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MACRA and CMS – A #HITsm Chat Summary and Commentary

Posted on January 12, 2017 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

Note: Join us Friday at Noon ET (9 AM PT) for the latest #HITsm chat.

We had a really unique opportunity to have the Acting Administrator of CMS, Andy Slavitt, join us as host of the #HITsm Twitter chat. His participation in the Twitter chat was a good illustration of how he led things during his time at CMS. We’ll see how things play out with this new administration, but I can personally say that I’m going to miss Andy Slavitt at CMS. He’s brought a fresh engagement from CMS that I hope will continue with his replacement and will continue with the other employees at CMS.

In the #HITsm chat that Andy hosted, we had a wide ranging discussion about MACRA and CMS. The chat was extremely active, so if you missed it live, be sure to read through the whole #HITsm transcript.

Here we’ll just highlight a few of the tweets that we found interesting and add a bit of commentary as well.


I really think this isn’t lip service, but is the culture of many at CMS now. That’s a huge win. There’s still a lot of work to be done and we need more voices willing to talk with CMS so that they hear the right messages, but it’s been a huge step forward.


I think many might think this was the tweet of the chat. There are a lot of pressures in healthcare that are shocking.


I loved this tweet. Many in government aren’t open to changes, but I think many on social media just spout complaints without a plan that will be better than what’s happening today.


All about the patients!


Seriously. If you’re on Twitter and care about healthcare, then you should be following Aisling. And do it for much more than on point emoji sharing.


My feeling is the Advanced APM participants are going to be the happiest group that participates in MACRA. There are good incentives and in many cases they get them for things they were already planning to do.
Read more..

MACRA Final Rule Is Out – MACRA Monday (on Friday)

Posted on October 14, 2016 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

We usually wait until Monday to do our weekly MACRA Monday blog posts. However, today the MACRA final rule dropped and so we thought we’d do MACRA Monday on a Friday. Since the rule just came out this morning, we haven’t had a chance to do much analysis. No doubt we’ll do a lot more analysis, summarizing, etc in the future. For this post, I just wanted to share with you the various places you can go to find the final rule and summaries of the final rule that will be helpful.

The first resource you need is the MACRA final rule itself. Yes, it’s 2398 pages, but remember that CMS is required to respond to the feedback that was given in the proposed MACRA rule. The rule itself is much shorter, but the explanation of the rule is quite long. As Andy Slavitt noted, it’s long in the interest of transparency.

The reality is that most of you will only want to check out the MACRA Final Rule Executive Summary. It’s only 24 pages and should give most people what they need to know about the MACRA final rule. You can leave the 2398 page final rule to the health IT policy wonks.

Along with the executive summary, CMS has put out a new website with resources, education, and tools for the Quality Payment Program (Or as we call it, MACRA). The Education and Tools page has some great resources for those wanting to learn more about MACRA.

If you plan to participate in MIPS, then you’re likely going to use the Explore Measures page. Considering MACRA’s increase in the number of measures, this page will help you navigate through the various measures and decide which measures you’re going to do as part of MACRA.

If you want a higher level look at what CMS did to put together the MACRA final rule, take a second to read through Andy Slavitt’s letter to Clinicians. We might disagree with the details of MACRA, but after reading letters like this it’s hard to argue that Andy Slavitt and his team aren’t listening to providers and healthcare’s feedback on these rules.

That’s all for today. Happy reading this weekend! Over the next months and years we’ll be diving into the details of the program. If you’re reviewing the final rule like us, share any insights or findings you find interesting in the comments. It takes a large community to understand new rules like this.

President’s Message for National Health IT Week #NHITWeek

Posted on September 27, 2016 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

This week is National Health IT Week. I’m not sure why we need a week for it. Some of us celebrate health IT all year round. That said, at least it’s an opportunity for some people that could impact healthcare IT to take some time to think about it. A good example of this was that President Obama put out a letter for National Health IT Week (Side Note: It’s kind of funny that it’s still a “letter” and not a blog post or Tweet or Snap or something else. It’s interesting how letters keep subsisting in electronic format. Hmm…sounds a bit like healthcare.). Here’s an excerpt of what he said:

During National Health IT Week, we recommit ourselves to improving the health of our citizenry using the breakthrough technologies of our time and reaching for the next frontier of innovation…Because of our collective efforts, 97 percent of our Nation’s hospitals and three-quarters of doctors are using electronic records to care for their patients…These efforts help advance our Administration’s goal of fostering the seamless and secure flow of electronic health information when and where it is needed most. Though there is more to be done to realize a healthcare system that fits each of our needs, I am confident that if we continue working together, we can build a future of greater health and prosperity for coming generations.

