    [House Hearing, 115 Congress]
    [From the U.S. Government Publishing Office]

      MACRA AND ALTERNATIVE PAYMENT MODELS: DEVELOPING OPTIONS FOR VALUE-
                                   BASED CARE

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

                                    HEARING

                                   BEFORE THE

                             SUBCOMMITTEE ON HEALTH

                                     OF THE

                        COMMITTEE ON ENERGY AND COMMERCE
                            HOUSE OF REPRESENTATIVES

                         ONE HUNDRED FIFTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                NOVEMBER 8, 2017

                                   __________

                               Serial No. 115-75

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

          Printed for the use of the Committee on Energy and Commerce

                            energycommerce.house.gov

                                   _________

                        U.S. GOVERNMENT PUBLISHING OFFICE

     28-263 PDF                  WASHINGTON : 2018

                        COMMITTEE ON ENERGY AND COMMERCE

                              GREG WALDEN, Oregon
                                     Chairman

    JOE BARTON, Texas                    FRANK PALLONE, Jr., New Jersey
      Vice Chairman                        Ranking Member
    FRED UPTON, Michigan                 BOBBY L. RUSH, Illinois
    JOHN SHIMKUS, Illinois               ANNA G. ESHOO, California
    MICHAEL C. BURGESS, Texas            ELIOT L. ENGEL, New York
    MARSHA BLACKBURN, Tennessee          GENE GREEN, Texas
    STEVE SCALISE, Louisiana             DIANA DeGETTE, Colorado
    ROBERT E. LATTA, Ohio                MICHAEL F. DOYLE, Pennsylvania
    CATHY McMORRIS RODGERS, Washington   JANICE D. SCHAKOWSKY, Illinois
    GREGG HARPER, Mississippi            G.K. BUTTERFIELD, North Carolina
    LEONARD LANCE, New Jersey            DORIS O. MATSUI, California
    BRETT GUTHRIE, Kentucky              KATHY CASTOR, Florida
    PETE OLSON, Texas                    JOHN P. SARBANES, Maryland
    DAVID B. McKINLEY, West Virginia     JERRY McNERNEY, California
    ADAM KINZINGER, Illinois             PETER WELCH, Vermont
    H. MORGAN GRIFFITH, Virginia         BEN RAY LUJAN, New Mexico
    GUS M. BILIRAKIS, Florida            PAUL TONKO, New York
    BILL JOHNSON, Ohio                   YVETTE D. CLARKE, New York
    BILLY LONG, Missouri                 DAVID LOEBSACK, Iowa
    LARRY BUCSHON, Indiana               KURT SCHRADER, Oregon
    BILL FLORES, Texas                   JOSEPH P. KENNEDY, III,
    SUSAN W. BROOKS, Indiana             Massachusetts
    MARKWAYNE MULLIN, Oklahoma           TONY CARDENAS, California
    RICHARD HUDSON, North Carolina       RAUL RUIZ, California
    CHRIS COLLINS, New York              SCOTT H. PETERS, California
    KEVIN CRAMER, North Dakota           DEBBIE DINGELL, Michigan
    TIM WALBERG, Michigan
    MIMI WALTERS, California
    RYAN A. COSTELLO, Pennsylvania
    EARL L. ``BUDDY'' CARTER, Georgia
    JEFF DUNCAN, South Carolina

                             Subcommittee on Health

                           MICHAEL C. BURGESS, Texas
                                     Chairman
    BRETT GUTHRIE, Kentucky              GENE GREEN, Texas
      Vice Chairman                        Ranking Member
    JOE BARTON, Texas                    ELIOT L. ENGEL, New York
    FRED UPTON, Michigan                 JANICE D. SCHAKOWSKY, Illinois
    JOHN SHIMKUS, Illinois               G.K. BUTTERFIELD, North Carolina
    MARSHA BLACKBURN, Tennessee          DORIS O. MATSUI, California
    ROBERT E. LATTA, Ohio                KATHY CASTOR, Florida
    CATHY McMORRIS RODGERS, Washington   JOHN P. SARBANES, Maryland
    LEONARD LANCE, New Jersey            BEN RAY LUJAN, New Mexico
    H. MORGAN GRIFFITH, Virginia         KURT SCHRADER, Oregon
    GUS M. BILIRAKIS, Florida            JOSEPH P. KENNEDY, III,
    BILLY LONG, Missouri                     Massachusetts
    LARRY BUCSHON, Indiana               TONY CARDENAS, California
    SUSAN W. BROOKS, Indiana             ANNA G. ESHOO, California
    MARKWAYNE MULLIN, Oklahoma           DIANA DeGETTE, Colorado
    RICHARD HUDSON, North Carolina       FRANK PALLONE, Jr., New Jersey (ex
    CHRIS COLLINS, New York                  officio)
    EARL L. ``BUDDY'' CARTER, Georgia
    GREG WALDEN, Oregon (ex officio)

                                      (ii)

                                 C O N T E N T S

                                  ----------
                                                                       Page
    Hon. Michael C. Burgess, a Representative in Congress from the
      State of Texas, opening statement..............................     1
        Prepared statement...........................................     3
    Hon. Gene Green, a Representative in Congress from the State of
      Texas, opening statement.......................................     4
    Hon. Frank Pallone, Jr., a Representative in Congress from the
      State of New Jersey, opening statement.........................     6
        Prepared statement...........................................     7
    Hon. Greg Walden, a Representative in Congress from the State of
      Oregon, prepared statement.....................................   127

                                   Witnesses

    Jeffrey Bailet, M.D., Chair, Physician-Focused Payment Model
      Technical Advisory Committee...................................     8
        Prepared statement \1\
    Elizabeth Mitchell, Vice Chair, Physician-Focused Payment Model
      Technical Advisory Committee...................................    10
        Joint prepared statement of Dr. Bailet and Ms. Mitchell......    12
    Louis A. Friedman, D.O., Fellow, American College of Physicians..    54
        Prepared statement...........................................    57
    Daniel Varga, M.D., Chief Clinical Officer, Texas Health
      Resources......................................................    68
        Prepared statement...........................................    70
    J. William Wulf, M.D., Chief Executive Officer, Central Ohio
      Primary Care Physicians, on Behalf of CAPG.....................    79
        Prepared statement...........................................    81
    Colin C. Edgerton, M.D., Alternate Delegate, American College of
      Rheumatology...................................................    89
        Prepared statement...........................................    91
    Brian Kavanagh, M.D., Chairman, American Society for Radiation
      Oncology.......................................................    94
        Prepared statement...........................................    96
    Frank Opelka, M.D., Medical Director, Quality and Health Policy,
      American College of Surgeons...................................   107
        Prepared statement...........................................   109

                               Submitted Material

    Statement of the American Academy of Family Physicians, November
      9, 2017, submitted by Mr. Green................................   128
    Statement of the American Association of Nurse Anesthetists by
      Bruce A. Weiner, President, November 8, 2017, submitted by Mr.
      Burgess........................................................   132
    Letter of November 8, 2017, from James D. Grant, President,
      American Society of Anesthesiologists, to Mr. Walden and Mr.
      Pallone, submitted by Mr. Burgess..............................   140
    Statement of the American Medical Association, November 8, 2017,
      submitted by Mr. Burgess.......................................   145
    Statement of the American Physical Therapy Association, November
      8, 2017, submitted by Mr. Burgess..............................   151
    Letter of November 8, 2017, from Mary R. Grealy, President,
      Healthcare Leadership Council, to Mr. Walden, submitted by Mr.
      Burgess........................................................   156

    ----------
    \1\ Dr. Bailet and Ms. Mitchell submitted a joint prepared statement.
    Statement of the American Society of Clinical Oncology by Bruce
      Johnson, President, November 8, 2017, submitted by Mr. Burgess.   160
    Statement of America's Health Insurance Plans, November 8, 2017,
      submitted by Mr. Burgess.......................................   163
    Statement of the Health Systems for Stark Reform Coalition,
      November 8, 2017, submitted by Mr. Burgess.....................   184
    Statement of the American Hospital Association, November 8, 2017,
      submitted by Mr. Burgess.......................................   186
    Letter of November 7, 2017, from David Hebert, Chief Executive
      Officer, American Association of Nurse Practitioners, to Mr.
      Burgess and Mr. Green, submitted by Mr. Burgess................   191
    Statement of the Society of Thoracic Surgeons, November 8, 2017,
      submitted by Mr. Bucshon.......................................   193
    Statement of the American Association of Orthopaedic Surgeons,
      November 8, 2017, submitted by Mr. Burgess.....................   196

      MACRA AND ALTERNATIVE PAYMENT MODELS: DEVELOPING OPTIONS FOR VALUE-
                                   BASED CARE

                                  ----------

                          WEDNESDAY, NOVEMBER 8, 2017

                      House of Representatives,
                                Subcommittee on Health,
                              Committee on Energy and Commerce,
                                                        Washington, DC.
        The subcommittee met, pursuant to call, at 10:02 a.m., in
    room 2123, Rayburn House Office Building, Hon. Michael Burgess
    (chairman of the subcommittee) presiding.
        Members present: Representatives Burgess, Guthrie, Barton,
    Shimkus, Blackburn, Lance, Griffith, Bilirakis, Long, Bucshon,
    Brooks, Mullin, Hudson, Collins, Carter, Green, Engel,
    Butterfield, Matsui, Castor, Sarbanes, Schrader, Kennedy,
    Eshoo, DeGette, and Pallone (ex officio).
        Also present: Representative Ruiz.
        Staff present: Adam Buckalew, Professional Staff Member,
    Health; Jordan Davis, Director of Policy and External Affairs;
    Paul Edattel, Chief Counsel, Health; Adam Fromm, Director of
    Outreach and Coalitions; Caleb Graff, Professional Staff
    Member, Health; Jay Gulshen, Legislative Clerk, Health; Alex
    Miller, Video Production Aide and Press Assistant; James
    Paluskiewicz, Professional Staff Member, Health; Jennifer
    Sherman, Press Secretary; Hamlin Wade, Special Advisor for
    External Affairs; Jeff Carroll, Minority Staff Director;
    Tiffany Guarascio, Minority Deputy Staff Director and Chief
    Health Advisor; Una Lee, Minority Senior Health Counsel;
    Samantha Satchell, Minority Policy Analyst; and C.J. Young,
    Minority Press Secretary.
        Mr. Burgess. The Subcommittee on Health will now come to
    order, and I will recognize myself 5 minutes for the purpose of
    an opening statement.

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

        Today marks the Health Subcommittee's third oversight
    hearing to examine the implementation of the Medicare Access
    and CHIP Reauthorization Act. Personally, for me, the Medicare
    Access and CHIP Reauthorization Act was a significant milestone
    because repealing the Sustainable Growth Rate formula was one
    of my highest priorities coming to Congress.
        The Medicare Access and CHIP Reauthorization Act represents
    a fundamental change in a healthcare payment system that had
    remained static for many years and had created uncertainty for
    providers. Before the passage of this bill, Congress delayed
    cuts to Medicare reimbursements for doctors a total of 17
    times.
        Through the hard work and steadfast leadership of the
    Energy and Commerce Committee and the unwavering commitment
    from the medical community, this bipartisan effort led to
    policies that sought to put power back in the hands of those
    who actually provide the care. That way, doctors will give
    shape to the healthcare payment of the future.
        So it is critically important that the Medicare Access and
    CHIP Reauthorization Act succeeds and I am glad that the
    committee remains dedicated to ensuring that we get payment
    reform right. It does continue to be one of my top priorities.
        Today, we will convene two panels of witnesses.
        And I want to welcome Dr. Jeffrey Bailet, the chairperson
    of the Physician-Focused Payment Model Technical Advisory
    Committee--we will call it PTAC for short--and Ms. Elizabeth
    Mitchell who is the vice chairperson of PTAC. I want to welcome
    you to our subcommittee this morning.
        The next panel, we will hear from physicians representing
    key stakeholder groups that have either already had, have an
    alternative payment model, or have one in the pipeline with the
    PTAC or the Center for Medicare and Medicare information. With
    that I want to take a moment also to welcome Dr. Daniel Varga
    from the Texas Health Resources Presbyterian Hospital where I
    did part of my residency, which provides care for many of my
    constituents in the north Texas area. It is good to have you in
    person today, Dr. Varga.
        The focus of today's hearing will be on the Alternative
    Payment Models which is one of two options that eligible
    professionals can be reimbursed under MACRA. The other option
    is a Merit-based Incentive Payment System which also deserves
    our full attention and will be the subject of an additional
    hearing in the very near future.
        One of the many goals of the Medicare Access and CHIP
    Reauthorization Act was to encourage and engage in care
    delivery models that drive quality while reducing healthcare
    costs. This movement towards alternative payment methods has
    allowed providers greater flexibility to innovate and try a
    delivery system that better aligns with their unique practice
    needs and allows them to produce better patient outcomes and
    offers an opportunity to share in the savings. I am encouraged
    by figures that indicate an estimated 50 percent of Medicare
    payments will be tied to these alternative payment methods next
    year.
        We may have heard of some of these models before. The
    Medicare Shared Saving Program through Accountable Care
    Organizations, the Next Generation ACO Model, the Comprehensive
    Primary Care Plus model, and the Oncology Care Model. It is
    safe to say we will likely hear of them and similar hybrids in
    the near future. It is notable and important these efforts are
    physician-directed and physician-led. This is not necessarily
    the easiest path, but it is the correct one.
        A recurring theme that we will hear this morning is that
    physicians are best suited to provide the determinants of
    quality. Patients are counting on us. Not congressmen, but
    doctors. They are counting on us to get this right. It has been
    2\1/2\ years since the Medicare Access and CHIP Reauthorization
    Act became law.
        I believe the true potential of this act has yet to be met,
    but I believe the law has already begun proving a success of
    delivering better care to beneficiaries, savings to the
    Medicare program, certainty for our doctors. It is important to
    hear the positive impact this law has had so far from everyone
    here today. Finally, it is critical that what we accomplish
    today follows the same open, transparent, and bipartisan
    structure that helped us get this act signed into law.
        I again want to welcome all of our witnesses. Thank you for
    being here today. Thank you for giving us your time. I look
    forward to your testimony. And I will yield the balance of my
    time to Mrs. Blackburn from Tennessee for a statement.
        [The prepared statement of Mr. Burgess follows:]

                 Prepared statement of Hon. Michael C. Burgess

        Today marks the Health Subcommittee's third oversight
    hearing to examine the implementation of the Medicare Access
    and CHIP Reauthorization Act since its enactment. Personally,
    MACRA was a significant milestone because repealing the
    Sustainable Growth Rate was one of my driving forces soon after
    I came to Congress. MACRA represents a fundamental change in a
    health care payment system that had remained static for many
    years and had created tremendous amount of uncertainty for
    providers since 2003. Before MACRA, Congress delayed cuts to
    Medicare reimbursements for physician services a total of 17
    times! Through the hard work and steadfast leadership of the
    Energy and Commerce Committee and unwavering commitment of the
    medical community, this bipartisan effort led to policies that
    sought to put power back in the hands of those who actually
    provide care. That way, doctors will give shape to the health
    care payment systems of the future. So, it is critically
    important that MACRA succeeds, and I am glad that the committee
    remains dedicated to ensuring we get payment reform right. This
    continues to be one of my priorities.
        Today we will convene two panels of witnesses. First, I
    want to welcome Dr. Jeffrey Bailet, chairperson of the
    Physician-Focused Payment Model Technical Advisory Committee
    (PTAC), and Ms. Elizabeth Mitchell, vice chairperson of PTAC to
    our subcommittee this morning. Later, we will hear from
    physicians representing key stakeholder groups that either
    already have an Alternative Payment Model (APM) or have one in
    the pipeline with PTAC or the Center for Medicare and Medicaid
    Innovation (CMMI). With that, I want to take a moment to also
    welcome Dr. Daniel Varga from the Texas Health Resources, which
    provides care for many of my constituents in the North Texas
    area.
        The focus of today's hearing will be on Alternative Payment
    Models (APMs), which is one of two options eligible
    professionals can be reimbursed under MACRA. The other option
    is the Merit-based Incentive Payment System (MIPS), which also
    deserves our full attention and will be the subject of an
    additional hearing in the near future.
        One of the many goals of MACRA was to encourage and engage
    in care delivery models that drive quality while reducing
    healthcare costs. This movement towards APMs has allowed
    providers greater flexibility to innovate and try a delivery
    system that better aligns with their unique practice needs,
    produce better patient outcomes, and offer them an opportunity
    to share in significant savings. I am encouraged by figures
    that indicate an estimated 50 percent of Medicare payments will
    be tied to APMs next year. We may have heard some of these
    models before: the Medicare Shared Savings Program through
    Accountable Care Organizations, the Next Generation ACO Model,
    the Comprehensive Primary Care Plus Model, and the Oncology
    Care Model. It is safe to say we will likely hear of them and
    similar hybrids much more in the future.
        It is notable and important that these efforts are
    physician directed and physician led. This not necessarily the
    easiest path, but it is the correct one. A recurring theme we
    will hear this morning is that physicians are best suited to
    provide the determinants of quality. Patients are counting on
    us--the doctors--to get this right.
        It has been 2\1/2\ years since MACRA became law. I believe
    the true potential of MACRA has yet to be met, but I believe
    the law has already been proven a success in delivering better
    care to beneficiaries, savings to the Medicare program, and
    certainty to doctors. It is important to hear the positive
    impact this law has had so far from everyone here today.
    Finally, it is critical that what we accomplish today follows
    the same open, transparent, and bipartisan structure that
    helped get MACRA signed into law.
        I again want to welcome all of our witnesses and thank you
    for being here. I look forward to your testimony.
        I would like to yield the balance of my time to Ms.
    Blackburn of Tennessee, for a statement.

        Mrs. Blackburn. Thank you, Mr. Chairman. And I am so
    pleased that we are doing this hearing today. And I was one of
    those that joined you in being a vocal opponent of kicking the
    can on the SGR. There were things that needed to be done and it
    is our responsibility to address those issues and to find
    solutions and of course getting MACRA to the President's desk
    was a solution.
        The old system of short-term fixes does not work, didn't
    work, and I am looking forward to hearing how the law's
    Alternative Payment Models are being designed and implemented
    and improving patient treatment and outcomes in a variety of
    settings. Being from the Nashville, Tennessee area, we have a
    lot of health care that is headquartered there and the steps
    that are being taken are important to them, to our
    constituents. And I yield back.
        Mr. Burgess. The Chair thanks the gentlelady. The
    gentlelady yields back. The Chair recognizes the subcommittee
    ranking member, Mr. Green of Texas, 5 minutes for an opening
    statement, please.

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

        Mr. Green. Thank you, Mr. Chairman. And I want to thank you
    for calling this hearing. I know we were both concerned over
    those 17 years that how we were going to fix the SGR and we did
    come to a bipartisan solution. And my concern and with this
    hearing we don't want to recreate the SGR and have Congress go
    through that so as nimble as Congress can be on our feet we
    need to make sure we catch it before we have to deal with it
    for 17 years.
        The Sustainable Growth Rate was the scourge of Medicare and
    doctors who treat Medicare patients for more than a decade and
    acted as part of the Balanced Budget Act of 1997. The SGR
    calculations led to a reduction of physician payments starting
    in 2002 and had to be patched annually, as you said, for 17
    years. In 2014, this committee along with other committees of
    jurisdiction finally came together and introduced a bipartisan
    bill to permanently repeal the SGR and replace it with a system
    that rewards value over volume and incentives for quality care.
        Finally, in 2015, an agreement on offsets was reached in
    H.R. 2 that was Medicare Access and CHIP Reauthorization Act or
    MACRA overwhelmingly passed both chambers and was signed into
    law. MACRA did more than just repeal the flawed SGR formula. It
    was designed to overhaul and realign payment incentives for
    Medicare and transition of our health system to one that
    rewards value instead of just volume of care. It provided
    stability in Medicare payments for providers for immediately
    following years and made it easy for providers to report on and
    deliver high-quality care, streamlining Medicare's multiple
    quality reporting systems, and over time consolidating them
    into one.
        Critically, MACRA encourages providers to move away from
    fee-for-service and partake in a new delivery model that will
    reduce costs while increasing quality. Under the law,
    physicians who treat Medicare beneficiaries have a choice
    between participating in the Merit-based Incentive Payment
    System, MIPS, or the Advanced Alternative Payment Models, APMs,
    to make the shift from fee-for-service and volume-based payment
    system to a value-based payment system.
        The focus of today's hearing is in the implementation of
    these two tracks, the Alternative Payment Models. Alternative
    Payment Models generally are an approach to provide provider
    payment that offers incentive to quality, cost-effective care
    in specific circumstances for specific patient populations or
    episodes of treatment. Advanced APMs created under MACRA go a
    step further and under these models physicians accept some
    amount of financial risk for the quality of the care and
    ultimate outcomes of their patients. Participants in Advanced
    APMs accept this risk in exchange for greater rewards when they
    succeed.
        Starting next year, qualifying APM participants can receive
    a 5 percent bonus in their reimbursement annually. Centers for
    Medicare and Medicaid Innovation center has developed and
    piloted APMs since its inception. Many of these now qualify as
    Advanced APMs under MACRA including certain Accountable Care
    Organizations, Patient-Centered Medical Homes and the
    Comprehensive Primary Care Plus model.
        I want to note that one of the most successful ACOs in the
    country is Memorial Hermann Accountable Care organization
    created and operated by leaders of the Memorial Hermann Health
    System in Houston, a 16-hospital integrated health system based
    in Houston. The Memorial Hermann ACO has been number one in
    Shared Savings Program ACO in the country for several years
    running, and by 2016 has generated nearly 200 million in
    savings across 3 years of participation in the program. Today
    we hear witnesses from these payment models, models that are
    currently underway and physicians participating in them in
    which are generating savings to Medicare and improved patient
    outcomes.
        Staunch oversight of MACRA is critical. We must avoid the
    pitfalls of what we did since 1997, and I am pleased we are
    having this hearing today and hope this committee engages in
    more oversight and dialogue as the major reforms of MACRA are
    fully implemented. And I yield back the balance of my time.
        Oh, sorry. For the record, I would like to insert a letter
    from the American Academy of Family Physicians.
        Mr. Burgess. Without objection, so ordered.
        [The information appears at the conclusion of the hearing.]
        Mr. Burgess. The Chair thanks the gentleman. The gentleman
    yields back. The chairman of the full committee has been
    detained on a conference call. We will recognize him for an
    opening statement upon his arrival. But pending that, I would
    like to recognize the gentleman from New Jersey, Mr. Pallone,
    the ranking member of the full committee, 5 minutes for an
    opening statement, please.

