[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:]
    
    
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    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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