3: Value
High-Value Health Care Other Information:
CMS supports the transformation of the nation’s current health care system to one in which patients and doctors can make informed
decisions about the most effective medical care, based on timely access to the latest evidence, in a way that delivers the
highest value care. This transformed system includes SMART health care, secure electronic records, electronic prescribing,
health transparency based on immediate, accurate, and comparative quality and cost information, new Medicare Advantage plan
designs and innovative prescription plan approaches, disease management programs, disease prevention, and value-based payment.
CMS processes an estimated 1.2 billion Medicare fee-for-service claims, handles millions of inquiries and appeals, and conducts
thousands of health care facility inspections and complaint investigations. To support high-value health care, we plan to
inform and support Medicare Prescription Drug plans, Medicare Advantage plans, and employer-sponsored retiree health care
coverage so that beneficiaries have maximum choice of benefit options at affordable prices. We work closely with industry
groups and providers, facilitate enrollment of millions of dual-and low-income subsidy eligibles, and develop policies that
facilitate health plans meeting beneficiary needs while controlling costs. We collaborate with states, regions, and providers,
including projects to implement survey procedures and interpretive guidelines related to organ transplants and restraint use.
We also continue to work with states and provide support on 1115 demonstrations, 1915(b) waivers, train survey and certification
surveyors, implement Medicaid quality initiatives, and develop and implement policies to better integrate Medicare and Medicaid.
CMS’ High-value Health Care initiatives through 2009 include: Information Technology Modernization The current IT modernization
initiatives will have a major impact on both infrastructure and applications and will result in systems that are scalable,
flexible, and responsive to policy changes, supportive of queries, and maintained on platforms that facilitate easy system-to-system
communication. Modernized systems will produce consistency in the use of Medicare data and predictability in systems changes,
and will increase the reliability of information used by the program’s stakeholders. This will lead to improved quality of
care and a better level of service for beneficiaries and providers. We are evaluating a number of options and have already
undertaken several modernization initiatives. CMS’ information technology modernization efforts include: • Consolidating the
number of data centers to increase our control of data center operations and better secure protected health information; •
Integrating functions, processes and data to improve service to beneficiaries and providers; • Implementing improvements in
service levels to beneficiaries and providers through the creation of web-based services and increased access to quality data;
• Integrating help desks and call centers to enable greater control over data security and privacy, sharing of information,
and service continuity across data centers; • Enhancing the data that CMS uses to administer its programs; • Optimizing the
use of the Internet while protecting the privacy of beneficiary information, which will reduce the administrative burden on
providers, help to ensure more accurate payments, and improve agency-to-provider communication; • Implementing industry and
Consolidated Health Informatics (CHI) standards in CMS systems; • Encouraging adoption of health IT to enhance safety and
reduce the burden of reporting quality measures; and • Implementing the Clinger-Cohen Act which requires that every Federal
agency develop an Enterprise Architecture (EA), a representation of the business and technical processes used by the agency
to accomplish its mission. EA provides a clear and comprehensive picture of what the current business and technology environment
looks like today, the desired capability and structure of the enterprise for the future, and a transition plan to act as a
roadmap from its current to its target environment. EA is a critical element in ensuring that the current and future business
and technical architectures for the Agency support the HHS mission, Strategic Action Plans, and performance and outcome objectives.
CMS will continue to optimize the interdependencies and interrelationships among its internal business operations and the
underlying IT infrastructure and applications that support these operations. Medicare Prescription Drug Program CMS’ new prescription
drug benefit provides seniors and people with disabilities comprehensive prescription drug coverage, the most significant
improvement to senior health care in 40 years. Millions of seniors and people with disabilities are already using this benefit
to save money, stay healthy, and gain peace of mind. Over 38 million Medicare beneficiaries have some type of prescription
drug coverage. Since launching this benefit, we have improved our data system (particularly helping the dual eligible population),
strengthened our 1-800-MEDICARE call centers, instructed plans on ways to better serve both beneficiaries and work with pharmacists,
and dedicated greater CMS resources to addressing enrollee concerns. CMS’ plans for the Medicare Prescription Drug Program
include: • Making sure beneficiaries can get prescriptions at a reduced cost, by building on the foundation for a strong program
management structure and competitive environment; • Providing Medicare beneficiaries with good prescription drug plan choices
that provide quality services that contribute to beneficiaries’ overall health and quality of life; and • Continuing to work
with partners, including states, plans, pharmacists, and advocates to ensure the continued success of the program. Long-Term
Solvency To potentially improve long-term solvency for CMS’ programs, and to improve their sustainability over time, we have
developed strategies for price and quality transparency and “value incentives” for consumers and providers. To continue our
