HCI3 Update from the Field: C is for CMMI

Submitted by francois.debrantes@hci3.org on Friday, December 28, 2012 - 12:00

Newtown, CT – December 28, 2012

C…that's the overall grade for the CMMI's 2012 efforts to reform payment in Medicare – While the CMMI has been busy in 2012 launching a number of initiatives, the net impact on Medicare spend is negligible. Adding up all of the Medicare beneficiaries in the launched initiatives, we get to less than 10% whose care will mostly be paid with something else than straight fee-for-service (FFS). As such, 90% of all funds flowing, especially for professional and ancillary services, continues to reward the volume of services provided, not their value, and certainly not their quality. In addition, there's really nothing innovative in payment that has been launched by CMMI in 2012. Let's review. The ACO expansions simply increase the number of provider organizations in global capitation/trend rate target arrangements, many of whom already had similar arrangements in place with private sector payers; and the CPCI is not that different from already existing PCP-based Medical Home initiatives. In fact, quite a few of the sites selected for the CPCI had an on-going PCMH program. Finally, the bundled payment program won't achieve lift off until 2013, mostly because of its design flaws. There's little doubt it could have been better, but at least the signal to the market that we are moving away from FFS was clear, and that's important.

What this means to you – with a reported half of its funding already gone in barely two years, we need far more focus on payment reform from CMMI in 2013 if we all hope to get a decent return on the billions spent. Because it's not the $1 billion wasted on hairy fairy "Health Care Innovation Awards" that's going to yield much of a return. So, for starters, CMMI should move to implement a number of the recommendations outlined in two NEJM Sounding Board papers a couple of months ago. First, formalize and implement the Acute Care Episode program universally across all of Medicare. Why this hasn't been done is more than puzzling, it borders on professional negligence. Second, deploy full price transparency of standard procedural episodes. The private sector is doing this with a number of tools, and Medicare should as well. Every beneficiary should know the differences in average episode costs for all the providers in their area. Third, institute competitive bidding for all medical devices, lab tests, basic imaging, and other "commodities". These three programs could be accomplished with far less lift than some of the more esoteric initiatives undertaken in 2012, and have more impact faster. At the same time, CMMI should launch requests for proposals for the promised second wave of bundled payments, those focusing on chronic conditions. Given the amount of time it has taken to design and get close to launch on the first wave, every day wasted gets us farther away from the goal of having the majority of Medicare dollars flowing through something else than FFS. And there's simply no excuse for that. So here's hoping that 2013 will yield a better grade for CMMI's payment reform efforts, because the country deserves better from them than a C performance.


Francois de Brantes
Executive Director
Health Care Incentives Improvement Institute, Inc.
w: www.hci3.org