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





    EXAMINING BARRIERS TO EXPANDING INNOVATIVE, VALUE-BASED CARE IN 
                                MEDICARE

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

                                HEARING

                               BEFORE THE

                         SUBCOMMITTEE ON HEALTH

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FIFTEENTH CONGRESS

                             SECOND SESSION

                               __________

                           SEPTEMBER 13, 2018

                               __________

                           Serial No. 115-166










[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 
		 
36-533                    WASHINGTON : 2019                 
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                    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)























  
                             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, prepared statement......................................    73
Hon. Frank Pallone, Jr., a Representative in Congress from the 
  State of New Jersey, preparedst atement........................    97

                               Witnesses

Nishant Anand, Chief Medical Officer, Adventist Health System....     4
    Prepared statement...........................................     7
Mary Grealy, President, Healthcare Leadership Council............    20
    Prepared statement...........................................    22
Timothy Peck, CEO, Call9.........................................    25
    Prepared statement...........................................    28
Michael Weinstein, President, Digestive Health Physicians 
  Association....................................................    37
    Prepared statement...........................................    39
Morgan Reed, President, The App Association......................    47
    Prepared statement...........................................    49
Michael Robertson, Chief Medical Officer, Covenant Health 
  Partners.......................................................    64
    Prepared statement...........................................    66

                           Submitted Material

Statement of various medical organizations.......................    99
Statement of the Breaking Down Barriers to Payment and Delivery 
  System Reform Alliance.........................................   101
Statement of Advocate Aurora Health..............................   103
Statement of AdvaMed.............................................   110
Statement of the College of Healthcare Information Management 
  Executives.....................................................   117
Statement of the Cancer Treatment Centers of America.............   123
Statement of the National Association of Chain Drugs Stores......   130
Statement of Medtronic...........................................   133
Statement of the American Society for Gastrointestinal Endoscopy.   137

 
    EXAMINING BARRIERS TO EXPANDING INNOVATIVE, VALUE-BASED CARE IN 
                                MEDICARE

                              ----------                              


                      THURSDAY, SEPTEMBER 13, 2018

                  House of Representatives,
                            Subcommittee on Health,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 1:15 p.m., in 
room 2322 Rayburn House Office Building, Hon. Michael Burgess 
(chairman of the subcommittee) presiding.
    Members present: Representatives Burgess, Guthrie, Shimkus, 
Latta, Lance, Griffith, Bilirakis, Long, Bucshon, Brooks, 
Mullin, Hudson, Collins, Carter, Green, Matsui, Castor, Lujan, 
Schrader, and Kennedy.
    Staff present: Daniel Butler, Staff Assistant; Karen 
Christian, General Counsel; Jay Gulshen, Legislative Associate, 
Health; Brighton Haslett, Counsel, Oversight & Investigations; 
James Paluskiewicz, Professional Staff, Health; Brannon Rains, 
Staff Assistant; Jennifer Sherman, Press Secretary; 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.

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

    Mr. Burgess. We will go ahead and call the subcommittee to 
order, and thank you for your indulgence. We were waiting a few 
minutes because there was another hearing starting downstairs 
and some of our members may be joining us in progress.
    But, for now, the hearing will come to order. I'll 
recognize myself 5 minutes for an opening statement.
    And today, we are convening to discuss a topic that is of 
significant importance to the healthcare industry at large, and 
this is the ever-evolving transition to value-based care as 
well as new ways of assuming risk and the role technology can 
play in these efforts. Over the course of the last few years, 
our healthcare system has begun a shift toward rewarding 
physicians for the quality of care rather than the quantity, 
and building off these efforts, providers, doctors, health 
systems, and payers are willing to explore new value-based 
arrangements and open the door to providing new benefits for 
their beneficiaries. I am certain that many members of this 
subcommittee have taken meetings in their districts on this 
topic, especially in the past couple of years as the shift to 
value-based care has accelerated.
    Notably, Congress passed the Medicare Access and CHIP 
Reauthorization Act of 2015 in the 114th Congress. For 
situational awareness, this is the 115th Congress, so that was 
2 years ago. This was a critical step in the right direction as 
we helped begin to shift Medicare towards being a more value-
based payment system. We have had other hearings about the 
Medicare Access and CHIP Reauthorization Act including the 
Merit-Based Incentive Payments Systems, conducting general 
oversight on the implementation of this crucial law.
    A lot of the work that this subcommittee conducts is to 
oversee the influence in the healthcare industry as moving into 
coordination with the 21st century. The Medicare Access and 
CHIP Reauthorization Act provided a platform for this effort to 
do so, and this afternoon we are going to hear from a number of 
people on the front lines who are working to deliver better 
outcomes at lower costs. This hearing will provide us with a 
significant amount of information as we move forward in 
assessing value-based payments, where it holds the most 
promise, where there may be barriers that Congress might 
consider examining in the future to ensure its success. I think 
it goes without saying everything we can do to lower the burden 
on physicians, freeze them up to deliver more in-patient care 
and that is the general direction that I think it's good for us 
to go.
    Value-based care models have been effective and have gained 
support throughout the country as they have proven to improve 
the quality of care and lower costs. This allows for positive 
outcomes for patients, physicians and insurers, as well as the 
overall healthcare system. As we have heard from witnesses at 
other hearings on this topic, taking these models on as a 
physician or healthcare system can be a difficult but still a 
rewarding task.
    Promoting innovation and quality are essential to 
modernizing American healthcare and enabling our world-class 
physicians to focus on providing coordinated quality care to 
their patients.
    Value-based models have evolved over time since their 
inception in the early 1990s, beginning with the efforts among 
private payers and state Medicaid programs to reward 
improvements in care with financial incentives. Models have 
grown broader and incentives more innovative as we have seen 
accountable care organizations and bundled payment programs, 
which address both quality and cost, take off across the 
country.
    These newer and more advanced models have allowed for 
physicians and other professionals to voluntarily come together 
to provide more coordinated care for patients and rewarding 
physicians with bonuses for hitting certain quality measures 
and based payments on expected costs for specific episodes of 
care. These models are the future of healthcare and it is 
important that Congress hear from the industry about how the 
implementation of such models works on the ground, or to the 
extent it's not working it's important that we hear that as 
well.
    Today, we have the chance to hear from witnesses about the 
models and ways that they are working to improve the quality of 
care or reducing cost. I suspect we will hear about the 
critical role that the laws we have worked on, including the 
Medicare Access and CHIP Reauthorization Act--the role that 
they have played in expanding innovation, but that barriers to 
implementing potentially beneficial models still exist.
    So I certainly look forward to hearing the thoughts of our 
expert panel of witnesses about the challenges and achievements 
in the world of value-based care. So I want to anticipate by 
thanking our witnesses for their willingness to testify today. 
We appreciate being able to have this important conversation 
and learn from your expertise.
    Seeing that the ranking member of the subcommittee is not 
here, the chairman of the full committee is not here, and the 
ranking member of the full committee is not here, perhaps it 
would be prudent to proceed with witness statements and then we 
will allow those individuals--as they arrive from their other 
hearing we will interrupt and allow them to deliver their 
opening statements.
    And I do want to remind members that all members' opening 
statements will be made a part of the record.
    So thanks to your witnesses for being here today and taking 
time to testify before the subcommittee. Each witness will have 
the opportunity to give an opening statement followed then by 
questions from members.
    Today, we are going to hear from Dr. Nishant Anand, the 
Chief Medical Officer for Adventist Health System; Ms. Mary 
Grealy, the President, Healthcare Leadership Council; Dr. 
Timothy Peck, CEO of Call9; Dr. Michael Weinstein, President, 
Digestive Health Physicians Association; Mr. Morgan Reed, 
President of the App Association; and Michael Robertson, Chief 
Medical Officer for Covenant Health Partners.
    Again, we appreciate all of you being here today. Dr. 
Anand, you are now recognized for 5 minutes for the purpose of 
an opening statement, please.
    [The prepared statement of Mr. Burgess follows:]

             Prepared statement of Hon. Michael C. Burgess

    Good afternoon. Today, we convene to discuss a topic that 
is of the utmost importance to the healthcare industry at 
large, the everevolving transition to value-based care as wells 
as new ways of assuming risk and the role technology can play 
in these efforts. Over the course of the last few years, our 
healthcare system has begun to shift towards rewarding 
physicians for the quality of care provided, rather than 
quantity. Building off these efforts, providers, health systems 
and payors are willing to explore new value-based arrangements 
that open the door to providing new benefits for beneficiaries. 
I am sure many of the members of this Subcommittee have taken 
numerous meetings regarding this topic, especially in the past 
several years as the shift to value-based care has accelerated.
    Notably, Congress passed the Medicare Access and CHIP 
Reauthorization Act of 2015 (MACRA) in the 114th Congress. This 
was a critical step in the right direction as we helped begin 
to shift Medicare toward being a more value-based payment 
system. We have held various other hearings about MACRA, 
including the Merit-Based Incentive Payments System, as we 
conduct oversight on the implementation of this crucial law.
    Much of the work that this Subcommittee conducts is to 
oversee and influence the healthcare industry in moving care 
coordination into the 21st Century. MACRA provided the platform 
for this effort to do so, and today we will hear from people on 
the front lines who are working to deliver better outcomes and 
lower costs. This hearing will provide us with a wealth of 
information as we move forward in assessing the value-based 
payments space, where it holds the most promise, and where 
there may be barriers that Congress might consider examining in 
the future to ensure its success.
    Value-based care models have been largely effective and 
have gained support throughout the country as they have proven 
to improve quality of care and lower costs--boasting positive 
outcomes for patients, physicians, insurers, and the overall 
healthcare system. As we have heard from witnesses at other 
hearings on this topic, taking these models on as a physician 
or healthcare system can be a difficult, yet rewarding task.
    As a physician and as a Congressman, I believe it is 
important for physicians and health systems to take on risk 
when it can lead to rewarding outcomes, both for them and for 
their patients. Promoting innovation and quality are essential 
to modernizing American healthcare and enabling our world-class 
physicians to focus on providing coordinated, quality care to 
their patients.
    Value-based models have evolved over time since their 
inception in the early 1990s, beginning with the efforts among 
private payers and state Medicaid programs to reward 
improvements in care with financial incentives. Models have 
grown broader and incentives more innovative as we have seen 
accountable care organizations and bundled payment programs, 
which address both quality and cost, take off across the 
country.
    These newer, more advanced models have allowed for 
physicians and other healthcare professionals to voluntarily 
come together to provide more coordinated care for patients, 
rewarded physicians with bonuses or reductions in payments for 
hitting certain quality measures, and based payments on 
expected costs for specific episodes of care. These models are 
the future of healthcare, and it is important that Congress 
hear from the industry about how the implementation of such 
models works on the ground.
    Today, we have the chance to hear from witnesses about 
models that they are working on and how there are or could be 
effective ways of improving quality of care or reducing cost. I 
suspect that we will hear about the critical role that laws we 
worked on, including MACRA, have played in expanding 
innovation, but that barriers to implementing potentially 
beneficial models still exist.
    I look forward to hearing the thoughts of our expert panel 
of witnesses about their challenges and achievements in the 
world of value-based healthcare. Thank you to our witnesses for 
their willingness to testify today. We appreciate being able to 
have this important conversation and to learn from your 
expertise.

    STATEMENTS OF DR. NISHANT ANAND, CHIEF MEDICAL OFFICER, 
  ADVENTIST HEALTH SYSTEM; MARY GREALY, PRESIDENT, HEALTHCARE 
 LEADERSHIP COUNCIL; DR. TIMOTHY PECK, CEO, CALL9; DR. MICHAEL 
WEINSTEIN, PRESIDENT, DIGESTIVE HEALTH PHYSICIANS ASSOCIATION; 
   MORGAN REED, PRESIDENT, THE APP ASSOCIATION; DR. MICHAEL 
   ROBERTSON, CHIEF MEDICAL OFFICER, COVENANT HEALTH PARTNERS