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

        Mr. Pallone. Thank you, Mr. Chairman, for holding this
    important hearing and thank the witnesses for being here today.
    We are meeting today to discuss one of the great bipartisan
    success stories of this committee, the Medicare Access and CHIP
    Reauthorization Act of 2015 or MACRA.
        MACRA built upon the successes of the Affordable Care Act
    to improve the quality and efficiency of the Medicare program
    and of our healthcare system more broadly. Prior to the ACA,
    healthcare services in the Medicare program were predominantly
    reimbursed on a fee-for-service payment model which rewarded
    providers for the number of tests or procedures they performed
    instead of the quality of medical care provided. And the ACA
    took major steps towards improving the quality of our
    healthcare system by creating new models of healthcare delivery
    within the Medicare program.
        These new payment and delivery models focused on
    transforming clinical care and shifting from a volume- to a
    value-based care model such as Accountable Care Organizations
    or ACOs and Patient-Centered Medical Homes. These models
    prioritize the patient with the goal of improving care
    coordination and patient outcomes by simultaneously lowering
    costs and they have reduced hospitalizations, emergency
    department visits, and have improved both the quality of care
    and access to care. There are additional opportunities to
    refine these models and increase savings, for example, by
    better targeting the riskiest and costliest patients for
    interventions.
        But I want to take a moment to recognize that while we
    continue to face challenges, the transformation to a value-
    based healthcare system is well underway. With MACRA we are
    entering the next phase of delivery system reform and further
    shifting the paradigm away from a volume-based to a value-based
    healthcare system.
        MACRA builds on these healthcare delivery systems reform
    efforts by offering opportunities and financial incentives for
    physicians to transition to new payment models known as
    Advanced Alternative Payment Models or AAPMs. And AAPMs must
    meet a number of criteria and require clinicians to accept some
    financial risk for the quality and cost outcomes of their
    patients. Physicians can join existing and successful models
    that qualify as AAPMs such as ACOs and the Comprehensive
    Primary Care Plus or CPC+ model which we will hear about today.
    They can also develop their own models known as Physician-
    Focused Payment Models.
        A number of physician organizations have already submitted
    applications for approval by the Physician-Focused Payment
    Model Technical Advisory Committee or PTAC, and PTAC has been
    accepting and reviewing applications for Physician-Focused
    Payment Models over the last year and has approved several for
    testing, including the ACS-Brandeis Model which we will hear
    about today from the American College of Surgeons.
        I look forward to hearing from PTAC about the application
    process, the way these efforts fit within the broader context
    of delivery system reforms, how these submitted models have
    been evaluated, and how models may be implemented going
    forward.
        Our second panel of witnesses practice in a variety of
    settings across the country and represent diverse expertise and
    training. They each have a unique perspective to share with us
    regarding the implementation of MACRA and how it has encouraged
    a focus on quality and efficient health care. And I want to
    thank you all for your commitments to delivery system reform.
    It is only through sustained commitment of the leading
    physician organizations and clinicians such as yourselves that
    we can hope to bend the cost curve.
        So I look forward to discussing the tools and best
    practices providers are already using, some of the challenges
    and opportunities they have faced as well as future efforts
    that can be employed to help make MACRA work effectively for
    all, so I thank you.
        I don't think anybody on my side wants the time, Mr.
    Chairman, so I yield back.
        [The prepared statement of Mr. Pallone follows:]

                 Prepared statement of Hon. Frank Pallone, Jr.

        Good morning. Thank you Mr. Chairman for holding this
    important hearing, and thank you to the witnesses for being
    here today.
        We're meeting today to discuss one of the great bipartisan
    success stories of this committee, the Medicare Access and CHIP
    Reauthorization Act of 2015, or MACRA. MACRA built upon the
    successes of the Affordable Care Act to improve the quality and
    efficiency of the Medicare program, and of our healthcare
    system more broadly.
        Prior to the ACA, healthcare services in the Medicare
    program were predominantly reimbursed on a fee-for-service
    payment model, which rewarded providers for the number of tests
    or procedures they performed instead of the quality of medical
    care provided. The ACA took major steps towards improving the
    quality of our healthcare system by creating new models of
    healthcare delivery within the Medicare program. These new
    payment and delivery models focused on transforming clinical
    care and shifting from a volume- to a value-based care model,
    such as Accountable Care Organizations or ACOs and Patient
    Centered Medical Homes.
        These models prioritize the patient, with the goal of
    improving care coordination and patient outcomes while
    simultaneously lowering costs. They have reduced
    hospitalizations, emergency department visits, and have
    improved both the quality of care and access to care. There are
    additional opportunities to refine these models and increase
    savings, for example, by better targeting the riskiest and
    costliest patients for interventions. But I want to take a
    moment to recognize that while we continue to face challenges,
    the transformation to a value-based healthcare system is well
    underway.
        With MACRA, we are entering the next phase of delivery
    system reform and further shifting the paradigm away from a
    volume-based to a value-based healthcare system. MACRA builds
    on these healthcare delivery system reform efforts by offering
    opportunities and financial incentives for physicians to
    transition to new payment models known as Advanced Alternative
    Payment Models, or AAPMs. AAPMs must meet a number of criteria,
    and require clinicians to accept some financial risk for the
    quality and cost outcomes of their patients. Physicians can
    join existing and successful models that qualify as AAPMs, such
    as ACOs and the Comprehensive Primary Care Plus (CPC+) model,
    which we will hear about today. They can also develop their own
    models, known as Physician-Focused Payment Models.
        A number of physician organizations have already submitted
    applications for approval by the Physician-Focused Payment
    Model Technical Advisory Committee, or PTAC. PTAC has been
    accepting and reviewing applications for Physician-Focused
    Payment Models over the last year, and has approved several for
    testing, including the ACS-Brandeis model we will hear about
    today from the American College of Surgeons. I look forward to
    hearing from PTAC about the application process, where these
    efforts fit within the broader context of delivery system
    reform, how these submitted models have been evaluated, and how
    models may be implemented going forward.
        Our second panel of witnesses practice in a variety of
    settings across the country and represent diverse expertise and
    training. They each have a unique perspective to share with us
    regarding the implementation of MACRA and how it has encouraged
    a focus on quality and efficient healthcare. I want to thank
    you all for your commitment to delivery system reform-it is
    only through the sustained commitment of the leading physician
    organizations and clinicians such as yourselves that we can
    hope to bend the cost curve.
        I look forward to discussing the tools and best practices
    providers are already using, some of the challenges and
    opportunities they have faced, as well as future efforts that
    can be employed to help make MACRA work effectively for all.
        Thank you, I yield back the remainder of my time.

        Mr. Burgess. The gentleman yields back. The Chair thanks
    the gentleman. The Chair would remind Members that, pursuant to
    committee rules, all Members' opening statements will be made
    part of the record.
        And we do want to thank our witnesses for being here today
    on both panels. We thank them for taking their time to testify
    before the subcommittee. Each witness will have the opportunity
    to give an opening statement followed by questions from
    Members.
        Today we will hear from Dr. Jeffrey Bailet, the chairperson
    of the Physician-Focused Payment Model Technical Advisory
    Committee, and Ms. Elizabeth Mitchell, vice chairperson,
    Physician-Focused Payment Model Technical Advisory Committee.
    That is a mouthful.
        We appreciate you being here today.
        And, Dr. Bailet, you are now recognized for 5 minutes for
    an opening statement, please.

       STATEMENTS OF JEFFREY BAILET, M.D., CHAIR, AND ELIZABETH
    MITCHELL, VICE CHAIR, PHYSICIAN-FOCUSED PAYMENT TECHNICAL MODEL
                           ADVISORY COMMITTEE

                      STATEMENT OF JEFFREY BAILET

        Dr. Bailet. Thank you. Chairman Burgess, Ranking Member
    Green, and distinguished members of the Energy and Commerce
    Subcommittee on Health, thank you for the opportunity to
    testify on behalf of the chair and vice chair of the Physician-
    Focused Payment Model Technical Advisory Committee or PTAC. We
    are Jeffrey Bailet, executive vice president of Health Care
    Quality and Affordability at Blue Shield of California--we
    insure 4.1 million members, we are nonprofit, and the third
    largest health plan in California--and Elizabeth Mitchell, my
    vice chair, CEO of the Network for Regional Health Improvement,
    a national network of multi-stakeholder Regional Health
    Improvement Collaboratives with over 30 members across the U.S.
        As an otolaryngologist--head and neck surgeon--and as a
    Blue Shield executive vice president, I am responsible for
    leading all medically related activities for the health plan,
    including quality medical management, provider contracting, and
    our Accountable Care Organization strategy, and I also serve as
    the chair of PTAC. Thank you for extending this opportunity for
    us to speak on the important topic of Medicare payment reform
    and PTAC's role supporting physicians and technicians as they
    transition to value-based care delivery.
        Even before the inception of MACRA there was considerable
    agreement that the current fee-for-service model based on
    paying for the volume and intensity of services is
    unsustainable and needs to change to a model that is value-
    based, patient-centered, and accountable. However, we need to
    transform the care delivery system and change the trajectory of
    spending in a way that maintains the vibrancy of the
    institutions and professionals that have dedicated their lives
    to preserving health and caring for the sick, injured, and
    dying in the U.S.
        MACRA and Alternative Payment Models have the potential to
    address the fundamental drivers of cost and quality and ensure
    that we have a high-value health system, the backbone of which
    is providers who want to change care delivery and give better
    care to patients.
        As the largest purchaser of health care in the world,
    Medicare has considerable influence on payment and, through the
    development of Alternative Payment Models, drive market change,
    and the PTAC plays an important role in accelerating model
    development. The PTAC is an 11-member advisory committee
    established to consider physicians and other clinical
    stakeholders' proposals for new payment models that foster
    high-quality, high-value health care.
        PTAC members are a diverse, highly talented group that have
    deep expertise in clinical care and technical expertise in the
    areas of measurement, payment, and care delivery reform. The
    committee includes a balance of physicians and non-physicians
    who are highly committed to ensure that proposals are
    critically, thoroughly, and expeditiously evaluated.
        We have sought to establish high-integrity relationships
    with the clinical and broader stakeholder communities across
    the country, some of which you will hear today. We are inviting
    comments, questions, or concerns prior to and during public
    meetings when models are evaluated. Furthermore, PTAC is keenly
    interested in all types of models including those emanating
    from single specialty, primary care, small and rural practices,
    sophisticated health systems, and multispecialty group
    practices.
        PTAC's disciplined and collaborative efforts have garnered
    tremendous interest in creativity from stakeholders, receiving
    33 letters of intent and 20 full proposals spanning many
    specialties, payment types, and practice sizes. To date, the
    PTAC has held 9 days of public meetings, we have deliberated on
    six proposals, we have voted on five with submitted reports to
    the secretary, and we have 14 proposals under active review. It
    is our belief that the interest in and work of PTAC confirms
    Congress' direction and intent for MACRA to transition U.S.
    health care to a high-value system delivering better care at
    lower cost.
        Lastly, PTAC works collaboratively with CMS and CMMI to
    garner input about specific proposals especially if they have
    previously evaluated to any capacity by CMS or CMMI. To date,
    the models PTAC has sent to the secretary for potential
    limited-scale testing have not been approved.
        In addition, we are unclear whether because of the
    extensive review process already provided by the PTAC,
    submitters can undergo a more expedited review and evaluation
    process. Our concern is that if we are not able to support our
    recommendations or work to fix any shortfalls in our analyses,
    the value of PTAC's process will not be fully realized. We
    believe that closer coordination between PTAC and CMS and CMMI
    will enable greater efficiency, greater capacity to implement
    more innovative models, and greater clarity for applicants
    seeking to understand the process of submission and approval
    and look forward to continued partnership with CMS and CMMI.
        In closing, PTAC is an incredibly important forum to
    identify innovative models from the field to expand Medicare's
    payment model portfolio. Transforming care delivery, including
    implementing innovative payment policy, is complicated;
    therefore an open public process that includes the stakeholders
    and also educates stakeholders and the public is likely the
    best way forward. We believe the PTAC is well suited for this
    purpose.
        We commend Congress for its vision and we thank you for the
    opportunity to be part of such important work. Thank you.
        Mr. Burgess. The Chair thanks the gentleman.
        Ms. Mitchell, you are recognized for 5 minutes, please.

