and clinicians, and
    those also can be used for our payment program.
        Mr. Guthrie. I do have a final question, so I am about to
    lose time. And my question was rather than one-size-fits-all,
    the MIPS was designed for you to have these relevance's of
    individual specialties, and I was going to ask you how CMS is
    approaching that implementation, and the law allows you. It
    sounds like you are doing it by having input. I know I have
    just ran out of time, but input from the individual specialty,
    I think, is very important to the----
        Dr. Conway. OK, if I answer briefly, so yes, input from the
    various specialties. We have also done some work with
    specialties and payers on core measure sets for various
    specialties in aligning across the public and private sector.
    So those are a few examples we are trying to make this
    meaningful to the diversity of specialties.
        Mr. Guthrie. Thank you. Thank you for your answers. I yield
    back.
        Mr. Pitts. The chair thanks the gentleman and now
    recognizes the gentlelady from Florida, Ms. Castor, 5 minutes
    for questions.
        Ms. Castor. Thank you, Mr. Chairman. Good morning, Dr.
    Conway.
        Dr. Conway. Good morning.
        Ms. Castor. Happy St. Patrick's Day to you.
        Dr. Conway. Thank you.
        Ms. Castor. I want to congratulate you and everyone at the
    agency for the progress that has been made so far. Even before
    the Congress passed MACRA and it was signed by the President,
    the agency had already embarked on many of these payment
    reforms. And it must be very gratifying for it to come to
    fruition. I know it is for us as we continue to grapple with
    how we move from volume to value and continue to tackle the
    challenges of the aging population in the U.S.
        The flawed SGR formula was well overdue and it was great
    that we could bring in as part of the repeal significant
    reforms. It came with a lot of new changes. One is the way we
    define and characterize quality in our health care delivery.
        One concern that I have heard back home is that the pre-
    MACRA set of quality measures often became an administrative
    difficulty for providers to collect and organize and submit.
    Can you give folks some assurances now on how MIPS will change
    the quality reporting system for providers, and do you expect
    MIPS to help providers focus more on patients rather than
    paperwork?
        Dr. Conway. Yes, so thank you for the kind words and the
    question. A few examples, and I do think this is a critical
    issue. One, I think the flexibility in MIPS allows the agency
    to lower the burden of reporting, so to make it more
    meaningful, part of the clinical work flow, et cetera, focus
    more on outcomes measures less on process.
        We will need to continue to have partnership and help from
    the various physician, clinician and specialty sides. To
    elaborate a little bit more, we have some great examples of--
    the ophthalmologists report that 75 percent of ophthalmologists
    in the country now are using their registry, using it in a way
    that they find meaningful to their practice and reporting on
    quality including outcome measures.
        We have other specialties that maybe don't have registries
    or electronic health record mechanisms yet and are still doing
    G-code claims and mechanisms that people find, and we have
    evaluated this, less meaningful to quality improvement.
        The goal is to maximize electronic health record reporting
    and registry reporting that is more meaningful for quality
    improvement, focus on outcome measures that are meaningful to
    physicians and their patients. And this public-private sector
    alignment piece, I think, is critical. I used to work for a
    provider where I had to report quality measures to the various
    entities that wanted quality measures, so aligning across
    public and private payers will help physicians report on an
    aligned set of measures.
        Ms. Castor. One of the strengths of the law is that it
    allows some flexibility among the medical specialties. They can
    have a say in the quality measures that apply to them. On the
    other hand, we don't want providers to take the easiest
    pathway. As you move forward with rulemaking, what overarching
    principles will CMS employ to ensure that there are enough
    appropriate and relevant quality measures in place?
        Dr. Conway. Yes, a few things there. Terrific question.
    One, we are considering how you would have central flexibility
    in what measures are reported, but still the ability to focus
    on outcome measures and more cross-cutting measures.
        Two, in our qualified clinical data registries and that
    reporting mechanism, how do you allow flexibility but also the
    ability, for example, to validate or audit data to ensure that
    quality improvement is occurring? And we do that in our
    hospital systems. So it is how do you take some of this
    learning from the hospital side into the diverse physician side
    of quality.
        And then lastly, on the measure development there was
    funding in MACRA for measure development, so we plan to utilize
    that funding to develop the next generation, if you will, of
    quality measures for physician and clinician measurement.
        Ms. Castor. Well, I want to thank you again. It is pretty
    remarkable. I will run into doctors in the grocery store or at
    various events and they want to jump right in and talk about
    all these things, and I bet some of my colleagues are
    experiencing some of the same things.
