For PDF version, click here CMMI needs to be dismantled
May 27, 2012 By Steven Greer, MD
The Supreme Court will soon announce its ruling on the constitutionality of the PPACA “Obamacare” law that was enacted as a federal clone of the Massachusetts “Romneycare”. Several entirely new government entities and bureaucracies were created in the law, including the new CMS division called The Center for Medicare and Medicaid Innovation (CMMI).
I was a Chairman of the grant review process for CMMI, and can tell you from firsthand experience that the program is nothing but a pork program that diverts untouchable Medicare entitlement funds to political cronies in key states. Regardless of the imminent Supreme Court ruling, the CMMI should be dismantled and de-funded by congress.
As the name describes, CMMI was created ostensibly to find ways to deliver Medicare and Medicaid in smarter, more “innovative”, ways than the current fee-for-service system that encourages waste and harmful programs. The PPACA law created the CMMI with $10 Billion in funding over ten years. But like most government programs, it was immediately hijacked and corrupted by the politicians.
After passage of the PPACA, the acting Administrator of CMS, Donald Berwick, MD, oversaw the creation of CMMI, and Richard Gilfillan, MD was chosen as the Director. Prior to running CMS, Dr. Berwick was the well respected and controversial CEO of the Boston healthcare policy think tank called IHI. It was during his days at IHI that Dr. Berwick made comments supporting comparative effectiveness, and other ideas used by the UK’s single-payer healthcare system, that later were use against him by the Republicans in congress to prevent his permanent nomination to be the director of CMS (Much was at stake. CMS has the largest budget in the federal government, exceeding that of the military). Dr. Berwick is now back in Boston working out of the IHI offices.
I became involved with CMMI in January of 2012 when I received an invitation from CMMI to participate as a reviewer of the grants. I sent in my CV and was selected to be a Chairman overseeing a group of reviewers.
Having written numerous other federal grant applications as a medical researcher, I was immediately surprised and confused by the very short time allotted for us to review 12 applications, each of which was more than 100 pages. I was selected as Chairman in February 15th, and I had only until February 29th to assemble a team of reviewers, host conference calls, then collect the completed scores. In contrast, an NIH grant receives many months of thoughtful review by scientists who are well regarded in their fields. Two weeks to do all of this was absurd.
I began to suspect that Medicare was not exactly interested in high quality input from the grant reviewers, to say the least, and that it was all just a cover for something else nefarious in nature. What exactly that was, I did not know at the time, but the red flags were raised in my mind.
To make matters more challenging for my review team, the online digital system called ARM that CMMI was using to handle our grant reviews was malfunctioning. CMMI contracted with the private company called Laurel Consulting Group based in Arlington, Virginia. The ARM system was deleting the painstaking time consuming review scores that our reviewers were inputting. At first, I assumed the reviewers were making mistakes, but when a reviewer resigned and I picked up his workload, I saw how my own data were being deleted.
Eventually, all but one of our reviewers resigned due to the problems with ARM, and also because the time required was far greater than any of us expected when we signed up as volunteers (e.g. reading and evaluate 1,200 pages in two weeks, attending conference calls, etc). I reported the problems to CMMI and to the private company. Laurel Consulting essentially accused me of lying, claiming that we must not have really entered the grant review scores and comments. After that, I too then left the program. Since all of the review teams used the same ARM system, it is quite likely that the other 3,000 CMMI grants were improperly reviewed, meaning your tax dollars were misallocated.
After my bad experience, I sent a memo to CMS’s person in charge of CMMI, Dr. Gilfillan, and also to the Secretary of the HHS, Kathleen Sebelius, which received no reply. I also sent a summary of my experiences to some national news outlets, but none of them paid any attention back in February.
A few months went by, and on May 8th, 2012, the list of the first group of CMMI grant recipients was awarded. Only 26 out of more than 3,000 applications were funded, and the conservative press pounced when favoritism was evident.
The one program receiving the most conservative press coverage, due to its ties with close friends of President Obama, was the Chicago Urban Health Initiative. The CMMI funding summary states, “Funding amount: $5,862,027. The University of Chicago Urban Health Initiative…is receiving an award to develop the CommunityRx system, a continuously updated electronic database of community health resources…The program will serve over 200,000 patients on the South Side of Chicago most of whom are Medicare, Medicaid and CHIP beneficiaries. The CommunityRx system will train and create new jobs for an estimated 90 individuals from this high-poverty, diverse community. This includes high school youth who will to collect data on community health resources as part of the Urban Health Initiative’s MAPSCorps program. It will also include the creation of a new type of health worker, Community Health Information Experts (CHIEfs), who will assist patients in using the Health.eRx and engage community-based service providers in meaningful use of the CommunityRx reports. The CommunityRx builds on infrastructure supported by ARRA funding from the National Institute on Aging. Anticipated outcomes include better population health, better use of appropriate services, increased compliance with care, and fewer avoidable visits to the emergency room with estimated savings of approximately $6.4 million.