                    STATEMENT OF ELIZABETH MITCHELL

        Ms. Mitchell. Thank you Chairman Burgess, Ranking Member
    Green, and distinguished members of the committee. Thank you
    again for the opportunity to be here today and for your
    leadership on these critically important issues.
        As president and CEO of the Network for Regional Health
    Improvement, my members and I work at the community level with
    all stakeholders, employers, providers, health plans, patients,
    and others, and I can assure you that healthcare quality and
    affordability are of primary concern. The urgency to reduce
    healthcare costs while improving quality cannot be overstated.
    This is impacting families, employers, State governments, and
    our overall economy.
        MACRA addresses the fundamental drivers and by reforming
    care and payment we have truly the opportunity to achieve
    better care at lower cost and this is an incredible opportunity
    for the U.S. Dr. Bailet has shared the innovation and
    leadership that we have seen from the physician community and
    their readiness to lead these changes. This is an opportunity
    that we cannot squander.
        Despite the exceptional interest in PTAC as evidenced by
    the number of proposals and letters of intent, there are still
    barriers that physicians face in transitioning to these new
    models. Providers who are ready and willing to lead change
    continue to face barriers and need additional support. The PTAC
    took the time to think about some of the key barriers that we
    have seen from the submitters over the first year and we have
    identified three priority areas for your consideration. These
    include the need for technical assistance to providers, greater
    access to shared data, and the opportunity for limited-scale
    testing of innovative models.
        PTAC believes that there is a material need for technical
    assistance for providers to develop and implement Physician-
    Focused Payment Models and APMs. Most physicians, they have
    experience changing care delivery but they have not been
    trained in the development of incentives, payment models, or
    risk management. Recent surveys of high-performing health
    systems and medical groups demonstrate the growing willingness
    to support and assume risk, but these organizations have made
    considerable investments in the infrastructure to successfully
    participate in APMs.
        And while large health systems may have the resources and
    expertise to develop and implement these models, such small and
    rural practices are at greatest risk of not being able to
    afford the technical support to design and implement the
    payment and care changes needed to succeed under risk-based
    models. This threatens to leave these small and rural practices
    out of the transition to value-based care.
        Congress should identify ways to enable the provision of
    technical assistance to providers seeking to develop and
    implement APMs in a way that does not exacerbate resource
    differentials among providers and that helps move all providers
    forward towards value-based care. Although MACRA does not
    authorize PTAC to provide such technical assistance, many
    members of our committee believe that PTAC should be able to do
    so, or at a minimum PTAC can provide valuable insights related
    to what types of technical assistance would be most helpful.
        The PTAC supports deployment of HHS resources to provide
    access to analytic, technical, and quality improvement support.
    We also believe that there is a need for greater access to
    shared data. This is a common barrier identified by submitters.
    PTAC, too, has observed common weaknesses among some of the
    submitted proposals. Specifically, applicants need
    communitywide, all-payer claims and clinical data sharing
    across communities to successfully implement models. Providers
    cannot manage risk, care, or cost without timely, comprehensive
    data.
        Most of the proposals PTAC has received require
    coordination of care across practices, providers, and
    communities, but if data is not shared effectively participants
    cannot coordinate patient care across episodes or populations.
    Data blocking, lack of interoperability, and other limits on
    data access continue to be a major barrier to care improvement
    on behalf of patients. The move to APMs as required by MACRA
    has made this an urgent issue. We ultimately must address the
    barriers to communitywide data access in order to enable the
    successful transition to APMs.
        Finally, limited-scale testing of innovative models is
    necessary before we scale models for national implementation.
    This is the committee's third priority and we believe that
    innovation in any industry requires the opportunity for small-
    scale testing. PTAC has identified limited testing of models as
    an important phase of development and implementation as it is
    unknown how key elements of the model will clinically and
    financially perform until the model functions in a testing
    environment.
        Given the diversity of markets across the United States,
    regional testing will also identify aspects of the models that
    may require flexibility and implementation. We do not expect a
    one-size-fits-all approach to reform and we believe limited-
    scale testing of these important innovations will allow
    successful transitions to Alternative Payment Models.
        In closing, I want to underscore what my chair has said. We
    are seeing excitement and innovation and enthusiasm from the
    field. We see clinicians who are ready to lead the
    transformation in care and payment, and we think this is an
    incredibly important opportunity to support the move to
    alternative-based payment models for a high-value health
    system. Thank you.
        [The joint prepared statement of Dr. Bailet and Ms.
    Mitchell follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Burgess. The Chair thanks both of our witnesses for
    their testimony this morning. We will move to the question
    portion of the hearing and I am going to recognize myself for 5
    minutes for the first round of questions.
        And Dr. Bailet, it is my understanding that during the
    summer you communicated with the Department of Health and Human
    Services identifying a number of opportunities where your group
    can provide or improve payment model development and I think I
    heard in Ms. Mitchell's testimony the answer to this question,
    but I am going to ask you.
        Does PTAC need authority to specifically authorize its
    ability to provide technical assistance through the APM
    development process?
        Dr. Bailet. Under the statute, MACRA remains silent on
    whether it gave the PTAC the authorization to provide technical
    assistance. As we said in our testimony, there are significant
    interests by PTAC members to provide technical assistance. As I
    said earlier, there is some very skilled, highly talented folks
    who really understand how to build these models both clinically
    and also on the financial business side and the measurement
    side to make them successful.
        We also understand that the PTAC has a role to play
    relative to evaluating models and providing technical
    assistance does cause potential conflicts. If you think
    downstream, supporting particular stakeholders and we then at
    the same time evaluate their models, depending on how that
    turns out you can see that there could be some downstream
    complications. Despite those challenges, we still believe at a
    minimum that we should because of our exposure and the insights
    that we gain from working with clinical stakeholders, we think
    we can be at a minimum a beacon to cast the light on particular
    areas that submitters are struggling with or are challenged
    that the global stakeholder community can learn from. And I
    think that is at a minimum a role the PTAC should play.
        I do think to answer your question directly that this
    question of can the PTAC provide technical assistance that
    needs to be answered definitively and so we would look to you
    for clarity on that.
        Mr. Burgess. And are you free to disclose your
    communications with the Department of Health and Human Services
    this summer? Were they positive in their comments toward you
    or----
        Dr. Bailet. Yes. Yes. We sent Secretary Price a letter. We
    have had private conversations with him as well. Very
    supportive, understands the importance of technical assistance.
    Again we have spent a year before we accepted our first
    proposal standing up the committee, building in a process. We
    want these models to be successful, but stakeholders, depending
    on their level of sophistication and experience and the
    infrastructure investments, they come at it from different
    places. This is new and we are all learning.
        So I think it is absolutely paramount that technical
    assistance be delivered. I believe the word we got back--and I
    will let my colleague speak as well that the receptivity for
    technical assistance exists. I think the mechanics of how it
    would be distributed, how it would be identified, and how it
    would go out to the stakeholders that remains an open question.
        Mr. Burgess. Very well.
        Ms. Mitchell, did you have something to add to that?
        Ms. Mitchell. I would only underscore the demand we are
    hearing from across the country. Again physicians understand
    clinical care delivery, but a lot of this work in incentive
    design risk management is new. PTAC has recognized the urgency
    of this. We do not have clear authority to address it. We think
    that somewhere HHS needs to find a way to meet the needs of
    providers so that they will be successful.
        Mr. Burgess. OK, thank you. Thank you for that observation
    and the acknowledgment that it may require legislative activity
    not just administrative activity.
        So I am going to ask you a question. I mean it comes up all
    the time, the hiring freeze that the administration has imposed
    across all levels of the Federal Government. Is your PTAC, is
    it currently subject to a hiring freeze?
        Ms. Mitchell. It is our understanding that they are subject
    to a hiring freeze. I think it is also important to note the
    volume of activity which I think is an indicator of success of
    PTAC, but it has also been more than we have anticipated in
    terms of time demands. This is again also highly technical,
    complex work, and I think having the right staff is critical.
    We have had excellent staff support. We just think that given
    the demand there is need for additional support.
        Mr. Burgess. Very well. We previously asked the
    administration to evaluate an exemption for PTAC and we will
    continue to communicate with them.
        Just to my last few seconds, I just want to make the
    observation. I downloaded the application form and, man, it is
    lengthy. I was actually going to provide a little technical
    advice that there ought to be a worksheet or a checklist.
    Actually there is one, but it is way, way deep in the weeds
    here. Maybe that ought to be advanced to right after the table
    of contents.
        Ms. Mitchell. Well, we appreciate the concern and we
    recognize that it is lengthy. However, the committee really
    felt that it was our job to make the instructions as clear as
    possible and as complete as possible, so we are hopeful that
    this is actually a helpful document. You will note that there
    is even visuals in there to explain the process.
        Mr. Burgess. Right.
        Ms. Mitchell. Again this is meant as a tool for assistance
    to submitters. Dr. Bailet?
        Dr. Bailet. I think the only other comment is as we design
    this we really put ourselves in the eyes of the stakeholders.
        Mr. Burgess. Sure.
        Dr. Bailet. And we were thinking this is new, our process
    is new. We wanted to be entirely transparent. And if you look
    at the document, it is constructed--there is a lot of
    definitions. Every 10, all 10 of the criteria are spelled out
    through the lens of the committee what is it that the criteria
    is trying to accomplish, what is the committee looking for to
    see in these proposals, because again I will go back to my
    earlier comment. We want these proposals to be successful.
        We also are taking feedback from the clinical stakeholders
    about our process. They have provided input and we have revised
    our process based on that input and we will continue to do so
    and we will take this comment under advisement as well.
        Mr. Burgess. I am sure we will have continued
    conversations. My time has long since expired. I will recognize
    Mr. Green 5 minutes for questions, please.
        Mr. Green. Thank you, Mr. Chairman. I think we would be
    happy to work with you to see what we can do. We don't want to
    have this process fail because we don't have staff or quality
    staff or that you can't provide assistance. That just seems
    silly. But we will be glad to work with you on that to see how
    we can do.
        Dr. Bailet and Ms. Mitchell, thank you for being here today
    and your insights. I would like to ask about PTAC's mission and
    what you have set out to accomplish. From my perspective, PTAC
    and the PTAC process, evaluating Physician-Focused Payment
    Models is uniquely in the delivery system reform context
    because it is driven primarily from the ground up by providers.
    Now does PTAC fit within the broader delivery system reform
    efforts?
        Ms. Mitchell. Thank you. I think what one of the consistent
    themes that we hear from submitters, and we have experienced in
    our day jobs, is that there are many clinical improvements that
    providers know could be made that would make care better for
    patients, and the current payment system is actually a barrier
    to making those changes. Many physicians will tell you they
    will lose money trying to do the right thing in many cases. The
    pay-for-service system often incents duplication, redundancy,
    overuse.
        So this is actually a forum, in my view, where clinicians
    can bring models for better care and hopefully have a payment
    system that supports those changes.
        Mr. Green. Well, and that's what I hear from my physicians
    that they are concerned about the end result so they want to
    have the input. And the unique benefits and challenges does
    have a model or, you know, challenge.
        But from my understanding PTAC is comprised of 11 members
    appointed by the Comptroller General. Each of these members are
    nationally recognized for their expertise in payment and reform
    and Alternative Payment Models. PTAC's members include both
    physicians and non-physicians.
        I know it has been official for having both physicians and
    non-physicians there because they can get the process moving,
    how does your review process engage stakeholders and the public
    along each step of the way?
        Dr. Bailet. So we have a multistep process and if you will
    indulge me I will walk the committee through it as quickly and
    efficiently as possible.
        So working with the ASPI staff using our primer on how to
    submit a model, the model is submitted to the committee
    formally after a letter of intent is sent 30 days in advance.
    And the only reason the letter of intent, it is non-binding,
    but it just helps us staff appropriately. We need to know how
    many models are out there and potentially coming in and that
    was the purpose of that letter of intent.
        When the proposal is submitted, the ASPI staff check it for
    completeness to make sure that all of the appendices and the
    references in the document is complete. At that point the model
    is transitioned to a review committee which is comprised of at
    least one physician and two other members of the committee to
    review the contents of the proposal and then they go about
    working with the stakeholders, the submitters directly. There
    is a question and answer. Typically it is at least one pass, if
    not two or more, in writing, an exchange for clarity on
    particular points in the model and then we have, we host a call
    with the submitters for additional clarity.
        During this entire process the proposal is published for
    the entire stakeholder community nationally to see. We get
    comments from the stakeholder community globally either in
    writing, we also have them come to our deliberative meetings in
    public and make public statements about their concerns,
    questions, or support for the models.
        Following the exchange between the stakeholder submitter
    and the PTAC review team, we then go to the national expert
    clinician. We have, if it is on renal disease we will speak
    with a qualified renal nephrologist to get their perspective on
    the elements of the model and it helps sharpens our focus and
    answer our questions that we still may have about the model and
    the proposal and how does it work in the real clinical
    environment, if you will.
        All of this time, the full committee does not deliberate.
    As a FACA committee all of our deliberations have to be done in
    public. So the proposal review team creates a document after
    all of their work on their recommendation based against the
    criteria of the secretary. It is non-binding, but it is
    directionally helpful for the full committee when we sit down
    for the first time in our public session to then deliberate and
    review.
        And if I could, that particular session how it starts is
    the review team reviews the model for the committee, we then
    invite the stakeholders up to the table. They either, so far
    they have been all coming in public. They have been coming to
    the public meeting. They then have an exchange. That typically
    can go on for an hour where we talk with them about questions
    that we have or sharpen our focus on the model before we
    deliberate because we want to make sure we understand the
    nuances of these models.
        We also have public comments come before we start to
    deliberate, so then the public comes up, they provide their
    input, and at that time the committee goes into the
    deliberative mode. We discuss the model amongst ourselves and
    then we vote against the 10 criteria on an individual basis. So
    it is, we support it--well, we don't support it, it doesn't
    meet the criteria, it meets the criteria, or it meets the
    criteria with priority. We do that through all of the criteria
    and then we vote on the model in general at making the
    recommendation to the Secretary to support, to support with
    high priority, or to support it with limited testing.
        That is the process, and it is exhaustive. And we are
    really happy to be part of it, but it takes a lot of energy to
    get it done.
        Mr. Green. Thank you, Mr. Chairman. I know I ran over, but
    these are issues that again we don't want to come here 5 years
    from now and have to see what we didn't do now.
        Dr. Bailet. Right, thank you.
        Mr. Green. So I appreciate your explaining the process.
        Mr. Burgess. The Chair thanks the gentleman. The gentleman
    yields back. The Chair now recognizes the gentlelady from
    Tennessee, 5 minutes for questions, please.
        Mrs. Blackburn. Thank you, Mr. Chairman. And I want to stay
    kind of in that same vein where Mr. Green is, because one of
    the things I think many times we will do is something gets
    passed, it gets on the books, it takes forever to get it
    straightened out. And when we are looking at the APMs and the
    utilization of technology in this process, it changes so
    quickly that there has to be a nimbleness that we have not seen
    before. And I assume that each of you agree with that because
    you are shaking your heads in the affirmative.
        But let's stay right with you, Dr. Bailet, and let me have
    you talk a little bit more about timeline, a little bit more
    about process. And Ms. Mitchell, I want you to weigh in on how
    we are, when you have this integration, if you will, the
    physician, which is an incredibly important component of this,
    and the other two stakeholders that are involved in this
    process, talk to me about how that relates to our rural and
    underserved areas.
        Dr. Bailet. So I will start with the timeline and the
    process. We are very sensitive and acutely aware of the need to
    get these models in the field. Physicians are being measured as
    we speak today for payment that will impact them a year and a
    half, 2 years downstream, so we did not want to be a rate-
    limiting step as these models came forward. We measure our, as
    we move through that process that I described those
    measurements are done in weeks. It typically takes about 2
    weeks for us to get back to the stakeholders with a series of
    questions.
        Mrs. Blackburn. So basically you are doing an expedited
    process in approving as you go?
        Dr. Bailet. Yes. We don't--well, because of our public
    schedule because we can't deliberate in private----
        Mrs. Blackburn. OK.
        Dr. Bailet [continuing]. The deliberation, we batch them.
    So we have a meeting next month. We have seven proposals. We
    are going to go through 3 days of public meetings.
        Mrs. Blackburn. All right. And then let me stop you right
    there.
        Ms. Mitchell, talk about this as it relates to the rural
    and underserved areas and how you are feeding in that data,
    because data is essential to this.
        Ms. Mitchell. Certainly I will try. I think it has been
    very important that there is a balance on the committee of
    physicians and non-physicians and I am one of the non-
    physicians. My background is actually working with multi-
    stakeholder groups at the community level for transforming care
    and payment.
        I am from Maine. I am highly sensitive to the small and
    rural issues. I think what we are--because we are receiving
    proposals from the field, we are receiving proposals from small
    practices. I believe you will hear that on the next panel. We
    are, I think, as a group we are a diverse group. We are
    committed to ensuring that everyone can succeed under this
    model and that is actually one of the reasons that we are
    particularly urging technical assistance so that it isn't just
    the well-resourced health systems that can afford these
    changes.
        Mrs. Blackburn. So you are deliberate and intentional in
    having individuals from these rural and underserved areas?
        Ms. Mitchell. We don't actually control who comes to the
    committee, we respond to the proposals that we receive.
    However, we are certainly trying to promote the opportunity and
    we certainly welcome and weigh the issues of small and rural
    practices to the extent possible.
        Mrs. Blackburn. OK. And let's look at the high-performing
    hospital or health systems and medical groups and just a couple
    of comments quickly--I have a minute left--on how you
    characterize those groups' interest in risk assumption.
        Dr. Bailet. The larger, more sophisticated integrated
    systems they have already made the infrastructure investments
    whether it is electronic health record, they have the modeling,
    they have the data analytics, the population health tools that
    really help them be successful in an Alternative Payment Model
    environment.
        And so they are very much, they are ready and willing, and
    some of them, many of them across the country, are already in
    alternative or Advanced Alternative Payment Models, so they are
    sort of leading the way, if you will. That said, I would be
    remiss if I didn't mention that the smaller practices have a
    high degree of nimbleness that the larger practices don't
    necessarily have, and can move very quickly, but they also need
    help with the infrastructure.
        Ms. Mitchell. And if I might just add to that, the small
    and rural practices may be providing exceptional care. We think
    that this might provide greater flexibility to them so that it
    isn't again the one-size-fits-all approach because we recognize
    that care will be delivered differently in different
    communities and in different sized practices.
        Mrs. Blackburn. Right. And that is the nimbleness that I
    think we are wanting to see and the flexibility that we want to
    see on this. And we are not going to be hesitant to continue to
    do oversight and to pull it back if we think it needs
    adjustment.
        I yield back, Mr. Chairman. Thank you.
        Mr. Burgess. The Chair thanks the gentlelady. The
    gentlelady yields back. The Chair will make the observation
    that is the third time the word ``nimble'' has been used. I
    don't recall that ever happening in a committee hearing before.
        Mr. Green. It is tough for Members of Congress to be
    nimble.
        Mr. Burgess. The Chair recognizes the gentlelady from
    California, Ms. Matsui, for 5 minutes, please.
        Ms. Matsui. Thank you, Mr. Chairman, and I will try to be
    nimble. So thank you very much for holding this hearing and
    thank the witnesses for being here today. You know, as you know
    we came together in a bipartisan way on this committee to fix
    the broken SGR and replace it with a MACRA, and I am pleased
    that you are making progress with the goals set forth by MACRA
    to truly transition our Medicare payment system from value to
    volume.
        As you state in your testimony, Medicare has considerable
    influence on payment and that can drive innovation. That is
    what I would like to focus on today. Every witness here is
    testifying to the hard work providers are putting in to update
    their systems of care and develop payment models that
    adequately reflect that. We are hearing about care
    coordination, patient-centered care, and better management of
    chronic diseases.
        I believe that technology whether in the form of data
    systems, measuring quality, interoperable electronic health
    records, care delivered remotely, or conditions monitored
    remotely will be integral to our success in achieving our goals
    of higher quality and reduced costs. Thank you, Dr. Bailet and
    Ms. Mitchell, for your leadership on PTAC and I appreciate the
    dedication you bring to your work.
        I would like to focus on this issue of telehealth and
    health IT. The 10th criterion for judging APMs is to encourage
    a use of health information technology. Either one of you or
    both of you, can you expand upon that? How does the PTAC ensure
    that models are encouraging the use of health IT?
        Dr. Bailet. I will start. It absolutely is essential,
    especially when you realize the diversity of the care that is
    delivered across the country and the shortages in particular
    areas where certain specialty services, for example, are not
    available. So leveraging technology is absolutely essential.
        You mentioned telehealth, making sure that patients,
    members have access to high-quality specialists through
    telehealth. There is a lot now with technology with your smart
    phone and a lot of diagnoses can be made using your smart
    phone, for example. So we need to leverage that technology and
    we embrace the submitters who put technology in front, embed
    that in the model.
        There are some challenges with that and the Secretary has
    commented about proprietary technology, because that obviously
    limits the deployment and the implementation of these models,
    but the notion of leveraging technology to drive care into the
    communities is absolutely essential.
        Ms. Matsui. OK.
        Dr. Bailet. Getting everyone on a health information
    platform and, as you know, being from California, my
    organization with also Blue Cross----
        Ms. Matsui. Sure.
        Dr. Bailet [continuing]. We have built an HIT platform with
    over 25 million records. So we----
        Ms. Matsui. Can I ask you this, then? So I assume health
    IT, electronic health records, devices that remotely monitor,
    clinical decision support software, software that helps
    clinicians on a team communicate securely and to allow
    providers to deliver care remotely, it includes all of this. So
    are there experts on the PTAC that specialize in health IT or
    have extensive experience with it? Does PTAC consult with such
    experts? Because I know you have a balance of people on there,
    physicians and non-physicians.
        Ms. Mitchell. I think to your point, there is a range of
    expertise, users of EHRs and other health IT and some of us who
    have been working around data sharing. I would like to
    emphasize our deliberations on this criteria. Technology is
    important but it is also insufficient. This is really about
    sharing the data freely and effectively across sites and many
    of the barriers to doing that are not technology barriers, they
    are business or otherwise.
        So I think it will be very important particularly as we
    move to measures of population health and also to reduce the
    burden on providers that this data be shared effectively
    regardless of the technology.
        Ms. Matsui. So you have, of the 20 or so models you have
    under review can you provide some examples of those that are
    leveraging technologies, and have the providers come up with
    creative solutions?
        Dr. Bailet. So there are several that have been highlighted
    that we have reviewed already. There is one specifically around
    looking at five different cancers and accuracy of diagnoses--
    lung, colorectal, breast. It is a bundled payment model. It
    comes from the Hackensack Meridian Health. They have a special
    technology that looks at the biopsies themselves and is able to
    do genetic analyses and helps tailor the treatments to the
    specific characteristics of that particular tumor type. We
    talked about the proprietary nature of that technology and they
    have assured us that other systems can adopt either that
    technology or a sister technology like that. But that is just
    one example.
        Ms. Matsui. Sure.
        Dr. Bailet. There are several others.
        Ms. Matsui. No.
        Mr. Burgess. The gentlelady's time has expired.
        Ms. Matsui. Thank you. I yield back.
        Mr. Barton [presiding]. The gentlelady yields back. The
    Chair recognizes himself for 5 minutes. I want to say at the
    beginning of my question period that I am not an expert on
    this, and I didn't hear the opening statements, so if this were
    an energy hearing I would be in good shape. But talking about
    MACRAs is, as I told Gene Green, a little out of my depth.
        My first question is just a basic question. We wanted to
    change the payment system because the old one was so
    complicated. Are any of these new systems actually being used
    right now, or are you just thinking about it? Either one of
    you.
        Ms. Mitchell. The models that we have received, several of
    them we have recommended for further testing, but then it is up
    to CMS and the Secretary when and if to implement those. So----
        Mr. Barton. As we speak, all the payments are still being
    made under the old system; is that correct?
        Ms. Mitchell. Well, there are demonstration projects that
    CMS has implemented over the last several years that do change
    payment, but the Physician-Focused Payment Models that we have
    evaluated have not yet been implemented at least through CMS.
        Mr. Barton. All right. And Dr. Burgess told me that you
    have actually voted on five alternative systems; is that
    correct?
        Dr. Bailet. Yes, five. We have deliberated on six, voted on
    five, with recommendations to the Secretary.
        Mr. Barton. OK. Now these five all passed, so to speak, so
    they have been forwarded to the Secretary, or did you vote down
    any of them?
        Dr. Bailet. We voted two down. And then the reason we
    deliberated on six, the sixth submitter retracted their
    proposal after hearing the point of view of the committee. They
    are--resubmitted it for after they have modified it, but the
    others were either recommended for small-scale limited testing
    or implementation.
        Mr. Barton. So you forwarded five to the Secretary----
        Dr. Bailet. Yes.
        Mr. Barton [continuing]. Which we don't have right now.
        Dr. Bailet. That is correct.
        Mr. Barton. But there is somebody active, I guess. The
    Secretary or his or her designee decides if these systems that
    you voted on are acceptable for the marketplace; is that
    correct? And then if he passes it then it comes back and
    doctors pick which one they want to use. Is that how it works?
        Dr. Bailet. Well, that is part of our challenge is we see
    this, we want to be a value-add to the system. We are upstream
    of CMS and CMMI. We want to make sure that the process and
    evaluation and the analysis that we are providing sharpens
    these models so that when they get downstream to CMS and CMMI
    it helps them do the work they need to do relative to analysis
    and figuring out how to actually stand up these models within
    the current Medicare system.
        Mr. Barton. Well, to me that seems overly complicated. Now
    it may not be, but I want to try again. Somebody is going to--
    your doctor groups have voted on systems that they want to use,
    right?
        Dr. Bailet. Right.
        Mr. Barton. You have forwarded those to the Secretary of
    Health and Human Services. The Secretary of Health and Human
    Services and the bureaucracy decides which of those are
    acceptable; isn't that right?
        Dr. Bailet. That is right.
        Mr. Barton. If they say, ``We have the HHS stamp of
    approval,'' it comes back, and who decides which of those to
    use once they are approved?
        Ms. Mitchell. The only requirement is that the Secretary
    post a public response to our recommendations. It is then up to
    the Secretary and CMS if and when to implement.
        Dr. Bailet. Our charge is to advise the Secretary, work
    with the stakeholders, make a recommendation, provide that
    advice.
        Mr. Barton. I got that and you have done it.
        Dr. Bailet. Yes, sir.
        Mr. Barton. You are waiting on the Mt. Olympus approval,
    right? Sooner or later some of these are going to be approved.
    My question is once they are approved--I guess I will rephrase
    it. How are they implemented once approved?
        Dr. Bailet. And again, that is, we need more clarity on how
    that is going to happen. That is not under our purview. We are
    ready, willing, and able to partner with CMS and CMMI.
        Mr. Barton. Well, who is the decision maker?
        Dr. Bailet. The Secretary and HHS.
        Mr. Barton. OK, I am saying they have approved it. I mean
    at some point in time somebody in the system, a doctor who is
    seeing patients----
        Dr. Bailet. I get it. OK.
        Mr. Barton [continuing]. Says OK, we are going to switch
    from this old system to this new system A.
        Dr. Bailet. Right.
        Mr. Barton. And I am assuming since we are trying to be
    inclusive that is a hospital, a region, a State, somebody says
    yes, we are going to use alternative system A.
        Dr. Bailet. Right. So that is where just like in CPC+ or
    some of the other models, the Alternative Payment Models that
    have already been deployed, the Oncology Care Model, for
    example, that is what CMS will do. They will take our
    recommendations. They will look at these proposals. They will
    refine the model and figure out how do we build this model with
    these concepts and be able to implement it within the Medicare
    payment system. They will put it out there, I believe.
        I don't want to speak for them, but my guess would be that
    they will take these models, put them out there for the
    physician----
        Mr. Barton. They. They being----
        Dr. Bailet. CMS and Medicare, put in Alternative Payment
    Models saying----
        Mr. Barton. So CMS is the one who chooses which model to
    use?
        Ms. Mitchell. We don't have the authority to direct CMS to
    do that. We can make recommendations.
        Mr. Barton. So they are going to tell you which model to
    use.
        Dr. Bailet. Or not.
        Mr. Barton. See, I had it all wrong. I assumed the doctor
    groups, the providers would choose which one they want, but you
    are saying CMS is going to say, ``We like this one.''
        Dr. Bailet. Well, CMS will make the models available for
    the stakeholders to then sign up to deploy. So they will, just
    like the Oncology Care Model, it is out there and practices
    will sign up to participate.
        Mr. Barton. And they can make more than one model
    available?
        Ms. Mitchell. Yes.
        Dr. Bailet. Yes.