While I’d like to think that this week has caused the President to spend some time thinking about healthcare IT, I’m not sure it really makes any difference. Besides the fact that some staffer or ONC itself probably did most of the work for the letter, the letter illustrates to me that the President doesn’t really understand the challenges that face healthcare IT. That’s unfortunate because it means we won’t see any real push to change things from him.

Just to be clear, I’m not saying the President should be an expert on healthcare IT and I’m certain that few people in Congress know much more about it than he does. They’re all likely in the same position the President is in with too many challenges and limited time. They can only dive in deeply on so many of them.

The thing that disturbs me about this letter is that it’s likely the same position that our government has had for health IT since pre-meaningful use. In fact, it’s likely why meaningful use was included so easily in the ARRA stimulus package. Is Health IT good? Well, electronic has been good in every other industry. So, that sounds good. Can you transfer bits and bytes of health data better than paper? Yep! So, EHR should make sharing data easier. Conclusion: Let’s keep doing more EHR and healthcare will be better and healthcare data sharing will happen.

It’s this naivety that’s gotten us where we are today.

My cause for optimism is that the people in government positions over healthcare like Andy Slavitt, Acting Director of CMS, do have a much better pulse on what’s happening in healthcare IT. They understand physician burnout. They understand overwhelming doctors with unnecessary and useless documentation. They understand data blocking and the pressures healthcare organizations face to not share health data. I’m not saying they have all the solutions. These are challenging problems, but I’m hopeful because they do understand these problems much better than most people give them credit.

Will we see much change? The jury is still out. Those at HHS only have so many levers they can pull. I do hope they can find ways to encourage without stifling innovation. I hope they focus on collecting useful data as opposed to possibly useful data. I hope they stop wasting money on EHR certification which provides no benefit and causes a lot of harm and they instead focus on a meaningful EHR interoperability certification.

Most of all, I hope they’re not afraid to focus on one thing that’s extremely valuable and doable (ie. interoperability) and set aside the 100s of other things which have questionable value. Wouldn’t we all rather have CMS do 1 thing really well as opposed to doing 100 things poorly?

Today I focused on some government health IT perspectives. Tomorrow I’ll talk about some of the other healthcare IT trends that get me excited and a few that scare me. Happy National Health IT Week!

Modifications to the MACRA 2017 Reporting Period #PickYourPace – MACRA Monday

Posted on September 12, 2016 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

This post is part of the MACRA Monday series of blog posts where we dive into the details of the MACRA Quality Payment Program.

As we mentioned near the start of the MACRA Monday series, many were predicting a delay or at least a modification to the MACRA timeline. While we’re still waiting for the MACRA final rule to come out with the official changes, Andy Slavitt, Acting Administrator of CMS, has announced some of the changes that will be in the MACRA final rule. Here’s the introduction to why they’re making these changes to MACRA (or the Quality Payment Program as they like to call it now):

We heard from physicians and other clinicians on how technology can help with patient care and how excessive reporting can distract from patient care; how new programs like medical homes can be encouraged; and the unique issues facing small and rural non-hospital-based physicians. We will address these areas and the many other comments we received when we release the final rule by November 1, 2016.

It’s comforting to many to know that they hear doctors pleas for help with all the reporting. We’ll see if the changes in the MACRA final rule will be enough.

As part of the announcement, Andy Slavitt said that the MACRA and MIPS program will still begin on January 1, 2017 with payment adjustments (ie. incentives or penalties) being paid in 2019 like we’d noted before. However, CMS now plans to provide multiple options to eligible physicians and other clinicians to avoid the negative payment adjustments in 2019.

