November 08, 2018

Warren Applauds HHS Secretary Azar Decision to Move Forward with Mandatory Bundled Payment Models

Decision comes after Warren pressed health experts, Azar, about need for better data to strengthen Medicare

Video of Warren's Questions in HELP Committee Hearing (YouTube)

Boston, MA - United States Senator Elizabeth Warren (D-Mass.) applauded HHS Secretary Alex Azar's announcement today that he would pursue mandatory payment models. This decision will improve data about bundled payments, giving health care researchers the rigorous tools they need to understand how payment reforms can bring down costs and lead to higher quality health care.

Secretary Azar's announcement that "mandatory models are going to see a comeback" reverses troubling steps taken by former Secretary Tom Price, who cancelled several mandatory payment models during his tenure at HHS. In written questions for the record submitted following his confirmation hearing before the Senate HELP Committee, Senator Warren pressed Secretary Azar to utilize mandatory models to improve care for Medicare beneficiaries. Senator Warren also recently questioned health care experts on the importance of mandatory payment models during a recent Senate HELP Committee hearing.

"I'm pleased that Secretary Azar has committed to move forward with mandatory bundled payment models when appropriate, a decision that will help us understand how to lower costs and improve the quality of patient care," said Senator Warren. "Former Secretary Price's decision to cancel many of these research projects was short-sighted. Today's decision is therefore an important step towards bringing down costs for taxpayers and securing better care for Medicare beneficiaries."

U.S. taxpayers spent an estimated $3.5 trillion on healthcare in 2017-an amount that is expected to reach $5.7 billion by 2026. As healthcare costs continue to rise, it is imperative that that the federal government continue efforts to deliver high-quality care to Medicare and Medicaid beneficiaries while lowering expenditures.

The Department's Center for Medicare and Medicaid Innovation (CMMI), housed within the Centers for Medicare & Medicaid Services (CMS), plays a critical role in identifying and assessing alternative payment models aimed at reducing health care expenditures. Unlike traditional fee-for-service models, in which insurers pay per healthcare service provided, bundled payment models provide care teams with a single, "bundled" payment to cover all the services provided in an episode of care. Experts have testified before the United States Committee on Health, Education, Labor, and Pensions (HELP) that bundled payment models provide care teams with strong incentives to keep healthcare costs down and provide high-quality care.

In contrast to voluntary payment models, in which health care providers decide to opt in to an alternative payment program, mandatory models require providers to participate in a payment program. This research design helps researchers collect high-quality data on how bundled payment models affect care. In response to questions from Senator Warren during a recent HELP Committee hearing, experts agreed that, under voluntary programs, researchers "don't know whether [they are] getting only the high performers or low performers in the data."

Given the importance of gathering high-quality data at CMMI, today's decision will improve information about bundled payments and accelerate efforts to bring down costs and improve patient outcomes.