February 15, 2019

Senators Warren, Alexander Are Encouraged By HHS Secretary Azar's Comments on the Department's Work to Pay for Health Care Based on Value, Rather Than Volume

Senators Seek More Information on When HHS Thinks Use of Mandatory Models is Appropriate

Text of Letter (PDF)

Washington, DC - United States Senators Elizabeth Warren (D-Mass.) and Lamar Alexander (R-Tenn.), encouraged by HHS Secretary Alex Azar's comments on the value of mandatory models, sent a letter to the Secretary yesterday to gather more information regarding the Department's use of mandatory models to test alternative health care payment methods. As health care costs continue to rise, it is imperative that the federal government continue efforts to deliver high-quality care to Medicare and Medicaid beneficiaries while lowering costs.

U.S. taxpayers spent an estimated $3.5 trillion on health care in 2017 -- an amount that is expected to reach $5.7 trillion by 2026. The Department's Center for Medicare and Medicaid Innovation (CMMI) plays a critical role in identifying and assessing alternative payment models aimed at reducing health care expenditures. CMMI has initiated a number of alternative payment models, including demonstrations testing bundled payments. CMMI demonstrations can be voluntary or mandatory. 

CMMI needs high-quality data to assess the efficacy of alternative payment models. According to researchers, "voluntary programs don't always provide insight into whether a payment approach ought to be rolled out on a nationwide basis," because "organizations that volunteer to participate in alternative payment models are likely to be systemically different from those that don't sign up." "Making participation in a payment program mandatory," meanwhile, "allows to correct for these selection effects." "High-quality data is critical to CMMI's ability to build the evidence of successful strategies to lower health care costs and improve the quality of care," the senators wrote. "Mandatory models, by enhancing the quality of data available to CMMI, can help ensure that bundled payment initiatives are only implemented widely if they are effective."

"In the creation of mandatory models," the senators continued, "appropriate steps should be taken to achieve improved quality, continue innovation, and minimize provider and beneficiary burden."

The senators were encouraged by Secretary Azar's comments on the use of mandatory models, where appropriate. They requested additional information from the Secretary regarding the circumstances where he believes it is appropriate for CMMI to mandate participation in alternative payment or delivery models. The senators requested answers to their questions and a staff briefing by March 14, 2019.

Senator Warren has been a strong advocate for the use of mandatory models to evaluate ways to reduce health care costs and improve quality:

  • July 2018: Senator Warren questioned experts before the United States Committee on Health, Education, Labor, and Pensions (HELP) who testified that mandatory bundled payment models provide high-quality data on ways to keep health care costs down and provide high-quality health care.
  • November 2018: After Senator Warren pressed Secretary Azar about the need for better data, the Secretary announced that he would move forward with mandatory bundled payment models, a decision that the senator applauded.