There will now be 4 options available:

Option 1 – Test the Quality Payment Program.
For this option, you just have to submit “some data” to the Quality Payment Program and you’ll avoid the negative payment adjustment. Basically, CMS just wants to make sure you’re connected and ready to participate in future years. While you won’t get a negative payment adjustment, you always won’t get a positive adjustment either. It will be interesting to see what the final rule defines as “some data.” I expect it will be pretty minimal.

Option 2 – Participate for part of the calendar year.
This option allows you to submit information for a reduced number of days in 2017. In other words, your performance period could start after January 1, 2017 and you could just do MIPS reporting for part of the year. This would qualify you for a small positive payment adjustment. I’ll be interested to see the details in the MACRA final rule which outlines how much smaller the payment adjustment will be and how it will be calculated.

Option 3 – Participate for the full calendar year.
This option is basically what’s in the MACRA proposed rule. You can take part for the full 2017 calendar year and potentially qualify for a modest positive payment adjustment. CMS suggests that many will be ready for this. We’ll see if that’s the case given the compressed timeline from when the final rule is published and the release cycles of EHR software companies.

Option 4 – Participate in an Advanced Alternative Payment Model in 2017.
It seems that participation in an Advanced APM is the same as the proposed rule. Of course, if you’re participating in an Advanced APM, then you avoid the penalties and don’t have to worry about MIPS. Nothing new there.

It’s no surprise that fewer penalties and looser requirements has been applauded by many in the healthcare community. It’s pretty rare that people complain about a loosening of government regulation and wish they would require more. Personally, I think the changes are a good thing. CMS will still be able to get data from organizations that participate for the full year. Hopefully, they’ll use that to guide any modifications for future years. However, they also aren’t penalizing those organizations who won’t be fully ready in 2017 because of the short timelines.

Be sure to check out all of our MACRA Monday blog posts where we dive into the details of the MACRA Quality Payment Program.

CMS Opens Door to Possible MACRA Delay

Posted on July 15, 2016 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

In related news to yesterday’s meaningful use REBOOT relief legislation, Andy Slavitt, Acting Administrator of CMS, testified about MACRA before the Senate Finance committee. In his hearing, Senator Orrin Hatch (R-Utah), chairman of the committee commented “Physicians will only have about two months before the program goes live. This seems to be a legitimate concern. Considering the MACRA law does give CMS flexibility as to the start of the physician reporting period, what options is CMS considering to make sure this program gets started on the right foot?”

In response to this Slavitt responded that CMS was open to options such as postponing implementation and establishing shorter reporting periods (both of which were widely requested during the MACRA comment period).

Both Slavitt and Senator Hatch talked about the importance of the MACRA legislation not killing the small practice physician. A delay and shorter reporting periods would be a great start. However, so many small practices have been burned by meaningful use that it might be too late for MACRA. It seems that MACRA is dead on arrival for many physicians based on historical experience with meaningful use and certified EHR. I’m not sure CMS could do anything with MACRA to really stem the tide.

This is reflected in a survey that Deloitte recently did to assess physician’s awareness of MACRA. The survey found that 21% of self-employed physicians and those in independently owned medical practices report they are somewhat familiar with MACRA versus 9% of employed physicians surveyed. 32% of physicians only recognize the name.

Basically, physicians barely even know about MACRA. Although, I’m quite sure if we asked them if they liked the MACRA government legislation they’d all say an emphatic No! (Kind of reminds me of Jimmy Kimmel’s Life Witness News) It’s too bad, because if doctors have already been participating in PQRS and Meaningful Use, MACRA won’t be that bad. Of course, the same can’t be said for those that haven’t participated in either program.

During the hearing mentioned above, Senator Hatch highlighted Andy Slavitt’s comment that “the focus must be focused on patients and not measurement.” Plus, he suggested that more needed to be done in this regard. Andy Slavitt responded that they need to reduce the documentation requirements so doctors can spend more time with patients.

Take those comments for what their worth. They’re hearing the right messages and I think they’re heading the right direction. Let’s hope we see that in the MACRA final rule.