        Mr. Barton. OK, because I thought the whole point of this
    was to give doctors or--I keep saying doctors--to give
    providers----
        Mr. Bucshon. Will the gentleman yield?
        Mr. Barton. I would be happy to yield.
        Mr. Bucshon. I think what you are trying to get at, if you
    don't--if there is an Alternative Payment Model that has been
    approved and you don't participate in that, then you are in
    MIPS.
        Dr. Bailet. Right.
        Mr. Bucshon. So you can at that point it seems to me you
    are not necessarily forced to accept the Alternative Payment
    Model, but if you don't you have to participate in MIPS. Is
    that----
        Mr. Barton. What is MIPS?
        Mr. Bucshon. That is the overall reporting system that
    assesses quality, value.
        Mr. Barton. The current system?
        Mr. Bucshon. Well, no. It was put in place under MACRA.
        Mr. Barton. So it is a new one too.
        Mr. Bucshon. It is a consolidation of three separate
    evaluation systems that were previous MACRA.
        Mr. Barton. I am glad I have clarified this situation.
        Mr. Bucshon. So the point is I think, Chairman, is that a
    physician if they don't participate in the Alternative Payment
    Model they will have to be in the MIPS. And you might comment
    on that. I yield back.
        Mr. Barton. This is the last because our time has expired.
    So answer Dr. Bucshon's question and then we will go to Ms.
    Castor.
        Mr. Green. I just want to say, Mr. Chairman, you and I
    could talk energy all the time.
        Mr. Barton. Yes. Energy policy is simple compared to this.
        Would you like to comment on----
        Ms. Mitchell. Yes. That is correct. PTAC is actually, I
    think our role is to expand the options for participation so
    that CMS has a broader portfolio that is representative of what
    physicians think would be better models. So we can recommend
    those for inclusion in the Medicare portfolio, but again it is
    not up to us who participates or if they are implemented.
        Mr. Barton. We thank and we yield to the gentlelady from
    Florida for 5 minutes.
        Ms. Castor. Well, thank you. And I want to thank you, Mr.
    Chairman, for calling this much needed hearing. And thank Dr.
    Bailet and Ms. Mitchell for your work on the Physician-Focused
    Payment Model Technical Advisory panel and to all of the
    doctors and medical professionals that have also been engaged
    in this and taking this on.
        I am very gratified to see the progress on transitioning to
    value rather than volume, at the same time while we improve
    patient care, allow doctors to practice medicine, and do
    everything we can to help lower the cost. I hear you talking
    about the difficulty now with submissions and approvals and you
    need answers from CMS and CMMI. Would you say that the progress
    has stalled on your work?
        Dr. Bailet. I am not sure I would use the word stalled. I
    think we are new. We are new at the game. And then I don't mean
    game in a negative way, but I mean this is a new process. We
    have only sent two sort of series of recommendations to the
    Secretary and, as you know, we have an interim Secretary, so I
    think that people are finding their way.
        We are in dialogue with CMS and CMMI. It is a constant, you
    know, it is a constant partnership. We are trying to work with
    them. They are providing insight----
        Ms. Castor. So they, really, it would be helpful if the
    committee held a follow-on hearing with CMS and the folks that
    are working on this to get some of the answers that Mr. Barton
    asked and Mr. Green and others.
        In order to most effectively review the proposals submitted
    to PTAC, MACRA required the Secretary to establish a set of
    Physician-Focused Payment Model criteria for evaluating the
    proposals. MACRA also required PTAC to then review proposals
    submitted based upon these criteria when making recommendations
    to the Secretary.
        So there are 10 criteria, including the extent to which
    proposals provide value over volume, increase care
    coordination, improve quality, all factors that PTAC considers
    when evaluating a proposal. Ms. Mitchell, can you describe the
    10 criteria established by the Secretary, particularly the
    criteria designated by PTAC as high-priority criteria?
        Ms. Mitchell. Certainly. And if I might just respond very
    briefly to your last question, I think it is very important. We
    are not seeing any sort of slowdown in number of submissions to
    the committee. In fact, it is the opposite. We have more
    proposals than we even had anticipated. I think the question
    about what happens next is really the open one.
        Ms. Castor. Thank you for clarifying that.
        Ms. Mitchell. Yes. And in terms of the high-priority
    criteria, we are evaluating each proposal against every
    criteria, but there were certain criteria that the committee
    thought carried, you know, particular weight. So as an example,
    scope is a high-priority criteria. We don't think that it is
    optimal to identify a model that only one or two or just a
    handful of practices can participate in, we are really looking
    for more transformative models. So scope, as an example, meant
    that we would have greater participation if it was a high-value
    payment model.
        The high-priority criteria, quality and cost, obviously the
    point of payment reform is not to change payment, it is to get
    better care at lower cost. So how are we determining if these
    changes are actually giving better patient care at a more
    affordable rate? So that seemed extremely important in the
    entire undertaking.
        And then, finally, payment methodology, if Dr. Berenson was
    here he would tell you we are not just looking for an addition
    of a new code. We are talking about meaningful changes in the
    methodology of payment, and that is what we are seeing. We have
    had some proposals that do not meet that criteria. They could
    be fixed differently, the barriers. We are really looking at
    models of payment that are currently not supported and require
    a new payment methodology.
        Ms. Castor. So, Dr. Bailet, you talked about you have seen
    some innovative proposals. Give us some hope here. What is
    innovative that you have seen? What has been difficult? What
    has been a little less challenging?
        Dr. Bailet. So there was a lot of energy in our last public
    meeting when we looked at hospital at home. So typically
    patients today show up in the emergency room, they need
    admission. They have criteria to meet admission. And this model
    has the sophistication for select patients to actually treat
    them as if they were hospitalized but to provide that care in
    the home. That is tremendously innovative. It is also allowing
    patients to----
        Ms. Castor. Is that because the medical professionals go
    there? I mean----
        Dr. Bailet. There is a team that is deployed, there is
    training. But the point is that hospitals are not places--you
    don't, you know, I am a surgeon and I would tell my patients
    you want to be in the hospital no more than 1 second longer
    than you need to be. Bad things happen to you in the hospital.
        And so this allows patients with the patient and the family
    to make a decision to get that care, but get it at home,
    safely. We think that model shows tremendous promise. There is
    some economics obviously, but it also is very beneficial when
    you match it against the criteria. It helps the patients
    specifically and their family to be able to get that care at
    home. That is just one example of several of the models that we
    have looked at.
        Ms. Castor. So out of these models what has been
    particularly difficult?
        Dr. Bailet. Physicians and stakeholders are very, they are
    much clearer on the clinical side of the model. Where we are
    challenged is on the payment side, getting the data to be able
    to model for the committee to say, ``Here is what the data is
    showing us, here is where the dollars are, and here is how the
    model will impact the dollars.'' That is an area of technical
    assistance that could help.
        I think Elizabeth wanted to make a comment.
        Ms. Mitchell. I would just add, several of the models we
    have seen are communitywide. As an example, how do we bring in
    hospice care, transportation, other services that patients
    actually need? And there is a major barrier of sharing data and
    information effectively in a timely way.
        So that--and a provider has said that that is their primary
    barrier to implementing the models that they are bringing--so
    that continues to be just a priority area that we have got to
    solve.
        Ms. Castor. Great. Thank you again for your work.
        Dr. Bailet. Thank you.
        Mr. Burgess [presiding]. The Chair thanks the gentlelady.
    The gentlelady yields back. The Chair recognizes the gentleman
    from Illinois, Mr. Shimkus, 5 minutes for questions, please.
        Mr. Shimkus. Thank you, Mr. Chairman. And I appreciate my
    colleague from Florida, because that was one of the questions I
    was going to ask and she picked it up, was highlighting a
    specific example. And I think you outlined a pretty good
    example of where you can be helpful. I am interested in this is
    because, you know, I was here in '97 when we passed the SGR to
    spend my career postponing it to the point where then we got to
    MACRA and MIPS and all this other position where we are today.
        Being a competitive market Republican and understanding
    competition and how that improves, you always get a little--I
    am concerned. The Government is such a big payer in the
    healthcare arena, whether it is Medicare or Medicaid, that we
    really do drive that reimbursement. And we drive the
    reimbursement because I mean, actuarially, those two are
    mandatory spending programs that are actuarially challenged.
        So then we, how do we look at trying to save the money, but
    we know docs want to get paid, right? We know docs want to get
    paid well if they can, so I think this is an interesting debate
    because doctors still want to be compensated for their
    training, their loans, and the like while we are trying to
    drive efficiency and lower costs.
        And that is your challenge that and you are an advisory
    committee or commission and you are advising the Federal
    Government on how we might be able to do that. And you gave us
    an example of one just in the last testimony, but I am
    concerned about the--you talk about telemedicine, sharing data,
    part of that is proprietary information. Part of it is going to
    be patient records. Part of it is going to be specific care
    models that practitioners may want to say, ``This is how I can
    financially do it. This will drive patients to me, but it gives
    me a competitive advantage,'' right?
        So how are you doing this? I mean how are you, or just
    let's do it in a big data framework, big data, and thank you
    for helping me remember the word, an algorithm. I mean how do--
    and we are going to have these big discussions on the
    algorithms and transparent, how do you do transparency on
    algorithms when someone feels that that is a proprietary nature
    that they have come up with?
        So those are the questions that I am interested in hearing
    as you are trying to provide advice and counsel, because some
    of this stuff might require either proposals from HHS or maybe
    legislative changes. Can you guys--Ms. Mitchell, do you want to
    say anything based upon my little diatribe?
        Ms. Mitchell. I will try. We have actually had proposals
    that do include proprietary elements, and I think we have been
    clear with submitters that anything that is included in a
    proposal for Medicare they won't have proprietary elements that
    couldn't be shared more broadly. Again this is an entirely
    voluntary process. They could do this without Medicare as well.
    I think it would be helpful probably to ask the next panel
    about some of their experience with that.
        And I think it is going to be a balance of interests. I
    think given the massive investment that we put into our
    healthcare system and the value for patients we are trying to
    achieve, I think there is just going to have to be a balance of
    obviously preserving the interests of all. I also think that
    there are success stories around the country--Oklahoma, Oregon,
    others--where there are sharing data across the community in a
    way that protects privacy. They are clearly effective stewards
    of that data. But it also allows physicians and others to have
    a full picture of population health and patient care and,
    frankly, it helps with patient safety. If a patient is admitted
    from one hospital to another and those records can be quickly
    transferred, that actually helps patient safety as well.
        So there are ways that this is being done around the
    country now that could be emulated and scaled.
        Mr. Shimkus. And I appreciate it. And I think also just in
    the--and I am going to close with this brief statement is I
    mean there is a national debate about how we pay for health
    care and will it be a one-payer system or will it be a
    competitive market model that helps bring clarity and
    efficiencies?
        So good luck, I am not sure how it is all going to turn
    out. I yield back the balance of my time.
        Mr. Burgess. The Chair thanks the gentleman. The gentleman
    yields back. The Chair appreciates the gentleman's request for
    good luck. The Chair recognizes the gentlelady from California,
    Ms. Eshoo, 5 minutes for questions, please.
        Ms. Eshoo. Thank you, Mr. Chairman.
        Dr. Bailet, it is wonderful to see you. And thank you, Ms.
    Mitchell. I have really enjoyed the questions of Members and
    your responses because you keep deepening and broadening what
    you are doing.
        Several of my questions have already been posed, but I want
    to pick up on what Congresswoman Castor said and recommend to
    the chairman that we have another hearing both with the
    stakeholders and with HHS, because I think it is important to
    bring that--to strengthen the linkage.
        Since you are dependent upon what, I mean you are doing so
    much work and then it goes someplace else and it seems to me
    that there is a question mark around it. So I am not
    suggesting, I am not impuning the agency, it just seems to me
    that I don't have a sense of how welcoming they are, especially
    if the model that you are recommending to them is going to cost
    more, because there is a constant push on the agencies not to
    spend as much.
        So which takes me to a question. You know the area that I
    represent. It is known as the innovation capital of our
    country. Most people think of it as just in terms of
    technology, but we have many, many of biotechnology companies
    that are creating really innovative technologies. Stanford
    Medical Center, I think, is doing important and exciting work
    around telehealth and telemedicine for the treatment of other
    health conditions such as stroke.
        Specifically, how are new and innovative technologies being
    integrated into the APMs?
        Dr. Bailet. We have had several proposals that have
    proprietary technology that are embedded, and I gave one
    example relative to the genetic ability to screen the tumor
    types for personalized medicine, and I believe Stanford is
    trying to do that work as well. There are other information
    systems, population health systems, that are able to look at
    the entire cohort. If you are in, for example, renal disease,
    look at your patient population and find elements to help
    sharpen the care and offer patients treatments before they
    start dialysis to improve the outcomes and decrease the chances
    for complications.
        I am trying to remember, I have all of the 20 in front of
    me.
        Ms. Eshoo. Well, no. That gives me a flavor. Do you know
    what the cost of a particular application is after you have
    reviewed it?
        Dr. Bailet. No, we don't. And that--no, we don't.
        Ms. Eshoo. So that is up to the agency to cost it out.
        Dr. Bailet. Right, yes.
        Ms. Eshoo. And are providers--I mean money drives
    everything in the world I am sorry to say, but it does. I don't
    know what the incentive on the part of physicians would be--
    well, maybe some that are highly idealistic, but people have to
    live, to move away from fee-for-service. I think doctors would
    say, and what do I get out of this? And I don't think that that
    is a selfish question.
        So do you see in the models that have been submitted to
    your commission that--I don't know how to put it. Are they
    based, if you put your fingers on the scales is it with
    anticipation that there will be a better system with better
    money? Maybe that is the best way to put it.
        Dr. Bailet. Physicians they want to do the right things for
    their patients. They want to get recognized appropriately for
    the work they are doing. There are certain limitations in the
    fee-for-service system that doesn't recognize those efforts,
    and despite those challenges physicians continue to do it
    anyways.
        These models reframe the way care is delivered. It
    recognizes their efforts. It pays for nurse coordinators. It
    pays for home care. It pays for things that the traditional
    system doesn't recognize that are incredibly valuable to drive
    outcomes and lower cost. So that is why--that is certainly why
    I am energized to be in this work, and I think my colleagues on
    the committee would echo that, and you will hear that from the
    stakeholders who are behind me.
        Physicians, again, and clinicians, they want to do the
    right thing for their patients. And yes, their economics have
    to work, but there also has to be, you have to do the right
    thing for your patients and it can't be completely driven by
    the economics. But we also have to be realistic about that.
        Ms. Eshoo. Thank you very much for important work.
        Ms. Mitchell. May I just----
        Ms. Eshoo. It is up to the chairman. You can answer. I
    can't talk.
        Mr. Burgess. Please answer.
        Ms. Mitchell. I would just add that I think all the
    research including recently from the National Academy of
    Medicine show that about 30 percent of health spending do
    nothing to improve patient outcomes, so there is waste in the
    system that could be addressed through better, more effective
    utilization that does not in any way create barriers for
    physicians.
        Physicians are trying to navigate those barriers right now.
    I think there is huge opportunity. I think there was a recent
    GAO report that showed we are spending about $40,000 per
    physician per year on performance measurement. There are
    opportunities for savings that actually enable physicians to
    have more flexibility to give the right care at the right time.
        Ms. Eshoo. Thank you very much.
        Thank you, Mr. Chairman.
        Mr. Burgess. The Chair thanks the gentlelady. The
    gentlelady yields back. The Chair recognizes the gentleman from
    Missouri, Mr. Billy Long, 5 minutes for questions, please.
        Mr. Long. Thank you, Mr. Chairman.
        And my questions are for both of you. And, Ms. Mitchell, I
    will start with you. And this first one might sound like an
    oxymoron, but can you each elaborate on why it is important
    that physicians not overassume risk in models they may be
    approaching for the first time while at the same time keep
    pushing forward in their drive for physicians to assume risk?
        Ms. Mitchell. Well, certainly, I think if Mr. Miller were
    here again representing the committee--I don't think risk is
    magic in any way. I don't think the assumption of risk will
    suddenly change care delivery, but I think it is a move towards
    greater accountability and ownership for outcomes. I think what
    we are trying to do is find models that appropriately enable
    risk and accountability certainly without putting a burden that
    is not manageable or sustainable on physicians, so I think it
    is a very important balance.
        I don't know if that answers your question, but we think it
    moves them towards value.
        Mr. Long. OK, Dr. Bailet?
        Dr. Bailet. So to follow on with Elizabeth's comments,
    there are unintended consequences. These models have elements
    that are new. Many of them have not been field-tested, if you
    will, so the intent is good, but until you actually deploy the
    model in the field, you are not exactly sure what are the
    outcomes. Are you going to get the outcomes that the model is
    established to accomplish, which is why the committee felt
    strongly and continues to feel that some limited testing is
    necessary for some models where the elements are uncertain or
    unclear.
        So we need to strike a balance between encouraging
    physicians and clinicians to take risk and to be held
    accountable and to be recognized for outcomes and paid
    accordingly, but we also know that in the world of in the past
    with managed care if you push too fast too far and you outstrip
    the sophistication of the clinicians and their ability to
    perform, those are also unintended consequences that we need to
    be careful about making sure that we don't do anything that is
    so disruptive that it impugns these organizations.
        And I used the word ``vibrancy'' earlier, and I used that
    specifically. I hear a lot of things about well, we want to
    keep our practice viable. I used to run a practice of nearly
    2,000 physicians in Wisconsin. I don't think viable is what is
    top of mind for patients who are seeking care. We want
    physicians and clinicians to have vibrant practices, to be able
    to provide the highest quality care with the best outcomes.
        And that is where if you outstrip your ability to do well
    in risk you can have an economic consequence that could impugn
    your practice. And when these small hospitals and rural
    practices go out of business, your ability to repair them or
    replace them are incredibly hindered. And so that is where I
    want to make sure that as we go forward we are very thoughtful
    about implementing at the right pace in the right way. And
    there needs to be flexibility. Elizabeth said it is not a one-
    size-fits-all solution that we are talking about here.
        Mr. Long. OK. And since your microphone is still on I will
    start with you on my next question and then we will move to Ms.
    Mitchell. I would like for both of you to answer this one. But
    do you believe CMS's approach in the short term should be more
    focused on ensuring providers are ready to transition to
    qualified Alternative Payment Models or in simply getting more
    providers into value-based payment arrangements?
        Dr. Bailet. You told me earlier that you were going to give
    me a tough question.
        Mr. Long. No, I didn't. You said I was, I just agreed with
    you.
        Dr. Bailet. Well, I think, and I am not being evasive, I
    think it is both. I think physicians, as I said physicians are
    in different--and clinicians--are in different states of
    readiness, and so they need to get in. They need to move away
    from fee-for-service. Whether they get in on the Merit-based
    Incentive Program, which has value elements, or they are
    sophisticated enough or willing to get into an Alternative
    Payment Model, I think physicians have to get on the playing
    field, clinicians have to get on the playing field and get in
    the game. And the fee-for-service model is not sustainable and
    so this, I think this legislation these efforts compel
    physicians and clinicians to get on the field.
        Elizabeth?
        Ms. Mitchell. I would just add that what we are seeing in
    PTAC is the early adopters, the leaders and the innovators who
    are ready to go. And I think by creating that opportunity by
    allowing them to go first with appropriate technical
    assistance, flexibility, and small-scale testing, we will learn
    a lot and that will enable some of the practices who are less
    ready to actually, I think, succeed as they move forward.
        Mr. Long. So do you agree with the doctor that both are
    important?
        Ms. Mitchell. Both are important, yes.
        Mr. Long. OK, thank you. I have got a really, really tough
    question for my next one, but you all are lucky I am out of
    time so I am going to yield back.
        Mr. Burgess. The gentleman's time has expired. The Chair
    recognizes the gentleman from Maryland, Mr. Sarbanes.
        Mr. Sarbanes. Thanks, Mr. Chairman. Thank you to the panel
    for being here. A lot of the motivation for the Affordable Care
    Act was to begin to kind of turn our healthcare system towards
    prevention, primary care, shift the kind of caregiver world to
    the prevention side of the spectrum, et cetera.
        MACRA was passed separately from the Affordable Care Act,
    but I am curious if you perceive that there is alignment there
    between the goals of the Affordable Care Act and the goals of
    the new kinds of payment methodologies that MACRA is pursuing.
        Ms. Mitchell. Well, I guess I would say that to the extent
    that the goals of both legislation were affordable care, I
    think there is alignment in the intent. Obviously the
    Affordable Care Act focuses more on insurance and I think MACRA
    focuses more, and appropriately so, on the fundamentals of care
    and payment. I don't think you will have affordable insurance
    until you have affordable care and it is going to be these
    payment and care delivery reforms that actually enable that.
        Mr. Sarbanes. Thank you. The other question I had is, it
    gets to sort of how--and a number of Members have spoken to
    this--but how the physician community in particular is
    receiving these new models. And I don't know if you are the
    right witnesses to describe this, but I am interested in
    whether kind of the next generation of physicians coming along
    whether you are seeing that there is, first of all, more
    facility with the concepts, maybe more eagerness to try them.
    Are medical schools beginning to assimilate some of these
    models into the conversations they are having with the next
    generation of providers? Is there a symmetry with how certain
    cohorts within the physician community are responding to these
    things?
        Dr. Bailet. I think it is highly variable. I mean, I am
    hoping that my colleagues, when they come up and testify, that
    you will hear some specific answers to those questions relative
    to training and the receptivity for the next generation of
    physicians and clinicians to embrace these models in care
    delivery.
        I think--and I don't want to speak for the committee, but
    from my own personal experience--I think there is an appetite
    for new medical trainees who are coming and entering into the
    clinical practice, I think there is an appetite for them to
    provide the value which is the high quality and affordable
    care. I think they understand the economics that these folks
    are coming out of school, for example, with hundreds of
    thousands of dollars of loans.
        So I think that they understand that there is an economic
    consequence if their current employer or their practice is not
    successful. So I believe that the economic piece is there. I
    think the clinical piece is there as well relative to
    innovation and training and I think there is a willingness to
    try. I think one of our biggest challenges is there is still
    the unknown. We don't know how some of these models are going
    to impact outcomes. And so I guess I would leave it at that.
        Mr. Sarbanes. Do you feel as though the provider community
    gets that they are living in a new world, if you think they are
    living in a new world or not yet?
        Dr. Bailet. I think there is probably some vestiges of
    remnants of folks in the provider community that still harken
    back for the fee-for-service environment. And I am not saying
    that fee-for-service there is not a place for that model in the
    new world, but I think that also there is a high degree of
    recognition that the value, paying for outcomes, being able to
    track it, and being able to actually deliver on the commitment
    to provide outcomes is one of the things that is in front of us
    that actually can bend the cost curve.
        So I do think that that is where the collective thinking
    around the provider community is today. As I go around the
    country I don't hear a lot of debates about, well, we need to
    go back to just pure fee-for-service. I am not hearing that. I
    think people are now focused on what does it look like, how do
    we get there, and at what pace do we move from fee-for-service
    to value and how do we do it while we are basically practicing
    in both worlds. How do we navigate risk in one and fee-for-
    service in the other, for example.
        Mr. Sarbanes. OK, thank you. I yield back.
        Mr. Burgess. The gentleman's time has expired. The
    gentleman yields back. And speaking for the vestige, the Chair
    recognizes the gentleman from Indiana, Dr. Bucshon.
        Mr. Bucshon. Thank you, Mr. Chairman.
        I would first like to, I would like to comment on what Ms.
    Mitchell said about the cost of care coming down as the key to
    affordable insurance. I completely agree on that. That is a big
    issue. And to do that more transparency in the healthcare
    marketplace as well as more active consumer participation in
    their healthcare decisions, including the cost of what they are
    being provided, is really key.
        As a former cardiothoracic surgeon I know my organization
    that I participate in, the Society of Thoracic Surgeons, they
    have been really pioneers in quality measurement for the last
    25 years with the STS database. And, Mr. Chairman, I would like
    to ask unanimous consent to submit their comments on this
    hearing to the record.
        Mr. Burgess. Without objection, so ordered.
        [The information appears at the conclusion of the hearing.]
        Mr. Bucshon. I would like to highlight the STS has designed
    a quality-based payment program specifically related to
    cardiothoracic disease including coronary bypass, grafting,
    valve repair, replacement procedures, and as well as treatments
    for lung cancer, relying on this database and I would encourage
    CMS and Congress to take a look at that, as they already have.
    And they are actively pursuing partnerships, looking forward to
    bringing, you know, fruition of payment model that could help
    provide quality incentives and efficiencies to really one of
    the largest cost centers that we have in the Medicare program.
        Ms. Mitchell, according to CMS, only, currently, 5 percent
    of physicians are in Alternative Payment Models. And I have
    heard from a number of physician specialty organizations that
    there are some Stark Law barriers potentially to participating
    and succeeding in an APM because it prohibits practices from
    financially incentivizing their physicians to follow treatment
    pathways that are related to value that might improve the
    system.
        Do you think there is any problems there legally in that
    that are preventing some people from participating in APMs?
        Ms. Mitchell. I am not an attorney and would not want to
    pretend to be, so I would not be able to answer that question
    with any authority. Perhaps Dr. Bailet has insights.
        Dr. Bailet. No.
        Mr. Bucshon. Maybe I will ask that for----
        Dr. Bailet. Played one on TV, right?
        Mr. Bucshon [continuing]. The next panel. Just there are
    some barriers out there. I am not a lawyer either. I don't, but
    we are going to be working on trying to decrease the barriers
    for physician participation in APMs.
        Maybe any one of you can discuss the importance of engaging
    in the specialty community in developing APMs. That can be some
    of the more difficult APMs to work to get together. And can you
    elaborate on where you see growth potential in the future for
    specialists playing a bigger role in these new care delivery
    models? Dr. Bailet?
        Dr. Bailet. Well, we have garnered a lot of interest from
    the specialists, single specialty societies. You are going to
    hear from my colleague Dr. Opelka about his ACS model. So there
    is tremendous interest and we have a number of specialty-
    specific models that we are evaluating right now. So I think
    that our interaction with the specialty community actually is
    pretty robust, but again I think you will hear that as you get
    to the next panel.
        Mr. Bucshon. I suspect that is true. Do you think it is
    more difficult to put together APMs as it relates to the
    specialists versus primary care or no?
        Dr. Bailet. I haven't seen that.
        Ms. Mitchell. I haven't seen that, either.
        Mr. Bucshon. Not really?
        Dr. Bailet. No.
        Mr. Bucshon. OK, good. The other area, and I have a minute
    and 30 seconds to address MACRA, is it will require
    significance guidance by CMS's physician participation in
    multiple APMs. Obviously we want physicians to be able to
    experiment with different approaches to improving their
    practices while also recognizing that many APMs being developed
    by stakeholders are somewhat narrow, centered around a specific
    disease or condition.
        Can each of you speak to why it is important to allow
    physicians to experiment with different quality-based payments
    and have you thought about this facet of the program as you
    review the proposals?
        Ms. Mitchell. So I will try to answer that. I actually
    think it could be very important to participate in more than
    one model. I think at the community level you are trying to
    align models and incentives and not carve out certain groups
    over here and others over there.
        So I think the ability to, as an example, have episodes
    within a capitated payment or an ACO, I think, is an important
    innovation to test. I think there are regulatory barriers right
    now to doing that and I think that is something that warrants
    further exploration.
        Dr. Bailet. I agree.
        Mr. Bucshon. Do you have any comments?
        Dr. Bailet. No, no.
        Mr. Bucshon. I yield back.
        Mr. Burgess. The Chair thanks the gentleman. The gentleman
    yields back. The Chair recognizes the gentleman from
    Massachusetts, Mr. Kennedy, 5 minutes for questions, please.
        Mr. Kennedy. Thank you to the chairman. Thank you to the
    witnesses. Thank you for answering the questions and educating
    the discussion.
        I wanted to get your opinion on a couple of things and
    build off a little bit of the conversation from our colleagues.
    There are different, I guess, excuse me, a variety of
    Alternative Payment Models that have now been put forth and
    authorized by CMMI. In your assessment if you had any ideas or
    suggestions for us, how does CMMI evaluate those different
    models?
        Are there factors there that should be taken into account
    differently or aspects there that perhaps Congress should be
    looking at that should be accentuated that aren't fully
    contemplated there? Do you have any suggestions as to how those
    models or other models might be put together to address the
    themes that you have talked about so far today?
        Ms. Mitchell. I hope this answers your question. I think
    that there are a lot of lessons from the demonstrations to
    date. I will point to sort of CPC and CPC+, initially, because
    we have seen, I think, real success in some communities because
    you have aligned payers so you have alignment of incentives and
    measures. So it is not just noise, it is everyone is going in
    the same direction. It is a primary care-based model and it
    requires data sharing across the community.
        I think those examples point to successes that could be
    replicated. I think there are some elements of the CMS
    evaluation approach that I don't know that we get information
    soon enough so that we can apply it and sort of rapidly learn
    and improve and I think there are ways to really take lessons
    earlier and share them more effectively to benefit all of the
    new models and implementers.
        Jeff, would you add anything?
        Dr. Bailet. No, I think that is well said.
        Mr. Kennedy. Building on that for a second, and one of the
    areas that I have focused on here is the--well, mental
    behavioral health and the integration thereof in primary care.
    So particularly for that model then we have seen issues around