                 STATEMENT OF DR. NISHANT ANAND

    Dr. Anand. Good afternoon, Chairman Burgess and members of 
the subcommittee. I am Dr. Nishant Anand and I serve at 
Adventist Health System as a Chief Medical Officer for 
Population Health Services and the Chief Transformation 
Officer.
    We have 46 hospitals located in nine states serving 4 
million people each year. This includes Florida Hospital 
Orlando, which is the largest single site Medicare provider and 
the second largest Medicaid provider in the nation.
    We have accountable care organization arrangements in 
Kansas, North Carolina, and Florida. We serve more than 400,000 
patients in our ACOs and we partner with several thousand 
physicians, two-thirds of which are independent physicians.
    Additionally, we will participate in the BPCI advanced 
model and are successfully participating in the CJR program. 
Today, I speak to you as a board-certified emergency medicine 
physician and a healthcare professional who has led value 
transformations at Memorial Hermann Health System in Texas and 
at Banner Health Network, which was a pioneer ACO, in Arizona.
    In value-based care delivery, I know firsthand the benefits 
this brings to patients and the barriers that block providers 
from realizing its full potential.
    We can improve the health and wellbeing of our patients but 
we need policy changes. As healthcare providers, there are many 
innovations that we would like to undertake that will improve 
the health and wellbeing of Medicare and Medicaid 
beneficiaries.
    First, we desire to build high value networks that enable 
healthcare providers to ensure high quality care and reduce 
variation in care. Second, we can expand shared technology 
services across that network. Third, we can develop common 
operational work flows to navigate patients across that complex 
network. Fourth, we can implement clinical pathways across the 
continuum of care--pathways that reward the triple aim rather 
than fragmented care.
    These four focus areas will help us achieve higher quality 
and more cost effective healthcare. However, barriers impede 
progress.
    These barriers are Stark Law, misaligned value-based model 
initiatives, and operational challenges.
    Number one, Stark Law modernization--I am not an attorney 
and cannot speak to the complexity of the law. But as a 
physician, I experience the challenges of the Stark Law each 
and every day.
    I believe that it causes barriers to doing the right thing 
for our patients. The Stark Law was developed in a 
reimbursement world that paid providers based on the volume of 
services.
    In today's world, where ACO providers coordinate care in a 
highly effective manner, these regulations serve more as a 
barrier than a protection for our patients.
    While HHS issues waivers for APMs, the problem is these 
waivers are not permanent. Number two, encourage providers to 
move to value. We are concerned that policies contained in CMS' 
proposed ACO rule would discourage providers from participating 
in value-based care.
    The existing financial benchmark to specialty and lower 
cost markets make it financially prohibitive to transition to a 
two-sided risk model and will deter providers from 
participating in the program. If the benchmarks do not provide 
room for improvement, allowing providers to transition towards 
value-based care delivery over time, providers will not 
participate.
    Benchmarks must also be accurately risk adjusted. Lastly, 
the proposal to limit shared savings payments from 50 percent 
to 25 percent of the savings will create an unsustainable 
business model.
    Number three, real-life operational challenges--to truly 
partner with private practice physicians, we want to share 
technology services such as clinical decisions support tools, 
telemedicine platforms, and referral solutions. I know these 
tools will help us make better decisions for patient care that 
will ultimately lead to better outcomes and lower costs. 
However, we need clarity that we can share these tools with our 
physicians to use with all patients. We need quick 
implementation of the 21st Century Cures Act.
    As providers are investing in high value networks, we 
painstakingly work to ensure that our partnerships are with the 
best providers. As a result, we need to refer our patients more 
intentionally, making sure that they see the best clinicians, 
which is sometimes at odds with the current Medicare conditions 
of participation.
    In summary, I ask you to consider a deeper dive into value-
based reforms that will accelerate our journey. We are ready to 
go faster but need additional help with payment reform, 
focusing on holistic care as well as regulatory reform.
    We need to help ACOs achieve critical mass in order to hit 
the tipping point where value-based care is what we deliver. 
This will allow us to achieve the coordination abilities as a 
community that will better serve our Medicare and Medicaid 
beneficiaries.
    I thank you for your time and interest and look forward to 
your questions.
    [The prepared statement of Dr. Anand follows:]

 [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
 
    Mr. Burgess. Thank you, Dr. Anand.
    Ms. Grealy, you're recognized for 5 minutes, please.

                    STATEMENT OF MARY GREALY

    Ms. Grealy. Good afternoon, Chairman Burgess and members of 
the subcommittee, and thank you for the opportunity to testify 
today on what I believe to be one of the most important topics 
in American healthcare.
    As our healthcare system evolves from a long-standing fee-
for-serve orientation to a patient-centered value-based 
approach to care, I am proud that the members of my 
organization, the Healthcare Leadership Council, are not only 
supportive of this transformation but have led it.
    Our members are innovative systems such as Adventist health 
plans, drug and device manufacturers, distributors, academic 
health centers, health information technology firms, and all 
are driving change within and across virtually every healthcare 
sector.
    We appreciate your effort today to shine a light on some of 
the barriers that are preventing an optimal transformation and 
transition to value-based care that will result in better 
outcomes for patients and improve sustainability for the 
Medicare program.
    Today, I would like to focus on several areas that warrant 
significant attention of this committee. I will begin by saying 
a word about the legal barriers that are keeping healthcare 
innovators from accelerating toward value-based care.
    Let me be clear. We believe it is essential to keep 
consumer and program protections in place while, at the same 
time, working in both the legislative and regulatory spheres to 
create an open unobstructed pathway for these value-focused 
activities that benefit both patients and the system as a 
whole.
    The Stark Physician Self-Referral Law and the Anti-Kickback 
Statute were created to prevent overutilization and 
inappropriate influence in a fee-for-service environment in 
which healthcare sectors and entities operated in their own 
individual silos.
    Today, however, in order to make the transformation to 
value-based care we need greater integration of services, 
improved coordination of care with cross-sector collaborations, 
and payment that is linked to outcomes rather than volume.
    Adopting these new delivery and payment models becomes 
difficult when faced with outdated fraud and abuse laws and 
potential penalties of considerable severity. For example, it 
is desired for healthcare providers to achieve optimal health 
outcomes through coordinated care, meeting high quality and 
performance metrics, and saving money through the avoidance of 
unnecessary hospital admissions and office visits.
    And yet, there are obstacles to incentivizing this level of 
performance. If a hospital wishes to provide performance-based 
compensation, it can run afoul of the current fraud and abuse 
framework. In fact, in terms of maintaining good patient 
health, the legal status quo does not even allow physicians to 
provide patients with a blood pressure cuff or a scale to 
monitor their healthy weight at home.
    To achieve meaningful progress toward a value-based 
healthcare system, it is also necessary to address how to 
foster further success in alternative payment models such as 
accountable care organizations. We know that better care 
coordination results in better outcomes for patients, which is 
the goal of accountable care organizations. But we must address 
the flaws in the current ACO structure.
    Medicare beneficiaries today do not choose to enroll in a 
particular ACO. Rather, they are assigned to one based on the 
physician they choose to see. So the accountable care 
organization is charged with the responsibility of managing the 
patient's care even though the patient is likely unaware they 
are even under that umbrella.
    Medicare beneficiaries may also not be aware of the 
benefits of this approach. Patients should be proactively 
informed of the benefits of coordinating care among providers. 
They should also be encouraged to remain in ACOs and other care 
delivery models that focus on coordination, information flow, 
and value. Doing so will enable these models to better achieve 
quality outcomes while controlling costs, and also to optimize 
the effectiveness of ACOs more progress needs to be made in 
data sharing and data interoperability so that entities have 
real-time knowledge of work flows, care coordination, and 
progress toward quality measures.
    Mr. Chairman, I also need to mention the importance of 
technology and the movement toward value-based care. 
Specifically, the expanded use of telemedicine is essential to 
more efficient utilization of healthcare resources, expanding 
the reach of healthcare providers.
    So we urge Congress and the administration to address 
Medicare's restrictions on reimbursement for telemedicine 
services and there's also considerable value to be found in 
making digital health applications more accessible for 
beneficiaries.
    And, finally, as we talk about coordinated care, we must 
focus on how we can gain the greatest patient and population 
health benefits from our healthcare workforce.
    All healthcare professionals must be empowered and rewarded 
to perform to the full extent of their professional license and 
to be valued members of healthcare teams.
    Thank you again for the opportunity to testify and I look 
forward to your questions.
    [The prepared statement of Ms. Grealy follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    
    Mr. Burgess. Thank you, Ms. Grealy. Thank you for 
participating with us today.
    Next, we'll hear from Dr. Timothy Peck. You're recognized 
for 5 minutes, please.

                 STATEMENT OF DR. TIMOTHY PECK

    Dr. Peck. Thank you, Chairman Burgess, and please extend my 
gratitude to Ranking Member Green and members of the 
subcommittee for the honor to speak to you today.
    I am here to share how I've seen firsthand how the lack of 
value-based care in Medicare fee-for-service system has led to 
wasted dollars on patient care.
    My name is Timothy Peck. I am an emergency physician and I 
am also an entrepreneur. I went to residency and did my chief 
here at Harvard Medical School and Beth Israel Deaconess and 
stayed on as faculty there.
    I left my career in early 2015 to be an entrepreneur and 
solve a problem--a problem that, in the emergency department, I 
lived every day. Nineteen percent of the patients who arrive in 
an ambulance to the emergency department come from SNFs--from 
skilled nursing facilities. One out of five patients I saw 
every day from an ambulance came from a SNF.
    Nursing home patients and patients over 65 in general don't 
receive great care in the emergency department. Hospitals are 
not a great place to get well for those over 65. Our own data 
on patients in nursing homes shows that 43 percent of patients 
in SNFs have dementia and almost all become delirious from 
moving them from a familiar place to the bright lights of the 
emergency department.
    In emergency departments we order every test under the 
rainbow. We put them in the hallway. They get renal failure and 
bed sores. We then admit them to the hospital that exposes them 
to infections and they often experience post-hospital syndrome 
condition in which most patients leave the hospital worse off 
than when they came in.
    Although I knew this about emergency departments and 
hospitals because I worked there, I didn't know anything about 
nursing homes. I went to medical school. I went to residency, 
and I had never once stepped foot into a nursing home. I needed 
to understand these patients better and why they were coming to 
me, and so I went and lived in a nursing home for 3 months 
myself.
    CMS says two-thirds of the transfers are avoidable and 45 
percent of the hospitalizations to the hospitals are avoidable 
for an estimated cost of about $20 billion per year. I needed 
to understand why this was happening. Right now, as of this 
moment, the only way to get paid for this care is to go by what 
the fee-for-service system says, and that is to put those 
patients in an endless loop of expensive care in which they're 
treated in the nursing home at a cost, they're put in an 
ambulance at a cost, and admitted to the hospital at a cost, to 
go right back into the SNF again.
    I needed to break this loop and, based on my research from 
living in the nursing home, I created a model in which we embed 
a first responder in the nursing home 24/7 who connects to an 
emergency physician by telehealth, who is home, remote, 24/7 
whenever there's any type of acute change in condition of that 
patient. The emergency physician who's home directs the care of 
that patient and decreases hospitalizations by upwards of 50 
percent, saving $8 million per 200-bed nursing home.
    In our first nursing home we've served, Central Island 
Healthcare in New York, according to CMS' own nursing home 
compare website, the percentage of Medicare residents who are 
rehospitalized after admission to Central Island is 11.1 
percent. The national average is 22.4 percent. Because of their 
success on this measure, Central Island received the highest 
possible quality score under the new SNF value-based payment 
program. One of our most recent SNFs, Terence Cardinal Cooke in 
Manhattan, has been able to lower its rehospitalization to 
single digits after full activation of the Call9 model.
    There are 15,600 nursing homes in the U.S. and there are 
billions of dollars and millions of lives to improve. I, 
myself, had no way of getting paid for the fee-for-service--
from the fee-for-service system for this type of program, and 
so we treated 3,500 Medicare patients, losing money on every 
single one, to be able to give you the data on--that I just 
quoted.
    It's not just us. I know a lot of health systems, 
providers, and entrepreneurs who have amazing ideas. But they 
are in no way incentivized to execute them.
    The only existing option for testing models is CMMI. When 
CMMI is able to succeed, it brings innovation to our patients, 
which they need. However, in the startups world we had a saying 
that in order to learn you need to be flexible and fail fast, 
fail smartly, fail safely, but also fail inexpensively. When 
CMMI doesn't work, it's far from inexpensive.
    The other way we can bring innovations to the Medicare 
program is by lifting 1834(m) of the Social Security Act. The 
issue is that the fee-for-service schedule does not create 
value and lifting 1834(m) would not protect us from those fees. 
Changing fee-for-service is the way that we need to move 
forward.
    Representatives Griffith, Lujan, Smith, Black, and Crowley 
have already championed a new approach, the RUSH Act of 2018. 
What this does is allows Medicare to avoid the $20 billion 
being spent on unnecessary hospitalizations and a novel 
approach in which providers can have value-based contracting 
instead of following the fee-for-service schedule. RUSH Act is 
the tip of the spear creating value-based contracting by 
supporting a program that has shown to increase quality and 
decrease costs.
    The bill is set up in a way that when savings happen, 
providers, nursing homes, and Medicare share in the potential 
savings. It's also set up in a way that providers get kicked 
out of the program if they don't save money or increase 
quality, which is how value-based care should be set up.
    You can be the change agent. You can be the reason why we 
saved Medicare program, not only for the $20 billion being 
spent on nursing home patients, the billions being spent on 
unnecessary services every year.
    The faster this happens, the less lives are lost and the 
more money that is saved.
    Thank you to the committee and Congressmen Griffith and 
Lujan for introducing the RUSH Act. It's the first step to 
bringing value to Medicare.
    [The prepared statement of Dr. Peck follows:]

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    Mr. Burgess. Thank you, Dr. Peck.
    Dr. Weinstein, you're recognized for 5 minutes, please.