Meaningful Use Relief from New REBOOT Legislation

Posted on July 14, 2016 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

John Thune has introduced a new legislation called the Electronic Health Record (EHR) Regulatory Relief Act (S. 3173) to provide some relief to hospitals and eligible providers participating in the Medicare EHR Incentive Program (Better known as Meaningful Use). You can find the legislative text (ie. legalese) and the summary document (ie. readable).

This legislation was written by the “REBOOT members” John Thune (S.D.), Lamar Alexander (Tenn.), Mike Enzi (Wyo.), Pat Roberts (Kan.), Richard Burr (N.C.) and Bill Cassidy (La.) who previously released a white paper on their Health IT concerns.

Here’s a short summary of what the legislation would do:

  • Codify the 90-day reporting period for meaningful use
  • Remove the All-or-Nothing approach to Meaningful Use and set a 70% threshold
  • Increased flexibility in Hardship Exceptions

If I’m reading the legalese right, it also opens the door for the HHS Secretary to allow a 90 day reporting period for MIPS as well. It’s interesting that it wasn’t highlighted in the summary document.

Regardless, these are all changes that will be welcomed by the healthcare community. What I like most about these proposals is that I don’t think any of them will impact how a hospital or doctor was previously planning to use their EHR. At least it won’t impact care in any sort of adverse way. Doctors will still be using an EHR. However, it will provide some reporting relief and will open the door of meaningful use to organizations that wouldn’t have been able to comply previously. Of course, I’m sure there are a few people out there that will settle for nothing less than a repeal of meaningful use completely. I predict that such a thing will never happen.

What do you think of this proposed legislation? Are they enough? Should they be providing more relief? Will this change your meaningful use plans?

Physician Data Paradox

Posted on June 29, 2016 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

“[Doctors] are overloaded on data entry and yet rampantly under-informed.”
-Andy Slavitt at Health Datapalooza

This quote from Andy Slavitt at Health Datapalooza has really stuck with me. He calls it the physician data paradox. It’s an ugly paradox and is at the heart of so many doctors discontent with EHR software. Andy Slavitt is spot on with his analysis. Doctors spend hours entering all of this data and get very little return value from that data or the volume of health data that is being captured.

My friend Dr. Michael Koriwchak has made an interesting request. In a recent blab interview he was on he said that CMS should only require the collection of data they’re actually going to use.

My guess is that the majority of meaningful use data would not need to be collected if Dr. Koriwchak’s rule was in place. CMS hasn’t really even collected the data from doctors, so they’re certainly not using it. Some of the principles of meaningful use would still exist like interoperability and ePrescribing, but we wouldn’t be turning our doctors into data entry clerks of data that’s not being used.

Think about the reality of meaningful use data collection: CMS doesn’t use the data. Clinicians don’t use the data.

We’ve basically asked doctors and other medical staff to spend millions of hours collecting a bunch of data that’s not being used. Does that make sense to anyone? You could make the argument that the data collection is creating a platform for the future. There’s some value in this thinking, but that’s pretty speculative spending. Why not do this type of speculative data collection with small groups who get paid for their efforts and then as they discover new healthcare opportunities? We can expand the data collection requirement to all of healthcare once doctors can do something meaningful with the data they’re being required to collect.

In fact, what if we paid docs for telling CMS or their EHR vendor how EHR data could be used to benefit patients? I’d see this similar to how IT companies pay people who submit bug reports. Not using health data the right way is kind of like reporting a bug in the health system. Currently, there’s no financial incentive for users to share their best practices and discoveries. Sure, some of them do it at user conferences or other conferences, but imagine how much more interested they’d be in finding and sharing health data discoveries if they were paid for it.

If we finally want to start putting all this health data to work, we’re going to have to solve the physician data paradox. Leveraging the power of the crowd could be a great way to improve the 2nd part of the paradox.

Government Involvement in Healthcare IT – How Meaningful Use Went Wrong

Posted on June 15, 2016 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

I have about 150 draft blog posts on EMR and EHR. Most of them are ideas for future posts. Unfortunately, I get so many new ideas, a lot of the drafts remain draft blog posts for long periods of time. I probably should create a better process for tracking my blog post ideas, but this was worked so far. Plus, it’s fun to go back and see what past ideas I had for posts and then think about how things have changed or whether that insight has stood the test of time.