progress toward addressing long-term Medicare solvency while providing better care and sustainable coverage, we need to accelerate
adopting Health Information Technology, focus more on prevention, and create more transparency. These steps will improve Medicare
for current and future generations. When we launched the prescription drug benefit earlier this year, CMS found that competition
provides greater value with lower cost. In this competitive approach, private drug insurance companies are very actively competing
with each other to provide the lowest premiums, best coverage, and best services on behalf of Medicare beneficiaries. Their
efforts have helped hold program costs and beneficiary premiums below expectations. Moreover, beneficiaries and their caregivers,
with support from Medicare and many local partners around the country, are using information on prices and coverage to choose
the most appropriate benefit coverage and at the lowest annual cost. Competition with good information on quality and price
has the potential to lead to cost savings in many other aspects of Medicare. CMS is beginning to implement competitive reforms
in durable medical equipment, Part B drug pricing, and other areas. The President has proposed budget reforms that will reduce
Medicare spending growth and save more than $36 billion over the next 5 years (FY 2007 – FY 2011), improving Trust Fund solvency
and reducing the general revenue needs of Medicare. The President’s FY 2007 budget also proposes additional reforms and initiatives
to improve Medicare’s financial condition by preventing costly complications and getting the right care to each patient, instead
of paying for more medical services. These proposals include: • Pilot-testing quality and efficiency measures to pay more
for better results rather than for more services; • Implementing competitive bidding approaches to the delivery of care; •
Continuing to expand access to Medicare Advantage plans, which save beneficiaries around $80 a month and can help reduce overall
health care costs by coordinating care and prevention; • Promoting the adoption of interoperable Health Information Technology;
• Making Health Savings Accounts available in Medicare in 2007 • Implementing modest reductions in market basket rates of
growth, including a proposed 0.4 percent reduction in the growth rate of Medicare payments (if Congress doesn’t pass a specific
alternative proposal to achieve needed improvements in sustainability); and • Gradually increasing the share of program costs
paid by the highest-income beneficiaries. Medicaid Reform Roadmap The Medicaid Modernization initiative is to develop and
implement sustainable Medicaid programs that provide coverage for millions of people who are not covered now. People in differing
economic situations will be helped through flexible benefits and incentives tailored to meet their needs. The Deficit Reduction
Act of 2005 moves the program in this direction by mandating reform and giving CMS the flexibilities needed to accomplish
the goals. CMS will help all states use the new benefit flexibility options to realize Medicaid innovation and efficiencies.
As we do this, we will also create programs tailored to meet the needs of diverse populations through Medicaid State Plan
Amendments. CMS will increase flexibility options to states by identifying a means by which States may begin the process of
incorporating Health Opportunity Accounts into the Medicaid programs. People with disabilities will have access to care in
their homes and communities. With Long-Term Care Reform, states will have the flexibility to give people access to health
care without waivers. Self-direction will be available in long-term and acute care settings. We will increase access to community-based
long-term care. The integrity of Medicaid will be assured, while also guarding against financial abuse. The Deficit Reduction
Act of 2005 affords States the voluntary opportunity to reform their long-term care delivery system in a variety of ways through
grant programs and multiple state plan options. CMS efforts to reform Medicaid include: • Providing clear policy direction
and encouraging all states to use new benefit flexibility options (including Health Opportunity Accounts) to realize Medicaid
innovation and efficiencies while creating programs tailored to meet the needs of diverse populations through Medicaid State
Plan Amendments; • Administering grant programs included in the Deficit Reduction Act of 2005 which were designed to promote
innovation and expand benefits and coverage. Grants include the Transformation Grants, High Risk Pool Grants, and grants for
the establishment of alternate non-emergency services providers; • Providing states with flexibility through the approval
of their application for 1115 Demonstrations and 1915(b) Waivers with parameters that could include reducing uninsured, promotion
of personal responsibility, budget neutrality and program outcomes evaluation; • Developing mechanisms to provide support
to states in rebalancing long-term care systems and increasing the number of individuals transitioned from institutions to
communities; • Developing measures to determine the effectiveness of rebalancing efforts; • Implementing the Medicaid Quality
Improvement Strategy to support states in their efforts to promote safe, effective, efficient, timely, equitable and patient-centered
care; • Providing guidance to State Medicaid Agencies on how to become a long-term “Partnership State;” • Increasing the number
of people who have the option to self-directed services through the new self-directed personal care state plan option, the
new Home and Community Based Services (HCBS) State plan option, and HCBS waivers; and • Creating a person-centered vision
for the future of the LTC, to serve as a blueprint for the long-range effort to reform the system over the next decade. State
Child Health Insurance Program (SCHIP) Reauthorization The State Child Health Insurance Program was authorized through Title
XXI of the Social Security Act and is jointly financed by the Federal and State governments and administered by the states.
