September 6, 2016

Committee on the Budget
U.S. House of Representatives
Washington, D.C. 20515

Dear Representative,

On behalf of the more than 1.2 million members and supporters of the Council for Citizens Against Government Waste (CCAGW), we appreciate your holding a hearing on Wednesday, September 7, 2016, entitled “Center for Medicare and Medicaid Innovation:  Scoring Assumptions and Real-World Implications.”

CCAGW has been concerned with the Center for Medicare and Medicaid Innovation (CMMI) for some time.  CMMI is one of three initiatives created under the Affordable Care Act, along with Patient-Centered Outcomes Research Institute and the Independent Payment Advisory Board that could morph into rationing boards, similar to those ones found in single-payer systems, such as Great Britain’s National Institute for Health and Care Excellence.

CMMI has broad authority to test a variety of payment models in Medicare, Medicaid, and the Children’s Health Insurance Program without congressional approval in its Phase 1 models.  These models do not have to go through regular notice and comment periods, and the agency’s decisions are not subject to judicial review.  Furthermore, the agency is not subject to annual appropriations, with a budget of $10 billion for fiscal years 2011-2019, and an additional $10 billion for each subsequent 10-year fiscal period starting in 2020.

CMMI is supposed to test payment models, not implement new policy that exceeds the agency’s statutory authority.  Mandatory payment models such as the Comprehensive Care for Joint Replacement, which went into effect in November 2015, and the nearly nationwide payment model for Medicare Part B, which is still under consideration, will change existing policy and result in greater federal control over healthcare delivery to millions of Americans.

In addition, CCAGW is very concerned that the methods being used by the Congressional Budget Office (CBO) to score CMMI models represent a ceding of authority away from the Congress and to the Executive Branch.  CBO’s July 30, 2015 online post, “Estimating the Budgetary Effects of Legislation Involving the Center for Medicare & Medicaid Innovation,” stated that while some of CMMI’s proposals will be successful and others will not, the agency will “generate savings that exceed the costs of conducting the tests and trials” and these “savings” will be incorporated in its baseline.  In other words, if a proposal saves money yet has a negative impact on patient access to important treatments, efforts by Congress to counteract such a proposal could be scored as either a cost or a reduction in savings to the government.

We urge you and your colleagues to ask the witnesses at the hearing, particularly CBO Deputy Director Mark Hadley, for a detailed explanation and analysis of the underlying rationale for this scoring model as well as its impact on Medicare and Medicaid beneficiaries, healthcare providers, and taxpayers.

While CCAGW has long supported innovation in healthcare that would improve quality and drive down costs, it is highly unlikely those objectives will be achieved by unelected government bureaucrats that are beholden to no one.  As has been demonstrated time and again, innovation and cost savings come from a vibrant and competitive free market that responds to consumers.

We look forward to the hearing and thank you again for carefully examining this important issue.

Sincerely, 

Tom Schatz
President, CCAGW