When President-elect Donald Trump announced last week his intentions to appoint Tom Price, M.D. (R-GA) as U.S. Department of Health and Human Services (HHS) Secretary, and Seema Verma as Centers for Medicare and Medicaid Services (CMS) Administrator, many healthcare associations were quick to react with thoughts on Price. The Georgia Republican Representative is well-known amongst industry professionals, as he is a chairman on a Congressional health subcommittee, and has been plenty active in his backing of physicians who voice concerns about their struggles with health IT. But more uncertainty comes with Verma, current president, CEO and founder of SVC, Inc., a national health policy consulting company, and what her potential impact could be on healthcare.
Based in Indiana, Verma worked first with former Gov. Mitch Daniels, and then Gov. Mike Pence, now the vice president-elect, on healthcare policy following the passage of the Affordable Care Act (ACA). She was an architect behind the Healthy Indiana Plan, an insurance program that was designed for people with low incomes that requires participants to pay minimal monthly contributions based on their incomes. When the Supreme Court declared it optional for states to expand Medicaid in 2012, Pence and Verma together worked on designing the Healthy Indiana Plan 2.0 (HIP 2.0), in which the state accepted federal dollars under President Obama’s healthcare law, but with a seemingly unprecedented element added: requiring low-income members to pay nominal fees for the care they receive. Those who couldn’t make these payments would no longer be eligible for healthcare services. Although the monthly fees were very low—only a few dollars in some cases, according to reports—in most states the poor are not required to pay anything.
The fact that Verma was able to implement this program—which puts personal accountability on members since their own dollars are at stake—under a Democratic healthcare law “made her an influential consultant to Republican state administrations,” according to a report in The Guardian. With the help of Verma’s consulting, Kentucky has attempted to implement a similar Medicaid program. “The state asked CMS [the Centers for Medicare and Medicaid Services] to allow Kentucky to impose work requirements beginning three months after benefits began, something no state in the country requires as a condition of Medicaid,” The Guardian reported.
That program in Kentucky is still under consideration by the government as the processes behind these policies continue to be a subject of controversy around the nation. Verma has not hidden her desire to depart from traditional Medicaid rationales; she co-authored a blog post in Health Affairs earlier this year that said, “Because HIP Plus members’ own dollars are at stake, they have ‘skin in the game’ and therefore an incentive to make cost-conscious healthcare decisions.”
At the time of Pence’s arrival as Indiana governor in 2012, there was a belief that he wouldn’t be in favor of Medicaid expansion. But he then eventually reversed course, while noting that expansion would have to be done using a program similar to the Healthy Indiana Plan and “in a fiscally responsible manner.” While the program has resulted in coverage for plenty more Indiana residents in the year-and-a-half it has been in existence, questions have arisen about how the approach behind HIP 2.0 could impact the future of Medicare and Medicaid as Verma gets set to take over CMS—assuming she gets approved by Congress.
Judith Solomon, vice president for health policy at the liberal-leaning Center on Budget and Policy Priorities, says that these programs “are not in line with decades of research that have shown that when you impose premiums on very low-income people, you depress participation. The plans in place in Indiana and the one that’s being considered in Kentucky represent barriers to the goals we all agree on: facilitating better use of the healthcare system, encouraging people to not use the ER for non-ER reasons, and getting preventative and primary care regularly,” says Solomon, whose work focuses mostly on health reform policies that make coverage available and affordable for low-income people. “When you talk about having to work to get insurance [as outlined in the Kentucky Medicaid program], that’s a concept that doesn’t make a lot of sense,” Solomon continues. “Those who are not working often have multiple conditions, including a lot of behavioral health conditions, so getting them coverage is often a way to get them healthy and back into the workforce. We don’t ask those questions of high-income people in the marketplace,” she says.
Solomon further points out that the poverty line is approximately $11,000 for a single person, so an individual, in the face of many tough financial choices, may often choose to not pay for a healthcare premium due to having other needs. This logic goes directly against the traditional spirit of Medicaid, which has long provided healthcare safety nets for the poor. Solomon adds that the incentives that Healthy Indiana Plan’s officials “claim they’re providing” are “not really effective since more than half of the [members] don’t know about them or understand them.”
Still, as more about Verma continues to come out publicly in the days following Trump’s announcement, there have been positive signs about her personality and demeanor (Healthcare Informatics reached out to Verma’s consulting firm for comment, but did not hear back). Doug Leonard, who serves as president of the Indiana Hospital Association (IHA), calls Verma “smart, tough, and creative.” Leonard, who worked closely with Verma on HIP 2.0, adds that “In times of tense negotiations, we have found her to be a problem solver, and at the end of the design [of the program], we collectively were celebratory of what we had done together. Seema is someone we admire and respect,” Leonard says.
The IHA head points to a possible link between the way Verma approached HIP 2.0 and the future of value-based purchasing, which of course draws strong interest from health policy and healthcare IT folks. “I have looked at the ACA as a catalog of experiments, and a great number of those were to move us away from a fee-for-service model that had the wrong incentives,” he says. Bundled payments and ACOs [accountable care organizations] are attempts to change the underlying incentives by not over-treating or overspending. Some of those experiments will work and some won’t. But I think that the incentives behind HIP 2.0— to not overuse the ER and having a person feel accountable for his or her healthcare spending—links to value-based purchasing, which also tries to create the right care at the right time at the right place,” Leonard says.
Leonard further adds that Verma possesses the ability to understand and design-in features that create the right outcomes for patients, providers and payers. “She has that intellectual capacity and approach that makes it so that she will be inclusive,” he says, noting that the issues themselves will be challenging. “MACRA [the Medicare Access and CHIP Reauthorization Act] was a replacement for a bad process. It’s easy to forget that MACRA was an attempt to fix a problem that was there before. You want to try to align everyone’s incentives to be participants in delivering the right care at the right time at the right place. Seema has the ability and approach to do that and realize its importance.”
Leonard is quick to point out that in Indiana, Pence was a conservative governor but was still very willing to embrace Medicaid coverage expansion. “It would have been typical of a conservative governor to not do anything, even though in his mind he didn’t support the ACA or the president.” Leonard says. As such, Verma has faced the challenge of helping to implement programs for Republican governors under a Democratic president, which Leonard believes speaks to her versatility. “Seema really understands the issues. It gives me comfort to know we have someone who is properly motivated to address the many challenges that are in front of us,” he says.
