Praise for House Hearing on CBO's Methods

The Honorable Tom Price, M.D., Chairman
Committee on the Budget
U.S. House of Representatives
Washington, DC 20515

Dear Chairman Price:

On behalf of National Taxpayers Union’s (NTU’s) members across the United States, I write to commend your diligence and perceptive approach in holding a hearing entitled “The Center for Medicare and Medicaid Innovation (CMMI): Scoring Assumptions and Real-World Implications.” As we have often discussed with you and your staff, our mutual goal of holding the Congressional Budget Office (CBO) accountable for its inputs into the fiscal policy process is a vital, if unsung, task.

On a near-daily basis, NTU’s staff is reminded of the impact that CBO’s work – sometimes for the better, sometimes for the worse – on the course of federal expenditures. In the case of CMMI, the scoring assumptions from CBO raise a number of concerns, over separation of powers, behavioral changes to the economics of the health care, and the viability of cost estimates. For example, CBO “bakes in” 50 percent of the cost or savings from a proposed rule (including CMMI demonstration projects) before that rule is finalized. As a result, any legislation from Congress offered between the initial and final versions of that rule can face a savings “penalty” in scorekeeping because the baseline has already been adjusted. Furthermore, CBO assumes that repealing CMMI’s appropriation of $10 billion would not save as much as anticipated, again because the CMMI baseline already claims $38 billion in savings from its regulatory acts between the years 2016 and 2025.

CMMI is imposing mandatory payment reimbursement models which could have serious economic and fiscal consequences, especially for prescription drugs dispensed through Medicare Part B. In order to determine whether they are desirable, these sweeping regulatory changes must be informed by the best possible data and estimating techniques. The nation’s taxpayers are grateful to you and your colleagues for taking such a thoughtful approach to finding answers for these admittedly difficult questions.

NTU and its members look forward to learning more about CMMI’s activities through the Budget Committee’s hearing, and to further assisting you as you deliberate potential reforms to the program. Thank you for engaging in this critical discussion.


Pete Sepp