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Official Offers Inside Peek at the CMS Innovation Center

By John Reichard, CQ HealthBeat Editor

November 21, 2012 -- It wasn't quite everything you always wanted to know about the Center for Medicare and Medicaid Innovation. But remarks this week by an official about what is essentially the overhaul law's laboratory for health care redesign were an eye-opener.

They revealed not only how intent the center is on its work, but the comments also underscored the center's potentially extraordinary impact.

For example, Hoangmai Pham, a senior adviser at the center, estimated that the center has a staff of 300 and has spent close to half of the $10 billion allotted to it over 10 years under the health care law (PL 111-148, PL 111-152). That's so even though the law is months away from its third anniversary.

"It's possible we're halfway through our funding already," said Pham, who spoke at a meeting this week sponsored by the Washington, D.C.-based Center for Global Development. "But that was what the administration wanted, which was to front-load this," she said.

Pham said the views she expressed were her own and that she was not speaking on behalf of the Obama administration or the Centers for Medicare and Medicaid Services (CMS).

The center has made large bets on several pilot projects to fulfill the health care law's imperative that it find ways to improve quality and lower costs. In addition to spurring efforts by doctors and hospitals around the country to organize team-based care of Medicare patients, the center has launched a broad-based campaign by hospitals and community organizations to reduce deaths from cardiovascular disease. Other ambitious projects include encouraging statewide health system redesigns in five states by combining the health care purchasing power of business and government. The thinking is that if purchasers unite behind a common payment strategy that rewards efficiency and quality rather than producing a higher volume of services, doctors' offices and other providers will have no choice but to rethink the way they deliver care to eliminate ineffective practices.

Another big focus: Get doctor's offices to quarterback the overall care of the chronically ill. The sharpened oversight will help patients keep up with good preventive care. And easing interaction with patients through email, websites, and weekend and evening hours will better maintain their health.

One-time opportunity

The plain-spoken Pham said the center is under the gun and has a fleeting opportunity. "There is a level of political will and market investment out there, and will to change, that we're not likely to see replicated any point in time soon if we blow this. So it's a one-shot deal."

But if the center is able to make the most of its opportunities and does uncover a promising approach, it can really make a difference.

It won't take an act of Congress to put a promising strategy into effect nationally by extending it to all Medicare, Medicaid, or Children's Health Insurance Program (CHIP) enrollees, for example.

The health care law gives the Health and Human Services secretary the authority to scale up nationally payment and health care delivery models that the CMS Office of the Actuary determines has the potential to save Medicare, Medicaid or CHIP expenditures.

"Historically, even when Medicare demonstrations have proved that an intervention was effective, we had to wait for Congress to act and to allow the expansion, and this removes that burdensome step," Pham said.

"We are also given unique waiver authority," she noted. That power lets the center waive specific payment rules and eligibility criteria to carry out projects. "So far, we've been told what we are not allowed to do is to curb benefits."

Also, unlike other demonstrations, "CMS does not need to obtain approval from the White House's Office of Management and Budget of the models initiated under the Innovation Center's authority," Robert Berenson and Nicole Cafarella of the Urban Institute observed in a February 2012 analysis of the center.

But pursuing innovation in health care without running afoul of laws and regulations is no simple matter. Meetings with lawyers are frequent, Pham said. "It's really all about the lawyers."

Broader cooperation is a hallmark of innovation, but that can mean stumbling over antitrust law. "We have a Department of Justice that I learned very thoroughly this year doesn't actually work with the White House," Pham noted.

The center is keen on developing data and sharing it with its partners to evaluate and refine their work. Pham indicated that there's lots of contact with partnering organizations in the projects it funds. The Center has made "huge investments" in what she called shared learning. "If you have one shot and no do-overs, you do not leave any data on the table," she said.

There's also an emphasis on not continuing to pursue approaches that clearly do not show promise. The White House Domestic Policy Council is interested in the question of how the center makes a decision not to pursue a given approach, Pham said.

Boosters of the center have high hopes for its success. Noted surgeon and New Yorker contributor Atul Gawande, in particular, has spoken in glowing terms of the model of continuing testing and innovation embodied in the innovation center.

At first glance, the health care law appears to give that approach longevity by making it a permanent fixture of health policy. The Urban Institute paper says, for example, that the health law appropriated "$10 billion for the Innovation Center every 10 years, into perpetuity."

But delivering results is tough, and key Republicans on Capitol Hill are deeply skeptical of the value of the center, which suggests its future is uncertain if political power shifts in coming years.

Pham said it is not all that hard to improve quality, as it turns out. But she added that it is "much harder to reduce costs." And she alluded to the ongoing political challenges that the center faces. "A lot of people are not sure this is what government should be doing," she said.

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