Innovation health care funds will be under extensive scrutiny

Medicare Payment Advisory Commission Executive Director Mark Miller warned Monday that Congress would have to monitor funds marked for innovation in the healthcare overhaul law to ensure the money works as lawmakers intended.

"We will have to vigorously protect the money and make sure it is used for these purposes," said Miller, speaking at a Capitol Hill briefing on potential changes to payment systems for medical services under the newly enacted law.

The health reform law establishes the Center for Medicare and Medicaid Innovation in 2011, appropriating $15 billion for the office over the next 10 years. The center is tasked with testing new payment and delivery systems for Medicare and Medicaid, with an aim toward reducing spending in the programs. If a system is shown to generate savings without reducing the quality of services, the HHS secretary is authorized to expand the pilot program without congressional approval.

Miller asserted that federal dollars require greater transparency at the Centers for Medicare and Medicaid Services, the agency that will oversee the innovation office.

"They have been given these resources," said Miller of the newly appropriated funds, "and now they will have to spend a lot of effort keeping people informed."

Jonathan Blum, a top official at CMS, said last week at a briefing on how Medicare is impacted by the healthcare law that the agency is working toward greater engagement with stakeholders, and is in the process of hiring staff and opening offices to achieve that goal.

Gail Wilensky, a senior fellow at Project HOPE and a former chair of MedPAC, said that while there was a consensus on how the federal payment system should change to generate savings, groups had little information on how to implement changes.

"A lot of history shows that this process takes time," said Wilensky. "These systems must be developed and accepted by Congress, and the process can be fraught with difficulties."

Wilensky also advised audience members to have "realistic expectations" of the savings to come from payment plan changes, saying that the notion revenues can be generated at levels higher than CBO estimates "bears no relation to the reality I know."