        But the goal eventually is to ensure that our neighbors can
    live longer and healthier and not just get the test or medicine
    earlier. I know those are your shared goals too, so I will look
    forward to collaborating with you on this as we move forward.
        Dr. Conway. Thank you.
        Ms. Castor. Thank you very much.
        Mr. Pitts. The gentlelady yields back. The chair now
    recognizes the gentleman from Illinois, Mr. Shimkus, 5 minutes
    for questions.
        Mr. Shimkus. Thank you, Mr. Chairman. Welcome, Dr. Conway.
    Kind of following up on Congressman Guthrie's questions, how
    many qualified alternative payment methods do you envision once
    we get into implementation. Do you have a universe? Do you
    know?
        Dr. Conway. Yes. So I think the eligible alternative
    payment models, we will make proposals on this as I said, but I
    think the eligible alternative payment models, we will have a
    reasonable set of eligible alternative payment models, I think,
    in the early years, and we hope that to grow over time.
        So I think we talked a bit about a physician technical
    advisory committee and other methods to have more specialty
    oriented, eligible alternative payment models over time, but
    our expectation is we will have a reasonable set of eligible
    alternative models out of the gate, and then we will work with
    physicians and clinicians so those number of models that meet
    the criteria in the statute grow over time.
        Mr. Shimkus. And it will again, a mechanism to reevaluate
    and refine, because obviously modern medicine changes so
    quickly and so that there would probably be new variables in
    the process.
        Dr. Conway. Yes. So yes is the short answer. We think both
    the list, if you will, of eligible alternative payment models
    will be refined over time and probably some will be added and
    some may move off the list, depending, and also the actual
    models. I mean, this is true of the innovation center models
    now. We will make adjustments frequently based on feedback.
        One of my calls before the hearing this morning was with a
    provider organization on one of our models giving us feedback
    that some of the eligibility criteria for the patients in the
    model may need to be adjusted. So we take that kind of feedback
    and make adjustments frequently based on feedback from
    physicians, clinicians or patients or others in the health
    system.
        Mr. Shimkus. So for the 2019 APM update, obviously we are
    not there yet, and if folks are qualified when would a 5
    percent distribution be paid? Do you have any idea? Have you
    gamed that out?
        Dr. Conway. Yes, so our goal operationally would be to have
    a performance period that allows us then to make the five
    percent incentive payments at the start of the given payment
    period. So our goal would be to have the payments start in the
    beginning of 2019.
        Mr. Shimkus. And let me just finish with this one. I was
    interested in your response on the trying to define nominal
    risk.
        Dr. Conway. Yes.
        Mr. Shimkus. So, and I don't know, Mr. Chairman, if in the
    report language of the bill if whether there was report
    language that addressed that at all. Do you know if there was?
        Dr. Conway. I do not know for sure, sir. We could check on
    that.
        Mr. Shimkus. Yes. And my point being obviously, there is
    always the debate here in Washington about us being specific or
    being vague and the agency then doing the definition, and which
    is leading, I think, many of us to say we have to be more
    precise so that maybe a definition might go awry of the intent
    of the legislative branch. So we want to be careful that we are
    not calling you back in and then having this big fight of why
    was your definition of the nominal risk different than what we
    intended in the passage of the legislation.
        Dr. Conway. Yes, so our goal as well would be to align with
    congressional intent and the statute. Obviously the statute is
    what we work with from a rulemaking standpoint. So more than
    nominal risk, we think, is a good guidepost. We will make a
    proposal based on that statute. Obviously if you have feedback
    on that proposal, or if at some point you want technical
    assistance on any statutory changes we would provide that.
        Mr. Shimkus. OK. Mr. Chairman, that is all I have. Thank
    you very much. I yield back.
        Mr. Pitts. The chair thanks the gentleman and now recognize
    the ranking member of the full committee, Mr. Pallone, 5
    minutes for questions.
        Mr. Pallone. Thank you, Mr. Chairman, and thank you, Dr.
    Conway, for joining us today.
        Ever since the passage of the Affordable Care Act our
    nation's health system is in the midst of unprecedented reform
    and MACRA has accelerated many of these improvements. And one
    of the reforms that I believe may be among the most crucial is
    our shift away from paying for volume and towards paying for
    value.
        So, Dr. Conway, the Administration has set goals to
    rounding Medicare's shift toward alternative payment models.
    You mentioned this initiative in your testimony, but can you
    elaborate on CMS's efforts?