Within broad Federal guidelines, each state designs its program, eligibility groups, benefit packages, payment levels for
coverage, and administrative and operating procedures. This important program has expanded health care coverage to millions
of children; however, the program is currently only authorized through fiscal year 2007. To ensure continued coverage of eligible
children through the SCHIP program CMS will: • Work with Congress to provide information necessary for reauthorization of
the program. • Maintain program operations and implement any new provisions of the program when reauthorization is obtained.
The New Orleans Health System CMS is developing a redesign project with the goal of producing an appropriate, comprehensive,
system-wide Medicaid waiver and Medicare demonstration proposal to accomplish the Secretary’s vision for the Greater New Orleans
area. We are actively developing direct relationships with beneficiaries through personalized tools and with the cooperation
of a well-developed grassroots network of partners. Specifically, CMS activities related to this initiative include: • Supporting
and helping the Louisiana Health Care Redesign Collaborative as it develops a practical blueprint for an evidence-based, quality-driven
health care system for Greater New Orleans; • Encouraging the Collaborative to expeditiously prepare an appropriate, comprehensive,
system-wide Medicaid Waiver and Medicare Demonstration proposal for the Greater New Orleans area that will guide the rebuilding
of its health care system; • Leveraging the power, resources and authority of other HHS operating divisions and other Federal
agencies to redesign the health system as efficiently and effectively as possible; and • Monitoring expenditure of funds allocated
through the DRA for the rebuilding process. Prevention and Quality Care We are at a turning point. Medicare is providing new
up-to-date preventive benefits and prescription drug coverage to prevent disease complications for beneficiaries with chronic
illness. To take full advantage of this support and the improved benefits, we need to take steps to encourage, support, and
reward the effective use of these benefits to provide high-quality care. CMS efforts to increase prevention services and quality
of care include: • Increasing the use of Medicare preventive screenings such as the “Welcome to Medicare Physical,” diabetes
screenings and counseling; • Reducing disparities in effective preventive services by measuring current national trends and
statistics; • Producing annual Quality and Disparities reports to increase the use of preventive services by racial and ethnic
minorities; • Evaluating future needs of the population and the levels of evidence required to incorporate personalized health
risk assessment, screening, and disease prevention intervention; • Examining new economic models for the diagnostics industry
that stimulate commercial development of cost-effective health screening and monitoring approaches; • Evaluating evidence-based
protocol management of health systems, ensuring that they include standardized safety and disease response and outcome measures;
• Supporting innovative knowledge engineering and developing new clinical decision support and service delivery models for
personalized health choices to prepare for the adoption of advanced technologies in the marketplace based on consumer-family
history and genetic-based risk assessment; • Continuing support for the value-based purchasing system for hospital pay-for-reporting
and the physician voluntary reporting program, which will include preventive services measures; • Continuing to offer and
promote a broad array of free provider educational products geared to enhance the providers understanding of preventive benefits;
• Developing new Medicare Advantage plan types, such as dual eligible and chronic care special needs plans, to improve overall
cost and quality outcomes for high risk populations and increase integration and coordination with state Medicaid Programs
for dually eligible Medicare beneficiaries; and • Supporting drug plan sponsors in their efforts to improve care coordination
and to develop innovative approaches to improving the quality of care for our beneficiaries. Pay-for-Performance CMS’ strategic
objective is to shift to a quality-oriented, patient-centered payment system. Because payment for care should be based on
a patient’s needs rather than on the type of facility that provides the care, we are developing a single assessment instrument
for hospitals, nursing homes and home health agencies. CMS is also working to implement a pay-for-performance system (P4P),
which rewards providers on the basis of quality (patient outcomes) and efficiency (less waste). Rewarding higher quality and
better efficiency benefits both Medicare beneficiaries and the Medicare program. We have joined the growing consensus that
the best way to help health care providers deliver high-quality, efficient care is to provide positive financial incentives.
MedPAC and bipartisan members of Congress have urged Medicare to provide financial incentives for both higher-quality and
efficient care. And leading provider groups representing physicians, hospitals, nursing homes, dialysis centers, and others
have also endorsed the movement toward quality-based payments that improve patient care. As in our other initiatives, we’ll
be looking to health care providers to help lead this effort. We are implementing and evaluating these payment reforms now.