    the absorption of electronic medical records for the mental
    health practitioners, the sharing of that information between
    primary care and mental health practitioners and obviously
    concerns about some of the dissemination around mental health
    records.
        What if there is some things that CMS might be able to do
    there, there is some issues there that might actually require a
    legal change. I don't know if you have any suggestions for us
    to look at given at least in my concerns about the lack of
    adequacy on a comprehensive care system set up to address those
    patients that are suffering from medical illness across the
    country particularly with regards to Medicaid. And so I don't
    know if you have any comments on that but would welcome them.
        Ms. Mitchell. I would personally just state for the record
    I think that is one of the highest priority areas in the
    country. I think that if we don't address mental behavioral
    health we are missing just a huge need, and integrating that
    into primary care is a very important strategy.
        I think there are very real limits and barriers, some
    regulatory and legal, that keep us from sharing information
    adequately and I think there are also examples around the
    country where we have done that effectively, responsibly, and
    protecting patient privacy but actually getting the information
    to people who need it for better care.
        I am happy to follow up with you on some of those models--
    --
        Mr. Kennedy. I appreciate that.
        Ms. Mitchell [continuing]. Because you are exactly right.
    We have to address that.
        Mr. Kennedy. Doctor, anything else?
        Dr. Bailet. No. I agree.
        Mr. Kennedy. So one of the great things about representing
    Massachusetts is, I am kind of preaching to the converted here,
    but being able to visit particularly those community health
    centers that are on the front lines of some of these issues
    from, you know, partnering with farmer's markets in doctors
    writing scrips to farmer's markets to make sure that their
    patients are getting access to fresh fruits and vegetables to
    the absorption of medical and adoption of medical-legal
    partnerships, so that when a patient potentially comes in with
    an asthma issue that if there is mold in an apartment, yes, you
    can give them an inhaler, but you are not going to address the
    concern because there is mold and an inhaler doesn't cure mold.
        Are there other systemic, you are talking about alignment
    incentives, what should we be focused on when we start to look
    at issues? You mentioned transportation before which is
    obviously critical. Are there other kind of one-offs here that
    you think we should keep in mind as we try to think of the
    opportunities and challenges of actually trying to reach out to
    patients and then wrap them in this continuum of care so you
    can get to them and reduce the cost of delivery?
        Dr. Bailet. I think there are lots of opportunities,
    palliative care, for example. I mean I think that the data
    where, you know, you follow the economics. So we consume a
    tremendous amount of resource relative to folks who are at
    their end of life. We have been able to, I have seen models out
    there where we have been able to get the uptick, the average
    length of stay, for example, in hospice which is, I think,
    nationally, somewhere between 16 and 18 days. There needs to be
    a more concerted effort that should be measured in months, not
    days, if we are doing the good work and want the outcomes we
    would want for that cohort of patients.
        So I think there is tremendous opportunity and, again, I
    used palliative care as an example, but there are others that
    you also raised.
        Ms. Mitchell. And you are exactly right. That is where the
    opportunity is to really improve health and reduce costs. We
    have examples by members around the country. There are
    partnerships with the criminal justice system and hospitals to
    actually identify much more effective interventions than, you
    know, another ER visit.
        And by doing that coordination, finding out what people's
    real needs are, typically--housing, transportation, the real
    upstream social determinants--that is where you are going to
    really impact health. And connecting those services, the
    providers and that information, I think, is a very big
    opportunity.
        Mr. Kennedy. Thank you. I appreciate it.
        Mr. Guthrie [presiding]. Thank you. The gentleman yields
    back, and I will now recognize myself for 5 minutes for
    questions.
        Dr. Bailet, in your testimony you mentioned how Medicare is
    driving market change through the development of APMs. What are
    these trends and what are you seeing the impact is on other
    players, or payers? I am sorry.
        Dr. Bailet. Well, I can speak for my organization that I
    currently work with, the Blue Shield. We are moving the
    commercial side of the business to value-based pay-for-value.
    It is one of our top priorities in the organization and MACRA
    actually allows--in 2019--allows the commercial payers to
    partner with Medicare and put these models in the field.
        So, again, the economics going from fee-for-service to
    value, paying for outcomes, it not only is the right thing to
    do clinically, but it is also the right thing economically. And
    as one of the largest payers in the State of California
    contracted with over 50,000 physicians and over 400 hospitals,
    we are very activated to get these practices of the future, if
    you will, out in the field and we want to do it with the
    stakeholder community, not to them.
        And that is one of the things that that is a tenet of the
    PTAC, which is why we are so transparent. We want to make sure
    that we are right there, lock arms with our stakeholders, and I
    hope you hear that from the folks who are going to come behind
    us. But it is driving market change.
        Mr. Guthrie. Do you believe our patients are being affected
    in a positive way with this?
        Dr. Bailet. I do. Again, yes. I do.
        Mr. Guthrie. Thanks. I have another question. So it appears
    that many are already responding to practice transformation
    efforts in commercial markets. Can you speak to the ideal way
    Medicare can both learn from these private sector efforts and
    harmonize with them to smooth practice modernization?
        Ms. Mitchell. So I guess I would just say I don't think
    providers think about their patients based on who pays their
    care, so to the extent that private and public payers can align
    that will enable providers to actually give optimal care across
    their patient population. To the extent that there are
    innovations in the commercial sector, I would hope that they
    would share those.
        Often it is very hard to get information on the outcomes of
    those changes. I think they could inform Medicare, and I think
    Medicare coming to the table and joining multi-payer efforts is
    really an optimal way to accelerate change.
        Mr. Guthrie. OK, thank you. And can you comment to the
    interests of PTAC in the diversity of models, but also those
    who have reached out to you? Do they include large and small
    rural and urban as well as primary and specialty interests?
        Dr. Bailet. Yes.
        Mr. Guthrie. Specialty interests, not special interests.
        Dr. Bailet. Yes. And so I think you will hear we have a
    small rheumatology practice that has submitted a model before
    us that we have not evaluated it, it is under evaluation. So we
    have a broad array of medical stakeholders again from the range
    of small and rural practice to sophisticated systems and
    specialty societies like American College of Surgeons, for
    example.
        Mr. Guthrie. OK, thank you.
        I will yield back and recognize Dr. Ruiz for 5 minutes for
    questions.
        Mr. Ruiz. Thank you very much, Mr. Chairman. And thank you
    for allowing me to waive on to this subcommittee.
        When we passed MACRA in 2015, one of the goals was to
    increase quality of care and stabilize payments, moving towards
    payment models that reward high-quality care. One of the
    options under MACRA is for providers to participate in an
    Advanced Alternative Payment Model under which the physicians
    accept some of the financial risk. However, in just over a year
    since its creation, the Physician-Focused Payment Model
    Technical Advisory Panel which reviews the proposed APMs has
    received only 19 proposals that we have discussed earlier for
    consideration and deliberated on just five of those. So I am
    concerned we are not seeing enough to really make a smart
    decision on what is going to be the best model.
        And speaking to different physician specialty
    organizations, I have learned that one of the greatest barriers
    to developing APMs are laws that prohibit many of these
    physician practices from coordinating, collaborating with other
    specialties while they are trying to develop an APM, much like
    what Dr. Bucshon mentioned, so this means that the groups are
    not able to test out their model to see if it will work in
    practice. And while these laws are important and serve an
    important purpose, in this instance they are restricting the
    development of these payment models, stunting movement towards
    fully achieving the goals of MACRA.
        What are some of these barriers in general that have
    inhibited different practices and organizations from developing
    APMs? If you can name me the top two barriers and then I want
    you to name the--if you were to recommend us, how would we
    resolve those top two barriers?
        I will start with Mr. Bailet and then I will go to Ms.
    Mitchell.
        Dr. Bailet. I guess what I would say, I would turn to the
    second row of testimony behind us, the folks who are actually
    out there trying to create these models for our consideration,
    to answer your question relative to those two barriers.
        Mr. Ruiz. OK.
        Ms. Mitchell, do you have an answer or an idea? Because I
    will ask them and I have been speaking with them.
        Dr. Bailet. Yes.
        Mr. Ruiz. But, you know, I wanted to get your perspective
    in being involved as well.
        Ms. Mitchell. Absolutely. In my testimony I shared that the
    barriers that we have heard most frequently in our first year
    are access to data and technical assistance to design the
    models and opportunity for small-scale testing. So I think
    those are three issues and we have actually asked for
    congressional consideration on each of those.
        So I do think that there are barriers, but I do also think
    that the panel, the next panel will be able to share how they
    have overcome them.
        Mr. Ruiz. So the MACRA required the Secretary to establish
    a set of Physician-Focused Payment Model criteria for
    evaluating proposals. MACRA also required PTAC to then review
    the proposals submitted based on these criteria when making
    recommendations to the Secretary. These 10 criterion including
    the extent to which proposals provide value over volume,
    increase care coordination, improve quality, et cetera, can you
    describe the 10 criteria established by the Secretary,
    particularly the criteria designed by the PTAC as, quote, high-
    priority criteria?
        Dr. Bailet. Yes, we reviewed that earlier but we can go
    back again.
        Mr. Ruiz. Give me the top two, please.
        Dr. Bailet. There is three.
        Mr. Ruiz. Give me the top two.
        Dr. Bailet. Scope, cost, and quality.
        Mr. Ruiz. Scope, cost, and quality. And in the proposals
    that you have reviewed in scope, cost, and quality, what are
    the easiest criteria for most proposals to attain?
        Ms. Mitchell. Well, I think all of the proposals that we
    have seen have recognized that we are looking for models that
    improve quality without increasing cost and they have all
    brought forward models that will----
        Mr. Ruiz. So everybody has been able to meet all 10
    criteria easily?
        Dr. Bailet. No.
        Ms. Mitchell. No.
        Mr. Ruiz. All right, so which are the difficult criteria
    for the organizations to meet?
        Ms. Mitchell. Well, I think one of the challenges is
    sometimes that it is not a payment methodology that is actually
    different enough to require an Alternative Payment Model. As an
    example they may just need a tweak in codes or something, a
    much more minor intervention, so it might not qualify as an
    Alternative Payment Model. That is one example.
        Dr. Bailet. I would say another example that we have found
    as a committee is the care coordination, the ability for
    physicians and clinicians to work with each other across
    communities, across disciplines, sharing data that we talked
    about. Those are all contributors to make----
        Mr. Ruiz. Is it more of a technical difficulty with the
    electronic medical records issues or is it a cultural, a
    difficulty within different institutions?
        Ms. Mitchell. I don't believe it is a technical barrier. I
    think it is more often a business or a cultural barrier. I
    think that it is certainly possible to share data across
    platforms and----
        Mr. Ruiz. What would you recommend we do to improve
    collaboration across the different institutions and specialties
    so that we can get better models?
        Ms. Mitchell. I think that we are seeing that. I think that
    the proposals that are coming forward are actually laying out
    ways to collaborate more effectively. I think that there can be
    incentives for data sharing. You can have data standards so
    that it is possible to share data across platforms, and you
    could actually ask the vendors to ensure that there is no data
    blocking so that data can effectively be shared.
        Mr. Ruiz. OK. If the barrier is a business model then I
    think we have to look at what are the business incentives for
    them to work together during these APMs, because they also have
    business needs in the short term as well.
        Ms. Mitchell. Absolutely. And I think that by changing some
    of the incentives that we are actually helping them to find
    viable business models for the right care.
        Mr. Burgess [presiding]. The gentleman's time has expired.
    The Chair recognizes the gentleman from Oklahoma, Mr. Mullin, 5
    minutes for questions, please.
        Mr. Mullin. Thank you, Mr. Chairman. Thank you for both of
    you all being here. As you guys have, you know, been sharing
    the same questions, my question line will be the same too. And
    I really appreciate you all's patience. As you can tell, the
    committee is really looking into this. This isn't something
    that we are looking to stand in the way, we are looking to help
    to improve and so we appreciate you all being here.
        I represent a very rural district, very, very rural
    district, and our constituents obviously receive care, many of
    them, from critical access hospitals. Do you think it is time
    that we explore, target value-based payment models for critical
    access hospitals that recognize the unique needs of rural
    areas?
        Dr. Bailet. I think, yes, I would agree with that.
        Mr. Mullin. Ma'am?
        Ms. Mitchell. Yes, I think so. I think there can be some
    very innovative practices in rural areas, and in many cases
    some of these models may actually allow small rural practices
    to succeed by creating more flexibility and really evaluate----
        Mr. Mullin. Which models specifically would you think?
        Ms. Mitchell. In terms of the models that we have received?
        Mr. Mullin. Well, and if you are talking about ways to look
    at the value-based payment structure how would that look like?
    What would we be needed to push from this point of view to make
    it?
        Dr. Bailet. Well, my experience with critical access
    hospitals in small rural communities, my former practice was in
    Wisconsin, getting specialty care to these small hospitals,
    allowing patients to get the care they need at home or in their
    local community rather than have to travel great distances. So
    using technology, telehealth, telepsych, for example,
    psychiatry, behavioral health at the bedside, neurology, it is
    often difficult to get those services, the actual practitioner,
    on the campus of these smaller hospitals.
        Mr. Mullin. Right.
        Dr. Bailet. But if you can leverage technology like
    teleneurology where they can actually be at the bedside with
    cameras and do the analysis that they need for patients who are
    having a stroke whether they are going to administer treatment
    there or transfer the patient, those are the kinds of things
    that these models will support, will stand up and recognize and
    pay for.
        Mr. Mullin. Have you looked at what Alaska is doing within
    the IHS? You know, they are extremely, obviously, rural and IHS
    has their own issues, their own problems, which, you know, we
    are working through that on a task force. Being Cherokee
    myself, I understand, you know, very well. But Alaska has
    seemed to be ahead of telemedicine, where, I mean, they just
    don't have that access to the care, that it is not reasonably
    for them to be able to get into and a lot of dynamics play
    into, factors play into this when you start talking about
    having to fly people in and out.
        And so they don't have a choice. They have been forced to
    do it, but they have been successful at it. Are you familiar
    with it? Have you looked at it at all?
        Ms. Mitchell. Not in any detail.
        Dr. Bailet. No. No.
        Mr. Mullin. Maybe we--I suggest you maybe taking a look at
    that. Another question, what is PTAC doing to encourage
    applications in rural and underserved areas?
        Dr. Bailet. So we are again reliant on the proposals that
    are submitted, but I will say, in the first year before the
    Secretary's criteria were finalized, we had several public
    meetings with stakeholders across the country and we were very
    clear and we continue to be very clear that we are encouraging
    small and rural practices to submit proposals, that we are
    receptive to receiving proposals.
        We see that as a significant area of need and we are trying
    to foster everything that we can do relative to our process to
    make sure that we are open and willing and we make it as
    seamless as possible for these smaller practices to compete and
    build these models for our evaluation.
        Mr. Mullin. So what are some of the barriers? And once
    again we are looking to work with you.
        Dr. Bailet. Right.
        Mr. Mullin. So what are some barriers that is standing in
    your way from this side? I mean because I am assuming if there
    were barriers that you could already take care of you would
    have already done that so there must be something that we are
    keeping that from happening.
        Ms. Mitchell. Well, again one of the barriers that again
    keeps coming up is the need for technical assistance
    particularly among small and rural practices who might not have
    the resources. I think we do need to find a way to offer that.
    I think some of the measurement systems in some of these models
    could actually be beneficial for small and rural practices or
    critical access hospitals which often have higher patient
    experience scores.
        They are actually, they might be recognized for the things
    that they are already doing well. So I think looking at
    measures and technical assistance and again the data needs for
    these practices. They can't necessarily build analytic teams
    nor should they need to. So how can we make it easier, reduce
    provider burden to actually just have the information they need
    to give the care that they are giving.
        Mr. Mullin. And just to make a point on when you said a
    patient's experience which we put, you know, high value on that
    which I agree is about customer service, but it is also about
    care too. A lot of times the reason why you see that, in my
    opinion, is these rural providers they are personally connected
    to the individual.
        Ms. Mitchell. Absolutely.
        Mr. Mullin. When my father had a major heart attack and
    actually coded he was right at the hospital. And the guy that
    was working there who is a good friend of ours knew my dad well
    and when he couldn't speak, he couldn't say anything, knowing
    the personality that my dad typically had, immediately
    recognized it and it saved his life. But I think that we take
    it more personal, but we are getting farther and farther
    behind.
        And we as a committee really want to help with that and as
    personally as a Member I want to work with you. If you have
    ideas, if there is something that we can do, if you recognize
    areas that we can push on this committee, please use our
    office. Use me as a resource because I am going to be using you
    as a resource. Thank you. And I yield back.
        Mr. Burgess. The Chair thanks the gentleman. The gentleman
    yields back. The Chair recognizes the gentleman from North
    Carolina, Mr. Butterfield, 5 minutes for questions, please.
        Mr. Butterfield. Thank you very much, Mr. Chairman. Thank
    you for convening this hearing today.
        Dr. Bailet, let me just direct one or two questions to you
    and then we will see how much time we have left after that.
        Dr. Bailet. All right.
        Mr. Butterfield. But first of all, thank you so very much
    for your testimony. Like the gentleman from Oklahoma, I
    represent a small rural community in eastern North Carolina and
    so I am very interested in your comments to him and to others
    about the challenges facing small rural providers in taking
    advantage of the APMs. And so, I guess, question one would be
    what proportion, what proportion of the 32 letters of intent
    and the 20 full proposals are from small and rural practices?
        Dr. Bailet. I don't have the number available. It is more
    than one.
        Mr. Butterfield. You just don't have it with you?
        Dr. Bailet. I don't have it with me.
        Mr. Butterfield. But you do collect the data?
        Dr. Bailet. Yes, we do. Absolutely.
        Mr. Butterfield. All right. Number two, has PTAC observed
    differences in applications from large practices and small and
    rural practices? Do you discern any differences between the
    applications?
        Dr. Bailet. Well, the applications are highly variable from
    application to application. And I think----
        Mr. Butterfield. In terms of quality?
        Dr. Bailet. Right.
        Mr. Butterfield. Quality?
        Dr. Bailet. In terms of sophistication and how they are
    built. So there is clinical sophistication and then there is
    the policy, payment policy sophistication, and both components
    need to be present for our recommendation to carry weight and
    to garner our support. The area of technical assistance, I
    don't want to--I think I would be--I don't want to say that the
    smaller practices are the ones that are needing more technical
    assistance compared to the larger, more sophisticated
    practices. I am not saying that.
        But we have found in both arenas, in both practice cohorts
    that there have been challenges with their model. More so on
    the payment side and the data side, not so much on the clinical
    side.
        Mr. Butterfield. But you do acknowledge that there is room
    for improvement in many of the applications?
        Dr. Bailet. Absolutely, yes.
        Mr. Butterfield. From the large practices to the small
    practices?
        Dr. Bailet. That is correct.
        Mr. Butterfield. But wouldn't you acknowledge at least that
    the weight of those, the majority of those are more toward the
    rural practices because of the lack of expertise? I mean we
    hear that every day up here where disadvantaged groups just
    don't have the expertise to present the quality of proposals
    that you would want.
        Do you communicate directly with the small and rural
    practices about the benefits of technical assistance? Do you
    let them know that it is there for the asking?
        Ms. Mitchell. Actually one of our key challenges is that we
    are not at this point allowed to offer technical assistance. We
    have made available the resources that we do have, so to the
    extent that the committee can organize data for applicants we
    are doing that. But so far we are limited from what----
        Mr. Butterfield. You can't proactively go out and advertise
    that it is available?
        Ms. Mitchell. Currently not.
        Mr. Butterfield. I didn't know that.
        Dr. Bailet. We are charged to evaluate the models as they
    stand. We cannot provide guidance. We cannot make
    recommendations on how the models should be reconstructed. That
    is not in the purview of the PTAC and we are careful not to go
    into the area at this point.
        Mr. Butterfield. All right. Let me try it this way then.
    Have you worked with Health and Human Services to share your
    experiences with applications and make recommendations about
    how to deploy resources and technical assistance, at least has
    HHS been made aware of this?
        Ms. Mitchell. Yes. And the committee sent a letter to
    Secretary Price naming technical assistance as a key need for
    applicants. So we certainly weighed in on that need.
        Mr. Butterfield. Right. I am about to run out of time, let
    me move to a different subject.
        Dr. Bailet, I am acutely aware of many of the health
    disparities that affect African American citizens today.
    Several of the approved APMs deal with chronic disease
    management like ESRD that disproportionately affects
    minorities. Can you discuss with me some of the APMs that are
    being considered that would disproportionately affect African
    American and other minorities?
        Dr. Bailet. We are currently evaluating a model for
    hepatitis C, which I would think, I believe, I don't have the
    numbers specifically in front of me, the demographics, but I
    believe that that is another health challenge that just like
    end-stage renal disease with the African American community. So
    those are two that come to mind.
        Mr. Butterfield. We are out of time.
        Mr. Burgess. The gentleman's time has expired. The Chair
    would inform the gentleman that I am getting a copy of the
    letter that the Physician Technical Advisory Committee sent to
    the Secretary in August and I will make that available to you
    so that you will know the communication that occurred from this
    group back to the agency.
        The Chair now recognizes the gentleman from Florida, Mr.
    Bilirakis, 5 minutes for questions, please.
        Mr. Bilirakis. Thank you, Mr. Chairman, I appreciate it so
    very much and I thank the panel as well.
        I have a few questions for both of you. Can both of you
    discuss your experiences in transitioning to value-based care
    outside of your work on the Physician-Focused Technical
    Advisory Committee and how that has influenced your view on
    what Advanced Alternative Payments Models can deliver? Now I
    know that some of these things have been covered, but if you
    could respond I would appreciate it.
        Ms. Mitchell. Sure. Well, I will speak to my experience
    which is quite different from Jeff's, but I actually used to
    work in a very large health system so I had some experience
    there as they were trying to transition their practices. But
    more recently I have worked in multi-stakeholder groups in
    various communities from Hawaii to Maine where they are
    bringing together employers, health plans, providers, patients,
    State governments, others, to try to come up with payment
    changes that actually meet all the stakeholders' needs.
        So is it getting value for the money, is it improving
    patient outcomes, and are clinicians actually happier providing
    this care and is it better suited, are the barriers being
    removed, it is actually that multi-stakeholder alignment that
    enables the transition. So that is, and we have tried various
    models, ACOs, bundles, Patient-Centered Medical Homes, and
    implemented those in different communities.
        Mr. Bilirakis. Thank you.
        Dr. Bailet. In my experience supporting large physician
    practices, multispecialty group practices, there is a
    tremendous amount of inertia to work with the physicians and
    the clinicians to get them to change their practice styles and
    move away from fee-for-service, volume-driven practices to
    focus more on outcomes. The models I have deployed in my former
    leadership roles relative to supporting physicians and
    clinicians, paying them for quality outcomes, paying them for
    collaboration with their colleagues, paying for their
    utilization of electronic health record. There has been and I
    think there continues to be some challenges with galvanizing
    the level of interest.
        There is challenges with the data that typically we hear
    from the physicians that as they move away from volume, you
    know, does the data that you are sharing with me that you are
    now going to pay me for accurately reflect the work that I am
    doing? So there is--I think it is washing out--but there was
    obviously on the front end of moving from volume to value a
    healthy dose of skepticism from the physicians. Well, you are
    going to pay me differently, but am I actually going to get
    paid for the work I am doing?
        So it is very challenging, but I think right now what I am
    seeing is that the mindset of the physician and the clinician
    is they know they need to do it. They know they need to move
    away from the fee-for-service environment and pure fee-for-
    service, and the question is how do we do it, and at what pace
    do we do it, and what tools are you going to provide me so that
    you are not overburdening my practice?
        Elizabeth talked about the $40,000 per physician just to
    monitor and track quality, but I would also argue there is
    another 750 hours I believe that was in that same study that
    each physician has to devote to monitoring and managing and
    measuring and reporting quality. I am here to say that as a
    health plan we had 188 quality metrics that we were holding our
    physician community accountable for. I don't want to get into
    the weeds, but I am sure you think that that is not optimal.
        Yesterday, the board of Blue Shield approved moving to an
    integrated healthcare association set of metrics, 34, and we
    are going to lead the way in the State and try and get a
    standardized set of metrics, 34 metrics--it is not boiling the
    ocean--to actually have and change outcomes and drive this
    value and try and take the burden away from the practitioners.
        Ms. Mitchell. And could I just add, I think that that is
    absolutely essential to not only reducing burden and cost, but
    allowing physicians to accelerate improvement. And the other
    element of that report is that there was only 5 percent overlap
    in commercial plans for using the same measures. If they could
    do what Blue Shield of California did and agree to use a common
    set, that makes life easier for physicians and it can lead to
    better care at lower cost. I think it is just an exemplary move
    and one that could easily be replicated around the country if
    folks were willing to do that.
        Mr. Bilirakis. Very good. We will take a hard look at that
    and I will submit my questions for the record because I don't
    have time. Thank you, Mr. Chairman, appreciate it.
        Mr. Burgess. The Chair thanks the gentleman. The gentleman
    yields back. The Chair recognizes Mr. Green of Texas for any
    concluding thoughts that he might have.
        Mr. Green. Mr. Chairman, my concluding thoughts, I want to
    thank you for the work you are doing and I think we just see we
    have a long way to go and we will do what we can to get you
    some resources so we can move it. Again my biggest fear is we
    are going to end up 17 years from now doing what we did with
    the SGR and medical practice is more important than that. So we
    will hopefully get some stability there. And thank you for your
    work and keep in touch with us and let us know what we may be
    able to do.
        Dr. Bailet. Thank you for your support. Thank you.
        Ms. Mitchell. Thank you.
        Mr. Burgess. And I will just recognize myself briefly.
        Dr. Bailet, I do want to, I think it is important to note
    that you all were chartered January of 2016. It took some time
    to organize and staff up, so it has really just been a little
    over a year that you have been at work on this and as someone
    else pointed out you do have day jobs as well.
        So it is, I mean I picked up perhaps on some criticism that
    you weren't active enough or doing enough. I am actually
    pleased with the work product that is coming through the PTAC
    right now and I believe that we--and then I think I heard your
    testimony that there is more, it appears there is more activity
    in submissions and I think that is good and I think that is
    important. I think we all recognize that there is a tremendous
    amount of work ahead of us on this.
        One of the things that I do feel obligated to mention, when
    this concept for the Physician's Technical Advisory Committee
    came up, when the legislation to repeal the Sustainable Growth
    Rate formula was being contemplated, some of us are less
    enthusiastic about all aspects of the Affordable Care Act and
    there are portions of the Affordable Care Act that to me are
    disagreeable because of the coercive nature of the Affordable
    Care Act. So the individual mandate would be one of those
    things and I am well on the record about that in this
    committee.
        But the Center for Medicare and Medicare Innovation, CMMI,
    which had the ability late on a Thursday or Friday afternoon to
    simply roll out a demonstration product that was going to be
    pushed out to the entire country with no cost-benefit analysis,
    with no randomized clinical trial, I mean this was a problem
    that I saw that we were careening towards. And the Physician's
    Technical Advisory Committee in part was created to help us
    offset what I saw was an impending disaster with CMMI.
        Now I think it is very helpful that Ms. Mitchell has
    pointed out the small-scale testing. It might be reasonable to
    find out if something works before we require every practice in
    the country to behave that way. CMMI was set up differently.
    Your model is, I think, the correct one because, yes, I was
    integral in setting it up, but still I think your model is the
    correct one.
        And we acknowledge there are elements of the unknown. This
    is new territory. There are going to be things that we
    encounter that we did not expect. And unlike the Affordable
    Care Act that it was perfect when it was passed and has
    required no adjustments, this I recognize may require
    adjustments going forward and this committee is going to be
    nimble about accepting those and providing you with the
    legislative backdrop that you need to do your jobs and we thank
    you for doing your jobs.
        Thank you for being here today. It has been a very
    informative panel, and you are now excused and we will
    transition to our second panel.
        Again we will thank our second panel of witnesses in
    advance for being here today and taking the time to testify
    before the subcommittee. Each will have an opportunity to give
    an opening statement followed by questions from Members. And
    let me give you a moment to get seated, and we will proceed
    with the introductions.
        Mr. Green. Mr. Chairman, before our witnesses leave, I
    would offer again if you want to sit down and work on how we
    can agree to, 7 years later, on the Affordable Care Act, we
    would be glad to do that.
        Mr. Burgess. I have always been available to you.
        Very good. Again we are going to have each of you after
    your introductions an opportunity to give an opening statements
    followed by questions from Members.
        So today we are going to hear from Dr. Louis Friedman, the
    American College of Physicians; Dr. Daniel Varga, chief
    clinical officer, Texas Health Resources; Dr. Bill Wulf, CEO of
    Central Ohio Primary Care Physicians; Colin Edgerton, American
    College of Rheumatology; Dr. Brian Kavanagh, chair for the
    American Society of Radiation Oncology; and, Dr. Frank Opelka,
    medical director of Quality Health Policy for the American
    College of Surgeons. We appreciate each of you being here
    today.
        And Dr. Friedman, you are now recognized for 5 minutes for
    an opening statement, please.