               STATEMENT OF DR. MICHAEL WEINSTEIN

    Dr. Weinstein. Chairman Burgess and members of the 
subcommittee, thank you for inviting me to testify regarding 
the importance of removing barriers to value-based care in 
Medicare.
    I am Dr. Michael Weinstein, a practicing gastroenterologist 
and President of Capital Digestive Care, an independent 
physician practice. I am also President of the Digestive Health 
Physicians Association, which represents 78 GI practices across 
the country.
    Independent physician practices provide high quality, 
accessible care in the community at much lower cost than 
identical services in the hospital setting, yet value-based 
arrangements are generally not available to us. Physician 
practices are facing increasing challenges competing with mega-
hospital systems that are favored by antiquated Medicare law 
and regulations.
    Hospitals recently embarked on a buying spree of physician 
practices. The number of physicians employed by hospitals 
increased 50 percent from 2012 to 2015. This has impacted 
costs, as hospitals seek to recoup their investments by 
capturing highly profitable ancillary services. These are the 
same designated health services that are regulated by Stark 
self-referral law. Despite some reforms, significant 
disparities for high-volume services persist. For example, 
Medicare pays nearly twice as much for colonoscopies in the 
hospital outpatient department as in an ASC. There is no 
clinical reason that nearly half of the 2.7 million 
colonoscopies continue to be performed in the more expensive 
setting.
    Policy makers should be doing more to encourage robust 
competitive market that allows independent practices to compete 
and deliver value-based care. Targeted policy changes will 
improve patient care and lower costs. Congress and CMS must 
improve the system the develop, evaluate, and approve 
alternative payment models.
    A couple of years ago, CMS projected that 10 to 20 percent 
of physicians would be enrolled in an APM. Today, that number 
is just 5 percent.
    PTAC was created to facilitate and recommend physician-
developed APMs. It has examined 26 APM submissions with five 
recommended for implementation and six for limited scale 
testing. But CMS has yet to implement a single APM recommended 
by PTAC. Moreover, many stakeholders have refrained from 
submitting proposals because they cannot test them first.
    The Medicare statute permits HHS to waive the Stark and 
other fraud and abuse laws on a case by case basis only for 
approved APMs. It does not allow testing. For example, PTAC 
recommended for pilot testing Project Sonar, an APM designed to 
promote coordinated care for patients with chronic inflammatory 
bowel disease. But that testing could not occur under the 
statute without explicit approval of CMS. This means that both 
clinicians and policy makers lack data to determine if the APM 
worked or if modifications should be considered.
    Also, access to affordable utilization data is needed to 
model and develop innovative payment arrangements. CMS charges 
$4,500 for one year of data from the HOPD and ASC setting, 
making multiple years of trend data cost prohibitive for many. 
Deidentified utilization information should be available to the 
public, researchers, and stakeholders for free on a public 
website.
    The ACA created waivers from the Stark and fraud and abuse 
laws for ACOs. This creates an uneven playing field for 
independent practices that would like to participate in value-
based arrangements but cannot. We do not advocate amending the 
Stark self-referral laws in the context of fee for service. But 
we do think the law needs to be modernized to encourage 
participation in APMs.
    Explicit prohibitions on remuneration for value or volume 
make no sense under at-risk arrangements that limit Medicare 
cost exposure. Practices must be able to incentivize 
appropriate physician behavior for adherence to recognize 
treatment pathways. How can Medicare promote value-based care 
if physicians are explicitly prohibited for paying for value?
    Finally, patients need better and more accessible 
information about their treatment options. For example, under 
the law, screen colonoscopy is covered regardless of where it 
is provided and the patient has no co-pay and patients have no 
idea that there is a substantial hospital versus ASC cost 
differential.
    Similarly, patients should be able to access uniform 
quality and patient outcome metrics across sites of service for 
identical procedures.
    Solutions are available and achievable. DHPA has joined 24 
other physicians organizations in endorsing the Medicare Care 
Coordination Improvement Act. That bill would provide the 
secretary the identical authority to waive statutory 
impediments for physician-focused APMs as provided to ACOs.
    It would also repeal the volume and value prohibitions for 
physicians participating in APMs and permits testing of 
formerly submitted models while they are under review by CMS. 
Enacting such improvements would dramatically increase 
physician participation in value-based care.
    We look forward to working with the committee on these 
ideas to strengthen the Medicare program, improve patient care, 
and conserve resources.
    Thank you.
    [The prepared statement of Dr. Weinstein follows:]

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    Mr. Burgess. Thank you, Dr. Weinstein.
    Mr. Green, we went ahead with opening statements from the 
witnesses, and if it's all right with you, we'll conclude our 
last two and then I will recognize you for an opening 
statement, if that's agreeable to you.
    Mr. Green. Mr. Chairman, I will just submit my opening 
statement for you and I apologize for being late.
    Mr. Burgess. That's not a problem. I know that there's a 
lot going on today.
    Mr. Reed, you're recognized for 5 minutes for an opening 
statement, please.

                    STATEMENT OF MORGAN REED

    Mr. Reed. Thank you, Mr. Chairman.
    My name is Morgan Reed and I am the President of the App 
Association and Executive Director of the Connected Health 
Initiative--a coalition of doctors, research universities, 
patient advocacy groups, and leading mobile health tech 
companies.
    Our organization focuses on clarifying outdated health 
regulations and encouraging the move to value-based care 
through the use of digital health tools to improve the lives of 
patients and their doctors.
    Demographics are set to overwhelm the Medicare system with, 
roughly, 70 million Americans enrolled by 2030. Yet, physicians 
and their teams are already reporting being overworked and 
burned out. Moreover, patients report a high level of 
frustration with the healthcare system. It simply takes too 
long and costs too much. And yet, this is the same world where 
every person can pay their mortgage, monitor their package 
delivery, review their child's homework, all while sitting in 
the waiting room of that very doctor.
    What's going on that we can't better engage with patients 
using the tools every single one of you has in the palm of your 
hand right now or strapped to your wrist? Why is it that CMS 
reimburses nearly a trillion dollars a year, yet can't use 
those technologies to cover telemedicine in a meaningful way? 
Why doesn't the system help doctors use tools that lower 
administrative burden, allow doctors to treat a patient and not 
the keyboard?
    Well, since I don't want to leave this committee in a state 
of depression--a condition, by the way, that has been proven to 
be treatable using digital patient engagement tools--I want to 
lay out what we see as the key questions to be asked and the 
pathway forward for our sector.
    First--the first question we should always ask in this case 
is does the policy decision drive value for patients. Medicare 
beneficiaries--wait a minute, let's call them what they really 
are--people, who live in their districts, or better yet, how 
about--let's we call them constituents--have a simple goal.
    They want to be healthy and they want to be independent, 
and for those with chronic conditions like type 2 diabetes they 
want treatment to help them stay as healthy as possible for as 
long as possible. For them, remote monitoring technologies are 
lifesaving tools.
    One of our member companies, Podimetrics, is one such 
remote monitoring company. They make a foot mat that detects 
diabetic foot ulcers up to 5 weeks before they become 
clinically present. This tech is not only more efficient than 
other methods but it also cuts down on hospital bills and 
ultimately saves limbs. Doctors like it because they stay 
engaged with the patient. But reimbursement under Medicare 
remains a question mark.
    Second question--does the policy decision drive value for 
care givers? We are all familiar with the horror stories from 
physicians on EHR adoption and the epic burnout we see as a 
result. Patients rightfully complain that physicians seem 
disengaged when they're typing away at a keyboard. Meanwhile, 
doctors find they must subvert the system by typing asterisks 
or other characters in a field they don't use. This not only 
creates extra work for them but ultimately will prevent entered 
data from being used predictably as part of machine learning or 
augmented intelligence systems.
    And finally, does it drive value for taxpayers? Taxpayer 
value comes from a system that incentivizes the right things at 
the right time.
    When it comes to preventative health, this begins with 
expansion of the CBO scoring window. I want to thank all of you 
who supported the Preventative Health Savings Act--H.R. 2953--
which would expand this window to 10 years. That's a good 
start. But preventative medicine can do much more.
    For example, my friend, Congressman Harper, knows full well 
that the University of Mississippi Medical Centers' telehealth 
program would save the state $189 million in Medicaid if just 
20 percent of Mississippi's diabetic population were enrolled.
    Just think of the taxpayer savings for the country if CMS 
supported what UMMC is doing today. And here are a few actions 
that Congress and the administration can take to hit the mark. 
First, Congress should pass the Connect for Health Act--H.R. 
2556--to clarify that Medicare covers tech-driven tools that 
enhance efficiency and clinical efficacy including the removal 
of the outdated restrictions under 1834(m).
    Second, for practices that still use the fee-for-service 
model, CMS should adopt billing codes that cover activities 
that use patient-generated health data and remote patient 
monitoring. CMS has done good work in unbundling CPT Code 9091 
and the proposed new code CBCI(1) and CMS should continue to 
look at the ways that the Digital Medicine Payment Advisory 
Group can develop future codes that support new technology.
    Third, Congress should file down regulations like the Anti-
Kickback Statute in the Stark Law to allow providers to get 
technology into the hands of patients. And finally, Congress 
should support the use of unlicensed spectrum, sometimes known 
as TV White Spaces technology to help cover rural populations 
so they can have high-speed internet in places traditional 
carriers don't cover cost effectively.
    I want to remind everyone here that we all are or will be 
part of the system, either as patient or caregiver. The least 
we can ask is for the system that treats us and the care teams 
that see us as real people, not just boxes on the spreadsheet.
    Thank you very much.
    [The prepared statement of Mr. Reed follows:]

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    Mr. Burgess. Thank you, Mr. Reed.
    And Dr. Robertson, you're recognized for 5 minutes, please.

               STATEMENT OF DR. MICHAEL ROBERTSON

    Dr. Robertson. Chairman Burgess, Ranking Member Green, and 
members of the subcommittee, thank you for the opportunity to 
testify on behalf of the National Association of ACOs.
    NAACOS is the largest association of accountable care 
organizations representing more than 6 million beneficiaries 
through more than 360 ACOs. I share my perspective as a 
practicing internal medicine physician since 1986 and currently 
as Chief Medical Officer of Covenant Health Partners and 
Covenant ACO in Lubbock, Texas.
    Covenant Health Partners formed in 2007 and we have had a 
clinically-integrated network for 11 years now. Through our 
network we have instituted robust health information 
technology, contracts for hospital services, and quality 
metrics for measures like hospital-acquired infections.
    We then branched out to commercial contracts and in 2014 
made the quantum leap to a 3-year Track 1 Medicare Shared 
Savings Program agreement. If we had not already had a 
clinically integrated network in place where we had already 
done much of the work to get ready for MSSP participation, it 
is unlikely we'd have made the decision to participate in the 
MSSP.
    It is also important for us that we didn't have to be 
concerned about taking downside risk since we were in a share 
savings only model. We learned that moving to value-based care 
is a massive undertaking that requires changing the behaviour 
of multiple providers.
    We've had to change physician behavior, hospital behavior, 
skilled nursing facility behavior, home health agency behavior, 
and the list goes on. In looking at our MSSP financial data we 
came to understand that much of our cost was coming from post-
acute care, namely, skilled nursing facilities whose costs are 
180 percent higher and home health agencies whose costs were 
250 percent higher than national normative data.
    We had to work closely with those providers to see costs go 
down and that took time and effort. By developing and working 
with providers in our preferred post-acute care network, we 
eventually got to a place where we have seen quarter by quarter 
decreases in costs in these areas.
    Participation in the MSSP has allowed us to reinvest in 
technology and infrastructure to manage our patient population. 
In our first year of participation in the MSSP, we saved 
Medicare $5 million and our share of that was $2.5 million 
through the gains sharing arrangement.
    We used the bulk of those funds to reinvest in our IT 
infrastructure and developed a physician dashboard for quality 
data such as adhering to evidence-based practices for chronic 
disease management and preventative care like pneumococcal 
vaccines and colonoscopy for our patients are displayed.
    We also invested in an analyst to review and manage our 
financial and quality data. One challenge we've had there is 
that financial data for Medicare is only available on a 
quarterly basis and then we receive that data some 4 to 6 weeks 
after that.
    So any change in our process can be delayed. We also hired 
care coordinators and invested in software to manage care. We 
now receive real-time alerts through our care coordination 
system when our patients arrive at the emergency department 
that allow us to push a care plan for the patient to the 
emergency room physician so that he or she isn't working blind 
and can assist us in providing high-quality cost efficient 
care.
    All of these things take time and money. Pushing too 
quickly to achieve results and take on risk without giving 
ample time for providers to develop the necessary 
infrastructure will mean providers will not participate.
    In year one of our Track 3 agreement, we ended up with a 
small profit. But based on early actuarial work, at one point 
we thought we would have to repay CMS $1 million to $4 million 
because that financial reconciliation for the MSSP was is 
delayed by about 8 months after the contract ends. Had my 
physician board of directors been told they would even have to 
pay back $1 million, there's no way that we would have 
continued participation in the MSSP.
    From a provider perspective, it doesn't make sense to 
assume financial risk to take care of Medicare patients as this 
entails accepting responsibility for costs the physicians 
cannot control such as the increasing costs of pharmaceuticals 
like chemotherapy.
    I think CMS has had some very positive changes in the new 
proposed rule. The expansion of the 3-day SNF waiver and the 
increased stability in the rule are both great improvements.
    I do have significant concerns about the speed at which the 
agency is asking people to move to risk though as well as the 
proposal to cut shared savings from 50 percent to 25 percent.
    Two years is not enough time to take on risk. It took us 11 
years and we are still hard at it, and the reduced shared 
savings amount is going to keep providers out of this program 
because it doesn't allow them to retain enough savings to 
reinvest in the IT infrastructure and care coordination that is 
needed to make these programs work.
    Furthermore, the limitation of the risk score adjustment 
between positive 3 percent and minus 3 percent over an entire 
5-year contractual period will also be harmful as it will 
penalize physicians financially for taking care of patients who 
are sicker.
    I commend this committee on its work to examine ways to 
increase the use of value-based models and arrangements in the 
Medicare program.
    Thank you for the opportunity to testify.
    [The prepared statement of Dr. Robertson follows:]