Efforts related to Pay-for-Performance include: • Collaborating with Premier, Inc., a group of non-profit hospitals, to operate
a demonstration to improve their quality of care by tracking and reporting quality data for 34 measures at each of about 270
participating hospitals; • Using the lessons learned from the Premier demonstration to shape our future hospital pay-for-performance
initiatives and help us develop a hospital pay-for-performance plan as mandated by the Deficit Reduction Act section 5001
(b); • Operating the Physician Group Practice demonstration, implemented in April 2005, to provide rewards to large, multi-specialty
group practices for improving the quality of care and reducing the cost increases for their patients; • Working to bring better
continuity of care and support for chronically ill beneficiaries in our traditional Medicare plan, by creating financial incentives
for care coordination through our Medicare Health Support (MHS) initiative and other disease management initiatives; • Paying
organizations to help chronically ill Medicare beneficiaries get better support, treatment and continuity of care within Medicare
Advantage health plans, including HMOs, PPOs, and fee-for-service plans that offer additional benefits; • Working with states
on Medicaid waiver and demonstration programs that provide financial support for improvements in quality, beneficiary outcomes,
and costs; • Conducting the Medicare Demonstration Project to Permit Gainsharing Arrangements (DRA Section 5007) and other
demonstrations under our authority to promote collaboration between hospitals and physicians to improve care. The hospital
provides for gainsharing payments to the physicians that are based on the savings incurred directly as a result of collaborative
efforts between the hospital and the physician. • As part of the development of the Medicare Hospital Pay-for-Performance
Plan, CMS is evaluating innovative uses to expand competitive bidding for episodes of care and exploring ways Medicare could
incorporate this approach in the hospital value-based purchasing program. Competitive bidding programs would provide positive
financial quality incentives to winning providers and suppliers based on a combination of quality and efficiency measures.
• Advancing the progress that has been made in the early stages of implementing pay-for-performance in the following settings:
hospital, physician, home health, skilled nursing and renal dialysis facilities. Early initiatives include the hospital pay-for-reporting
program and physician voluntary reporting program. Quality and Cost Measurement in Medicare Fee-for-Service Systems CMS has
many important opportunities to help health professionals, patients, and all of the stakeholders in our health care systems
turn promising new ideas into action. What our agency does about quality in Medicare and Medicaid has great impact on the
future of health care. By supporting the transformation of our health care system to prevention-oriented coverage, Medicare
has tremendous opportunities to help our health care system deliver higher-quality care in both the acute and post-acute care
settings. We want our health care system to deliver: • The right care, for the right patient, at the right time; • High-quality
care that is safe, effective, efficient, patient-centered, timely, and equitable; • Care that is personalized, prevention-oriented,
and patient-centered, based on evidence about the benefits and costs for each particular patient; and • Care that is based
on 21st Century biomedical science, science that is marked by new approaches in the lab such as genomics, nanotechnology,
and next-generation information technology. These new sciences are only just beginning to have an impact on patient care,
but they hold tremendous potential. CMS will encourage cross-licensing agreements among inventors of fundamental technologies
such as genomic and proteomics patents as well as research tools to streamline integration of components into health care
deliverables. Our Integrated Data Strategy Our Integrated Data Strategy (IDS) is the centerpiece of the new CMS data environment.
It is the foundation for sharing data at all levels within CMS, HHS, other Government entities, and external business partners.
CMS has established a series of goals that are fundamental to achieving its vision of providing a centralized, scalable, enterprise-wide
repository for the Agency’s health care data. The high-level goals for the IDS are to: • Transition from a claims-centric
orientation to a multi-view orientation that includes Beneficiaries, Providers, Health Plans, Claims, Drugs, and other views
as needed; • Provide uniform privacy and security controls; • Provide database scalability to meet current and expanding volumes
of CMS data; • Transition from a stove-piped approach to a highly integrated data environment for the enterprise; • Integrate
data from such other sources as the Food & Drug Administration (FDA), Department of Veterans Affairs (VA), and Department
of Defense; and • Let users analyze the data in place rather than rely on data extracts. The IDS implementation will incrementally
incorporate new datasets within four phases: Phase 1 - Medicare Drug and Beneficiary Data; Phase II - Medicare Part A & B
Claims Data; Phase III - State Medicaid Data; Phase IV - Historical Data. Informed Provider Community CMS must work closely
with the provider community to make sure that they support high quality services to beneficiaries. This relationship requires
that CMS fulfill its responsibility to offer the provider community timely and accurate information, prompt response to inquiries
and comprehensive education outreach about CMS programmatic initiatives such as new payment systems, NPI, prevention, and
reducing overpayments. To continuously enhance the ability to keep providers informed, we will: • Expand and improve the technology
that supports communication to providers and increases the availability of electronic and web based transactions. • Continue
to pursue all opportunities to engage in a two-way dialogue with providers. By listening, CMS programs are improved and operational
burden minimized. • Continue a comprehensive provider education program using the CMS.gov Provider Center, Medicare Learning
Network educational products including “MLN Matters,” expanded provider listservs, FI/carrier/MAC outreach, and Regional Office
outreach activities. This level of service to the provider community encourages providers to partner with CMS and help reach
the beneficiary whenever there is important information that individual beneficiaries need to know.
Objective(s):
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