[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

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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.
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    [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:]
    
    
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    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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