Failed experiment in reducing medical costs is ripe for elimination

 The federal government’s role in health care was settled to a large extent when Congress passed, and then failed to repeal, the Affordable Care Act, commonly known as ObamaCare. While provisions of the law have been expanded and others reversed, the underlying system of healthcare exchanges remains intact. However, some ObamaCare programs have proven to be so ineffective and costly that they must be promptly repealed, starting with the Center for Medicare and Medicaid Innovation. 

The center was supposed to create new payment models that would reduce spending and improve quality of care for Medicare, Medicaid and the Children’s Health Insurance Program. When it was created, the Congressional Budget Office estimated that $7.5 billion would be spent on new models between 2011 and 2020, which would save $10.3 billion. The net savings of $2.8 billion represented .05 percent of Medicare’s net budget. 

Even for members of Congress, who specialize in creating new programs that do not work, the idea that this experiment would lower costs and help stave off Medicare’s insolvency was preposterous. Simply put, government bureaucrats would get a little more than $1 billion annually to cook up new ideas to save a miniscule amount of money for the fourth largest federal program — whether they saved a penny or lost billions. 

It is not difficult to guess how the center for innovation has turned out to date. Between 2011 and 2020, it spent $7.9 billion to operate models, or $400 million more than projected, resulting in $2.6 billion in lower spending, or $7.7 billion less than projected. The result was a net spending increase of $5.4 billion. The budget office estimates that it will cost another $1.3 billion through 2030, but only if its ability to create cost-saving models improves — something it has failed to demonstrate in its first decade. Unfortunately for taxpayers, it will get its $10 billion over 10 years regardless of its success or lack thereof — unless Congress decides otherwise.

There are good reasons to doubt that anything will change. Only four of the 49 models (8 percent) created between 2011-2020 showed enough potential to save money and improve care that they were continued. The losses from Medicare Advantage Value-Based Insurance Design, which began in 2017, reached $4.5 billion in 2021-2022. After changes were made, the program failed. It is scheduled to be cancelled at the end of fiscal year 2025.

The Trump administration has cancelled four other models that will also never save money or improve care.

The center for innovation’s attempts to fix its intractable problems include a new Wasteful and Inappropriate Service Reduction model, which exemplifies the agency’s intrusiveness and encroachment on patient and provider choices. Effective Jan. 1, 2026, there will be significant levels of prior authorization for Medicare fee-for-service patients in six states for 17 services, including treatments for Parkinson’s disease, sleep apnea, arthritic knees and incontinence. 

Instead of being accountable to Congress or to taxpayers, the center for innovation operates with sweeping, unchecked power to impose policy changes, without any debate or consent from the American people. Under the guise of testing “models” and “demonstrations,” bureaucrats can unilaterally rewrite the rules of American health care, bypassing elected representatives. These forced, one-size-fits-all options leave patients and providers sidelined with limited choices and rising costs. 

Two members of the House Ways and Means Subcommittee on Health have expressed their concerns. Rep. Adrian Smith (R-Neb.) said that “since its creation, it has failed to improve Medicare and Medicaid for beneficiaries.” Rep. Vern Buchanan (R-Fla.) said that it “has been allowed to operate and increase direct spending by billions of taxpayer dollars a year without congressional approval or any meaningful oversight for far too long.” And American Enterprise Institute senior fellow James Capretta wrote: “[We] don’t need [more] bureaucratic micromanagement cloaked under the mantle of innovation. Congress should do away … with the Center for Medicare and Medicaid Innovation.” 

When President Trump took office, he promised to root out and eliminate waste, fraud and abuse across the federal government. It should be clear to him and the Department of Health and Human Services that a program that costs billions, evades accountability and diminishes patient choice should have no place in America’s healthcare system. 

After 15 years of failure, this experiment has outlived its window to provide any benefit to the American people. The only way that the agency can save taxpayers money and improve healthcare is by closing its doors. Since that is not likely to happen voluntarily, Congress should eliminate the agency as soon as possible. 

Tom Schatz is president of Council for Citizens Against Government Waste. 

https://thehill.com/opinion/congress-blog/5522090-healthcare-innovation-center-failure/