The conservative National Review wrote, “The Chicago program, known as the Urban Health Initiative, is run by one of President Obama’s closest golfing buddies, scandal-magnet Eric Whitaker, who has been entangled with Illinois corruption celebrities Rod Blagojevich and Tony Rezko over the past decade.”
Prior to this media coverage on the 26 CMMI grants awarded, something far more concerning occurred. While Dr. Berwick was still acting as the Administrator of CMS and overseeing the creation of CMMI, the Partnership for Patients was created as the first program within CMMI, with $500 Million in funding. On the CMMI website it states, “Launched in April 2011, the Partnership for Patients is a nationwide public-private partnership that offers support to physicians, nurses and other clinicians working in and out of hospitals to make patient care safer and to support effective transitions of patients from hospitals to other settings. The Community-based Care Transitions Program tests models for improving care transitions in order to reduce hospital readmissions.”
One might think that the mission of the Partnership for Patients seems like a very noble use of federal funds, and it might very well be. But a major conflict of interest and ethical breach was created when The Health Research and Educational Trust, or HRET, was awarded a grant from the CMMI, and then, in turn, awarded a subcontract to the CMS Director’s own IHI in Boston. This has not yet been reported in the press and is an exclusive news story. I learned of it from a source involved in the Partnership for Patients process.
I asked Dr. Berwick to confirm the subcontracts between his IHI and HRET and he replied, “I don’t think there are contracts between them, but they’re good friends.” Dr. Berwick is careful to make it clear that he is now no longer the CEO of IHI, yet he does go to work in the Boston offices of IHI.
To have CMS money flow to the company where the director of CMS was formerly the CEO for 19 years smacks of favoritism and corruption, and is reminiscent of the controversial Defense Department contracts to Dick Cheney’s former employer, Halliburton. However, to be sure, if CMMI somehow survives the ruling of the Supreme Court, and if a Republican is elected as president, then the GOP will almost certainly use CMMI as a tool to distribute political favors just as has the Obama administration. This is another reason that the CMMI needs to be dismantled.
Cronyism and pork projects aside, let’s assume for a moment that the CMMI grants were awarded via a squeaky clean peer-review system based purely on merit, then the CMMI would still be an ineffective waste of taxpayer dollars. That is, if the first 26 grants are of any indication. The aforementioned Chicago Urban Health Initiative program is purely a job creation program for urban underprivileged youth in Chicago. Also, as another example, the $5 Million given to The Center for Health Care Services in San Antonio is another job creation program, at best, and does not “innovate” anything.
As I looked at the summaries for each of the 26 winning grant programs, not one of them seems to be able to truly change the Medicare fee-for-service culture, but rather are simply additional spending pork programs. The term “Innovation” in the name CMMI seems to be a euphemism for “jobs programs”. If any of those program applications would have been assigned to my group, I would have given them low scores as a chairman of the review process.
The CMMI web site that lists the details of the 26 grants awarded also lists the estimated savings to CMS that each program will provide, therefore offsetting the initial costs. The financial accounting methods used are unknown. I am a professional financial analyst that advises the largest institutional investors in the world, and an expert on the financial models for the largest healthcare companies, having built the excel spreadsheets. I can tell you that it is pure hocus-pocus for CMMI to estimate that any of the 26 programs will save money. I challenge CMMI to explain to me how they derived those forecasts. Moreover, estimating cost savings was not part of our review process, so this must have been calculated internally by the CMMI group.
I can also say for certain that the 12 grant applications which I personally oversaw were egregiously designed thinly veiled requests for handouts that offered no “innovation” whatsoever. For example, one was submitted by a for-profit company that offered a holistic healing process through human touch.
Dr. Berwick himself has said that up to a third of all CMS spending goes to waste or fraud. The newly created CMMI is nothing but a stealth stimulus plan to help job creation and politicians’ careers, just like the extremely ineffective ARRA “stimulus plan” was in 2009. The ARRA did nothing to reduce unemployment, and neither will the much smaller CMMI.
The CMMI is a very bad idea. If the Supreme Court does not nip this in the bud, then congress should do so. That is my informed opinion as an insider to CMMI.