    STATEMENTS OF LOUIS A. FRIEDMAN, D.O., FELLOW, AMERICAN COLLEGE
      OF PHYSICIANS; DANIEL VARGA, M.D., CHIEF CLINICAL OFFICER,
    TEXAS HEALTH RESOURCES; J. WILLIAM WULF, M.D., CHIEF EXECUTIVE
      OFFICER, CENTRAL OHIO PRIMARY CARE PHYSICIANS, ON BEHALF OF
      CAPG; COLIN C. EDGERTON, M.D., ALTERNATE DELEGATE, AMERICAN
       COLLEGE OF RHEUMATOLOGY; BRIAN KAVANAGH, M.D., CHAIRMAN,
      AMERICAN SOCIETY FOR RADIATION ONCOLOGY; AND FRANK OPELKA,
      M.D., MEDICAL DIRECTOR, QUALITY AND HEALTH POLICY, AMERICAN
                          COLLEGE OF SURGEONS

                     STATEMENT OF LOUIS A. FRIEDMAN

        Dr. Friedman. My name is Louis Friedman. I am pleased to
    share with this committee my perspective and that of my
    national organization, the American College of Physicians, on
    Alternative Payment Models under MACRA, specifically a
    Comprehensive Primary Care Plus program. On behalf of the
    college, I wish to express our appreciation to Chairman Burgess
    and Ranking Member Green for convening this hearing, for
    allowing us on the front lines of patient care to share our
    experiences in the transition to value-based care.
        ACP is the Nation's largest medical specialty organization,
    representing 152,000 internal medicine physicians who
    specialize in primary care and comprehensive care of
    adolescents and adults, internal medicine subspecialists, and
    medical students who are considering a career in internal
    medicine. I am board certified in internal medicine and am a
    fellow of the American College of Physicians. Since 2001, I
    have been in private practice at Woodbridge Medical Associates
    in New Jersey which has been NCQA-certified as a Patient-
    Centered Medical Home Level 3 since 2008.
        Our practice is small with just four physicians and one
    physician assistant. In the 3 years since our practice started
    participating in the CPCI program and now 1 year into the CPC+
    program Track 2, we have gained significant knowledge with the
    benefits and challenges of the program. I would like to share
    my experiences with all of you today. Under CPC+ we have
    expanded our ability to analyze and deliver care and our
    patients have benefited in many ways.
        With the added financial support that the CPC+ program
    provides, we have been able to offer self-management programs
    such as nutrition classes and dietician visits. These are
    available free of charge to patients and have been well
    received by many who need them. For example, I have had one
    patient who was six-feet three inches tall, weighed 442 pounds,
    he had a high blood pressure and terrible venous insufficiency
    of the legs, which causes massive chronic swelling. He enrolled
    in our 8-week class and by the end had lost 31 pounds. He
    dropped another 10 pounds in the next 2 months and his swelling
    has improved.
        Now this is an extreme example but shows that we can induce
    positive lifestyle changes which in turn can help prevent
    disease. Feedback data from CMS is another tool that we did not
    have access to previously, but now do as a result of our
    participation in CPC+. Often, patients simply are not aware
    that many medical issues such as upper respiratory infections,
    rashes, minor cuts and bruises, can be easily treated in less
    expensive urgent care settings or office setting often for a
    shorter wait time for the patient.
        Now we can review the number of patients, our patients per
    quarter who are admitted to the hospital, seen in the emergency
    room, or seen in urgent care centers. Once identified, we hope
    to better educate these patients as to when and when not to
    seek emergency room care. Prior to CPC+ we didn't have this
    ability and thus had no idea how many unnecessary emergency
    room visits there were.
        Pre-visit planning by ancillary staff and effective
    monitoring within the EHR have helped us to improve our rates
    of vaccination, screening procedures for mammograms, and
    diabetic eye exams. Screening tools for early detection of
    dementia have helped us and at-risk families better prepare to
    care for their loved ones, and the CPC+ reimbursement for
    managing these patients with this diagnosis has been helpful
    for targeting this effort.
        On a practice management level, regulations issued by CMS
    requiring EHR vendors to obtain health information technology
    certification made it possible to track patient parameters more
    effectively. Prior to enacting these regulations, EHR vendors
    had no incentive to create effective dashboards with which we
    can track patient measures such as blood pressure, blood sugar
    measurements, et cetera. Without this ability there would be no
    way that a practice could hope to report the necessary measures
    to the program.
        If this committee and Federal agencies look to improve upon
    this program in the future, I would like to offer some
    suggestions. First, there is a need to simplify the reporting
    requirements under CPC+. As more private payers enter the APM
    market, one option would be to streamline specific metrics
    across the proposed CMS and private payer models. This would be
    in line with ACP's Patients Before Paperwork initiative and the
    ideas that the college has laid out for how to address
    excessive administrative tasks as well as with the
    administration's new Patients over Paperwork and Meaningful
    Measures initiatives.
        Another suggestion would be efforts should be made to
    encourage interoperability among EHR software vendors which
    would lead to better electronic communication between medical
    offices and hospitals. And I would be remiss if I did not
    acknowledge that there is a financial incentive as well to
    participation. This is needed for the practice to maintain the
    appropriate staff and computer systems. However, I believe we
    must continue to move forward with value-based coordinated care
    such as been found in programs like CPC+, the Medical Home, and
    other APMs away from fee-for-service system.
        Given the time and effort our practice has invested over
    the past few years to this end as well as the significant and
    incremental improvements we have experienced, we plan to
    continue with this model and not return to a purely fee-for-
    service structure.
        In closing, I would like to note that since 2016, practice
    participation among ACP members and advanced payment delivery
    models is increasing, and many more have noted that they are
    making changes to prepare for successful participation in the
    QPP overall. This is the case for both the ACP primary care and
    subspecialist members. Therefore, we in the physician community
    appreciate the opportunity to offer our input on how these
    models are impacting our practices and both in patient care,
    both now and throughout transition. We very much want to be
    part of this process and provide feedback whenever needed.
        [The prepared statement of Dr. Friedman follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Burgess. The Chair thanks the gentleman.
        Dr. Varga, you are recognized for 5 minutes, please, for an
    opening statement.