        Dr. Conway. Yes, thank you for the question and I could
    talk a long time on this so I will try to be brief. I have been
    working on health system transformation for quite a while, both
    outside of government and in government, and I think the
    progress in the last 5 years is substantial, the last 3 to 5
    years.
        Some of those numbers I gave you would sound like just
    numbers when you go through them, almost zero percent in
    alternative payment models to 30 percent. That is 2011 to the
    beginning of 2016 numbers, so fairly rapid period of time, $117
    billion. And the important part is not just the dollars, but
    what it means for patients. I mean, we can't recount all the
    stories, but advanced primary care medical homes where the
    patients love the care they are receiving, it is well
    coordinated, they understand what they need to do, and a
    physician will tell me, I am finally practicing medicine the
    way I want to after many, many years.
        Our ACO models have grown where we are serving almost 9
    million Medicare beneficiaries and growing, so a huge number of
    beneficiaries in accountable care organizations, including my
    own mother. And so I think the level of transformation that you
    have enabled through the statutory language CMS has tried to
    help catalyze, and then importantly, really driven by states,
    communities, providers, people moving forward and helping drive
    the change, I think it has made our care system quality
    results, over 90 percent of our quality measures improved
    significantly in the last 3 years.
        Safety results, safer in the hospital today than
    previously; cost results, lowest cost growth in many years. We
    have got to keep going though. There is more work to do and we
    want to do that with you. But I think the opportunity here for
    improvement on behalf of patients in the system is huge. We
    have made a lot of progress and we will have to continue to
    accelerate that progress. Sorry for the long answer.
        Mr. Pallone. No, that is all right. In that vein I know you
    have mentioned that CMS has already mentioned its first
    benchmarks, achieving the 30 percent payments through
    alternative payment models this year, but just give me some
    more information about efforts undertaken that build on this
    momentum.
        Dr. Conway. Yes, so I think we have a number of new models.
    We do have a goal by the way to achieve at least 50 percent by
    the end of 2018, so we are still on that trajectory. I think a
    number of new models we are excited about. We have a model for
    episode-based payment for joint replacement that will be
    starting April 1st. When I interact with hospitals and
    physicians and they say what that means to them in terms of
    coordinating care across a 90-day episode for a patient that
    needs a hip and knee replacement, which is a very common
    procedure in Medicare, I think a huge opportunity for
    improvement. And we saw that in an earlier model on hip and
    knee where it improved quality, lower cost.
        We have an oncology model we are hoping to announce, the
    oncologists that came forward, but a very robust response from
    oncologists saying they want to do episode based care for
    oncology cancer care, deliver the care they know is better. And
    they are partnering with us and other payers so that is a
    multi-payer model.
        So we think there is a number--so both of those will add to
    the alternative payment model numbers I gave you and are just a
    few examples of how we think these programs and alternative
    payment models will continue to expand over time and improve
    care for patients.
        Mr. Pallone. OK. And I only have a minute left. But one
    issue that hasn't been raised as much here today is the
    alignment between Medicare and Medicaid. MACRA specifies a
    participation and certain Medicaid payment models could allow a
    provider to meet Medicare's all-payer APM targets. Is alignment
    between Medicare MIPS and APMs and Medicaid a priority for CMS?
        Dr. Conway. Yes, definitely, and I will even broaden it a
    bit, alignment between Medicare and Medicaid and commercial
    insurers as well. So I think we are doing a lot of work at the
    state level, for example, and nationally to align on quality
    measures on approach to payment models. Our Health Care Payment
    Learning and Action Network has put out proposals on alignment
    for ACOs, alignment in bundled payment. We think that Medicare,
    Medicaid and private sector alignment is critical to success.
        Mr. Pallone. All right. Thanks a lot. Thank you, Mr.
    Chairman.
        Mr. Pitts. The chair thanks the gentleman and now
    recognizes the gentleman from Indiana, Dr. Bucshon, 5 minutes
    for questions.
        Mr. Bucshon. Thank you, Mr. Chairman, a couple comments and
    then a quick question. I think Congressman Shimkus talked about
    Congress and its prescriptiveness and as it relates to PTAC
    recommendations. We will be following that as you probably know
    in seeing where CMS is, and if CMS turns out repeatedly and
    really doesn't follow, take or follow some of the
    recommendations, then we may even need to ask further questions
    about that and have more prescriptive legislation involved.
        The other thing is, and we mentioned this at Doctors Caucus
    a few months or so ago, I would encourage CMS to consider
    pausing the meaningful use program implementation and
    reassessing how physician practices and hospital systems are
    able to comply in a cost effective manner. I hear a lot about
    that.