This post is an example of that and the draft blog post contained a tweet that Greg Meyer shared during a #HITsm Twitter chat back in December 2014. Here’s the tweet:

No doubt Greg’s tweet resonated with me back in 2014 and still resonates with me today. In meaningful use, the government got way too deep into the how and caused all sorts of unintended consequences. We’d be in a much better position if the government would have just defined the measures and functions and not how you actually got there.

What’s interesting is that this is more or less what I’ve been hearing from Andy Slavitt in regards to MACRA. I’m not sure CMS has executed this vision well, but it’s at least hopeful that their leader is espousing a similar approach to what Greg describes above.

I’d also point out an insight I believe I first heard from Dr. Michael Koriwchak. He espoused the principle that CMS shouldn’t require the collection of any data which it wasn’t going to actually use. Think about how meaningful use would have been totally different if they’d employed this rule. What value is there to healthcare if we collect a whole bunch of data that’s never actually used to improve care?

Do you think CMS will get this right with MACRA? Share your thoughts in the comments.

Is CMS Listening to Doctors’ Thoughts on MACRA?

Posted on June 10, 2016 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

I have to admit that I have a lot of respect for Andy Slavitt. He’s doing a really hard job as Acting Administrator of CMS and he’s been very vocal and open about his view of what they’re doing and their efforts to listen to those of us in healthcare. I’ve really appreciated his willingness to engage the community on challenging topics. Did you ever see this from previous CMS administrators?

This tweet illustrates Andy’s efforts to really listen to doctors when it comes to MACRA:

This illustrates why I previously wrote that Andy Slavitt was very much in touch with the pulse of what doctors are feeling and experiencing. Although, with that comment I also said that I hoped that the policies and programs they implemented would match that understanding.

I realize that this concept is much easier said than done. Andy Slavitt and his team at CMS are sometimes not able to make changes to things like MACRA even if they know it’s the right thing to do. They aren’t the ones responsible for making the legislation. Their jobs are to implement the legislation. It’s a tough balance which always leaves people wanting.

The only thing awkward about Andy Slavitt’s tweet above is that he says CMS has “trained nearly 60,000.” It’s quite interesting that he views these MACRA sessions as trainings. I thought they were more listening sessions than training sessions, but I guess I was wrong. Certainly you have to train a doctor on the MACRA legislation if you want to get the right feedback from them. So, I guess training and listening aren’t mutually exclusive, but it’s not surprising that many doctors don’t want to be “trained” on MACRA. For some doctors, anything less than a full repeal of MACRA will be less than satisfying and that’s not going to happen.

While you can complain about the way Andy might phrase things in a tweet, I don’t think that’s very productive. Although, I don’t think listening to (or should I say training) 60,000 physicians’ thoughts about MACRA is very useful either if we don’t see that feedback incorporated into the final MACRA rule. This tweet gives me some hope that the feedback has been heard and we’ll see some important changes to MACRA:

When the MACRA final rule comes out, I hope that along with the changes that were made we also get a look into the changes that people requested that CMS was unable to make because of the way the legislation was written. I’m not sure if CMS is allowed to be that transparent, but if we’re going to help push for better legislation it would be great to know which feedback was thwarted by legislation so that doctors can push for better legislation.

Remarks of CMS Acting Administrator Andy Slavitt at the Marketplace Innovation Conference

Posted on June 9, 2016 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

Welcome. And thank you for coming to a session that allows us to look at a deeper level at what is happening inside the Health Insurance Marketplace. And I’m not talking about what’s in the headlines, but below the surface– what’s happening with millions of Americans as they get coverage– many for the first time– and also how the system is adapting. At the same time, the consumer is beginning through the Marketplace to shape many of the changes in health care as they make decisions about the coverage and care they want. My focus today isn’t really just on the success stories, of which I see many, but on the lessons we have learned and are still learning from what’s going on inside and across the Marketplace.

I stood up here a year ago and reflected on another program which served millions of people as it reached not its third year of operation, but its 50th– the Medicare program.