                       STATEMENT OF DANIEL VARGA

        Dr. Varga. Thank you, Mr. Chairman. Thank you to the
    members of the committee. My name is Dan Varga. I am the chief
    clinical officer and senior executive vice president for Texas
    Health Resources and the senior executive officer of the
    Southwestern Health Resources ACO, also speaking as a
    participant in Premier's Population Health Collaborative.
        I would like to make three points to the committee. First,
    our decision to move to a two-sided risk, Next Generation ACO
    was a direct result of the incentives included in MACRA and the
    fact that these Alternative Payment Models, in our opinion, are
    working. We believe in a value-based healthcare system where
    incentives for all providers can be aligned and where
    healthcare providers are able to collaborate using an
    integrated infrastructure and transparent data on quality and
    utilization to deliver better outcomes for our patients.
        This is even more critical in North Texas. Because of North
    Texas' strong economic and population growth, more than 40
    percent of practicing physicians do not participate in the
    Medicare fee-for-service program or severely limit their
    availability to fee-for-service beneficiaries. Thus, by
    participating in the Next Gen ACO, Southwestern Health
    Resources ACO has been able to keep almost 3,000 physicians in
    the fee-for-service model. And this includes faculty, employed,
    independent PCPs, specialists, urban and rural physicians.
        Moreover, because of our participation in a Next Gen ACO we
    have waivers that allow us to partner with doctors to reduce
    the CMS reporting burden for our clinicians by reporting those
    measures for them as a group, earn bonuses by participating in
    the ACO which creates important incentives to physicians to
    move to this new care model, have access to comprehensive data
    on utilization for our 67,000 beneficiaries, allowing us to
    better direct our care management activity to areas where it
    can create the most value.
        I can't point out enough that this data transparency for
    integrated providers is priceless and also allows us to
    clinically integrate within a set of safe harbors. In our
    experience, these models are working. In our experience with
    our 67,000 beneficiaries, we are among the top 10 Medicare ACOs
    in 2015 and 2016, saving 30 million in '15 and 37 million in
    2016.
        We have been able to garner and retain top talent including
    600 primary care physicians--40 percent employed, 60 percent
    independent--as well as another 2,300 participating providers;
    budget in 2017 and '18 to distribute over $22 million in
    incentives and gain sharing to independent PCPs alone, make
    investments in infrastructure to support coordinated patient-
    centered care with a budget of 70 million in 2018 to go along
    with over $100 million in investments since the institution of
    our ACO program; to tighten our network of providers to create
    better outcomes for our patients based on objective clinical
    and efficiency metrics; and to better manage our ED and acute
    care utilization.
        We additionally have the benefit of participating in
    Premier's Population Health Collaborative. Since 2012, about 50
    percent of the Premier ACOs have achieved shared savings,
    better than the approximately 31 percent experienced by the
    rest, while also outperforming on quality metrics. In 2016, a
    hundred percent of the Collaborative's Pioneer and Next Gen
    ACOs achieved savings versus 50 percent otherwise.
        And we also have the advantage, again referencing data, of
    sharing data, not just on our beneficiaries but on hundreds of
    thousands of Medicare beneficiaries and the ability to learn
    from our peers on how their markets are performing and how
    tactics in those markets can be deployed in ours. Share these
    results to demonstrate that while there has been concerns that
    APMs are not delivering real savings, it is clear that with a
    balanced and planned approach and effective execution, these
    models can work.
        The second point is that these value-based care and payment
    models are a significant departure from the past, changing 50
    years of culture and habit. There is a number of implications
    to that. First, the changes are obviously long overdue as we
    move from a fragmented fee-for-service system where providers
    are incented to do more services to one where competition will
    be driven by high-value networks that deliver differentiated
    outcomes.
        This work to better organize the healthcare market into
    high-value networks is necessary and desirable and we would
    urge that folks make a differentiation between consolidation to
    create excessive market power and integration of providers in
    the market to create a high-value network. Policymakers should
    also be careful not to tilt the playing field to the advantage
    of one provider group over another and maintain a level playing
    field.
        And finally, while significant progress has been made to
    move to a value-based payment and delivery model, this Congress
    and administration should continue to build on these positive
    steps as have already been mentioned with needed change as we
    believe more organizations will move to and succeed in APMs,
    and I encourage you to review the listed areas' reform in my
    written testimony and those in Premier's Delivery System
    Transformation Roadmap.
        Thank you again for the opportunity to testify before this
    committee. You have made a vital and lasting impact on our
    Nation's healthcare system with the design and enactment of
    MACRA and I urge you to continue to build on this successful
    work. Thank you.
        [The prepared statement of Dr. Varga follows:]

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        Mr. Burgess. The Chair thanks you for your testimony. The
    Chair would make an observation that it has been long a goal of
    mine to have a panel with five or six physicians before this
    subcommittee. This may be one of the first times this has
    happened in my experience. I wasn't really planning on talking
    about this aspect. I wanted to get five or six doctors in here
    to tell us how much economists should be paid.
        Dr. Wulf, you are recognized for 5 minutes.

                      STATEMENT OF J. WILLIAM WULF

        Dr. Wulf. Thank you, Chairman Burgess, Ranking Member
    Green, and members of the Health Subcommittee for inviting me
    to testify today. I am pleased to be here to share with you how
    the move to Alternative Payment Models is working to transform
    the delivery of health care.
        I am testifying today on behalf of CAPG. CAPG is the
    largest association in the country representing capitated
    physician organizations participating in coordinated care. CAPG
    members include over 300 medical groups and independent
    practices in 44 States, Washington, DC, and Puerto Rico. CAPG
    members have proven that APM-type models of payment and care
    delivery can lead to lower cost and higher quality.
        I also address you today as a physician and the CEO of
    Central Ohio Primary Care Physicians. Our group consists of 370
    physicians, 200 adult primary care physicians, 60
    pediatricians, 75 hospitalists, and 25 specialists. COPC is the
    largest physician-owned primary care group in the country.
        Let me begin by emphasizing a single point: The value
    movement is working. To underscore that point I will share with
    you our organization's journey into value-based payments and
    why being in an APM matters to primary care. We were formed in
    1996 when 33 of us got together from 11 practices. Beginning in
    2006 through 2014, we reported for PQRS when it was still PQRI,
    we deployed an EHR and we are now on our second generation EHR.
    All of our eligible providers met meaningful use. We too became
    Level 3 Patient-Centered Medical Homes.
        All of these initiatives, every one of them, made being a
    PCP less satisfying in a fee-for-service world. In 2014, we
    entered into shared savings contracts with both commercial and
    Medicare Advantage payers. We sought contracting structures
    that reward PCPs for things that do not happen. If you are a
    primary care physician taking care of 1,500 patients and no one
    has colon cancer because they have all had their colonoscopies,
    you have created value. Value heretofore unrecognized by the
    primary care physician, but recognized by the employer or the
    payer.
        We developed programs to improve care. This meant expanding
    our hospitalists program, developing transition of care
    nursing, hiring care coordinators, having visiting physicians
    who see only two patients in crisis a day, and having an ER
    intervention program where our nurses intercept our patients in
    the emergency room. In 2016, we earned $12 million in shared
    savings for our primary care physicians that was returned to
    them. Our Medicare readmission rate on 4,000 Medicare
    admissions in 2016 was 7 percent. The national average is over
    18 percent.
        The ability to reward primary care physicians for high
    quality and lower cost is crucial to the preservation of
    primary care. In 2017, we desire to be in a Medicare APM. We
    qualified for CPC+ Track 2. CPC+ payment model allowed us with
    prepayment to expand our existing care coordination, move
    towards capitated payment because of the hybrid model, and
    receive quality payments. In 2018, we will move to prepaid
    contracts with downside risk on 25,000 Medicare Advantage
    lives.
        Clearly, MACRA's incentives for advanced APM participation
    is the latest program driving us into new models of payment.
    Past programs have discouraged fee-for-service volume and APMs
    are now rewarding value and creating value. We are thrilled to
    see that last week CMS announced its intention to create an
    advanced APM demonstration in Medicare Advantage. With one-
    third of all Medicare lives in Medicare Advantage, it is
    crucial that it be rewarded like fee-for-service Medicare. In
    the MACRA final rule the agency states that participants in
    such demo will qualify as an APM. This is a crucial step
    forward and we thank the Members of Congress including those
    present at today's hearing and we encourage CMS to move
    forward.
        Thank you for the opportunity to testify. I hope it has
    been helpful and I am pleased to answer questions.
        [The prepared statement of Dr. Wulf follows:]

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        Mr. Burgess. The Chair thanks the gentleman.
        The Chair recognizes Dr. Edgerton 5 minutes for your
    opening statement, please.

                     STATEMENT OF COLIN C. EDGERTON

        Dr. Edgerton. Chairman Burgess, Ranking Member Green,
    Chairman Walden, Ranking Member Pallone, and distinguished
    members of the Health Subcommittee, thank you for the
    opportunity to speak before you today.
        My name is Dr. Colin Edgerton and I am rheumatologist in a
    small private practice at Low Country Rheumatology in
    Charleston, South Carolina. I am one of seven rheumatologists
    in a single specialty group. Our practice is a typical
    rheumatology practice with around 50 percent of our patients
    being in Medicare along with a significant number of TRICARE
    patients and a smaller group of Medicaid patients. The
    remaining group of patients are in the commercial segment.
        Because South Carolina, like most areas of the country,
    suffers from a shortage of rheumatologists, our patients may
    travel long distances, commonly 1\1/2\ to 2 hours, to see us
    and receive treatment. As a result, we see a mix of urban,
    suburban, and rural populations. In addition to my work as a
    rheumatologist, I am also privileged to be involved with the
    American College of Rheumatology, where I currently chair the
    committee on rheumatologic care. The ACR represents
    approximately 9,500 rheumatologists and rheumatology health
    professionals.
        Community physicians including rheumatologists are keenly
    aware of the opportunities created by MACRA for developing
    models to promote value-based care. Before MACRA there really
    was no meaningful way for small specialties and small practices
    to participate in Alternative Payment Models. As
    rheumatologists, we did not have the opportunity to engage in
    APMs. Our specialty simply did not fit into the previously
    existing value-based products.
        Coming from a community practice setting, even just a few
    years ago I would not have considered myself someone who could
    get involved in an APM. But with the repeal of the SGR formula,
    an institution of MACRA, rheumatologists saw for the first time
    a structured opportunity to participate in value-based
    medicine.
        There are several reasons that I and also the ACR have been
    excited to get involved in creating APMs under MACRA. Most
    notably, we immediately saw the benefits of APMs, recognizing
    that certain aspects of care provided by rheumatologists as
    cognitive specialists are undervalued in the current system. In
    many instances, the value of training and expertise provided by
    rheumatologists is not recognized in payment outside of
    innovative models. Additionally, non-face-to-face care and
    chronic disease care coordination with other providers are
    critically important but not reimbursed services provided by
    rheumatologists every day. And like other specialists that are
    developing APMs, rheumatologists know that these valuable
    services prevent costly or unnecessary procedures and lower
    overall costs.
        My early foray into value-based medicine involved reaching
    out to leaders in the AMA initially who had experience with
    value-based projects through CMS. This finally led me to the
    Physician-Focused Payment Model Technical Advisory Committee,
    PTAC, whose members have been generous with their time,
    listening to my ideas, and guiding my progress. The ACR
    simultaneously has begun developing an APM and I have been
    fortunate to participate as a representative of the community
    of rheumatologists.
        The ACR's APM is approaching its testing phase and my
    partners and I are eager to be a pilot site. The ACR's APM
    addresses the treatment of rheumatoid arthritis, a lifelong
    condition whose care depends on the stage of the disease. The
    APM reflects the varied involvement of the rheumatologist
    during these distinct stages of care, splitting payment into an
    initial stage for diagnosis, including, for example,
    communication with primary care physicians followed by ongoing
    care stratified by the disease severity and other illnesses
    that complicate disease treatment. This model aligns payment
    with physician work and reimburses services that have
    traditionally been undervalued.
        Quality measures are built into the APM to ensure treatment
    adheres to best practices. Rheumatologists as a specialty are
    energized by the opportunity to provide our patients value-
    based care through this framework. We look forward to
    participating with more physician participation in APMs.
    Specifically, smaller practices are eager to participate in
    APMs as well, and allowing some of the downside risk to be
    covered could help those practices get involved.
        Regarding timelines, as soon as MACRA was codified many
    specialties began to look at APMs, and I am hearing that a
    reduction in the qualification thresholds could allow these
    eager physicians to utilize the APM framework.
        We appreciate the committee's work to get us to this point
    and we look forward to continuing to develop and implement
    innovative new payment models that offer the opportunity to
    provide better patient care aligning payment with highly valued
    services. Thank you again for inviting me and I am happy to
    address any questions the committee may have.
        [The prepared statement of Dr. Edgerton follows:]

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        Mr. Burgess. The Chair thanks the gentleman.
        Dr. Kavanagh, you are now recognized for 5 minutes, please,
    for an opening statement.

                      STATEMENT OF BRIAN KAVANAGH

        Dr. Kavanagh. Thank you, Chairman Burgess, Ranking Member
    Green, and members of the Health Subcommittee. I am a radiation
    oncologist at the University of Colorado. I treat cancer
    patients there. I serve as the chair of the board of directors
    for the American Society for Radiation Oncology, also known as
    ASTRO.
        ASTRO represents more than 10,000 individuals striving to
    give cancer patients the best possible care. ASTRO's membership
    includes radiation oncologists, nurses, cancer biologists,
    medical physicists, and other healthcare professionals. Close
    to 60 percent of all cancer patients will receive radiation
    therapy and ASTRO's members treat more than one million cancer
    patients each year.
        Radiation therapy is a safe and effective treatment for
    cancer. It works by damaging a cancer cell's genetic material
    thus stopping its growth. When the injured cancer cells die the
    body's natural healing processes remove them. Most treatments
    are given as outpatient procedures and so patients can maintain
    a high quality of life while receiving treatment. Of the
    million patients treated annually with radiation therapy, about
    60 percent receive care in hospital outpatient departments and
    the other 40 percent receive care in freestanding community-
    based centers.
        Radiation oncology centers have extremely high fixed costs.
    The minimum capital to build one is approximately 5\1/2\
    million dollars. Radiation oncology reimbursement rates have
    had cumulative payment cuts totaling approximately 20 percent
    for freestanding community-based centers in recent years. These
    payment cuts created instability throughout the profession,
    jeopardizing the viability of these centers and patient access
    to care.
        ASTRO very much appreciates Congress' longstanding support
    of radiation oncology, perhaps best exemplified by the
    bipartisan passage of the Patient Access and Medicare
    Protection Act of 2015 or PAMPA. However, PAMPA is not a
    permanent solution and it only stabilizes radiation oncology
    payments temporarily through the end of 2018. We believe it is
    critical that radiation oncologists have an Advanced
    Alternative Payment Model before PAMPA expires.
        The Medicare Access and CHIP Reauthorization Act, MACRA,
    has provided ASTRO with an opportunity to pursue an APM that
    promotes high-quality care and moves us beyond the prior era of
    uncertainty. Recently, the Center for Medicare and Medicaid
    Innovation, CMMI, released a report to Congress which outlined
    design considerations for implementing an advanced APM in
    radiation oncology. ASTRO has proposed a Radiation Oncology
    Alternative Payment Model, the ROAPM, and we are pleased to see
    that our proposal is concordant with the concepts for an
    advanced APM in the CMMI report.
        Currently, there is only one oncology-focused advanced APM,
    the Oncology Care Model, the OCM. However, ASTRO is concerned
    that this model does not adequately address the needs of
    patients who need radiation therapy and ROAPM is needed to
    fully realize the benefit of multidisciplinary care for
    patients. And we believe that the ROAPM would complement and
    build upon the foundation set forth by the OCM.
        The ROAPM is designed to incentivize the appropriate use of
    cancer treatments that result in the highest quality of care
    and best patient outcomes. The model applies to a comprehensive
    list of cancer disease sites that account for more than 90
    percent of Medicare spending on radiation therapy and include
    breast, lung, prostate, colorectal, and head and neck cancers.
        The ROAPM uses care episodes that are clearly defined by
    billing codes that punctuate the beginning and end of a
    treatment course and the 90-day period thereafter. An episodic
    payment rate will enable practitioners to focus on high-value
    patient care. The model features a two-sided risk corridor with
    an opportunity for shared savings but also accountability for
    excess resource utilization. Throughout the episode, physicians
    must adhere to strict clinical practice guidelines.
        These guidelines help to ensure that patient care is
    appropriate and of the highest quality without over or
    undertreating patients. In addition, the model rewards
    participation in a robust practice accreditation program and
    measures performance on accepted quality measures to promote
    safe, high-quality care. The ROAPM also rewards shared decision
    making with patients, efficient communication with other
    providers caring for the patient, and survivorship planning.
        In summary, ASTRO would like to thank Congress very much
    once more for repealing the SGR with the MACRA legislation.
    MACRA has ended the significant instability associated with the
    SGR and created a forward-looking framework for the advancement
    of value-based care. ASTRO fully embraces the spirit and goals
    of MACRA and is committed to ensuring that radiation oncology
    can fully participate in advanced APMs to drive higher quality,
    cost effective cancer care.
        The proposed ROAPM incentivizes the use of appropriate
    cancer treatments that produce the best possible outcomes for
    patients, helps rein in Medicare spending, can stand on its own
    or dovetail with other APMs, uses well-established guidelines,
    and contains key patient engagement components. After
    experiencing significant payment cuts under Medicare fee-for-
    service in recent years, the field of radiation oncology needs
    long-term payment stability and predictability to secure
    patient access to care. ASTRO is committed to moving full speed
    ahead to ensure that radiation oncology can participate in
    advanced APMs under MACRA that drive greater value in cancer
    care. The next step is implementation of the ROAPM before
    December 31st, 2018.
        Thank you for the chance to speak with the committee.
        [The prepared statement of Dr. Kavanagh follows:]

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        Mr. Burgess. The Chair thanks the gentleman.
        And Dr. Opelka, you are recognized for 5 minutes for an
    opening statement, please.

                       STATEMENT OF FRANK OPELKA

        Dr. Opelka. Mr. Chairman, Ranking Member Green,
    distinguished members of the committee, we thank you for the
    opportunity, the privilege to come before you today on behalf
    of the 84,000 members of the fellows who are members of the
    American College of Surgeons.
        MACRA, to us, created a unique opportunity for physicians
    to lead in the development of APMs. When you think about it,
    since the inception of fee-for-service over a half a century
    ago, clinical care has become increasingly more complex. We
    have many more medications and technologies upon which to treat
    patients. And the only way to succeed has been for us to form
    teams, teams of care around patients for which these patients
    suffer.
        So we have come together in thinking about Alternative
    Payment Models in team-based episodes of care to add to the
    library of Alternative Payment Models to be considered. We
    lacked the opportunity to build business models or payment
    models around team-based care until MACRA came along with the
    advanced APM opportunity. When you consider what has to go
    forth in building that APM model there are five general
    principles that I think that would be helpful to think about as
    you do this.
        First is the clinical care model, something we as
    clinicians are all expert at, and those are those complex
    models of team-based care that have changed today. Second are
    the quality measures that assure that those models are
    effective. Third, what are the payment models the insurer has?
    That is that technical component that makes it difficult to
    build the APM. We as clinicians are not those who have the
    technical skills of building the payment model aspects.
        Fourth is changing our business operations from fee-for-
    service into these alternative risk-based models. And fifth,
    the actual structure of risk, what is involved? There are all
    sorts of aspects to risk. There is insurance risk. There is
    clinical risk. There is operational risk of having the right
    team ready to meet those clinical risks.
        The PTAC has been a wonderful experience for us. We learned
    with them. They were hypercritical of our model and helped us
    in framing the model and making necessary adjustments and
    corrections to the model. There was an enormous back and forth
    between our team, the American College of Surgeons, and our
    partner Brandeis University in building the APM model. We
    partnered with Brandeis because of their knowledge in the
    Medicare cost measurement system and their role in developing
    the CMS Episode Grouper that is used by Medicare to frame the
    actual cost structure of different episodes.
        The Episode Grouper allowed us to provide risk-adjusted,
    patient-individualized, significant target prices. Not a
    bundle, but a patient episode price, extremely granular
    information that allowed us to create an operational model for
    national scaling of an implementation of an APM. When we come
    about the quality aspect of this, the ACS has a centurylong
    experience in multiple registries that we use worldwide in
    defining, measuring, and improving quality of care.
        Our ACS optimal resource for surgical quality and care and
    safety division runs things like the National Surgery Quality
    Improvement Program. These gave us a framework upon which to
    build an episode-based measure framework. Stop measuring
    physicians and measure patients. How did the patient do? If the
    patient did well, reward the team. If the patient didn't do
    well, it is time to penalize the team.
        So let's measure patients and what they do and not the
    individual physicians and make us all have shared
    accountability because that is what patients expect us to do.
    We have added to this the ability to put in the phases of care
    across the episode. For example, in surgery there is a preop
    phase, an intraop phase, a postop phase, post-discharge phase.
    We have also put in patient-reported outcomes which we think
    create meaningful measures. So instead of measuring here and
    there across a surgeon's experience, we are measuring the
    episode for the patient. We think that is critically important.
    The episode-based measure framework coupled with the EGM allows
    us to create quality cost measures with teams of providers to
    influence the patient experience and outcome.
        Assigning risk--this is the difficult part. Asymmetric
    risk, we don't think symmetric risk, same upside-downside risk
    really draws in what we need. We think you need asymmetric
    risk, more upside to bring people out of fee-for-service into
    the model and significant enough downside to protect the
    patients and the payer as well.
        So that is the nuts and bolts of what we put forward. The
    PTAC process has given us considerable experience and input.
    And moving forward now, we have gone through PTAC in December
    all the way through March with approval in April. That went to
    the Secretary, and within a couple months we heard back from
    the Secretary giving us further direction, further
    clarification, testing and piloting with CMS and CMMI. We have
    been working with them almost on a weekly basis since then in
    walking forward in workgroups to deal with intellectual
    property, refinement of validity and reliability of the
    modeling, further questions about how the EGM grouper is used
    in the model, and the quality and the risk adjustment aspects
    of the overall model.
        Once again, Mr. Chairman, we thank you and your committee
    for all your efforts in this regard, and we look forward to
    your questions.
        [The prepared statement of Dr. Opelka follows:]