        And it is good that you are continuing to work with
    stakeholders on what determines quality. I think that is
    extremely important as a physician that you continue to do that
    and I appreciate that it appears that you are doing a really
    fine job doing that.
        On the reimbursement, it appears that the Relative Value
    Scale Update Committee recommendations on reimbursement have
    not been followed very closely over the last few years.
    Specifically, more recently in ophthalmology, but historically,
    pain management, cardiac surgery and others. And I would
    encourage CMS to take a revisit of these recommendations that
    have a result--what CMS has done has resulted in significant
    payment cuts to providers and the question is, why is that? Why
    the Relative Value Scale Update Committee recommendations have
    not been followed more closely. That is a question.
        Dr. Conway. So on the last one, I will have to look into
    that more specifically in the specific codes and
    recommendations----
        Mr. Bucshon. Yes.
        Dr. Conway [continuing]. And we can get back to you, sir.
        Mr. Bucshon. Appreciate that. And then a recent study in
    health affairs found that physicians spend about $15 billion a
    year on quality reporting, hopefully this will be better under
    MIPS. Is CMS conducting an assessment of costs and
    administrative burdens associated with physician compliance?
    That is the first question.
        And if not, is this something CMS might embark on
    especially as a means to judge MIPS' future success in reducing
    this financial burden? So it costs a lot of money to comply, so
    are there things that CMS is looking at to try to improve that?
        Dr. Conway. Yes, so we are trying to lower the burden of
    reporting. We think mechanisms to get there are things like
    qualified clinical data registries and other aspects that more
    seamlessly integrate with the physician and clinician work
    flow. And we do think lowering the burden, increasing
    flexibility, simplicity, but still focusing on outcome measures
    that are meaningful, are critical to success.
        Mr. Bucshon. By the way, I am a big supporter of quality
    measures and payment based on value and success. It is just
    critical of course that physician groups and other stakeholders
    are part of what determines that and also make their ability to
    report in a timely and appropriate manner less costly and more
    efficient. Those are really important.
        The last question I have is, are large hospital systems
    pushing for CMS for so-called single check payment from CMS for
    provider services? Do you know what I mean by that?
        Dr. Conway. Do you mean global budget?
        Mr. Bucshon. Yes.
        Dr. Conway. So we have some states that have asked us with
    their hospitals to think about global budgets in those states
    for a subset of interested hospitals.
        Mr. Bucshon. OK, because the orthopedic things you talked
    about are starting to lean towards that. Look, I am all for
    efficient coordination of care, decreasing costs and improving
    patient outcomes. The question is, is whether or not a global
    budget like that, a so-called single check to a hospital system
    for all services provided, from a physician's perspective, will
    be something that could be successful because it all depends on
    a lot of internal negotiations amongst the hospital and their
    provider network, providers themselves. And it almost continues
    to help eliminate the independent practice model from a
    physician perspective. Do you have any comments on that?
        Dr. Conway. Yes. We think the independent practice model of
    physicians and clinicians is important and important to
    delivery system reform. Two, in some of our bundle payment
    mechanisms we specifically enable gain sharing and other
    mechanisms to try to make sure that physician engagement is
    deep. And lastly, the entities that are successful generally
    have a deeply engaged physician and clinician workforce.
        Mr. Bucshon. OK. Again, I would like to interact with you
    on a couple issues, the pause in the meaningful use and what
    your thoughts are on that at some time outside of a committee
    hearing, and also the RUC recommendations and why it appears
    over the last number of years that those haven't really been
    taken into serious account when reimbursement decisions are
    being made at CMS.
        Thank you. I yield back.
        Mr. Pitts. The chair thanks the gentleman and now
    recognizes the gentleman from Pennsylvania, Dr. Murphy, 5
    minutes for questions.
        Mr. Murphy. Thank you. Good morning, Dr. Conway.
        Dr. Conway. Good morning.
        Mr. Murphy. Just to be clear, the models we are talking
    about here for payments on things, they are there to
    incentivize doctors to do the most effective and efficient care
    and reward them for good decisions.
        Now one of the areas that what I get concerned about this
    is CMS policies restrict doctors from making decisions. And so
    I want to lay out a couple things that I hope CMS reviews,
    because it is great if we empower doctors to do the best thing,
    it is a problem if we say, please do the best thing, by the way
    we aren't going to let you do it, particularly for people on
    Medicare and Medicaid.