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    Mr. Burgess. And thank you, Dr. Robertson, and thanks to 
all of our witnesses for spending time with us this afternoon.
    Mr. Green, I will once again offer to recognize you for an 
opening statement. If not, we'll go directly to questions.
    Mr. Green. I think we'll go directly, and I ask unanimous 
consent to place my statement into the record.
    Mr. Burgess. And without objection, so ordered, and----
    [The prepared statement of Mr. Green follows:]

                 Prepared statement of Hon. Gene Green

    Good afternoon and thank you all for being here today.
    Today's hearing is titled, ``Examining Barriers to 
Expanding Innovative, Value-Based Care in Medicare.''
    I want to thank the Chairman for having this hearing and I 
thank all of our witnesses for joining us today.
    Today's hearing focuses on the current transition in the 
Medicare Program away from fee-for-service and towards a value-
based payment system that is centered on the patient.
    One of the main ways the Affordable Care Act sought to 
reduce healthcare costs is by encouraging doctors, hospitals 
and other healthcare providers to form networks that coordinate 
patient care and become eligible for bonuses when they deliver 
that care more efficiently.
    ACA took a carrot-and-stick approach by encouraging the 
formation of accountable care organizations, or ACOs, in 
Medicare.
    Today, there are 472 ACOs operating in the United States, 
caring for 9 million beneficiaries.
    In 2015, our committee passed the Medicare Access and CHIP 
Reauthorization Act (MACRA), which expanded on the ACA to 
further encourage the use of value-based compensation by 
encouraging providers to create incentives to participate in 
new care delivery models that increase quality and reduce 
costs.
    Starting next year, Medicare providers must participate in 
either the Merit-Based Incentive Payment System (MIPS) or an 
Advanced Alternative Payment Model. Both options are value-
based systems. This has led providers in recent years to adopt 
new care delivery systems.
    Studies have shown that value-based care systems lower 
costs to the overall health system while improving patient 
outcomes, a win-win that everyone should support.
    ACOs saved Medicare an estimated $1.1 billion in 2017, with 
a net savings of $314 million after bonuses were paid out. This 
is a significant improvement over previous years and a clear 
sign that ACOs are succeeding as intended.
    Additionally, the experience with the Shared Savings 
Program has shown that ACOs do better over time, both in terms 
of performance on quality measures and at generating savings, 
as they gain experience with care transformation.
    Studies have shown that ACOs have reduced readmissions from 
skilled nursing facilities, generated fewer emergency 
department visits and hospitalizations, and had less Medicare 
spending overall relative to comparison groups.
    I am concerned with the proposed rule the Centers for 
Medicare & Medicaid Services (CMS) issued on August 17 that 
would shorten the onramp for new ACOs to take on downside 
financial risk from 6 to only 2 years.
    I am also concerned that the proposed rule cuts shared 
savings in half for certain ACOs from 50 percent to 25 percent.
    I am looking forward to hearing from our witnesses who have 
managed or have experience with ACOs on their views on the 
proposed rule and whether this proposal may be harmful to 
current and new entrants.
    I know some stakeholders are interested in making changes 
to the Stark Act and AntiKickback statute. I agree that 
Congress should be open to revisiting current laws if these 
regulations are bona fide barriers to value-based care.
    However, the Stark Act and Anti-Kickback statute were put 
in place to protect patients and taxpayers from potential 
abuses, including subjecting patients to unnecessary testing 
and referring patients to lower quality services.
    According to the Government Accountability Office last 
year, improper payments in Medicare accounted for $51.9 
billion. The Stark Act and Anti-Kickback statute continue to 
serve important roles in protecting taxpayers from waste, 
fraud, and abuse.
    Any effort to reexamine these laws must place the 
importance of protecting patients and taxpayers from excessive 
costs and abuse at the top of the priority list.
    Thank you again, Mr. Chairman, for holding this hearing, 
and I yield the remainder of my time.

