Seema Verma, CMS Administrator Nominee, Discusses MACRA, M.D. Burden in First Senate Hearing

Feb. 16, 2017
Seema Verma, President Donald Trump’s choice to run CMS, emphasized access to healthcare coverage, patient-centered care, and moving important healthcare decisions away from the government in her first Senate hearing for her nomination, held on Feb. 16.

Seema Verma, President Donald Trump’s choice to run the Centers for Medicare and Medicaid Services (CMS), emphasized access to healthcare coverage, patient-centered care, and moving important healthcare decisions away from the government in her first Senate hearing for her nomination, held on Feb. 16.

Verma, president, CEO and founder of SVC, Inc., a national health policy consulting company, faced the Senate Committee on Finance on Thursday morning, bringing her family along to sit next to her for the hearing. Throughout the session, she faced sharp questioning, though perhaps not as hard-hitting as just-confirmed Department of Health and Human Services (HHS) Secretary Tom Price, M.D., received in his two Senate hearings in recent weeks. If confirmed, Verma will replace Andy Slavitt as CMS Administrator, who was an Obama administration appointee.

Verma was questioned hardest by Sen. Ron Wyden (D-Ore.), who several times asked the nominee to give examples of how she will keep Americans insured and asked for specific policy changes she is planning on making. Verma, in response, did not give many details, but reiterated that she has “fought for coverage and better outcomes” her entire career. When Sen. Wyden noted that Sec. Price said the same thing in his hearings, but refused to commit to giving all Americans coverage, Verma said that she wants to make sure that all Americans have access to high-quality and affordable care.

To this end, Wyden pressed Verma on a rule that was released yesterday by CMS, which the federal agency said in a press release, “would make changes to special enrollment periods, the annual open enrollment period, guaranteed availability, network adequacy rules, essential community providers, and actuarial value requirements; and announces upcoming changes to the qualified health plan certification timeline.”

Wyden opined in the hearing that the rule, the first by CMS since Price was confirmed, “meant less coverage, higher premiums and more out-of-pocket costs for working families.” He added that the rule “puts insurance companies over patients.” In response, Verma said that she has not been to CMS or HHS offices and had nothing to do with the development of that rule. Wyden again went back to questioning since he felt that the rule “does the opposite of what Trump said when he stated his goal of insurance for everyone” last month. Verma said she could not comment on the rule, but that both she and the president “are committed to coverage.”

There were further questions and statements as it related to value-based healthcare and healthcare IT during the Senate hearing. Committee Chairman Orrin Hatch (R-Utah) was the first to bring up the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), of which he said work on the law “continues to be bipartisan.” Hatch noted, “The Obama administration took great pains to engage doctors and stakeholders through the initial implementation stage [of MACRA]. Early and often consultation should be the rule and not the exception.”

Verma agreed with the Utah Congressman, saying she applauds Congress for the passing of MACRA. “It was an important step forward to provide stability for providers and move us toward better outcomes,” Verma said. “The most important thing we can do is engage stakeholders not just on the front end, but all the way through. What are they going through and what are their challenges?”

Further touching on MACRA, Wyden brought up that small and rural practices in his state of Oregon are constantly asking him about virtual group reporting—which starting in 2018 will allow small practices to be assessed as a group across the four MIPS (Merit-based Incentive Payment System) performance categories—and about what qualifies as “nominal risk” to qualify for an alternative payment model (APM).

Verma noted a few times that MACRA “will be a challenge for small and rural providers, but that it’s a worthy goal. We have to support them,” she said. “For smaller providers taking risk, they will be reluctant since they don’t have the financial reserves that bigger health systems have. When thinking about holding providers accountable for outcomes, that also depends on patients. So we need to think about strategies for engaging patients so they can work with providers for achieving outcomes. Smaller and rural providers taking on risk will be a formidable challenge,” she said.

Continuing, Verma said that she isn’t sure if rural and small providers “want to take on risk at all.” As such, she added, “When we are designing these programs we have to keep their needs in mind. Larger systems and insurance companies have taken on risk, but even looking at ACO [accountable care organization] models, there’s not a lot of people comfortable taking on risk.”

Wyden then said, listening to Verma’s comments, one could draw the conclusion that she is in favor of fee-for-service, to which Verma responded, “There are concerns with fee-for-service, in terms of rewarding volume over quality. I do support efforts that hold providers accountable for outcomes and increasing the coordination of care. It’s another thing all together in having them take on risk,” she said.

Verma also gave similar thoughts to Sec. Price when it comes to mandatory bundled payment models, saying that she “support efforts around innovation, as it’s important that we are trying to climb the highest mountain. Innovation is important, as we look at testing new ideas. That process has to be sure of a couple of things, like making sure we are not mandating people to participating in something there is not consent around.”

What’s more, several times throughout the hearing, Verma noted how a core goal would be to reduce the burden currently on U.S. physicians. In her opening statement, she said, “Doctors are increasingly frustrated by the number of costly and time-consuming burdens. CMS’ rules and regulations should not drive doctors form serving their beneficiaries.” She added, “Patients and doctors should make the decisions about their healthcare, not the federal government. We need to find ways to leverage innovation and technology to drive better care.”

When asked by Hatch about her thoughts on the Meaningful Use program and how CMS can best go about reducing unnecessary regulations, Verma said, “We need to talk to doctors and have open collaboration and communication with them to identify regulations and provisions that are [leading] providers to consider not participating in the program.” She also added that she likes the potential of electronic health records (EHRs), but that she has been around doctors “where they're staring at the computer instead of looking at me."

Finally, Verma was unsurprisingly questioned on an IndyStar story from 2014 that reported a conflict of interest in which Verma’s consulting firm received more than $3.5 million in state contracts to help construct the Healthy Indiana Plan insurance program, but also at the same time, “worked for one of the state's largest Medicaid vendors — a division of Silicon Valley tech giant Hewlett-Packard. That company agreed to pay Verma more than $1 million and has landed more than $500 million in state contracts during her tenure as Indiana's go-to health-care consultant,” according to the report, which asked the question of who Verma is working for “when she advises the state on how to spend billions of dollars in Medicaid funds — Hoosier taxpayers or one of the state's largest contractors?”

At the time, Verma defended herself, saying that “SVC has disclosed to both HP and the state the relationship with the other to be transparent. If any issue between HP and the state presented a conflict between the two, I recused myself from the process." Nonetheless, according to that report, “the recently ousted head of the state agency administering Verma's contract told The Star that Verma once attempted to negotiate with state officials on behalf of Hewlett-Packard, while also being paid by the state.”

In today’s hearing, Verma again defended herself, saying she was not negotiating for HP, but rather putting out communications materials, while her work for the state was around policy and the development of programs. There was not an overlap, and when there was, her team would recuse themselves, she said.

As Healthcare Informatics reported shortly after Trump announced her nomination, Verma worked in Indiana first with former Gov. Mitch Daniels, and then Gov. Mike Pence, now the nation’s vice president, 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. This sparked some controversy, as the requirement of the poor to pay even small monthly fees to remain eligible for healthcare services has been considered by Democrats to be unfair. Nonetheless, many Republican administrators applaud Verma for being able to put this plan in place under a Democratic healthcare law, Obamacare.

Sen. Hatch said towards the end of the hearing that he plans to hold the Seema Verma confirmation vote "expeditiously." Healthcare Informatics will continue to update readers with this story as it unfolds.