        We have had hearings before on the issue, for example,
    protected class of drugs. My understanding is there is still a
    move in CMS to eliminate psychiatric drugs as part of this
    protected class, but you may be aware that with protected class
    of psychotropic drugs antidepressants may all be
    antidepressants, but because of side effects some people will
    stop taking them. And yet, if that drug, the new drug is not
    covered that it doesn't do any good, so the physician is trying
    to make a decision but his hands are tied.
        There is also an issue with--and I know, look, we did what
    we needed to do with SGR and we have this, with this act which
    is now a month ago we passed this bill and we have about 73
    billion in offsets, and net costs may be 141 billion and we are
    hoping to find all the money for that but still, we recognize
    the value of that.
        But I have been working on mental health reform now for a
    couple of years. This committee has been dealing with this, but
    there still is an IMD exclusion in this with CMS. We used to
    have 500,000 psych beds in this country in the 1950s and now we
    have less than 40,000. We need 100,000, because people with an
    acute phase of psychotic break need a place to go besides a
    five-point tie down in an emergency room or being put in jail
    or being sent to the county morgue. But people with serious
    mental illness not in treatment are at a high risk for suicide,
    violence, et cetera.
        Now the consequence not treating mental illness according
    to NIMH, even back in 2010, was pretty staggering. Fifty
    percent of individuals with a serious mental illness have a
    chronic illness, at least two, and 40 percent of them don't
    receive any treatment in any given year.
        Additionally, Medicaid reports show that the extraordinary
    role of mental illness in multi-morbid illnesses that five
    percent of people in a Medicaid population account for 55
    percent of the costs of Medicaid, and virtually all of those
    have a mental illness.
        And so, and also with people with delusions and
    hallucinations, the longer they go without treatment the worse
    it gets. The longer a person waits for treatment for a
    psychotic episode the longer it takes to get the illness under
    control. For bipolar disorders, the sooner a person gets on
    lithium or other treatments the better their treatment goes.
        So, but what happens here is we have this wide range of
    people with serious mental illness who are SSI and SSD
    recipients and the cost of untreated mental illness is pretty
    amazing. I mean, the cost of untreated diabetes, which many of
    them have particularly if they are taking second generation
    antipsychotics, costs of untreated diabetes is $245 billion per
    year in this country, $176 billion in direct medical costs. And
    that is why it is so important for many people with serious
    mental illness to get treatment early on.
        I want to make sure that as we are approaching this that
    whether it is Medicare or Medicaid, anything within CMS' realm,
    let doctors treat patients. But when we come up with rules that
    say you can't prescribe what is most effective, you can't let
    them stay in the hospital more than 16 days, 16 beds, and you
    can't see two doctors on the same day, this is without CMS not
    certainly Medicare, but it is all our money.
        So I look here with the high numbers we have for
    cardiovascular disease, pulmonary disease, infectious disease,
    all which have a higher mortality rate, higher morbidity rate,
    we have to change this. So although I am pleased this committee
    worked to get doctors paid more, we have to make sure that
    policies associated with this do not tie their hands with CMS
    policies that prevent them from getting them into acute care,
    making sure we address that quickly, making sure we have the
    medications available for them.
        So along those lines, when we saw that CBO actually scored
    this they said that we don't know how to score this. They
    simply came up with the numbers and said, well, let's just
    multiply the number of hospital beds in this country, psych
    beds 147 million, whatever that is, times the cost and they
    came up with this staggering number, but saying we really don't
    know how to do this.
        I know CMS is also looking at other avenues for this, for
    example, in managed care programs to do something like a 15-day
    length of stay. If we made it an average length of stay, that
    would help. But I am just asking you, take that information
    back, work this out.
         Missouri actually did a study that says when you lift that
    16-bed rule you actually save about 40 percent in the federal
    area. It is a huge savings. And I guess I come down to this. If
    we have all this money to pay doctors, we ought to be able to
    come up with a few billion dollars to treat patients. And so I
    want you to take that message back as you work these things
    out. Please make sure we allow the mentally ill to be treated.
    Please make sure that doctors' hands aren't tied. And as you
    are looking at incentives, make sure you are not preventing the
    actions from taking place. Thank you.
        Dr. Conway. Great.
        Mr. Pitts. The chair thanks the gentleman. I now recognize
    the gentleman from Florida, Mr. Bilirakis, 5 minutes for
    questions.
        Mr. Bilirakis. Thank you, Mr. Chairman. I appreciate it
    very much. First question is, has CMS done any modeling if
    commercial insurance is using value based products and payment
    arrangements similar to CMS' proposed alternative payment
    models? Do you envision that Medicare Advantage would or could
    count towards a provider's alternative payment model
    performance threshold?