    Mr. Green. I will share it with all of you all. You can 
read it on the way home.
    [Laughter.]
    Mr. Burgess. The chair would remind all members that all 
members' opening statements will be made part of the record, 
filed following Mr. Green's missive.
    So I will recognize myself 5 minutes for questions and, Dr. 
Weinstein, thank you for being here. You represent I guess what 
we would describe as independent physicians. Is that a fair 
assessment?
    Dr. Weinstein. Yes, independent gastroenterologists--about 
1,900 across the country.
    Mr. Burgess. So you raised the issue of independent 
physicians--the difficulty they might have in accessing the 
alternative payment model and being able to participate in 
that.
    Could you just kind of go over what are the major obstacles 
for the independent physician to be able to participate in an 
alternative payment model?
    Dr. Weinstein. Yes, certainly. Thank you.
    Independent physicians, particularly sub-specialty 
physicians take care of chronic disease. We don't do primary 
care. We are used when a patient needs a particular service or 
has a particular disease.
    So in a standard ACO type APM, we are technicians, in 
general. But an independent practice like ours takes care of a 
lot of patients with chronic inflammatory bowel disease, 
chronic liver disease. These are very high cost, high beta, 
high variable cost patients that generally are managed--even 
their primary care is managed by gastroenterologists.
    In developing an alternative payment model for inflammatory 
bowel disease, we grouped. Our association got together and 
used actuaries, did the data analytics using our own data to 
determine what a model to take care of patients over a long 
period of time would be.
    Project Sonar was that APM. It was actually the first APM 
presented to PTAC when PTAC started. It received a tentative 
approval for testing and then got stuck. It does use technology 
to engage patients in their own care so that we could do 
outreach and try and identify patients before they show up in 
the emergency room, before they show up in the hospital.
    So the difficulties in developing that APM, obviously, 
there was a cost burden in getting the actuarial data. There 
was an inability to test to model because of the Stark 
prohibitions and then not knowing how to modify it, obviously, 
it makes it difficult.
    So we are sort of shut out of APMs as gastroenterologists 
because we don't have any alternative payment models that we 
can participate as independent physicians.
    But we are very willing to invest in the technology to do 
that.
    Mr. Burgess. Sure. If we can overcome some of those 
obstacles and those obstacles would be what you just 
delineated. I may get back to you in a written question form 
about PTAC because I've got a particular sensitivity to that. 
PTAC was a creation of, basically, this subcommittee a couple 
Congresses ago and, conceptually, PTAC was there so that 
physicians would be back in charge of quality metrics as 
opposed to leaving that all up to the agency.
    So it is very important to me the PTAC work and I am 
discouraged to hear that you're having trouble. So I may follow 
up with you on that because I do feel that it's such an 
important concept.
    But Dr. Anand, let me just ask you, in moving to downside 
risk models to allow a system like Adventist to integrate 
independent physicians into your networks, is that a 
possibility?
    Dr. Anand. Great question, Mr. Chairman.
    From a philosophical perspective, two-thirds of our 
clinically integrated networks are independent physicians, and 
so we have always approached with the philosophy that we want 
to have the best clinicians to be part of our networks.
    Sometimes it's the best employed physician. Sometimes it's 
the best independent. But we hold ourselves to high standards. 
We want physicians who are going to be focused on quality at 
the best experience at an efficient cost.
    So with that, as we transition into the post-MACRA world 
and being part of an advanced APM becomes more important to our 
independent physicians, we've seen that as a great way for us 
who are in a Medicare shared savings model to align with our 
physicians who are going to be either subject to a penalty or a 
possibility of a bonus in the MIPS program or, alternatively, 
who are interested in taking more holistic care in moving 
towards an advanced APM model.
    So MACRA is one of the big opportunities that's going to 
allow us to partner with their physicians. Too, taking downside 
risk allows us to coordinate care more across the continuum 
with the waivers that are present, with the ability to bring in 
more components of the delivery system.
    We talked a lot about post-acute. We talked about our 
specialists. Bringing all those providers together in the--and 
some are going to be independent, some will be academic, some 
will be employed--that's going to allow us to coordinate care 
more holistically.
    It's also going to allow us to share tools and technologies 
to achieve that coordination--sometimes apps, sometimes EMR-
integrated tools that are going to be part of it. There's an 
upside potential that could also be--if the ACO is successful 
that's also going to be an attractive component for the 
physicians as well. So there's several components. In my mind, 
I think the MACRA component, especially as we transition into 
the later years of the MACRA model into the advanced APM model 
I think there's going to be a lot of synergies with independent 
physicians.
    Mr. Burgess. And I just want to address for you, since you 
brought up the interoperability title of 21st Century Cures, 
the oversight of the implementation of 21st Century Cures has 
been front and center in front of this subcommittee because the 
scientific aspects, the FDA NIH aspects. There was actually a 
mental health title.
    So we've had separate hearings on both of those and the 
third, of course, was the interoperability title, which I 
thought deserved its own oversight or its own subcommittee 
implementation hearing. Because of the delay from the rule 
coming from the office of the national coordinator I was 
actually talked into postponing that last June.
    In retrospect, perhaps we should have pushed again with the 
hearing. But and, obviously, we are up against some other 
things in the calendar which you may have heard about in the 
papers.
    But at some point this year, I intend to have that 
interoperability title implementation hearing that you said 
would be critical for you.
    Mr. Green, I recognize you 5 minutes for your questions, 
please.
    Mr. Green. Thank you, Mr. Chairman, and I thank you for 
your effort to make the system work.
    Dr. Weinstein, about 2 weeks ago I was invited to speak to 
the gastroenterologists in Houston, Texas, and I was surprised 
after I got up and talked about MACRA and how we are trying to 
stay attuned to it as members of Congress, watching what the 
agency does.
    At the end of it, which is not usual, I didn't have any 
questions at all. So I wasn't sure that the physicians were 
aware of what's going on.
    Have you seen that? And that's not just one specialty. That 
was just one I happened to speak to a while back.
    Dr. Weinstein. I think the largest physician groups around 
the country have their ears to the ground as to what's 
happening with MACRA and MIPS. In a gastroenterology practice 
it's unfortunate that there really isn't a way for us to 
participate in APMs and we are looking at having to implement 
MIPS, which is a very expensive way to gather data and a very 
inefficient way to gather data and yet it has never been proven 
to help patient care.
    So I think smaller groups are unaware of what's happening. 
I am not sure----
    Mr. Green. Although in the Houston area we should have a 
whole lot of gastroenterologists.
    Dr. Weinstein. There's some very large groups in Houston. I 
am familiar with a couple of them.
    Mr. Green. OK.
    Dr. Robertson, welcome to our committee. The chair is from 
north Texas. I am from Houston, and, obviously, we speak the 
same language, coming from Lubbock.
    Can you speak for a little more on your organization's 
initial decision to transition in the ACO model and why this 
model was the best fit for your organization?
    I think you answered some of that. You were already on that 
road that you thought the ACO would work.
    Dr. Robertson. We were on the road because we had already 
gone into Track 1 in 2014. We were making a decision as to 
whether we wanted to participate another 3 years in Track 1 or 
move to a different model when a law called MACRA became on our 
horizon, and like many things in life, timing is everything.
    This was fortuitous timing. We looked and the more we began 
to discover about MACRA, the more we knew we wanted to be 
qualifying providers under an advanced APM as opposed to being 
thrown in the briar patch of MIPS. The positive and negative 
variations in reimbursement under the MIPS systems is going to 
be very disruptive for physician practices, especially small 
physician practices.
    Our ACO has a large employee medical group in it that's 
owned by Covenant Health. But 50 percent of our organization is 
composed of independent physicians, which are just one- or two-
person groups.
    The amount of money that has to be put into that to make 
those folks work under a MIPS system is horribly expensive and 
together, collectively, we thought that we could do better if 
we were in a risk-bearing program. We'd already had some 
experience under Track 1.
    We saw what we could do from a quality perspective and we 
had been decreasing the amount of spend. The difference is, 
though, the way they calculate your financial benchmarks under 
Track 3. Totally different than Track 1, and we really didn't 
have a good understanding of that when we entered into Track 3. 
So that's made that a little bit problematic for us.
    Mr. Green. Going from what you were, what type of 
infrastructure changes and provider education and training did 
your organization undertake to implement the ACO model? Was 
it--from where you went to what you're doing now?
    Dr. Robertson. We started in 2007 and initially just took 
commercial contracts. But we started then developing a way of 
showing physicians their individual performance. Every 
physician believes that they are the world's greatest physician 
and they provide absolutely good quality care.
    The problem is our system is so broken that it encourages 
just transactional care. You're there for 15 minutes and then 
good luck to you, or you get to the hospital dismissal 
driveway--good luck to you.
    Doing this requires you to think differently. You own that 
patient 365 days a year, 24 hours a day, and you have to have 
access to some data to help you understand where the spend is 
occurring and then you have to invest not only in IT systems to 
show physicians how they're performing but you have to hire a 
lot of people to help patients do things that you need for them 
to do.
    You can't imagine that a patient is going to be able to 
take everything you tell them in a 15-minute visit. Our care 
coordinators can move out into the community with them, help 
them stay on track, help them set goals for self-care, and 
provide them some other opportunities to find medications that 
we sometimes prescribe that we have no idea are so expensive 
and get them access to the medications they need at a better 
price.
    Mr. Green. Well, I've been on the committee since 1997 and 
it's, like, I got so tired of hearing about how bad the SGR was 
and that's why this committee wants to stay on top of it 
because the last thing we want to do is recreate the problems 
physicians had under the SGR, and that's why I appreciate the 
whole panel to be here.
    By the way, my son-in-law is a gastroenterologist and my 
daughter is in infectious disease so and they do think they can 
cure everything.
    [Laughter.]
    Mr. Burgess. They probably can.
    Mr. Green. And I am glad they can.
    Mr. Burgess. The gentleman yields back. The chair thanks 
the gentleman.
    The chair recognizes the gentleman from Kentucky, Mr. 
Guthrie, the vice chairman of the subcommittee, 5 minutes for 
your questions, please.
    Mr. Guthrie. Thank you very much, and the first question is 
for Mr. Reed, and I think I wrote it down. I was trying to 
write as you were saying it but I am not that quick.
    But you talked about making changes and you said in your 
testimony make changes in the Stark and anti-kickback laws in 
order to get the technology in the hands of patients. I think 
that's pretty accurate what you said.
    How does the anti-kickback statute prevent providers from 
giving patients the tools that may help them, and if we update 
the statutes how do we effectively protect against fraud and 
abuse?
    Mr. Reed. Well, I think that's at the core of the question 
and I was very pleased to hear several other folks of this 
panel talk about the fact that the way that, especially in the 
ACO space, it works is, as I understand it, if a physician 
group wants to provide technology into the hands of a patient 
for remote patient monitoring or other patient engagement that 
might have--part of it would be a referral that it kicks into a 
consideration under the anti-kickback.
    The problem with that is that the very tool that I might 
put into the hands of a patient, a tablet like this one or 
anything like that, that I am going to use to gather data on 
the patient, I am going to want to necessitate a referral if 
one of the things that shows up from the evidence that I am 
collecting on that patient says, hey, they need to see a 
gastroenterologist.
    And so the moment that I do that I am in trouble with the 
law. As far as where the fraud lies, the reality is the fact of 
remote patient monitoring and digital services it's a whole lot 
easier to monitor exactly what the use of that device is doing, 
what it's entailing, how long it's used for.
    In fact, the very data that we need to show effectiveness 
is also going to be very useful to demonstrating that it's not 
being used fraudulently.
    So we think that removing that barrier for good 
recommendations to good gastroenterologists or infectious 
disease specialists like Mr. Green's daughter are the kind of 
tools that we need to make available, and the idea that a 
patient is now limited because I can't give them the tech that 
they need, that's just crazy.
    Mr. Guthrie. I don't disagree with you.
    So, Dr. Peck, how are healthcare apps and telehealth 
services changing the Nation's healthcare access? Sort of 
mentioned here, and how do we encourage telehealth, from our 
perspective?
    Dr. Peck. Thank you.
    In terms of the apps question and technology, I do agree 
that there is the component that whenever I suggest to have an 
app in the hands of a patient, when they start to use it if it 
does generate the idea that they now need to see another 
physician that can cause a lot of problems in terms of self-
referral.
    So but moving into telemedicine, there's a lot of talk of 
1834 and of Social Security Act, and lifting that. I would like 
to make the point that lifting that in 1834(m) seems to be a 
plug into the hole that fee-for-service Medicare beneficiary 
program has created for itself.
    Because smaller companies, startups, innovations even of 
larger companies and of healthcare systems don't have a way 
necessarily to value-based contract with Medicare directly, 
they have no way to get paid for innovative programs that are 
outside the fee-for-service schedule.
    If you have something that's innovative, new, better, 
cheaper, faster, and brings higher quality, well, that's 
perfect for value-based care.
    So why can't we have a provider contract with Medicare? 
CMMI is one of the ways to do that. But, again, this is a long, 
arduous, expensive, and not very flexible process.
    The RUSH Act, which I talked about, was introduced and the 
RUSH Act works for nursing homes but I want to broaden that 
out. I think what's important about the RUSH Act, when you take 
a look at it, is that has this value-based arrangement idea 
with Medicare.
    It allows the providers, the doctors, the nursing homes who 
are housing the patients, and Medicare to all share in any 
savings that are generated.
    And then there's down side risk as well.
    Mr. Guthrie. I've only got about 30 seconds. To anybody on 
the panel, so we are talking with Medicare here and how 
difficult it is to innovate and change things.
    Are you seeing it when you're dealing with private health 
insurance and others?
    Dr. Peck. I am talking about Medicare.
    Mr. Guthrie. I know you are, but do you see it in your 
private world it's quicker to adapt and you're seeing these 
changes?
    Dr. Peck. Yes.
    Mr. Guthrie. So that we would lose these changes if we just 
went to pure Medicare for everybody?
    Mr. Reed. Absolutely. There are problems on the innovation 
side, and here's one of the problems.
    As we noted earlier, it's a trillion dollars. So anyone, 
any venture capitalist, when our members are looking at raising 
money, the VC is going to ask, well, what's the total 
addressable market, and when you have to describe that one-
third of your total addressable market is Medicare and 
Medicaid, the next question is so how do we get paid out of 
that system.
    So when you look at 1834(m) as a plug that prevents--and I 
am going to do something unheard of--I am going to say 
something nice about a government agency--CMS has actually done 
some good things lately to try to break free of where 1834(m) 
has been preventing forward progress.
    But to your direct question, even though in the private 
sector there are ways around Medicare and Medicaid 
reimbursement, there's a trillion dollars of addressable market 
there that any wise venture capitalist is going to say how do 
we get to it, and with barrier like 1834(m) it's staving off 
our ability to move into that space.
    So yes, it harms our ability on the Medicare and Medicaid 
side, and yes, it harms our ability to grow our businesses to 
cover more people.
    Mr. Guthrie. Thanks. I am out of time. I yield back.
    Mr. Burgess. The chair thanks the gentleman. The gentleman 
yields back.
    The chair recognizes the gentleman from New Mexico, Mr. 
Lujan, 5 minutes for your questions, please.
    Mr. Lujan. Mr. Chairman, thank you so very much for this 
important hearing and I want to thank our ranking member, Mr. 
Green, as well.
    I would also like to acknowledge Chairman Walden and 
Ranking Member Pallone for looking at how telehealth services 
can be used to improve access to quality care, to save patients 
and Medicare time, energy, and money.
    Dr. Peck, you point out in your testimony that if skilled 
nursing facilities across the country are to implement 
telehealth services to scale then something needs to change 
within the billing system.
    The skilled nursing facility value-based purchasing program 
authorized by the Protecting Access to Medicare Act is shifting 
Medicare's reimbursement for skilled nursing facilities to a 
value-based system.
    SNFs are now evaluated on a hospital readmission measure 
that provides incentive payments to encourage SNFs to keep 
patients healthy.
    Dr. Peck, how does Call9 and models like Call9 affect 
nursing homes' performance under this new reimbursement system?
    Dr. Peck. Thank you for that question.
    The new reimbursement system and models like Call9 that 
decrease hospitalizations--unnecessary and avoidable 
hospitalizations--increases the payments to nursing homes and 
rewarding them for that good behavior.
    And I would mention in my testimony that one of our first 
nursing homes just finally got their value-based score and they 
are receiving a large bonus from that.
    What that program doesn't do is incentivize the providers--
the physician groups who are delivering that care. That program 
does give the bonus to the nursing home itself but not to the 
providers, the doctors.
    So it's a good program and I think it will help a lot and 
incentivize a lot of nursing homes to reduce hospitalizations 
but leaving out the physician groups.
    Mr. Lujan. I appreciate that very much, especially in light 
of your testimony and the testimony of others that found that 
19 percent of transfers to the emergency department are from 
skilled nursing facilities--one in five.
    You mentioned in your testimony that Call9 model uses 
additional clinical staff to complement the nursing home staff. 
Can you elaborate on how the Call9 staff work with nursing 
homes to treat patients?
    Dr. Peck. Certainly. So our particular model we place first 
responders. These, by training, are EMTs, paramedics. They can 
be nurses with emergency experience--CD techs.
    What unites them all is that they understand emergencies 
and acute care. I think this is a key point. A broader point is 
that what we do is we bring the emergency department to the 
nursing home in this way with the physician who is remote in 
this onsite.
    Nurses in nursing homes are great at chronic care. That's 
what they do, and if the nursing homes had faculties and staff 
that could take care of emergencies, we wouldn't have 19 
percent of the patients going to emergency department coming 
from nursing homes.
    So what we do is put the emergency care in there to 
supplement but not--and complement, excuse me, but not 
supplement what they do--not replace what they do.
    Mr. Lujan. Many members of the subcommittee worked on 
recent provisions to expand telehealth reimbursement for 
telestroke, end-stage renal disease, accountable care 
organizations, and Medicare Advantage plans.
    Dr. Peck, how does the RUSH Act build on this successful 
legislation?
    Dr. Peck. Right. So all of those legislations help address 
the CBO issue of the CBO scoring telehealth usually as an 
additive program. The reason for this is they count it as a 
duplicative measure.
    Telestroke--I will key in on that one--end-stage renal 
disease, we can key on that as well. It's very hard to make 
more strokes. It's very hard to make more sessions of dialysis 
every week for a patient.
    So it controls itself in terms of the volume that's there 
and that lends itself perfectly to value-based arrangements and 
value-based contracting.
    Our model is working with emergencies. It's very hard to 
rack up new emergencies and make more emergencies out of thin 
air. So when you have that kind of cap on a certain condition I 
think that's a nice place to start to focus on to start to chip 
away at bringing value into Medicare.
    Mr. Lujan. And the requirements under the RUSH Act speak to 
additional workforce. What qualifications will these people 
have and is there a way to train existing staff to accomplish 
the same goal or is there value to bringing in a new person?
    Dr. Peck. Yes, I think there are ways to have existing 
staff become more trained in emergencies, have more skills for 
emergency medicine, be more comfortable in CPR type settings.
    However, I do believe it's important to have additional 
staff if you're going to retain patients in a nursing home and 
more patients who are sick. Having the existing staff there and 
not augmenting with another person I think will take away from 
the care of the rest of the patients who don't have 
emergencies.
    Mr. Lujan. I appreciate that. Thank you, Mr. Chairman.