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        Mr. Burgess. The Chair thanks the gentleman and thanks to
    all of our witnesses for participating today. We will move to
    the question and answer portion of the second panel and I will
    recognize Dr. Bucshon from Indiana for 5 minutes, please.
        Mr. Bucshon. Thank you, Mr. Chairman. Thanks, everybody,
    for being here. I was a cardiothoracic surgeon before I was in
    Congress so I also reiterate what the chairman said about how
    great it is to have an entire panel of physicians here at the
    Health Subcommittee.
        A couple of quick things. The American College of Surgeons,
    Dr. Opelka and others, proper risk, and this is a little off
    the beaten path, but proper risk stratification of patients and
    assessing patient outcome and how important that is, I
    mentioned in the previous panel the STS database and other, you
    mentioned some databases.
        I mean one of the things I have always been concerned about
    as a physician when we are trying to design what is quality of
    care, how important is, I think, individual specialties
    assessing the risk stratification in the patient group that is
    in their area. How important do you think that is?
        Dr. Opelka. So if we are rewarding based on outcomes, there
    is nothing more important than actually having accurate risk
    adjustment and that comes ideally from clinical data. So we
    have worked on this modeling with folks like STS. How do we use
    the STS database to validate the current risk adjustment and
    how do we use future versions of STS in this modeling to make
    enhancements? We think that is the kind of work that needs to
    be done so that you get proper risk-adjusted pricing as well as
    proper risk-adjusted quality measurement.
        Mr. Bucshon. Anyone else? Dr. Wulf?
        Dr. Wulf. Two comments. I think data is useful, not only
    for risk adjustment to identify your high-risk patients, but we
    as primary care need accurate data to identify value in our
    specialists. Historically, a primary care physician refers to a
    specialist based on either knowing them and their kids play
    soccer together, they trained together. We think of specialists
    as quality, but data is so important as we in primary care seek
    value for our patients and we can identify that through data.
        Mr. Bucshon. Dr. Varga?
        Dr. Varga. Yes, sir. And we would agree. Further, probably
    the biggest issue for us is having adequate data as mentioned
    to be able to do risk stratification. But it is not just simply
    to get the right pricing, it is actually to understand the
    level of care that the patient requires at any point in the
    continuum and then understand how to match resources to that
    level of risk stratification. It is critical whether you are
    talking about a primary care scenario or whether you are
    talking about a complex cardiovascular surgery case.
        Mr. Bucshon. Anybody else have a----
        Dr. Edgerton. I would agree. From the rheumatology
    perspective we know that our patients with rheumatoid arthritis
    suffer from other comorbidities that have a massive impact on
    their outcomes, but that is also important when we are looking
    at the cost of their care. We have struggled to extract that
    data from our EHRs despite the fact that we spend large amounts
    of time entering data into the EHRs. We have designed a
    clinical data registry called a RISE Registry as a college to
    help us do that, to extract some of that data, but it continues
    to be a struggle.
        Mr. Bucshon. Yes. I agree with everything everybody said
    because I think Government agencies tend to maybe think if you
    give a couple of little, a couple data points in health care
    like overall morbidity or overall mortality without getting a
    bigger, deeper dive, especially specific deeper dive, you can,
    these things don't work out that well because it is just not
    specific enough.
        Dr. Wulf, you probably know I read, I co-led the letter to
    CMS about certain payment arrangements between Medicare
    Advantage plans and physicians as advanced APMs under MACRA.
    And I understand, you mentioned CMS has come out and said that
    a new MACRA rule that they would be initiating a demonstration
    project to test the approach, and I know CAPG has been a
    leading voice in pushing this.
        So can you talk about the importance of APMs in a little
    more depth than you did in your testimony as it relates to
    Medicare Advantage and why CMS should move quickly along with
    this demo?
        Dr. Wulf. Yes, and thank you for that effort, Dr. Bucshon.
    Just like as we entered into shared savings and now risk with
    Medicare Advantage, we were able to provide for that subgroup
    of our seniors certain benefits that we were able to pay for
    with a per-member, per-month payment. Through CPC+ we were able
    to expand those benefits to all of our seniors.
        So just as we are now with APMs recognizing and providing
    programs for Medicare, it would be unfair to exclude the one-
    third of patients in Medicare Advantage from those type of
    fundings that all medical groups use to create coordinated
    care. So I think it is important that all programs are for all
    seniors, fee-for-service Medicare and Medicare Advantage and I
    think this is a step in that direction.
        Mr. Bucshon. OK, thank you.
        I yield back, Mr. Chairman.
        Mr. Burgess. The Chair thanks the gentleman. The gentleman
    yields back. The Chair recognizes the gentleman from Texas, Mr.
    Green, ranking member of the subcommittee, 5 minutes for
    questions, please.
        Mr. Green. Thank you, Mr. Chairman. I want to thank our
    whole panel for joining us today.
        Dr. Varga, I understand that transitioning from a
    healthcare organization to an Alternative Payment Model can be
    challenging and there are a lot of moving parts to consider. In
    your testimony you discuss how MACRA encouraged Texas Health
    Resources to participate in the Next Gen ACO model. Can you
    speak a little more about what it is like at Texas Health
    Resources before implementing the Next Gen ACO model and why
    this model was the best fit for your organization as opposed to
    an APM?
        Dr. Varga. Yes, sir, happy to respond. As I pointed out in
    my oral testimony, first and foremost for Texas Health
    Resources and for the Southwestern Health Resources ACO, this
    was an issue of access to care. With a large percentage of the
    doctors in North Texas not participating in fee-for-service
    Medicare program there is a very difficult scenario for folks
    who are aging out of commercial insurance and aging into
    Medicare actually finding a primary care doctor and in some
    situations a specialist who actually accepts patients in the
    fee-for-service model.
        A bit of workforce constraint as well in the Medicare
    Advantage program there as well, one of the things we really
    wanted to make sure we did with this is by offering the
    incentive programs that come through the Next Gen Alternative
    Payment Model, we are able to actually incent physicians to
    participate and continue to see Medicare fee-for-service
    patients.
        I think the other thing that we are experiencing in this is
    the ability to really coordinate care across the full continuum
    with our physicians, whether it is specialists or primary care.
    We have already shown that we can generate savings in the
    model. We already started to demonstrate that we can actually,
    in very targeted areas with adequate data, start to decrease,
    which in North Texas is a big issue which is overutilization of
    post-acute services whether it be rehab, skilled nursing
    facilities, or home health.
        So the program has made an incredible impact on us, and we,
    like Dr. Wulf's group, believe that we can extend that into the
    Medicare Advantage program as well as move forward.
        Mr. Green. How did MACRA and the opportunities it created
    hasten this decision to engage in a delivery system reform and
    participate in the Next Gen ACO model?
        Dr. Varga. I think probably the reason that MACRA
    accelerated this is in the MSSP Track 1 program that we have
    historically participated in, the cap on upsides really created
    a model that, in terms of looking at what sort of benefits we
    could return to physicians in that model, was relatively
    limited. The other piece of the Track 1 model that was very
    different from Next Gen is some of the waivers we get in Next
    Gen to be able to more aggressively coordinate care across the
    full continuum and actually take in different sorts or adopt
    different payment models like advanced care coordination fees,
    sub-capitation, actually full cap, really creates a model where
    we can actually get our group of folks to manage these patients
    across the full continuum.
        The ability to create value, both for the patients and for
    the physicians in the network, is far superior to the model we
    had in Track 1.
        Mr. Green. What was the challenge to get your providers to
    get comfortable with the level of financial risk posed by the
    Next Gen's ACO model?
        Dr. Varga. Well, that is one of the reasons we believe in
    this integrated model is that as it was mentioned earlier, the
    concept of asymmetric risk is one that is tolerated in this. So
    given that the health system and the Part A expense of the
    model is usually the most expensive piece of this, the health
    system provider can absorb upfront the bulk of the risk, both
    the risk incurred by building infrastructure, but also the
    potential for downside risk and the ability to help physicians
    manage that piece as they went forward.
        So we really had very little resistance to the providers
    stepping in to a two-way risk model.
        Mr. Green. And what type of infrastructure changes in
    provider education did Health Resources require to implement
    that Next Generation ACO?
        Dr. Varga. The biggest change above the MSSP Track 1, which
    we had been in for the last 3 years, was really a far more
    aggressive care coordination model for mostly the post-acute
    world. That is really in our ACO where the data points us. We
    had already undertaken a fairly significant investment that
    allowed us to help our doctors get onto a common electronic
    health record platform with us, a common disease registry
    platform to point out gaps in care, and a common analytics
    platform for reporting. The biggest issue was actually in
    putting the technology and bodies in place to be able to do the
    post-acute care coordination model.
        Mr. Green. Mr. Chairman, normally as a lawyer I have plenty
    of lawyers in the room, today we have plenty of physicians. And
    I think that is what is important, to make sure you are
    comfortable with what we are doing and again not recreating an
    SGR that goes 17 years and really hurts medical practice and
    your patients. So thank you for having the hearing.
        Mr. Burgess. The gentleman yields back. The Chair thanks
    the gentleman.
        And Dr. Friedman, Ranking Member Green brings up an
    excellent point. And as I was talking to you before the hearing
    convened, I can remember a morning probably 2005 or 2006 when I
    had to face a roomful of your participants all sitting around
    little round tables down in a room in the basement of this
    building, and it was significantly stressful. I thought
    everyone was going to be eager to hear what my thoughts were on
    repealing the SGR, but nobody wanted to hear what they were.
    They just wanted it done, and they wanted it done last week.
        So I felt the anxiety. It only took us 13, 14 years to get
    to this point, but it was largely your group, that group of
    doctors that morning, that really provided the, you know, the
    lift and the thrust to get this thing done. Do your doctors
    ever talk about that now? Are they grateful the SGR is gone or
    have we just moved on and now we are at the next thing?
        Dr. Friedman. Sorry. So just repeat that last part of the
    question.
        Mr. Burgess. Well, are your doctors, do they talk about
    things like that now? Are they grateful the SGR is gone or are
    they just worried about the next phase?
        Dr. Friedman. I think it is a mix. You know, I think, you
    know, I spent a fair amount of time polling my colleagues in
    the office before I came to do this and I get mixed remarks.
    From the standpoint of patient care we have seen some big
    benefits. Care coordination has improved and outreach to
    patient has improved. We don't go to the hospital anymore. We
    are just strictly outpatient doctors, so we are in the office.
    And from that standpoint we have gotten very good at retrieving
    the information and getting the patients into the office so
    there is continuity of care.
        So things have been great. And I have to say that, you
    know, the fee-for-service model was not working for us. I mean
    we, had we not embraced this model, had we not embraced CPCI
    and Patient-Centered Medical Home early on and now CPC+, we
    would have sold our practice to a larger system. So I think
    they would all acknowledge that.
        That being said, I think the administrative burden that we
    see in the office, the physicians' administrative burden, and
    also my administrator's, the amount of work that she has to do
    has increased, and that is a bone of contention.
        Mr. Burgess. Very good.
        Dr. Varga, you in your testimony talking about that Premier
    doesn't simply want to employ physicians, you want to create
    those high-value networks so you have doctors who are basically
    private practice doctors who are working within your network;
    is that correct?
        Dr. Varga. We do.
        Mr. Burgess. And kind of a 60/40 split on that between
    employed physicians and independent physicians?
        Dr. Varga. With the 60 being the independent PCPs.
        Mr. Burgess. How do you allow them to maintain their own
    independent practices and at the same time conforming to the
    measures that you are requiring to improve outcomes?
        Dr. Varga. It is a good question. I think the biggest issue
    for us as we started was actually getting everyone to commit to
    a pluralistic physician model where in large part we are
    largely agnostic to the physician economic relationship with
    the health system.
        So as we said we have faculty, we have employed, and we
    have independent PCPs. We also have independent specialists who
    participate with our ACO in a nonexclusive fashion through a
    series of structures that we have built inside the ACO. I think
    the common thread, Mr. Chairman, is simply that, independent of
    the economic relationship folks have with this, we all have
    aligned incentives, we all work off of a common infrastructure,
    and we are all held accountable to the same clinical
    performance metrics.
        And we really believe that it is highly valuable to have
    that pluralistic model in play because an employed-only model
    really tends to drive you to one sort of structure. It can
    work, but you don't really learn from the independent practice
    proposition. You also don't learn from folks who are
    nonexclusive to your network as well.
        Mr. Burgess. So you also talk about the anxiety and
    complaints. How is that part of it going?
        Dr. Varga. You know, it has actually gone fairly well. You
    know, we are fortunate in North Texas that the economics of the
    two-way risk ACOs are actually a little bit better than they
    are in some other areas of the country, so we have been able to
    produce shared savings at a fairly hefty rate for the last 2 or
    3 years. We still have complaints, and I think one of the
    things that we will start to really encounter as we go forward
    is we have not yet had to really, really drive the narrowness
    of the network in terms of----
        Mr. Burgess. Have not.
        Dr. Varga. We have not, in large part because the
    physicians have largely performed to the set of standards that
    we have set in predominantly a one-way risk model. As you get
    into a much more aggressive two-way risk model, as you get into
    Medicare Advantage, the importance of really, really high-
    performing physicians becomes absolutely critical.
        Mr. Burgess. And Dr. Edgerton, your practice would, you
    know, of all of the different types of practices that I worried
    about as we were doing this, your highly specialized, small
    office, I mean that was the one that I thought was going to
    have the most difficult time with any sort of adjustment along
    these lines, but you have done it. Is that right?
        Dr. Edgerton. That is correct. And we are approaching now
    that pilot phase. One of the real benefits has been the
    interaction with PTAC. Interestingly enough, because they can't
    reach out to us directly, it was largely looking at the PTAC
    Web site and the way that they are so transparent. In studying
    the feedback they had given to different models that were
    similar to what we were thinking about and being able to learn,
    it is sort of like a university of APMs if you spend enough
    time on their Web site and see the comments that come both from
    PTAC and from other stakeholders.
        So that has really been useful in moving us along, not only
    as a small office but also as a small specialty.
        Mr. Burgess. Very good. And I do need to observe that we
    have a vote on and I do want to recognize Mr. Guthrie for his
    questions.
        Dr. Bucshon, we probably won't have time to go to a second
    round if that is OK with you.
        Mr. Guthrie. Do you want me to yield to you? Do you have
    any more questions?
        Mr. Burgess. No. I will yield to you and please go ahead
    with your questions.
        Mr. Guthrie. Hey, Larry, I will ask one quick one if you
    want to go into--OK.
        Dr. Varga, since joining an APM what have you been able to
    accomplish and what do you hope to accomplish in the future
    with regard to patient outcomes?
        Dr. Varga. So I think the first thing we have been able to
    accomplish--and I can't emphasize this enough to the
    committee--is, number one, we have for the first time I think
    in history had comprehensive data on the population of Medicare
    beneficiaries that we are managing, which opens up a world of
    opportunity. As folks who are physicians would tell you, if you
    give doctors useful, reliable, timely data, 99 times out of 100
    they will make the right decisions off of that data. And so it
    starts with that.
        I think the second piece is we have been able to align
    incentives with our physicians, our hospital providers and our
    post-acute providers to really take a patient-centric, patient-
    oriented approach around quality and efficiency and be able to
    really drive that care model. I think we are excited about the
    savings we have generated. We are also very proud of the
    quality metrics we have generated within the program as well.
        And I think the last thing that I would say in that is it
    has really turned the culture. We think far more in an ACO-
    centric way than we do in a hospital-centric way now, because
    our lives live in the ACO and we coordinate care in the ACO.
    The hospital is one very small----
        Mr. Guthrie. Thanks. I want to--now I have a couple of
    physician friends here that have practiced under this and they
    may have a different perspective. I want to make sure they have
    a chance to ask what they want to ask.
        So Dr. Bucshon, I will yield.
        Mr. Bucshon. Thank you, I appreciate that.
        I mean this is more on a personal level. I mean, I think
    for those of you who are in an APM, do you think participation
    in an APM has affected positively the quality of life of
    physicians in all of your practices and do you in the job
    satisfaction amongst physicians, because I think all of us know
    that there has been a decreasing job satisfaction amongst
    physicians in all specialties over maybe the last 20 or 30
    years, and our ability to recruit quality people to go into all
    of our specialties maybe has become a little more difficult. So
    do you think participating in these APMs and the way we are
    redoing the system maybe will improve those circumstances?
    Anyone want to comment?
        Mr. Guthrie. I am noticing my time. We probably just have
    time for one answer and then we are going to have to go vote.
        So go ahead, Dr. Wulf.
        Dr. Wulf. I would comment from a primary care standpoint,
    absolutely. That we are able to get to a payment model that
    rewards quality instead of volume, and this does that, makes
    all the difference. And I have been asked before what is the
    tipping point for this and it actually is not financial. The
    tipping point is physicians understanding that you can get them
    into a contract model that will pay for quality and pay for
    value. And so absolutely it is these type of payer contracting
    relationships have changed our physicians' lives and made a
    very difficult clinical life much more palatable.
        Mr. Guthrie. Thanks. I wish I had more time for everyone
    else, but we are called to the floor. So I will yield back my
    time to the Chair.
        Mr. Burgess. And the gentleman yields back. The Chair
    appreciates that. We have a series of votes on the floor that
    is going to consume some time, so I think we can conclude the
    hearing and dismiss you all and not have to reconvene after
    votes. But I do want to thank all of you for being here today.
        We have received outside feedback from a number of
    organizations and I would like to submit their statements for
    the record: The American Association of Nurse Anesthetists, the
    American Society of Anesthesiologists, the American Medical
    Association, the American Physical Therapy Association,
    Healthcare Leadership Council, American Society of Clinical
    Oncology, AHIP, the HSSR Coalition, American Hospital
    Association, American Association of Nurse Practitioners, the
    Society of Thoracic Surgeons, the American Academy of
    Orthopaedic Surgeons, and without objection, so ordered. Those
    will be made part of the record.
        Pursuant to committee rules, I remind Members they have 10
    business days to submit additional questions for the record. I
    ask witnesses to submit their response within 10 business days
    upon receipt of the questions. And without objection, thanks
    again. The subcommittee is adjourned.
        [Whereupon, at 1:09 p.m., the subcommittee is adjourned.]
        [Material submitted for inclusion in the record follows:]

                     Prepared statement of Hon. Greg Walden

        I thank Chairman Burgess for his continued leadership on
    MACRA, as well as Ranking Member Pallone, for the bipartisan
    slate of witnesses we have before us today.
        Today marks our third hearing since the passage of MACRA.
    Just as this committee led the effort to find a solution to SGR
    and other issues then, we continue our oversight over the
    bipartisan law and remain committed to its successful
    implementation.
        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. It seems
    like this was so long ago, but we must not lose perspective of
    what we have accomplished. Particularly now as we continue to
    move forward on the implementation of this important law.
        MACRA is up and running and today we will hear about the
    most forward looking aspect of the law--Alternative Payment
    Models (APMs). Today, they are already delivering better
    outcomes for Medicare beneficiaries and returning savings to
    the Medicare program. This is not a hypothetical--the
    transition to value is real, and very much underway and
    delivering results.
        MACRA has already proved to be a success. It has acted as
    an accelerant on doctors being able to enter into new team
    based arrangements, to think about their patient populations
    through payments that reward outcomes, and to take what they
    knew worked in the private sector and carry it over to the
    Medicare program.
        Most importantly, APMs finally reward providers for all the
    things they have always wanted to engage with patients on, but
    instead were forced to simply ``do more'' to be able to afford
    to stay in the Medicare program. MACRA delivered that change.
        Physicians in qualified APMs will receive a 5 percent bonus
    from 2019-2024. Technical support is provided for smaller
    practices to help them participate in APMs. We will hear from
    the Physician Technical Advisory Committee (PTAC), another
    successfully implemented element of MACRA, that is further
    helping physicians create models that are data driven with
    physicians in the driver's seat.
        We are still in the early stages of moving away from
    traditional fee for service, but these efforts continue to be
    embraced by the physician community who are eager to assume the
    risk if it means being put back in the charge within an APM to
    best direct care for their patients and to be judged on
    outcomes.
        We expect to hear today from our witnesses who come from
    diverse backgrounds. They train and practice across the
    country, in rural and urban settings. Each are practicing
    physicians, in different arrangements and all have worked with
    their organizations to provide tools and best practices that
    other physicians can utilize and learn from to be better
    positioned to succeed under MACRA.
        This committee stands with the physician community in our
    united goal of a successfully implemented MACRA and we will
    continue to work with you in a bipartisan fashion to see that
    the law delivers on its promises.
        That said, I think we should all be very excited by the
    work already underway by our witnesses to make tangible
    differences to the care delivered to the country's Medicare
    beneficiaries. I look forward to hearing more about their
    efforts and continuing to work toward a successful
    implementation of MACRA.

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