        Dr. Conway. Yes. So we work closely with Medicare Advantage
    and other commercial plans. The various plans are implementing
    many of the same models CMS is, accountable care organizations,
    bundled payment, advanced primary care medical homes. We are
    actually now doing work with the health plans. We did quality
    measure alignment work, but now through what is called our
    Health Care Payment Learning and Action Network we are also
    aligning on things like risk adjustment, attribution, data.
    Once again we obviously can't force alignment, but we are
    having discussions around these various payment models and how
    we align.
        In terms of Medicare Advantage, as you know, in the statute
    there is the multi-payer, all payer provisions starting in the
    2021 payment. So that would allow us to look across not just
    traditional Medicare, but also payments to providers from other
    commercial plans including Medicaid and Medicare Advantage. And
    we will have to propose the details of that but the statute is
    flexible in its focus across multi-payers.
        Mr. Bilirakis. Thank you, next question. One area that is
    addressed by MACRA but will require significance guidance by
    CMS is physician participation in multiple alternative payment
    models. We wanted physicians to be able to experiment with
    different approaches to improve their practices while also
    recognizing that the many APMs being developed by stakeholders
    are narrowly focused on a specific disease or condition.
        How might CMS approach the issue of a physician wanting to
    participate in multiple APMs while seeking to avoid MIPS'
    penalty through noncompliance, and then will CMS consider APM
    participation in the aggregate when determining if a physician
    reaches the performance threshold?
        Dr. Conway. Yes. So we are looking at this issue now and
    have heard it from physicians and clinicians as well about
    wanting the desire to potentially participate in multiple
    eligible APMs. As you know, part of this is driven by there are
    percentages for payments and/or patients in the statute, 25
    percent initially and then going up over time. So one of the
    issues we have heard from physicians and clinicians is they may
    want multiple eligible alternative payment models to try to
    meet those thresholds.
        So we are looking at this now, how would we do this
    operationally, how would we allow that to occur. To go back to
    principles, our goal is to allow physicians and clinicians to
    practice medicine and to practice it the way they choose and to
    allow multiple paths to success, so that physicians and
    clinicians can select whether it is MIPS or eligible
    alternative payment models, the models that are most meaningful
    to their clinical practice. So those are a few thoughts on that
    sir.
        Mr. Bilirakis. Well, thank you very much. I yield back, Mr.
    Chairman.
        Mr. Pitts. The chair thanks the gentleman and now
    recognizes the gentlelady from Indiana, Mrs. Brooks, 5 minutes
    for questions.
        Mrs. Brooks. Thank you. An overarching problem with the
    current physician quality programs is attribution. And
    physicians have communicated to the committee that they get
    attributed to patients' costs and outcomes of the physician
    have little or nothing to do with. At the same time, other
    physicians don't have any patients attributed to them at all.
    And so what is CMS doing to fix the attribution problem as it
    implements MIPS?
        Dr. Conway. So we are doing a number of things to work on
    attribution. I think for a number of our payment models we have
    dealt with the attribution issue for a longer period of time,
    like accountable care organizations where we have things like
    plurality of visits, et cetera, and have dealt with some of the
    specialty issues on attribution. Similar in primary care, for
    bundles we often have a primary attribution mechanism.
        Where it becomes challenging and you are alluding to in the
    MIPS arena, is in a traditional fee-for-service environment
    where patients are seeing very many different physicians and
    clinicians how we do attribution. We do think the statute has
    some guideposts there that are helpful. You included language,
    as you know, on physicians and clinicians being able to
    identify their relationship with patients, which we think is
    intriguing, and we are looking at how you might implement that
    so physicians and clinicians are directly engaging in
    attribution.
        You also included language on virtual groups, which is
    complex but an interesting area of the statute to think about
    how you might enable physicians and clinicians to make choices
    about virtual groups or enable virtual groups based on the
    data.
        So I think attribution will continue to evolve. This
    actually was in our discussions we have had with other private
    payers. But evolve in a way we think it will continue to
    improve over time and also enable the ability to physicians and
    clinicians to engage in the attribution issue.
        Mrs. Brooks. As the law encourages coordination of care and
    the growth of medical homes, what is your current thinking then
    of how to attribute patients to a primary care practice
    specifically in order to determine their health outcomes?
