Senior officials at CMS are dragging their feet over expanding services for diabetes prevention programs that evidence shows can reduce insurance costs and improve the health of millions of Americans.
The diabetes prevention program was one of the crown jewels of the Obama administration’s efforts to reinvent health care. CMS’s Innovation Center in 2013 started a major clinical trial, whose results showed it improved health while cutting costs by $2,650 per participant. Because of these results, policymakers recommended the program be scaled up.
The program involves group coaching of participants at risk of developing Type 2 diabetes because of unhealthy weight gain. In-person and virtual programs have been developed. But CMS has refused to fund the virtual programs, and has slowed implementation of the in-person programs over what officials say is concern about fraud.
A host of startups have received nearly $200 million in funding to provide virtual weight-loss and diabetes prevention programs. But CMS officials are offering them little reason to hope the government will start paying for their services, reversing momentum that was developing in the Obama years.
CMMI’s leadership seems to have lost interest in the diabetes prevention program, startup executives say, and appears more focused on an overarching strategic review prompted by the change in administration.
About 90 million Americans are estimated to have prediabetes. About half the private insurance plans in the country offer weight-loss programs to prevent it, company officials say, but prediabetes is especially prevalent among Medicare-eligible seniors. The American Diabetes Association says about a quarter of the elderly have the condition.
Diabetes prevention has vast potential, proponents say. In in a pilot study conducted by the Y, participants who completed a prevention course averaged a 5.2 percent weight loss. CMS’ actuaries said that in addition to health care cost savings, participants were healthier and longer-lived.
But though CMS started reimbursing providers in April, only 70 program locations across the country are qualified to provide the service, it says, though it believes more providers will be able to bill Medicare soon. About 400 programs have earned certification from the CDC, a prerequisite on the path to qualifying for Medicare reimbursement.
Qualifying for payments is an arduous process. To allay fraud concerns, owners of organizations applying for reimbursement must undergo fingerprinting for background checks.
A POLITICO review of CMS’ map of diabetes prevention program providers found that only four of them were located near the top 10 cities in the U.S., for example. Those four providers were an average of 112 miles away from the downtowns of New York, Philadelphia and Washington, D.C.
One of the flagship prevention programs — the Y — has had only three of its local affiliates qualify for Medicare, out of 200 that offer the service.
A Y spokesperson said the agency was not surprised by the slow pace of qualification. But in its rulemaking to establish the program, CMS said it expected to pay out $23 million to providers, with an average payment per participant of $320 — meaning it anticipated around 71,000 participants during 2018.
It’s unlikely CMS can hit that pace, say executives from various startups. Saeju Jeong, the co-founder of Noom, estimated that only about 1,000 Medicare beneficiaries have used the service so far. CMS says it doesn’t have participation data.
Jeff Ruby, the founder of competitor startup Newtopia, estimates that about 50 percent of the employee population has insurance coverage for the programs. Reimbursement from CMS would be a “harbinger” for other insurers and motivate them to cover their services, he said.
Advocates say virtual diabetes prevention programs, which connect participants and their coaches through phone, computer and Skype-like channels, are the best way to quickly spread prevention around the country. Leaders of the biggest startups in the field have sent multiple letters to CMS making this point, and they reiterated it in conversations with POLITICO.
“It’s very difficult at a population level to get large numbers of people to show up once a week [in-person] for 16 weeks,” said Neal Kaufman, the chief medical officer of Canary Health, another digital provider.
Kaufman noted that it’s “not a fun group” to join, which means organizations have to undergo significant marketing costs to entice potential participants to join. Finding and training coaches is another major financial undertaking for bricks-and-mortar providers. To have a broad public health impact, it’s “hard to do it 15 people at a time,” he said.
By contrast, he said, digital services simply have to “buy a new server” to scale up.
To be sure, Kaufman and his peers are self-interested. Digital diabetes prevention program providers see big business as well as better health in their service. According to digital health investors Rock Health and a review of venture capital database Crunchbase, startups offering the services have raised nearly $200 million.
Yet they’ve been cut off from Medicare, one of the biggest markets for their service. When rolling out the benefit, CMS chose not to reimburse primarily digital providers, saying it needed more data showing they worked, since the pilot study involved face-to-face services.
Many startups have funded or participated in clinical trials to prove their merit, but CMS hasn’t budged. Multiple startup executives — and one CMS source — say the agency hasn’t shown interest in funding its own study in the near future, and hasn’t sought data from their trials, either.
“We want to participate,” said Newtopia’s Ruby. “There doesn’t seem to be a will on the other side at the moment. … I quite frankly believe it’s not going to happen.”
“I was so happy two years ago. Now where am I?” said Noom’s Jeong. “As a businessman, I don’t know.”
Meetings with CMS and its Innovation Center staff recently have focused on concerns about potential fraud stemming from digital services, rather than testing whether their programs work, several executives said.
Fraud concerns have shaped the program since the beginning. MedPAC, which advises Congress on Medicare programs, warned the Obama administration to require tight protection against illicit activity in the program. So-called supplier-driven benefits had a history of fraud and abuse, it cautioned in a letter.
Kaufman, however, said digital programs were less vulnerable to being gamed than in-person programs. In a digital program, everything is documented — making the service easier to audit from the outside, he said.
In promulgating the in-person program, CMS wrote that participants who missed a face-to-face session could instead use a limited number of “virtual make-up sessions.” In justifying the decision, the agency wrote that “emerging evidence” suggests that virtually provided services are “similarly successful” to in-person ones, “including among Medicare-age participants.”
“That line haunts me in my sleep,” one industry executive groaned. Despite its words, the agency hasn’t moved forward in accepting virtual programs.
In May, the American Medical Association gave a boost to the programs, writing newly installed CMMI head Adam Boehler to argue that “substantial evidence” supports reimbursement for digital programs and citing two dozen papers supporting that claim.
If the benefit isn’t expanded, the AMA warned, beneficiaries in many areas will have few or no options for a diabetes prevention program provider. “To put it simply, the DPP was expanded based on projected savings and improved health outcomes that are unlikely to materialize without the addition of a virtual program option,” association CEO James Madara wrote.
CMMI’s diminished interest in the program has prompted some frustrated executives to change business plans. Noom’s Jeong says his company is expanding abroad: South Korea and Japan, he said, have a much more welcoming attitude toward digital providers.
“This beautiful discovery … it’s crazy it hasn’t scaled up,” he said.