    Mr. Burgess. The chair thanks the gentleman. The gentleman 
yields back.
    The chair recognizes the gentleman from Ohio, Mr. Latta, 5 
minutes for your questions, please.
    Mr. Latta. Thanks, Mr. Chair, and to our panel today, 
thanks very much for being here on this very important topic.
    If I could start, Dr. Anand, with you. Do medical 
professionals or health practice of health practices face 
barriers, regulatory or otherwise, to adopt new technologies?
    Dr. Anand. Yes, great question. So I think we've alluded to 
several comments on the barriers that we face. One is related 
to being able to financially support the costs that go into 
implementing new technologies and tools.
    With our independent physicians, when I was in Texas the 
average practice size was about one and a half for the 
independent physicians. Some places are a little bit larger.
    But independent physicians don't have the capital in order 
to be able to make those purchases. When you're in an ACO 
construct and you apply the Stark waiver and the Stark 
exemptions, you can now, as a system, come together and allow 
them to access those tools and technologies and apply it across 
their patients.
    The challenge we find is those tools and technologies, and 
it's a question that we've struggled with, is can you apply 
those tools and technologies only for Medicare beneficiaries or 
apply them broader, more widely, across all of the patients or 
the provider panel that the patients see.
    And that's been a big struggle for us. We'd love to see the 
Stark waiver expanded and, in an ACO structure, provided at the 
provider level because as clinicians we can't sort out who's in 
which program and when a member is in another program.
    We can use this tool and technology that's going to change 
care for this patient but we can't use it in that other patient 
situation.
    So those are some of the challenges that we face. I think 
if we could, in the ACO construct, we are coordinating care 
basically--provide these tools and technologies and allow them 
to use those tools and technologies for all of their patients I 
think we'd be in a much better situation.
    Mr. Latta. Let me ask you this--just follow up on that. 
You're talking about the independent practitioners out there. 
Would that also--these barriers be disproportionately affecting 
small and rural providers because--who could benefit quite a 
bit from telemedicine?
    Dr. Anand. We do. In our health system we have several 
markets that are in rural markets. We have one in Asheville, 
North Carolina--a campus that's there. We also have one in 
Manchester, Kentucky, and in those settings what we are finding 
is it's becoming harder and harder to have specialists and 
particular services provided in those markets.
    Now, in our system, we have a great skill set and great 
number of specialists in our Orlando market and we would love 
to be able to provide that cognitive expertise to those folks 
in Manchester, Kentucky, as an example.
    The reimbursement models we struggle with we'd love to be 
able to support the providers that are providing primary care 
services with the specialists that we have.
    And so we struggle again with the Stark rules that go with 
it. But rural services, at least in my opinion, are going to 
continue to be harder to come by, especially with specialty 
services, and when we have these large centers that can provide 
those services if we could figure out a way through the Stark 
exemption and payment models to transpose that cognitive skill 
to those markets our beneficiaries will be able to get much 
better care.
    Mr. Latta. Well, if you look at what we could do in 
Congress, what would you like to see us do specifically?
    Dr. Anand. I think if we could do two things--one is allow 
us in certain, especially rural markets and critical access and 
hospitals that don't have access to larger partnerships--allow 
us to provide those tools and technologies through a Stark 
exemption.
    Number two is if we could figure out a payment model where 
we could reward those services and cover some of the 
infrastructure costs that go with it I think that would allow 
us to be able to provide that service on a larger scale and, 
again, it would allow better access for beneficiaries and the 
patients that live in those smaller rural areas.
    Mr. Latta. Mr. Reed, with my last minute I have, I am a 
firm believer that data has the power to spur change and data 
allows us to recognize important trends and patterns that, in 
turn, influences decision making and ultimately finds 
solutions.
    How could Congress reduce these barriers to sharing health 
and patient data without compromising that patient privacy?
    Mr. Reed. Well, it's a great question and, of course, it's 
always good to remember that the P in HIPAA stands for 
portability, and I think that's at the core of where we stand.
    We would urge Congress to do everything in your power to 
address what Dr. Burgess said earlier and that is let's see 
ONC's report on info blocking, because ultimately, as we are 
moving into this space where data has to be available and 
interoperable, we know that the only way to get a patient the 
solution that they need is to find out what's wrong with them, 
and the more data that all of these gentlemen here at this 
table, and Mary, can have, the better chance we have of 
correctly identifying the disease and, more importantly, 
getting you the right treatment at the right time.
    So, first of all, we need to do better on interoperability. 
Second, we need to continue to push forward on finding the 
right terms and glossaries so that the notes fields, which are 
a key aspect of how a doctor communicates your story, not just 
your test results, becomes part of a record that can be used by 
every single person at this table. And so it starts with ONC. 
Let's see what they have to say.
    Mr. Latta. Thank you very much.
    Mr. Chairman, my time is expired and I yield back.
    Mr. Burgess. The chair thanks the gentleman. The gentleman 
yields back.
    The chair now is pleased to recognize the gentleman from 
Virginia, Mr. Griffith, 5 minutes for your questions, please.
    Mr. Griffith. Thank you very much, Mr. Chairman.
    First, before I do that, I have a letter that has been sent 
in support of the RUSH Act, which Dr. Peck was so kind to make 
nice comments about earlier that Mr. Lujan and I of this 
committee have signed onto along with a number of others, 
including Adrian Smith. But I have a letter, without objection, 
if we could submit that for the record.
    Mr. Burgess. Without objection, so ordered.
    [The information appears at the conclusion of the hearing.]
    Mr. Griffith. We'll get that down to you. All right, I 
appreciate that.
    And, Dr. Peck, again, thank you for your kind comments on 
the bill and I know we've got a lot more to do, and this just 
gets us started and you made some comments in that regard as 
well.
    You also mentioned in your testimony that Call9 treats 80 
percent of the patients you see in the nursing home versus 
transferring them to the emergency department.
    How do you interact with the other 20 percent of patients 
that are still transferred to the emergency department?
    Dr. Peck. It's a great question. That's where we get to 
save a lot of lives that otherwise wouldn't be saved. That's 
why I left my job as a traditional emergency physician. Someone 
took my job as an emergency physician after I left, right.
    But these patients who we can't get to in their moment of 
emergency in these nursing homes they otherwise would be 
pulseless. They otherwise would be having very severe problems.
    But with our program and other programs in nursing homes we 
can get to them at that point, and the average--when you put 
all the numbers together after you call 911 it takes about 64 
minutes including the wait to see an emergency physician. If 
you're pulseless, across the country that can be 36 minutes. So 
yes, being with people at the moment of emergency saves lives.
    Mr. Griffith. And that's very good. But I guess I am trying 
to figure out, OK, what happens once they go off to the 
emergency room? You have decided that you all can't take care 
of it and you're getting 80 percent of them right there in the 
nursing home--they never have to make that trip and, as you 
describe in your opening statement, with the bright lights that 
are confusing and the long wait and the ride in the back of a 
van. It's an ambulance. But when you're sick and not feeling 
well, it's just the back of a van.
    Dr. Peck. Yes. Yes.
    Mr. Griffith. So how are you able to continue to interact 
with that 20 percent that's at the hospital?
    Dr. Peck. Right, and we talk a lot about interoperability 
and pushing data over, and writing--even being able to write 
notes in the same language that an emergency department needs 
to see and streamlining the data transfer is where there's a 
lot of opportunity to help those patients. Yes.
    Mr. Griffith. All right.
    And in your testimony, you stated that Call9 currently 
operates in 10 nursing homes in New York--and this was in your 
written testimony--but has not spread to more rural areas.
    Yet, how would Medicare's reimbursement of technology-
enabled care delivery models allow for these models to reach 
more rural areas?
    Dr. Peck. Yes. So right now, we are dependent on the 
Medicare Advantage and commercial payers to be able to make 
this happen. So we have to go to areas where those MA 
penetrations is as high as possible, which is usually urban 
areas as well as larger nursing homes where there's more MA 
patients.
    So we can't possibly go to smaller nursing homes or 
Medicare-heavy nursing homes right now. We would lose the 
company.
    Mr. Griffith. Now, you said Medicare heavy. What about 
Medicaid-heavy nursing homes?
    Dr. Peck. Right, so long-term care Medicaid patients are 
usually dual eligible for the most part because they're over 65 
for the most part, or disabled for the most part. So Part B is 
where these payments are coming from, not from the Medicaid 
program.
    Mr. Griffith. OK. I appreciate that.
    Representing a fairly rural not affluent district, this is 
one of the reasons that I am pushing for these ideas because my 
constituents deserve to get just as good care as those folks in 
the urban areas or in the wealthier areas.
    Let's see if I have time to get one more in.
    Dr. Peck, one issue policy makers have faced in advancing 
telehealth legislation is the lack of data, and I know 
everybody's talked about data, but the lack of that data on the 
effects of telehealth on actual Medicare beneficiaries, this is 
a hard barrier to overcome because without reimbursement for 
providing these services to Medicare beneficiaries there are 
few who are going to be able to take the financial loss to 
build enough meaningful data.
    How can Congress continue to support entrepreneurs in 
generating these meaningful data points?
    Dr. Peck. Yes, it's vehicles to be able to get these models 
through after they're proven, the PTAC being one of those. We 
have held back our PTAC application at this point until we 
understand more about what the program intends to do.
    We also see this opportunity--the RUSH Act as the tip of 
the spear to be able to have Congress directly allow Medicare 
to contract with startups and entrepreneurs and innovative 
programs.
    We need those on that side to be able for me, as an 
entrepreneur, to go to the venture community and raise money. 
They're not going to give it to me unless there's a way to make 
return on that investment.
    Mr. Griffith. Right. Well, I appreciate it and appreciate 
all of you all being here. This is an important subject and I 
look forward to working with all of you as we move forward.
    I yield back.
    Dr. Peck. Thank you.
    Mr. Burgess. The chair thanks the gentleman. The gentleman 
yields back.
    The chair recognizes the gentlelady from California, Ms. 
Matsui, 5 minutes for questions, please.
    Ms. Matsui. Thank you, Mr. Chairman. I want to thank the 
witnesses for joining us today. I am pleased that we are 
hosting this hearing to discuss how we transition toward 
rewarding value over volume in our healthcare system.
    Thanks to the Affordable Care Act, the MACRA providers 
today have more opportunities than ever before to redesign how 
they deliver care to their patients.
    Moving to value-based care is important. But we can't lose 
sight of the importance of the Stark Law in protecting the 
Medicare program from waste, fraud, and abuse.
    Although a shift to value-based care may require re-
examination of certain policies, the self-referral laws 
continue to serve an important purpose.
    It is important to differentiate between changes to Start 
Law that would lead to more value-based payment models and 
coordinated care and changes that would gut the intention of 
Stark and allow the pay for play at the expense of patients.
    Several of you note that the secretary has authority to 
waive the Stark Law for innovative value-based arrangements.
    Mr. Reed, your testimony notes that you believe that HHS 
has clear authority to provide exceptions to the Stark Law. Can 
you expand on what steps you believe the secretary can take to 
modernize Stark to encourage high quality value-based care?
    Mr. Reed. Well, I think you have heard from the 
multiplicity of the witness perspectives here that essentially 
the secretary needs to look at the Stark and any kickback from 
the perspective of what is your ultimate goal.
    You said the ultimate goal is to make sure that we don't 
have waste, fraud, and abuse. I would posit the primary goal of 
Medicare is to make sure that people over the age of 65 have 
the kind of care that helps them stay healthy and be 
independent.
    And so when I look at it from the perspective of what is 
the capability of the secretary to waive, you used some key 
words, which was innovative technologies that can help improve 
the outcome.
    And so I think that with each request for an exception I 
think it falls under that waiver authority. But I also would 
note that we have to be very careful with waiver authorities to 
something that Dr. Peck said earlier, which is when it only 
happens every year enough to renew, it makes it quite difficult 
when you sit down with a venture capitalist and your new board 
to say our entire business model is dependent on our hope that 
a waiver will continue to the next year.
    Ms. Matsui. Yes.
    Mr. Reed. And while we are not only bidden to the VC 
community, we have limited resources. It changes where you 
focus your time and energy if you have that possibility hanging 
over your head.
    So I would like the waiver to be exercised on those 
innovative technologies but in a manner in which allows us to 
really build and grow them and not just worrying about----
    Ms. Matsui. OK.
    Mr. Reed [continuing]. Where there might be an overuse.
    Ms. Matsui. OK. Now, I want to get into telehealth, because 
over the years a group of us on Energy and Commerce have worked 
together to advance the adoption and use of Telemedicine.
    As CMS implements MACRA, we want to make sure that the new 
health technologies are integrated into new models of care from 
the start.
    And, Mr. Reed, in MACRA Congress intended for telehealth 
and remote monitoring to be rewarded within the MIPS clinical 
practice improvement activities.
    Can you comment on CMS' recent efforts to support and 
expand the use of these services?
    Mr. Reed. Absolutely. We are very pleased that the MIPS 
program included IA activities. Especially, we think it's very 
important that they allowed for small practices to see their 
number--to get an appropriate reward for engaging with their 
patients when it comes to using telemedicine and remote patient 
monitoring products.
    I think what's really important though is for the parts 
that you're mentioning, which are critical, and are worthy of 
note, we don't think we should forget the fact that the APMs--
that there was no mention of remote patient monitoring as part 
of the APMs----
    Ms. Matsui. Right.
    Mr. Reed [continuing]. And I think it's important to note 
that, from our perspective, we appreciate what you have been 
doing both as a cosponsor of Connect for Health and as a 
cosponsor for the evidence-based Telehealth Expansion Act.
    So we appreciate the work you have done in this space and 
we think that that all needs to be continued.
    Ms. Matsui. OK. Now, as CMS continues implementing MACRA, 
in what ways should Congress be thinking of program oversight 
with regards to promoting the use of telehealth and remote 
monitoring services?
    Mr. Reed. Evidence. That's the real crux of this issue. We 
always take the perspective that every physician--and the whole 
system has three real questions: does it work, will I be in 
trouble for using it, and then, finally, does it make economic 
sense.
    And so that first question of evidence becomes critical. 
You have heard multiple people here talk about CMMI. I think 
it's ironic that CMMI--we met with CMMI the other day. Love 
them, great people over there. But they told us, hey, we are 
going to move really fast and get this study out in 10 years.
    [Laughter.]
    Ms. Matsui. OK.
    Mr. Reed. Just recently all of you know that 10 years ago 
there were no smart phones.
    Ms. Matsui. That's right.
    Mr. Reed. That's when that started. So and we are looking 
at the evidence that we need to bring to the fore. We cannot 
wait for CMMI and a 10-year study that hopefully shows how it 
all works.
    We are going to have to use other sectors.
    Ms. Matsui. OK.
    Well, thank you, and I've run out of time so I yield back.
    Mr. Guthrie [presiding]. Thank you, and I appreciate the 
gentlelady for yielding back and the chair now recognizes Mr. 
Bilirakis from Florida for 5 minutes for questions.
    Mr. Bilirakis. Thank you, Mr. Chairman. I appreciate it 
very much and I thank the panel for their testimony today.
    Dr. Anand, thank you for being here and I have a couple 
questions for you.
    Adventist Health System has a sizeable, as you know, 
presence in Florida. You stated that earlier, and throughout 
the Tampa Bay area--and I represent parts of the Tampa Bay 
area--I want to commend you also for making such tremendous 
improvements to Florida Hospital North Pinellas, which is my 
hometown hospital, and the community has really rallied around 
the hospital. So thank you so very much. A wonderful place.
    Dr. Anand, how many of your doctors are involved in and how 
many independent physicians are part of your accountable care 
organization?
    Dr. Anand. Great question. When you look at the State of 
Florida, we've set up one accountable care organization that 
serves approximately 55,000 Medicare beneficiaries.
    When you add our ACOs and our clinically integrated 
networks in the State of Florida, we have approximately 3,900 
physicians of which two-thirds are independent physicians.
    We partner with them in the Tampa market, for example. The 
numbers may vary a little bit but that statistic, about two-
thirds, holds pretty true.
    Mr. Bilirakis. OK. You have set up again and operate a 
number of ACOs. Is that correct? And where exactly in Florida? 
Is that at the Orlando area or is that in several hospitals in 
the Tampa Bay area?
    Dr. Anand. Good question.
    So what we've done, in order to help improve the care in 
Florida we've actually set up one statewide Medicare shared 
savings program--one ACO--that encompasses the whole area.
    It's in the Tampa market, goes into the Orlando market, 
brings together providers from the Daytona, Volusia, Flagler, 
Highlands, Hardee County. In the future, we'll actually be part 
of it as well.
    And so what we are hoping to do is starting to bring 
together an improvement model where we can actually improve the 
care and wellbeing of all the patients in Florida.
    Mr. Bilirakis. Very good. Very good.
    What makes your ACO unique when compared to other ACOs and 
how has your ACO been successful? How has it been successful in 
reducing costs and increasing outcomes?
    Dr. Anand. Great question.
    Mr. Bilirakis. Increasing outcomes--that's the bottom 
line--the quality of care. But go ahead, please, sir.
    Dr. Anand. Great question.
    So let me tackle the first question--what makes our ACO 
different.
    Mr. Bilirakis. Yes.
    Dr. Anand. So from a organizational perspective, we 
fundamentally believe in holistic care. We believe that medical 
care is a small portion of the overall health and wellbeing of 
our patients and beneficiaries.
    And so we focus on things that affect their social 
determinants of health--their mental wellbeing, their spiritual 
wellbeing, some of their financial issues that we have.
    And so we really take a holistic picture and approach to 
improving the health and wellbeing of those patients. The 
literature has confirmed over and over that when you apply that 
holistic approach you're going to get better health outcomes.
    If you come and treat the emergency medicine physician as 
well--if you treat the patient in the emergency department and 
then they go off and they don't have the services that they 
need, they will be back in the emergency department over and 
over again.
    And so that's been one of the fundamental approaches from 
the beginning is that we want to make sure we incorporate all 
of those elements into----
    Mr. Bilirakis. Cost reduction is a factor as well.
    Dr. Anand. Correct. From a cost reduction perspective, we 
focused on where the variation lies in care and there is 
tremendous variation as you go from region to region as well as 
provider to provider.
    And what we do is we help provide the tools, the 
technology, the data, the analytics that empowers physicians to 
have the information that they need to provide the best level 
of care.
    We are looking at pathways related to issues such as back 
pain where we can actually provide interventions and treatments 
that are going to make a lasting improvement such as physical 
therapy, rather than just going straight to surgical therapy, 
which may not improve outcomes initially.
    Mr. Bilirakis. I like that.
    Can you talk about some of the challenges you face in 
structuring your particular ACO when dealing with the Stark 
Law?
    Dr. Anand. Yes. That's a great question.
    So we had several challenges with the Stark Law. I think 
we've covered a lot. But just to summarize, if it was permanent 
I think that would be a big help.
    Two, there's a lot of questions about the applicability of 
the Stark waivers for all patients. Some of our providers have 
10 Medicare beneficiaries. Some of them have Medicaid 
beneficiaries.
    Some of them have a hundred or 1,500 Medicare beneficiaries 
and what we would like to do is actually see the Stark waivers 
apply down at the provider level so that the provider doesn't 
have to realize that this patient is a Medicare beneficiary 
that's in an ACO program. This Medicare beneficiary is not--
this other one may be, but we are not quite sure right now.
    It's too hard to operationalize from a physician 
perspective and so we'd like the Stark Law to apply to provider 
level. If we can do that, we can coordinate care effectively 
because we have the pathways. We know what the clinical 
pathways are and we can share it with the physicians and allow 