        Dr. Conway. So our current methodology is often based on
    plurality of visits to a primary care doctor. We are actually
    experimenting now in testing new methods. So in our ACO models
    now we are testing what is called voluntary attribution, but
    essentially the patient says this is my doctor, and then they
    are attributed to that doctor. We think that has a lot of
    promise. We are still testing how to do that best and how to
    make sure patients and physicians understand it, but we think
    that idea of voluntary attribution can be helpful.
        A number of our models now have prospective attribution so
    people know their patient population ahead of time. In our next
    generation ACO model which just launched in January they get
    prospective attribution of those organizations, many of which
    are physician led. They have the ability to do voluntary
    attribution so the patient is saying I am in this model, this
    is my doctor, this is my provider. They also have things like
    telehealth waivers and other things to help them succeed.
        But I think you can look at some of our leading edge
    models, if you will, to see where we think we can go in
    attribution and overall these new payment models.
        Mrs. Brooks. What criteria is CMS using to determine the
    eligibility of specific medical homes?
        Dr. Conway. For eligible APMs you mean?
        Mrs. Brooks. Yes.
        Dr. Conway. Yes. So, as you know, the statute specifically
    called out if a primary care medical home was expanded using
    the CMMI authority that that would be an eligible APM. We do
    not have any models yet from the innovation center that have
    been expanded. We do have Comprehensive Primary Care Initiative
    which has shown decreased hospitalizations, decreased ER
    visits, positive quality of care results, but has not yet met
    the--our actuary would need to certify that model for it to be
    expanded. That has not occurred yet because it is still in the
    first couple years of the model.
        We also could make proposals on primary care medical homes
    that could allow new models, whether they are CMS-run or run by
    others or brought to us by others like physician groups, to
    qualify as an eligible alternative payment model.
        Mrs. Brooks. So you are open to having new definitions and
    new criteria brought to you with respect to medical homes?
        Dr. Conway. Yes, and you could certainly comment on
    congressional intent if you want to. It was called out
    separately in the statute which we read as, and a number of
    members have mentioned today, the focus on primary care. So we
    are trying to adhere to both the statute and what we think was
    meant. And we know primary care is critical to health system
    transformation, so we need robust primary care models that
    allow primary care physicians and clinicians to participate and
    be a foundation for delivery system reform.
        Mrs. Brooks. Thank you. I have nothing further, Mr.
    Chairman, yield back.
        Mr. Pitts. The chair thanks the gentlelady. That concludes
    the first round of questions. We are going to go to one follow-
    up per side, and the chair recognizes Dr. Burgess for a follow-
    up.
        Mr. Burgess. Thank you, Mr. Chairman. I appreciate the
    courtesy. Thank you, Dr. Conway, for staying with us this
    morning. Let me just ask you a couple of questions about the
    electronic health records side of this.
        Underlying legislation kind of envisions clinical data
    registries and certified electronic health records serving as
    the reporting mechanism for providers to interact with the
    Medicare program. Could you give us an idea about your agency's
    work in ensuring that these systems are able to serve the
    reporting functions envisioned by the legislation?
        Dr. Conway. Yes. Thank you, Doctor, for the question.
        A few things that we are doing, I think, one, working on
    the electronic health record space first. As I mentioned, we
    think MIPS and the MACRA legislation allows us additional
    flexibility to focus on interoperability, simplicity, outcomes.
    We are working with the Office of the National Coordinator, as
    I know you know Dr. DeSalvo, on a few areas. One, standards and
    really having common standards that are used. Two, making sure
    that the program increasingly focuses on this interoperability
    issue which is a critical function. Three, ONC did just come
    out with a rule around their ability to oversee electronic
    health record vendors, et cetera. Four, you put in the MACRA
    statute around data blocking, which we agree with you can be a
    major issue, and the ability for providers to need to attest
    that there is not data blocking going on as well.
        We think some of the changes like application program
    interfaces, not to get too technical, but some of the new
    standards that may allow application developers and apps and
    others to build on top of electronic health records including
    registries, be able to pull data and then report that
    information, we think has serious potential.
        And a number--sorry for the long answer--a number of the
    specialties that I mentioned, like GI and ophthalmology and
    others that have effective registries, often can pull
    information from electronic health record, maybe combine that
    with other information and then use it to report, which we
    think is a viable, exciting pathway.
        Mr. Burgess. Very well. A statement was made earlier in the
    hearing that this was a bill passed so the doctors could be
    paid more. I just respectfully would disagree with that
    philosophically. There were bills that were required to pay
    doctors more. Those were called doc fixes, and we passed one
    every year that I was here for 13 years. It cost a tremendous
    amount of money, did nothing about the underlying payment
    system. Well, did a few things around the margins and perhaps
    made things a little more onerous without really trying to take
    a global approach to improving the payment structure.