Before it became the beloved program that millions of Americans rely on for their health and financial security, Medicare had, for those of you that know the history, fairly controversial beginnings and has gone through a number of evolutions. In large part, Medicare has been successful because it has adapted to the progress of medicine and the needs of the consumer, moving from a medical benefit to prevention to the pharmacy and now to coordinated care models. Medicare today is not only a leading force in value-based care, but it also offers widely popular consumer choice and competition for services and benefits from private plans across Medicare Advantage. The Health Insurance Marketplace, in many ways, picks up right there, bringing private sector competition and services to make health care available in an even more open market fashion– and creating greater opportunities for us to learn to serve consumers successfully.

As I reflect on the progress of the Marketplace, I will cover three important topics:

-First, that the Marketplace is succeeding by almost any benchmark, but it is still in its early trial and error stage. Progress won’t be even and for the first five years, we will continue to be in a learning and experimentation period– where a lot will be tested before best practices are more widely developed.

-Second, that the Marketplace, stepping back from the daily headlines, is a highly strategic opportunity for those who see health care evolving into a more B2C market to create new competitive advantages.

-And, third, is that even though we are in the learning and experimentation stage, we are confident we have the tools to make sure the market is stable and succeeds for the long term

Success but Early

Secretary Burwell talked this morning about how far we’ve come thanks to the ACA and thanks to so many communities across the country– the many physicians and clinicians, consumer advocates, assisters, health plans and hospitals who have worked together to have a remarkable impact. We’ve brought the uninsured rate to a record low and for the first time, our country is providing access to care for people regardless of their medical condition or how much money they make. Competition has worked to create more affordable choices. Last year, as 4 million new consumers signed up for coverage, over 90 percent of them had an average of 3 insurance companies to choose from, translating into 50 plan options. Two-thirds of HealthCare.gov customers had the option of selecting a plan with a monthly premium of $75 or less after tax credits. And thanks to tax credits, consumer’s rate increases averaged only 4 percent.

But more important is what consumers are getting for their money. Commonwealth reports that consumers say they can afford primary care and prescription drugs they just couldn’t afford before. And a good-sized majority are satisfied with their coverage. So we are beginning the process, in community after community across America, of re-connecting consumers to the health care system. Employer-sponsored coverage has not been disrupted and yet employees now have options to move jobs without fear of their families being unable to afford and obtain coverage. And contrary to what some headlines may suggest, the Marketplace has launched at and maintained costs well below CBO estimates. This is true for both consumers and the government– even as we provide care more comprehensively and to many who had conditions that had gone untreated.

While this represents a good start, we are in the very early stages– particularly, in the context of how programs like Medicare developed. And the Marketplace is right in the middle of what i will call a 5 year “learning and experimentation stage.” During these early years, consumers are getting educated about their options, while market participants– payers and care providers– learn their needs and experiment with the best ways to meet those needs. We are hearing promising approaches every day. But it’s not every day, or even every decade, that a new market totaling in the $10s of billions of dollars is created and launched across the country– and in places as diverse as rural North Dakota and Center City Philadelphia– where consumers have a diverse set of health needs, languages, cultures and incomes. So today, I hope we recognize that while we have learned many things, we are still only in this first stage of learning how best to bring affordable high quality care and service to this new market.

Strategic opportunity with consumerism

A fair question is why is it worth investing in all of this learning in all of this experimentation to serve the individual consumer market.

What makes the Marketplace an important strategic opportunity is very simply how squarely it puts power into the hands of the consumer. I mentioned this when I talked about the development of Medicare into Medicare Advantage and Medicare Part D, but the Marketplace is consumerism in the purest form. Over the years, the consumer has been much talked about but had very little power to shape what they wanted and paid for. There have been a lot of forces over the years that have shaped health care. Until now, everyone but the consumer has had a say in it.

The Marketplace gives the consumer a voice they have never had before. And every day, the Exchange gives us unprecedented insight into how consumers behave and what they want from the health care system. There’s a short list of learnings and a far longer list of things to be learned.

Let me start with some of things that we have learned.

-First, Marketplace consumers are much more engaged and increasingly educated about what they purchase particularly compared to other health care consumers. 70percent of renewing consumers on the Federal exchange– seven-zero– came back to the exchange to proactively choose a plan instead of opting automatic enrollment. That creates millions of opportunities for consumers to find the right offering at every open enrollment. As they say in my home state of Minnesota, the hockey capital of Minnesota, many more shots on goal means more opportunities to score– useful as plans experiment with different offerings.