them to provide the best care.
    The tools and technologies that we've talked about we have 
those available and we'd love to be able to share them with the 
physicians. But we still have confusion on if they can share it 
with just--and use them just on their Medicare beneficiaries or 
if they can use it on all patients.
    And so we love the direction that the committee is headed. 
We'd like to see an expansion in those particular instances.
    Mr. Bilirakis. Very good.
    Thank you very much, Mr. Chairman. I yield back.
    Mr. Guthrie. The gentleman yields back.
    The Chair now recognizes Mr. Long from Missouri for 5 
minutes for questions.
    Mr. Long. Thank you, Mr. Chairman.
    And Mr. Reed, in your testimony you talk about the value 
telehealth can have for taxpayers. You state that evidence from 
practitioners contradicts the often overstated fears that 
telehealth could lead to a bonanza of over utilization.
    Instead, telehealth could substitute for otherwise more 
expensive healthcare services. Could you talk about what the 
evidence has shown so far on the cost savings that telehealth 
could produce?
    Mr. Reed. Absolutely, and I know it's a rival state but the 
also great State of Mississippi has done some amazing work with 
telemedicine and remote patient monitoring, particularly in the 
area of type 2 diabetes care.
    What you see out of the University of Mississippi Medical 
center is an effort to directly engage with patients, 
particularly in the Delta, who have no care or no facility or 
an originating site within 2 hours.
    It was crushing the state economically. But by putting a 
tablet in the hands of folks at home with the necessary high-
speed connection that exists in those areas what changed was 
the nurse practitioner could notice, hmm, your blood glucose is 
kind of high--let's get on the phone. Oh, it was a family 
reunion? OK, stay off the pecan pie for the next week--let's 
get that down.
    And so what you saw is you didn't see an over utilization. 
What you saw was a stoppage of the kind of danger symptoms that 
went on. So instead of that person ending up on the pathway to 
blindness, on the pathway to losing a leg, you saw them 
engaging with a nurse, maybe with a little nagging, to say hey, 
back off that--don't have that second piece--let's get you in 
for a test.
    So when you think of it in very simple terms, you're 
right--maybe telemedicine means that they go have a face to 
face visit.
    But if that face to face visit is a conversation about how 
they stay healthy, that's a whole lot cheaper than a face to 
face visit that results in an amputation or blindness or a 
treatment that they'll never recover from.
    So I am OK with telemedicine leading to a lot of physician 
engagement because it's the kind of engagement that keeps 
people on the front side of the wave and not the back.
    Mr. Long. So that's where the savings comes in then?
    Mr. Reed. Absolutely.
    Mr. Long. So how long would it take these cost savings to 
materialize?
    Mr. Reed. Well, here's what's amazing. In states like 
Mississippi and in other places, they've seen 100 percent 
reduction in readmissions in certain types of type 2 diabetic 
problems and they've had those results in a matter of 2 to 3 
years.
    So a lot of it is what kind of nurses you have--we've had a 
lot of discussion about skilled nursing--what kind of nurses 
you have and what elements you have to engage.
    But we are not talking about a decade to see an 
improvement. We are talking about a short matter of years, 
depending on the condition and where those people are in terms 
of their education.
    Mr. Long. OK. When you're talking about that they're using 
telehealth and monitoring their type 2 diabetes--their glucose 
monitor, I guess, or whatever--so these people are pricking 
their finger at home and then relaying to the nurse or 
practitioner, doctor----
    Mr. Reed. Yes.
    Mr. Long. Over the iPad? Is that correct?
    Mr. Reed. That's correct, and here's the part that's really 
good. It isn't just that that result goes. It's not passive. 
They put that result in. They get information and feedback on 
how they're doing.
    The most dangerous thing, and I know every physician here 
knows, is a passive patient. A patient who's engaged in their 
care, they're on top of it. When they see that number on that 
iPad, they say to themselves, well, how does that look. Oh, it 
doesn't look good--what did I do. And then the nurse calls up 
and says hey, I didn't like what you're seeing, and here's the 
really good part. What if they're doing a great job? What if 
that is a great number?
    Mr. Long. More pecan pie.
    Mr. Reed. That's right. But more importantly, then that 
pecan pie--what's even better is the next step. The next step 
is the nurse calls up and says, you're doing a great job, and 
that creates an active engaged patient. That's where your 
savings come from. That's what eliminates people. We are 
talking about numbers here but we are also talking about lives 
and quality of life. So it's important that we deal with the 
numbers but let's never forget about the people that are 
involved here.
    Thank you.
    Mr. Long. How do we ensure the long-term savings from 
telehealth are factored in beyond a 10-year window?
    Mr. Reed. Well, I think that's something we've all been 
talking about here on the move that you and I believe your 
cosponsor on the Preventative Health Savings Act to try to move 
that ONC window.
    I think that realistically, given the speed of technology--
like I said, there were no smartphones 10 years ago and then 
now none of you would ever be 3 feet away from your smart 
phone.
    So think what you have to look at is let's extend the 10-
year window but then let's also be cognizant of the fact that 
we are probably going to see some major shifts in the way that 
people are engaged in their daily lives with technology.
    There's this concept that tech is just about kids. That's 
not true. Any of you have grandkids? I bet you you FaceTime 
with your grandkids on your mobile device.
    If you think about where adults over the age of 65 are with 
technology it's a myth that people over 65 can't tech because 
they can tech just fine.
    Mr. Long. And these new watches that Apple rolled out 
yesterday with the telehealth applications on there.
    Mr. Reed. Correct.
    Mr. Long. Pretty amazing stuff of what they--I can't 
remember the CEO's name. Is it Cook now? Or whatever, but 
rolled out yesterday.
    Mr. Reed. I will be happy to come by and show you one on 
September 22nd, I think.
    Mr. Long. OK. Very good. Thank you, Mr. Chairman. I yield 
back.
    Mr. Burgess [presiding]. Chair thanks the gentleman. The 
gentleman yields back.
    The chair recognizes the gentleman from Georgia, Mr. 
Carter, 5 minutes for your questions, please.
    Mr. Carter. Thank you, Mr. Chairman, and thank all of you 
for being here. This is certainly a very important hearing.
    I want to start with you, Dr. Weinstein.
    Full disclosure--before I became a member of Congress I was 
an independent retail pharmacist so I appreciate independent 
healthcare practices.
    When I talk to my colleagues about the problems that we are 
having hanging on to independent retail pharmacies they think I 
am only talking about independent retail pharmacies. But I am 
not. I am talking about independent healthcare practices.
    That, to me, is a real big problem here and one of the 
things I wanted to ask you to begin with is I am really 
troubled to hear that your practice is having trouble with 
participating in some of these cost-saving arrangements with 
Medicare because of the outdated CMS policies.
    And I just wanted to ask you what do you think are some of 
the advantages that perhaps the big hospital systems have over 
you, being an independent practice? Can you think right off of 
some?
    Dr. Weinstein. Well, hospital systems are really just 
people. So, the big hospital systems--I guess you might say 
that for the really complex tertiary care--complicated surgical 
infectious--somebody with a multi-system disease needing multi 
specialists, obviously--hospital systems are important.
    But many of the diseases that we take care of are really 
isolated to gastroenterology or maybe gastroenterology and 
surgery. So one or two specialties, and the idea is to be able 
to get to those people, engage those patients before they need 
major hospitalization.
    Mr. Carter. Right. Right.
    Dr. Weinstein. That's where the savings is, and engaging 
those patients. The Project Sonar that I mentioned before, 
which was tentatively approved by PTAC but then didn't move 
forward, is a technology engagement with patients to determine 
how they're doing on a basis where they might ignore symptoms 
from time to time and engage them before they get to a 
hospital.
    So there is certainly need for hospital systems for the 
very acutely sick. But the majority of patients, hopefully, can 
avoid hospitals.
    Mr. Carter. Absolutely. Well, thank you and good luck. I am 
pulling for you. Trust me.
    Dr. Weinstein. Thank you.
    Mr. Carter. Mr. Reed, I want to go to you because I'm very 
interested in this. I've had a company in my office that--and 
help me to articulate this because I suspect you know about it 
better than I do.
    But they're coming to Georgia now and they are involved--
they have an app that they've created because in Georgia right 
now it takes 3 weeks on average to get an appointment with a 
primary care physician and in some areas, particularly in the 
area that I represent--south Georgia, a very rural area--it may 
take even longer to get that.
    Well, they've come out with an app that can take advantage 
of cancelled--cancellations or changes in a schedule and you 
can use that app but they're telling me that the only way they 
can bill for it outside of the private pay--the only way they 
can bill for it for the Medicare patients is if they do it by 
flat fee and they want to do it on a per usage basis. Again, I 
am sure you understand that much better than me. But the rules 
are so antiquated that they can't do it.
    Mr. Reed. That's correct. I had my staff, prior to this 
hearing, poll through my written testimony and come up with a 
glossary of 44 different acronyms that I used--just from my 
testimony--and I am pretty sure that everybody here has the 
same number--but that really represents the status that your 
company in the great State of Georgia is dealing with.
    The problem that they face is they also get completely 
differing answers. For example, on the one you're talking 
about, when you look to share that information on an 
application like that on how you bill, you have got to deal 
with a couple of different systems, not only from an 
interoperability perspective but also how do you do the data 
sharing.
    Right now, they can do a flat fee that somebody pays but if 
you try to do a per physician basis pay, there's no mechanism 
by which it processes through the Medicare or Medicaid system.
    So they're really stuck out there in the fee-for-service or 
private payer model and it makes no sense because, as you say, 
when somebody drops off of an appointment that they can't get 
to, especially in areas like yours with a healthcare 
professional shortage area, this is the exact time that you 
want somebody to say hey, I need that patient, and as I said at 
the beginning, this demographic problem is only going to get 
worse, not better.
    So when it comes to the model, we really don't see MACRA 
and--and I am sorry, we don't see CMS really providing pathways 
for those kind of innovative products at all.
    Mr. Carter. OK. OK. Well, I see I am out of time. Thank 
you, and I yield back.
    Mr. Burgess. The chair thanks the gentleman. The gentleman 
yields back.
    The chair recognizes the gentleman from Indiana, Dr. 
Bucshon, 5 minutes for questions, please.
    Mr. Bucshon. Thank you, Mr. Chairman.
    Dr. Weinstein, can you talk about the challenges in 
developing and testing an APM like Project Sonar and also do 
you think that the current volume and value prohibitions in the 
Stark Law make it difficult to test APMs?
    Dr. Weinstein. I do. Thank you for the question.
    The problem with APMs in developing care pathways and 
determining how you're going to share the care of a patient, 
potentially, with other physicians outside of the convener, 
whether--if the convener is an independent physician, if the 
convener is even a hospital system--if you're going to 
interrelate with other physicians then you can't test that to 
see whether the technology communication is correct, whether 
the in-patient engagement is correct. You can't share the data 
because you will buck up against certain Stark regulations.
    So it would be great to be able to test an APM all the 
outcomes, the technology that's needed, in a way before you get 
to a PTAC decision once the application is submitted and the 
current regulations don't allow you to test.
    So, hopefully, I answered----
    Mr. Bucshon. You did. It's pretty clear there are Stark and 
anti-kickback problems that are making it difficult. The 
Medicare Coordination Improvement Act, which I've introduced 
with my Democrat colleague, Dr. Ruiz, would allow practices 
legitimately developing and implementing an APM to essentially 
be exempt through waivers from these provisions.
    Do you think this would encourage more practices to develop 
APMs?
    Dr. Weinstein. I do. I think when we've polled, at least in 
the Digestive Health Physicians Association, I think these very 
large groups are very interested in modeling opportunities to 
take care of patients under lower cost/better outcome care.
    They've built the infrastructure to be able to do that. 
They're willing to take risk to do that. So I think more people 
would be willing to look into other diseases, not just 
inflammatory bowel disease but chronic liver disease and such, 
and thank you for submitting that bill.
    Mr. Bucshon. You're welcome.
    I yield back, Mr. Chairman.
    Mr. Burgess. The chair thanks the gentleman.
    The chair recognizes the gentleman from Illinois, Mr. 
Shimkus, 5 minutes for questions, please.
    Mr. Shimkus. Thank you, Mr. Chairman.
    I apologize for not being here. I've learned everything 
about forestry services, wildfires, prescribed burns, and the 
health effects of wildfires in the air. So that's where I've 
been the last 2 hours.
    We wanted to get up here to make sure we set the records 
for some public policy. So some of the questions that I had 
have already been answered through the question and answer 
period. But I want to state that promoting greater value within 
our healthcare system is a worthy goal and I strongly support 
efforts to promote value-based models within our Medicare 
program and throughout our healthcare system. But current 
progress has been slow.
    As elected officials, we need to find ways to increase the 
value opportunities in the Medicare program to address issues 
of program solvency and improve the patient experience, both 
for beneficiaries and, just as important, their loved ones.
    Reforms that empower all healthcare entities to engage in 
value-based reforms can lead to meaningful value for all, 
unleashing private sector innovations within the program at a 
time when our benefits to care and programmatic spending are 
sorely needed.
    As this committee considers opportunities to promote value-
based models, I recommend we consider two things. One is to 
explore opportunities to support all stakeholders--patient, 
payers, manufacturers, vendors, and providers--to enter in and 
benefit from participating in value arrangements; ensure that 
any reforms that are in this area are implemented in ways that 
ensure patient care and program spending are protected.
    Medicare beneficiaries and taxpayers should benefit from 
our efforts, not be hurt by them. Hence, your discussion and 
debate, which I missed a lot of, on the anti-kickback statutes, 
the Stark Laws, and the like.
    Also, you also talked about, obviously, the patient care 
and the protection of the taxpayers, spending.
    So, Mr. Chairman and Ranking Member Green, although he's 
not here--we see the Honorable Congresswoman Matsui in his 
place--I firmly believe that legislative approaches in this 
area should empower all Medicare entities to drive value 
throughout the program, ensure that beneficiary care and 
program spending are protected, and promote opportunities for 
beneficiaries to directly benefit from these reforms.
    That's why I've asked my staff to begin developing 
legislation that creates avenues for all stakeholders--
patients, providers, payers, manufacturers, and others to enter 
into and succeed in value-based healthcare models throughout 
the Medicare program, not just within the constraints of CMMI.
    I hope to work with you, Mr. Chairman and Ranking Member 
Green, and my colleagues on both sides of the aisle in 
developing an advocacy of such an approach.
    Mr. Chairman, I would like to enter into the record a 
letter in support of the legislative efforts by the Breaking 
Down Barriers to Payment and Delivery System Reform Alliance 
and a letter from Advocate Aurora Health containing comments 
filed with CMS in response to its request for information 
regarding physician self-referral.
    Mr. Burgess. Without objection, so ordered.
    [The information appears at the conclusion of the hearing.]
    Mr. Shimkus. And with that----
    Mr. Griffith. Would the gentleman yield?
    Mr. Shimkus. I will yield.
    Mr. Griffith. Mr. Reed has talked about how we didn't have 
smart phones 10 years ago and the beauty of this is is that 
while our nursing homes might not be able to use telemedicine, 
you can go back and watch all the testimony later via your 
smart phone.
    Mr. Shimkus. And you don't think I've done that?
    Mr. Griffith. I don't think you have done it yet. I think 
you will do it on the way home.
    Mr. Shimkus. You bet. Thank you, and I yield back my time.
    Mr. Burgess. The chair thanks the gentleman. The gentleman 
yields back.
    I believe that all the members of the subcommittee have 
been recognized for questions and we'll now recognize Mr. Ruiz 
of California, who's not on the subcommittee but has presented 
himself here, and you're recognized 5 minutes for questions, 
please.
    Mr. Ruiz. Great. Thanks for letting me sit in here and 
listen to this wonderful presentation and also participate in 
this very important conversation.
    I was pleased to partner with my colleague and fellow 
physician, Congressman Bucshon, to introduce H.R. 4206, the 
Medicare Care Coordination Improvement Act, which would 
modernize Stark Laws to make it easier for physician practices 
to successfully develop alternative payment models, or APMs, 
incentivized in MACRA, and it will also incentivize us to fully 
reach a value-based payment model that the ACA encourages.
    I believe that Stark Law is important but it needs to be 
tweaked because currently physician practices are hampered from 
fully and successfully participating in APMs.
    So the Stark Law was created to help curb some of the 
quantity-based payment models that we have developed in the 
past and oftentimes this Stark Law prevents physicians from 
referring to other physicians that they know in a medical home 
model-based in order to achieve a value-based payment model, 
which we want to move toward.
    So we need to update and we need to tweak it so that we can 
encourage a value-based payment model and alternative payment 
model.
    So this bill will give CMS the authority to give a narrow 
exception to Stark just for the time that the APM is being 
developed, which is the same waiver authority that was given to 
ACOs in the ACA.
    So, Dr. Weinstein, thank you for being here today and for 
your testimony in support of this legislation. In your 
testimony, you referenced the slow pace at which independent 
physicians have been developing alternative payment models.
    I am also concerned that in order for MACRA to succeed, we 
need to break down barriers encourage more innovation and care 
delivery models to be put forward.
    Can you give us a specific example of how, if we are able 
to pass this narrow exemption, an independent gastroenterology 
group like yours could improve patient care for your patients?
    Dr. Weinstein. Again, thank you for the question and thank 
you for submitting the bill.
    As a specific example, we want to be able to reward 
physician behavior for following better care pathways and as 
opposed to just performing individual services.
    So if I am going to work with a surgeon and I want to work 
with a particular surgeon in an APM for dealing with 
inflammatory bowel disease, then I want to reward that surgeon 
for following the care pathways to lower the cost of care.
    If I am doing that then--if I am rewarding him for value, 
for better outcomes, well, that actually flies in the face of 
some of the language of the original Stark Laws.
    And I said it in my testimony--we are not in favor of 
removing Stark prohibitions on fee-for-service standard, self-
referral, and things like that. That has nothing to do with 
modernizing the Stark rule for an alternative payment model, a 
model where groups of independent physicians are sharing risk 
in managing a better outcome for a patient and in doing that in 
a way that does not violate the Stark Laws.
    Mr. Ruiz. Thank you. I yield back.
    Mr. Burgess. The chair thanks the gentleman. The gentleman 
yields back.
    Seeing that there are no further members to ask questions, 
Mr. Reed, I do want to just point out you have graciously 
mentioned several times today the Public Health Savings Act--
the bill that I introduced with Diane DeGette some time ago--
actually, several Congresses ago--and I had actually hoped to 
have a hearing on that before we concluded this year, it's on 
the list just like the data blocking bill from the Office of 
National Coordinator.
    But it is an extremely important concept to be able to look 
for preventative healthcare at a wider window than the 10-year 
typical budgetary window that the Congressional Budget Office 
allows.
    So I thank you for bringing that up and I am going to use 
that as additional gas in the tank to see if we can't get that 
hearing structured.
    Mr. Reed. No, we'd love to help you gain more cosponsors. 
Thank you.
    Mr. Burgess. Thank you.
    Well, seeing that there are no other members wishing to ask 
questions, I do again want to thank our witnesses.
    I do want to submit the following documents for the record 
from Advo Med, from the College of information--I am sorry, 
from the College of Healthcare Information Management 
Executives, Cancer Treatment Centers of America, National 
Association of Chain Drugs Stores, Medtronic, the American 
Society for Gastrointestinal Endoscopy, and Jeff Lemieux and 
Joel White article in ``Health Affairs.``
    [The information appears at the conclusion of the hearing.]
    Mr. Burgess. Pursuant to committee rules, I remind members 
they have 10 business days to submit additional questions for 
the record and I ask the witnesses to submit their responses 
within 10 business days upon receipt of those questions.
    And without objection, the subcommittee is adjourned.
    [Whereupon, at 3:16 p.m., the committee was adjourned.]
    [Material submitted for inclusion in the record follows:]