        And as I outlined in my opening statement this was a
    disruptive action, I recognize that and I have heard from a lot
    of my peers that they are nervous about some of the things we
    are doing, but I do believe it was in the best interest of
    continuing to be able to provide Medicare services. So really,
    this bill was not a bill aimed at paying doctors more, this was
    a bill aimed at maintaining access for Medicare patients to
    their physicians, hence the name, Medicare access.
        So I appreciate while people are concerned and I get a
    number of people pushing back on the overall cost, and once
    again I would just ensure people, the cost of doing nothing,
    the no-billed scenario, if you will, was about a billion
    dollars more over 10 years than what we are doing today, and we
    do have the opportunity to try to put some of the building
    blocks in place that allows for the sustainability of the
    program in the years to come.
        Look, if I had just been able to do this the way I would
    have wanted, I would have simply directed CMS to pay whatever
    bills come in over the transom and stop bothering everybody.
    But we all know that wasn't a realistic approach. And I promise
    you, I hear from a lot of my cohort that that is where we
    should have been on this.
        But I do respect the work that you are doing, and I hope
    that--I mean, I know that we are going to see you back here in
    the subcommittee and I look forward to that. I look forward to
    learning how you are making the process better for everyone
    involved.
        Thanks, Mr. Chairman. I will yield back.
        Mr. Pitts. The chair thanks the gentleman and now
    recognizes the ranking member, Mr. Green, for a follow-up.
        Mr. Green. Thank you, Mr. Chairman. And following up on my
    colleague from Texas, and I agree, it was Medicare access. And
    granted, whatever Medicare rate may not even pay the cost of
    the physician, but it is part of a physician's practice. In
    every doctor I have ever met, I just want to practice, they
    tell me, I just want to practice medicine. I don't need to get
    rich, I just want to practice medicine and heal people.
        Let me ask a follow-up also on as we transition to value
    based payments it is clear that technology must play the
    increasing large role. Recently, Acting Administrator Slavitt
    has admitted some limitations in the current meaningful use
    program and stated it will now be effectively over and replaced
    with something better.
        Dr. Conway, given that meaningful use of certified EHR
    technology will remain part of the MIPS score, what broad
    parameters does CMS intend to use to guide its future approach
    to the use of health IT?
        Dr. Conway. Yes, so the broad parameters and principles
    that both Acting Administrator Slavitt and I and others have
    discussed from CMS are few. Number one, and we do think the
    MACRA statute allows us to evolve the electronic health record
    program for physicians and clinicians in a very positive
    direction.
        The principles are, one, flexibility so that the electronic
    health record can be used for the diversity of physician and
    clinician practice. Two, simplicity so that it really focuses
    on the aspects that matter most. Three, interoperability so
    that the information is truly flowing across systems.
        And then four, what I will call, what we call user design
    and interface. That the technology is increasingly usable,
    integrated into the work flow of a physician or clinician in a
    seamless fashion, which we think there is still opportunities
    and this is shared between CMS and the Office of the National
    Coordinator and obviously vendors working with physicians and
    clinicians so that user interface is as easy to use as
    possible.
        Mr. Green. Well, I am glad you mentioned that. And my next
    question was MACRA gives CMS the flexibility to reform the
    program because that is one of the concerns. And again, we will
    be visiting over the next number of months in following what
    CMS says. I appreciate your perspective and hope the committee
    will continue a collaborative relationship with CMS to advance
    the health IT infrastructure in moving forward.
        So Mr. Chairman, I yield back.
        Mr. Pitts. The chair thanks the gentleman. That concludes
    the questions of members present. We will have follow-up
    questions. We will send them to you in writing. We ask that you
    please respond promptly. A reminder, that members have ten
    business days to submit questions for the record, so they
    should submit their questions by the close of business on
    Thursday, March the 31st.
        Dr. Conway, thank you very much. Very good hearing. Very
    important issue. We will continue to monitor this, and thank
    you. We look forward to working with you.
        Dr. Conway. Thank you.
        Mr. Pitts. Without objection, the subcommittee hearing is
    adjourned.
        [Whereupon, at 11:53 a.m., the subcommittee adjourned.]
        [Material submitted for inclusion in the record follows:]

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        [The attachments to this document can be found at: http://
    docs.house.gov/meetings/IF/IF14/20160317/104683/HHRG-114-IF14-
    20160317-SD008.pdf.]

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