-The second learning is that many consumers actually want to shop for their health care, in addition to their health coverage. Last year, the Marketplace began to offer consumers the option of selecting plans not by looking at the plan first– but by first finding a hospital or physician or prescription . . . then looking at which health plan offers them. Even in a pilot year, consumers chose this path 3.6 million times in just the 38 Federal marketplace states.

-Third, consumers want access to routine services without a deductible, with 8 in 10 consumers selecting plans which provide direct services outside of their deductibles like primary care and generic drugs. Health plans are responding in what I think is a promising early example of the consumer shaping a need and the market fulfilling it.

-Finally, consumers are saying loudly and most clearly that affordability matters more to them than it does when they select a plan through an employer– and is the most important concern. 90 percent of people have selected bronze or silver plans. And those large number of consumers who came back to shop? Those who switched plans saved over $500. So if consumers want savings, what are they willing to compromise on? According to a recent Kaiser Family Foundation report, consumers would much prefer a narrower network to a higher deductible or higher premium. This needs to be explored more as it opens the door, not just to narrow networks, but to innovative contracting and network strategies. While we have long wrestled with affordability as a country, the Marketplace allows us to see it in a new way– through the eyes of a consumer as they seek out high-quality care they can afford. And that reminds us– the millions of us who work in health care– that affordability and affordable care must be a part of everyone’s job.

So, while we’ve learned a lot about consumer preferences, there is still a longer set of questions that can be explored and experimented with over the next two years. And here are seven of mine but I know there are many others.

-How do we reach out to and connect with communities that are still left behind?

-What role will quality ratings and consumer reviews play in shaping the market and in improving quality as they are piloted and promoted?

-What role will exposing the actual cost of services play in consumer decision making and in increasing affordability?

-Will consumers choose the ease of a more standard set of “simple choice” benefits or will they opt for more customization?

-What about consumer loyalty? Working on health means building relationships with consumers and I expect this to be a big area of learning. There are examples of highly active markets where people can switch frequently, like cell phone service, music subscriptions or auto insurance. Competitors in those areas have found innovative ways to build long-term loyalty. Several companies are aggressively experimenting on the Marketplace. One, Centene, with its Ambetters product, offers a loyalty account to consumers and deposits money for consumers to use towards deductibles, coinsurance, and other health care spending.

-Next, what are innovative and consumer friendly ways to help consumers manage the costs of care — particularly in rural or other under-served locations? Companies are experimenting with enhanced primary care access, telemedicine, personalized health interventions, and other approaches you’ve heard today. These innovations will be ripe for scaling well beyond the Marketplace.

-Finally, what Marketplace specific contracting approaches will create aligned incentives and reduce the underlying unit costs that are a significant part of a consumer’s premium? Health plans must be successful in partnering with hospitals– who have seen a significant benefit from the ACA in reduced bad debt and increased patient flow– to lower the cost of care for consumers.

The point is that consumerism brings a trial and error phase with new approaches to everything from network strategy, to care management models, to new product approaches, benefit designs and new customer retention. Many of the companies in this room and a number of others have found success and have passed that on to consumers in the form of lower and more predictable costs and innovative services. Others haven’t yet but are beginning to follow best practices or look for other competitive advantages. And some will end up as more pure B2B companies. In the age of Uber and the consumerization sweeping our economy, we need to allow everyone the opportunity to innovate in this space. Outside of health care, the B2C economy has upended businesses like stock trading, travel and even data storage that once had only a limited consumer presence but now give consumers the ability to do for themselves on their mobile phones what they couldn’t before.

For a number of health plan CEOs that I talk to, their view of the Marketplace represents the opportunity to accelerate their organizations into this B2C world and get in synch with consumer demands as many of them see health care continuing to shift across all areas from B2B to B2C. In our notice of rulemaking last year, we asked explicitly for ways we could make innovation and testing of new ideas and approaches easier and must look for more opportunities and flexibilities ahead.

