Chairman Price Opening Statement: Center for Medicare and Medicaid Innovation: Scoring Assumptions and Real-World Implications

As prepared for delivery

Welcome back and thank you to everyone for joining us this morning.

One of the core responsibilities of Congress is oversight. It’s our job to keep a watchful eye over government departments and agencies to ensure their activities are fairly, efficiently, and effectively executed. In order to competently exercise its oversight authority, Congress has instituted certain instruments and agencies to aid in that endeavor – perhaps none with as large an impact as the Congressional Budget Office (CBO).

CBO is critical to Congress’s oversight and legislative activities. Members rely on the experts at CBO to provide well-reasoned, non-partisan analysis that informs and helps shape Congressional decision-making. So, we appreciate and value the professional work that CBO performs day in and day out.

In fact, it is because of the critical role CBO plays in the oversight and legislative process that we are here today to specifically examine how CBO’s analysis of the Center for Medicare and Medicaid Innovation (CMMI) – and the assumptions within that analysis – is impacting the ability of Congress to perform its legislative and oversight duties.

The Center for Medicare and Medicaid Innovation is a group within the Centers for Medicare and Medicaid Services (CMS) tasked with developing and testing new delivery and payment models for health care providers under Medicare and Medicaid. There have been legitimate questions and concerns raised about CMMI’s new Medicare payment models. Concerns with the adverse impact these experiments might have on the practice of medicine and patient access to critical health care treatments; questions about the agency’s decision to require mandatory – rather than the usual voluntary – participation of health care providers in the models; and generally whether the new models exceed CMMI’s legal authority.

It is important to remember: when we talk about new payment models, we are not just talking about a computer simulation or a science project in a lab somewhere. We are talking about real people and their access to care; we are talking about whether or not seniors on Medicare are able to receive the medications or treatment options that their physicians believe are in the best interest of the patient.

There are real lives that could be impacted – potentially harmed – by these suggested changes, even by the models themselves because CMMI is making participation in the demonstrations mandatory rather than voluntary before the effects of such changes to care, quality, and outcomes are known.

This is why oversight over CMMI’s activities is so important.

The broad powers vested in CMMI and the agency’s interpretation of that authority have the potential to further degrade Congress’s lawmaking authority by shifting decision-making away from elected officials into the hands of unelected officials. CMMI has the authority to design and implement different models and test those models on segments of the population for either an unspecified or limitless period of time. When you add in the fact that CMMI has determined that it can mandate participation in these experiments and run them indefinitely, you have a scenario where the agency has in effect enacted changes to the Medicare and Medicaid programs while circumventing Congress.

This assumption of lawmaking authority by the Executive Branch takes such powers out of the hands of the legislature. No matter which political party controls which branch of government at any given time, such a precedent is unhealthy for our democracy.

Unfortunately, under its current analysis, the Congressional Budget Office tells us that any altering of CMMI’s demonstration activities would result in a substantial loss in savings. CBO appears to come to this conclusion by assuming that CMMI’s abilities to produce savings supersede those of Congress. If there is overlap between legislative initiatives and CMMI’s authority, legislative proposals are secondary and savings assumptions favor CMMI. It is this reasoning – that the Executive is more effective at legislating than the Congress – that is so concerning.

In its first five plus years of operation, CMMI has spent nearly $6.1 billion with no tangible savings yet to show for it. And, yet, CBO tells us that they expect the program to cover those expenses with savings by 2017. While at the same time, in its own Long-Term Budget Outlook, CBO has admitted that it does not know which, if any, of the current demonstration projects CMMI has embarked upon will result in savings.

Admittedly, there will always be a certain level of uncertainty in any estimates or projections. What concerns this committee and others is the certainty with which CBO’s analysis seems to project substantial savings by CMMI in the future. Those yet unrealized supposed savings make it a challenge for policymakers to propose changes to the program; which in turn, makes it challenging for policymakers to exercise our oversight authority.

At the end of the day, our goal is to ensure the integrity of Congress’s oversight authority. Because we value the input of CBO in the legislative process, it is important that we have the opportunity to question and understand the underlying assumptions and methodology that inform the basis of its analysis. Because we believe seniors on Medicare ought to have access to the life-improving and life-saving treatments their doctors recommend, it is important that we ensure Congress is able to exercise its oversight authority.

To discuss these issues, we are joined today by Mark Hadley, Deputy Director of the Congressional Budget Office; Dr. Joseph Antos, the Wilson H. Taylor Scholar at the American Enterprise Institute; Ted Okon, Executive Director of the Community Oncology Alliance; Dr. Mark Madden, an orthopedic surgeon at OrthoVirginia; and Topher Spiro, Vice President for Health Policy at the Center for American Progress.

And with that, I yield to the Ranking Member, Mr. Yarmuth.