(i) CMMI Facilitates Reformation of State Health Care Delivery Systems — Maryland and Massachusetts

CMMI's authorizing legislation¹⁴ and development of State Innovation Models (SIM) recognize the role of states in implementing delivery system reform initiatives designed to lower health care costs and improve quality. CMMI recognizes the importance of states in “determining the effectiveness of the health care system and the health of their population.”¹⁵ States impact health as “payers for Medicaid, the Children's Health Insurance Program, and state employee populations, and they impact care delivery through their licensing and public health activities.” CMMI developed State Innovation Models (SIM) “to address specific issues in [a] state” and to “accelerate [comprehensive] state-level health care transformation.”¹⁶ Grant awards were made to develop State Health Care Innovation Plans (Model Design awards) and to fund implementation of transformation plans (Model Test states). Since 2013, CMMI has provided SIM funding to 34 states, 3 territories and the District of Columbia. Unlike other CMMI models that test a specific delivery system or payment model, SIM models focus on “developing the infrastructure necessary to enhance coordination and communication across the care continuum.” These models are important to federal-state efforts to control health care costs because CMMI partners with other CMS entities and other HHS agencies to “align and leverage federal delivery system reform programs and opportunities.”¹⁷ Maryland will use the grant it received under CMMI's State Innovation Model to implement a component of the next phase of the All Payer Model (Total Cost of Care). Initially from 2016 — 2018, Maryland worked on developing a Dual Eligible ACO for its Medicaid program to implement in 2019.¹⁸ Under the July 2018 Total Cost of Care Agreement, the state will continue to progressively plan for and implement dual eligible clinical care and payment alignment. The state will begin with integrating behavioral health and Medicaid providers into the Maryland Primary Care program and consider at a later time the national dual-eligible ACO model or another national Medicare/Medicaid model.¹⁹ Similarly, Massachusetts received a SIM Model Test Grant in April 2013 that was extended.²⁰ Massachusetts Medicaid initially established a patient-centered medical home model, Primary Care Payment Reform Initiative (PCPRI), that provided capitated payment and a coordination fee. It developed certified Community Partners, which are community-based organizations with expertise in delivering care to members with behavioral health, long term support, and social services. While providers lauded the timely access to behavioral services, initially neither utilization nor spending decreased and there were no significant changes in measures of care coordination or quality of care. Thus in 2017, Massachusetts received a Medicaid Section 1115 waiver (2017–2022) to implement accountable care models that continue the work of the PCPRI, expands use of the state health-information-exchange to share information among clinicians, and continues use of e-referrals to community services.

(ii) CMMI's New Direction — New CMS Administrator & Deputy Administrator for Innovation & Quality and Director of CMMI

In September 2017, CMS Administrator Seema Verma articulated 6 goals for CMMI. Those goals are (1) Choice and competition, (2) Provider choice and incentives, (3) Patient-centered care, (4) Benefit design and price transparency (use of data to ensure receipt of cost-effective care that improves outcomes), (5) Transparent model design and evaluation (use partnerships and collaborations with public stake-holders and gather ideas from a broad array of organizations), and (6) Small Scale Testing.²¹ The request for information (RFI) sets forth eight areas of focus for future models.²² The one that would directly impact Maryland and Massachusetts's existing global budget initiatives include the state-based and local innovation, including Medicaid-focused models. While the RFI asserts that the agency is going in a new direction, the primary thrust of this area is similar — allowing states and health care providers to work with CMS to drive reform and local innovation that “meets the needs and goals of each state for improving care and lowering costs.”

More clarity as to the direction of HHS came from the appointment of the second Trump Secretary for HHS, Alex Azur on January 24, 2018. In March 2018, he identified value-based transformation of the health care system as one of his top four priorities. He acknowledged that this important concept is more than a decade old. The four key factors to achieve this transformation are having interoperable health information technology; transparent health care prices; a willingness to experiment with new, flexibly-designed models of care delivery, and the removal of government burdens that impede value-based transformation. In April 2018, Secretary Azur appointed Adam Boehler the Director of CMMI.

(i) Congressional Legislation — 2017

Federal legislation reflects a continued effort to eliminate IPAB that is consistent with the recommendation in Better Way. In early February 2017, the Senate and the House of Representatives introduced bills to abolish IPAB.²⁷ However, Congress was unable to pass a bill or joint resolution by the three-fifths majority required under the ACA. Instead, in September of 2017, the Senate passed a budget bill that would defund IPAB.²⁸ While the House of Representatives passed H.R. 849 to repeal IPAB on November 2, 2017, the Senate did not pass a companion bill.²⁹ Finally, on February 9, 2018, IPAB was repealed by the Bipartisan Budget Act of 2018.³⁰

(ii) IPAB Repeal — Loss of the Federal Oversight Entity While State Oversight Continues

The Congressional Budget Office (CBO) originally projected that IPAB would achieve Medicare savings of $15.5 billion from 2015 until 2019.³¹ A similar amount of savings, $15 billion, would occur from 2018–2027. As expected, repealing IPAB is projected to increase the federal deficit by $17.5 billion over ten years (2018–2027).³²

During IPAB's tenure, the chief actuary first predicted that Medicare's growth rate would exceed the target rate in 2017. Thereafter, there were predictions for 2022, and more recently 2024, 2025, and 2026.³³ Fortunately, the Medicare program did not exceed its per capita growth rate in 2017.

In contrast to the federal move away from an oversight agency, states continue to use oversight agencies to contain health care costs and reform their delivery systems. For example, both Maryland and Massachusetts are continuing their efforts to bend the cost curve by limiting their health care cost growth to their state GDP through comprehensive or global cost control systems.^{Reference Majette34} Maryland has successfully limited its per capita hospital revenue growth for all payers to less than the state GDP (3.58%): 2014 (1.47%), 2015 (2.31%), 2016 (.80%), and 2017 (3.54%).³⁵ On January 1, 2019, Maryland will shift from an All-Payer system focused on controlling hospital costs for the Medicare program to a Total Cost of Care program that focuses on limiting health care costs by all providers for the entire health care system.³⁶ Over ten years Maryland will continue to keep its health care costs below the state GDP, limit its Medicare per beneficiary spending growth to save the Medicare program at least $1 billion dollars by 2023, and improve patient outcomes and quality of care.³⁷ In contrast, Massachusetts has had mixed results controlling its health care costs. The total health care expenditure was below the state benchmark of 3.6% for 2013 (2.4%). It increased in 2014 (4.25 %) and 2015 (4.8%), and is preliminarily below the benchmark for 2016 (2.8%). However, the four-year average is below the state benchmark and each year's growth is below the national growth rate.³⁸