Innovation and Medicare: Transparent, accountable and 'outside the box' thinking
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As the president-elect and Congress prepare to govern, there are a lot of important considerations. When it comes to the Affordable Care Act and the nation's core health care programs for older Americans, those with disabilities and the poor, Medicare and Medicaid, I hope maintaining mechanisms for programmatic innovation will be a priority.

For many years, health care policymakers of all stripes have labored to develop policies that move beyond simply paying for services rendered to incorporating incentives to improve the quality of care provided in reimbursement methodologies, all while achieving clinical and administrative efficiencies and savings.

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The experience from the launch of Medicare and Medicaid in 1965, has been that exploring and implementing meaningful payment policy innovations has been fraught with political complexity and bureaucratic inertia. Every constituent with a stake in the payment policies of these public health insurance programs has sought the assistance of their legislators to thwart initiatives not to their advantage. Those actions, driven by self-interest, are not unexpected nor to be criticized. Indeed, it is exactly the kind of involvement that should take place in a representative democracy.

But the flip side is that policy evolution is frequently stymied as the need for new policies are lost to protect the status quo. What has become clear is that status quo health policy will not result in balancing the need for high-quality, accessible health care with the economic realities of competing demands. A mechanism for conceptual innovation, experimentation and implementation, when warranted, is critical to the orderly innovation of our nation's health care delivery and financing system.

One approach to such a mechanism has been the Center for Medicare and Medicaid Innovation (CMMI), which is a division of the federal agency that operates the Medicare and Medicaid programs.  Authorized by the Affordable Care Act, CMMI has brought together an exceptional team of seasoned and thoughtful professionals who have labored to conceptualize new approaches to organizing health care providers and paying for services and products by the Medicare and Medicaid programs. Much very good work has been done. But with that, a number of issues have surfaced raising concerns and even alarm with many of the most important constituencies of these federal health care programs: patients, hospitals, physicians and other providers of care, drug makers, and Members of Congress.

Simply, CMMI's authority to innovate and the urgency to reform how Medicare and Medicaid deliver and pay for health care benefits to the aged, disabled and poor have played out in ways that are resulting in resistance from impacted groups. Some of that resistance is tied to the general antipathy many have, including the president-elect and the many in Congress, to the Affordable Care Act. But others who support CMMI's purpose and innovation objectives are also raising concerns about CMMI's overreach – and questioning whether CMMI’s flexibility may be excessive given the high stakes for beneficiaries of these programs.

The objections to some of CMMI's initiatives fall into five areas:

1. Testing possible innovations nation-wide with mandatory participation. For many, this is more than a demonstration, but is more akin to a programmatic reform. Political push-back is predictable. Early testing of promising innovations should both time limited and involve the number of providers to empirically prove or disprove the innovation thesis.

2. Much of CMMI's authority in the design and implementation of innovation demonstrations are not subject to review by the courts. While the courts should not be used to unreasonably delay or intervene in CMMI's work, even well intended demonstrations might benefit from judicial review to assure compliance with CMMI's statutory authority.

3. Phase 1 testing should not be mandatory. The risks of unintended consequences are simply too great to require providers of care to participate in the initial testing of an innovative idea. The sophistication and capability of providers to undertake novel delivery system or payment methodologies varies widely. Phase 1 trials should be voluntary.  In turn, the subsequent trials should build on what was demonstrated and what was learned in the initial trial. Introducing new concepts in a Phase 2 trial should not be permitted.

4. Communities impacted by the innovation have inadequate insight and involvement in the design and testing of the idea. Those parties which will be impacted or involved in a demonstration should have sufficient understanding of the problem and the innovative solutions design to permit them to meaningfully contribute to the solution design and its testing.

5. CMMI undertakes multiple, conflicting demonstrations seeking to solve the same problems. Too often, it seems like CMMI is throwing ideas at a wall to see what sticks. A strategic approach to problem solving and innovation unclear. Again, transparency and participation by stakeholders would go a long way to development of an effective innovation strategy.

Innovation in federal health care programs is critical if the nation is to deliver on its promise to provide health care benefits to older Americans, people with disabilities and the poor while doing so in an economically sustainable manner. But, to protect beneficiaries, reasonable safeguards must apply. A dedicated, nimble structure with a clear mandate and adequate resources to carry out a program of innovation is essential. The success of such a program can be assured by balancing the challenges of thinking and acting "outside the box" with transparency and accountability.

Bruce Merlin Fried is a partner at Dentons and the former director of Center for Health Plans and Providers at the Health Care Financing Administration (HCFA; now the Center for Medicare and Medicaid Services).


The views expressed by authors are their own and not the views of The Hill.