             Prepared statement of Hon. Frank Pallone, Jr.

    Today's discussion is important to help Congress understand 
the different ways we might expand innovative, value-based care 
in our Medicare program.
    The Affordable Care Act (ACA) took major steps towards 
improving the quality of our healthcare system by creating new 
models of delivery within the Medicare program. These new 
models were intended to transform clinical care and shift from 
a volume- to a value-based care model, such as Accountable Care 
Organizations (ACOs) and Patient Centered Medical Homes 
(PCMHs).
    With the passage and implementation of the Medicare Access 
and CHIP Reauthorization Act (MACRA), we entered the next phase 
of healthcare delivery system reform. MACRA built on the ACA's 
efforts by offering opportunities and financial incentives for 
providers to transition to new payment models known as Advanced 
Alternative Payment Models, or A-A-P-Ms. AAPMs require 
providers to accept some financial risk for the quality and 
cost outcomes of their patients.
    MACRA also created the Merit-Based Incentive Payment 
System, or MIPS, an alternative path for clinicians to make the 
shift away from a volume-based system to a value-based system 
that focuses on quality, value, and accountability. Together 
these new programs were designed to influence doctors to make 
change and the law gives them great flexibility in choosing the 
right model for the right provider.
    Unfortunately, I have been disappointed thus far with the 
Trump Administration's progress on building on these successes 
and their lack of actions to move the Medicare program to a 
value-based system.
    Most notably they have rejected the goals made under the 
previous administration, to make 50 percent of all Medicare 
payments to hospitals and doctors through value-based models by 
the end of 2018.
    They have not taken meaningful action to expand the number 
of Alternative Payment Models available to Medicare providers. 
They have failed to test or implement any physician-focused 
payment models and have cancelled or scaled back a number of 
bundled payment models.
    Meanwhile, CMS has taken steps to undermine MACRA's MIPS 
program, by exempting 60 percent of Medicare physicians from 
its requirements. While I understand that there are challenges 
with MIPS, I don't think the answer is to just exempt providers 
from its requirements. Nor do I think that is what Congress 
envisioned. By exempting these doctors entirely, the 
Administration is choosing not to engage small providers-a lost 
opportunity to say the least.
    I am also concerned that the Administration's proposed 
regulation on ACOs will dampen enthusiasm for engaging in these 
models. The evidence is unequivocal that ACOs have both 
improved the quality of care for Medicare beneficiaries, and 
saved the Medicare program money.
    As our two witnesses with experience with the ACO program 
will testify today, the kind of cultural change required to 
implement an integrated, patient-centered, system like an ACO 
takes time and investment in people and in systems. While I 
support efforts to get more ACOs to embrace financial risk, the 
proposed rule could potentially cut the program off at its 
knees by requiring ACOs to take on risk within two years, and 
by lowering the shared savings rate.
    Let me conclude by addressing the issues of Stark and the 
AntiKickback Statute. I know some stakeholders view these laws 
as a barrier to value-based payment reform. I would be 
interested in hearing about specific instances in which Stark 
and the AntiKickback Statute have posed barriers to value-based 
payment arrangements. But I also want to stress the continuing 
importance of these laws, which are intended to ensure that 
doctors do what is best for patients, not what is best for 
their bottom line. There is empirical evidence that these laws 
operate to prevent overutilization in Medicare. This is bad for 
both patients and taxpayers. So, we must proceed with great 
caution in making changes to these laws.
    I also want to underscore-eliminating or reducing the 
effectiveness of the Stark and Anti-kickback laws is not a 
delivery system reform agenda. On its own, deregulation does 
not move us to value. That will require transformative 
leadership at HHS, and an industry-wide commitment to align 
financial incentives with healthcare quality and performance, 
with the patient always at the center.
    I look forward to discussing these and other issues with 
the panel today. I yield back.
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