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Experts Agree: CBO, “Health Demonstrations” Should Top Congress’s Scrutiny List

by Pete Sepp / /

Health care, program savings, the budget process – taxpayers have so many priorities for the incoming Congress and Administration to address, it’s difficult to know where to start. One item, involving all three of these areas of concern, should occupy an important place on the agenda: the Center for Medicare and Medicaid Innovation’s (CMMI) “demonstration projects,” and the Congressional Budget Office’s (CBO) highly troubling activities to undermine Congress’s policymaking prerogatives. The chorus for action to restrain these reckless impulses is growing, and may have just gotten a boost with today's news that Congressman (and House Budget Committee Chairman) Tom Price was on tap to serve as Secretary of Health and Human Services in the Trump Administration.

NTU’s President issued a joint statement with his counterparts at Americans for Tax Reform and Council for Citizens Against Government Waste urging scrutiny of both CMMI and CBO, noting that: CBO thinks that CMMI’s unelected bureaucrats will save tens of billions of dollars from Medicare and Medicaid, but if the people’s elected representatives want to set policy instead, it will "cost" taxpayer dollars. This is not only bad scoring, it's an inappropriate weakening of Congress' right to make entitlement policy.”

Hot on the heels of that post-election warning, our friend Elizabeth Wright at Citizens Against Government Waste has written an excellent primer on the short but troubled history of CMMI, and how CBO has acted as its enabler. Created by Obamacare barely five years ago, CMMI was supposed to “test innovative payment models,” designed to save money in the taxpayer-funded Medicare and Medicaid programs. From its beginning, Wright points out, “Congress [had] limited control over CMMI, especially with respect to spending. Funding is on autopilot (similar to entitlements or mandatory programs) and is therefore not obtained through the annual appropriations bills.” Between 2011 and 2019, the agency was authorized at $10 billion in funding, about $6.1 billion of which has been obligated so far.

The result, Wright recounts, has been anything but obvious. Three “demonstrations” are underway or proposed that affect care for joint replacement, Medicare Part B prescriptions, and cardiac care, and CBO has little information so far to determine how funding for these projects has been spent, much less any outcomes. The budget scoring agency’s information about the demonstrations is gleaned from CMMI’s website, and it indicates conversations with CMMI staff “occur infrequently.” As Wright properly sums up the situation:

In other words, any information CBO has from CMMI is scant and incomplete; regardless of costs or results, the center is off and running with little accountability. Alarmingly, CBO relies on this dearth of information to provide budget scores to any legislation that would change the models.

Other budget experts have been increasingly vocal about their concerns as well.

American Enterprise Institute’s Joseph Antos, who testified at a House hearing this fall on CBO and CMMI that NTU followed closely, said:

The most important issue is CBO’s decision to account for savings that might be lost for ‘initiatives CMMI is undertaking (or is expected to undertake)’ [emphasis added] in assessing legislative proposals. This remarkable decision to score lost savings for demonstration projects that have yet to be announced is a sharp break with past practice. Just as CBO does not score legislative proposals that have not yet been advanced, it seems unreasonable for them to score actions by CMMI that have not yet been advanced.

As a former assistant director for health policy at CBO, Antos knows when to sound the alarm.

The Galen Institute’s Doug Badger, who has advised both the White House and the Senate, also commented on the absurdity of CBO’s role in this particular Obamacare controversy:

Although no CMMI project has yet worked and CBO can’t think of one that will, it feels that someday some project surely will succeed and that the secretary will expand it, enabling the government to pocket $38 billion over the next decade (less the $10 billion it fronted CMMI). Unless, of course, Congress were to curtail CMMI’s powers or enact some of its more promising models into law. … In the eyes of the Congressional Budget Office, then, Congress should mind its own business and leave lawmaking to those who inhabit CMMI’s cubicles of excellence.

While this chorus of voices grows, public officials pondering the repeal and replacement of Obamacare should bear in mind the serious negative implications of CMMI’s structure and CBO’s approach to its operations. Both are in need of a major reassessment and corrective action.