Market Stability

Finally, as in all markets, strategies won’t succeed the first time, every time. Over the course of these five years, we need to allow for continued experimentation. But problems that have plagued certain health care markets for years, lack of access, higher prices, poor social determinants of health also won’t get solved overnight. Unlike the Medicare program, the Marketplace is a complete private-sector solution to covering the uninsured and competition and innovation take some time to work. Gaps, like low competition or higher costs in some rural communities that have existed for years, will remain and be even more visible while we all work on solutions to address them.

Part of our job in the Administration and overseeing the marketplace development is to create a predictable and level playing field for consumers, health plans and care providers and to create stability in these early years, even through these natural bumps and to allow for this experimentation.

Even as the market signs up millions of new consumers in record numbers, we are paying rigorous attention to adjustments that are needed as the Marketplace matures. We have an experienced team of career operators and actuaries, who have come from both the private sector and directly from our Medicare Advantage and Part D operations where we know how to set up and operate large successful marketplaces with a variety of risk structures. This team studies the data and meets regularly with all market participants and takes a strategic view to determine what adjustments are warranted.

This past January, I committed to complete a thorough review and making of adjustments on what we have learned to date. And over the past several months, we have taken a set of actions which strengthen the risk pool, limit upward pressure on rates, and provide a strong foundation for the Marketplace for the long term. This process is a continual ongoing commitment but we have made meaningful progress so far.

-First, we systematically review our policies towards Special Enrollment Period (SEP) sign ups. We eliminated many SEPs that were unnecessary or subject to abuse, clarified the process and added validation requirements and enforcement for those who have a need to enroll during a SEP.

-Second, we have proposed steps to align risk adjustment to account specifically for consumers who may need Marketplace coverage for only a partial year, reducing the unintended consequences. One of the aims of the Marketplace is to be there for people when people need the coverage and when people find work, insurance companies shouldn’t be penalized.

-Third, we have proposed further enhancements to risk adjustment so health plans can invest in serving sicker, hard to treat populations. This begins with incenting everyone to invest in the data and analytics to understand their members better.

-Fourth, we are providing health plans with earlier and better information for rate filings to reduce surprises and help them better predict the cost of medical care for enrollees and price their policies appropriately.

-Fifth, we have announced several actions that both help consumers get or keep the right coverage and improve the risk pool: by closing short term coverage loopholes; by significantly improving our Data Matching process to prevent consumers from unnecessarily losing coverage; and, by improving the transition for Medicare eligible consumers out of the exchange and on to Medicare.

-And, of course, in recognition of the still early stage we’re at with the end of the 3-year reinsurance program, the one-year tax holiday of $13.9 billion will also help stabilize premiums next year.

And later this year, we will talk about our innovative effort to focus on reaching young people in the fourth Open Enrollment period.

These changes will give health insurers, supported by state departments of insurance, the ability to become more confident in putting together affordable offerings for consumers as they finalize rates over the summer and fall. And more broadly, as new areas emerge, I am highly confident in the focus and expertise of the career staff at CMS, and at the tools at their disposal, to continue to make the Marketplace attractive, stable and successful.

Close

In closing I would just like to emphasize a few points. I originally came to CMS to help lead the turnaround of HealthCare.gov and participate in the implementation of the Affordable Care Act. Thanks to the passage of the ACA, we have finally moved past the place where many of us have spent our careers– in debates about how we might address the uninsured or improve care, to a time when can now get busy actually covering people. It has been and is uniquely rewarding to be a part of. But health care didn’t automatically become affordable and accessible the day the law passed. It has taken incredible effort to see a system that hasn’t changed in a long long time begin to build this new market, but much more will be learned before best practices are more harmonized.

For all our success to date, new coverage must only be the start of things. We have the opportunity to change health care in America like we did 50 years ago at the dawn of Medicare and Medicaid, back when 1/3 of seniors lived in poverty to a time, now, when less than 10 percent of seniors live in poverty. And if we learn and experiment in these early years, we are just getting started. And part of the next leg of the development is not just how people’s lives change in profound ways, but how the consumer can force changes on the health system that wouldn’t happen– or happen as quickly– otherwise. Progress won’t be a straight line, but we are committed to working side by side with all of you in what will have far reaching impact to improving health care across this country. Thank you for all of the incredible hard work and innovation.