CMMI Overview

The Center for Medicare and Medicaid Innovation (CMMI),[1] established as part of the Affordable Care Act (ACA), is responsible for developing and offering new programs for Medicare and Medicaid participants.  The Triple Aim has been a guiding principle for all initiatives to date:  better healthcare for patients, better health for the population, and reduced cost.  To date, CMMI has developed the following programs:

  • Partnership for Patients – Consists of a multidisciplinary effort to reduce hospital-acquired infections and hospital readmissions.  There are two components:  the first is a $500 million effort to develop public-private networks to reduce hospital-acquired infections; the second includes another $500 million that is available as a reward for providers who can demonstrate effectiveness in reducing hospital readmissions.
  • ACOs – Includes 32 Pioneer ACOs that were announced in December 2011[2],[3] and which are expected to save $1.1 billion in Medicare expenses over the next 5 years.  Other models include Advance Payment ACOs and the Shared Savings Program.  All ACO models reduce costs to the federal government, maintain patient choice, and require that quality metrics are met.  Some transition reimbursement into value-based models; a specific transition program enabled three institutions that participated in the Medicare Physician Group Practice Demonstration to move into the Pioneer ACO model.  Advance Payment ACO applications are still being accepted.
  • Bundled Payments for Care Improvement Initiative – Offers four models, each with a slightly different framework.  However, each model also requires that the applying institution propose specific details on the areas to be included and the anticipated savings.
  • Comprehensive Primary Care Initiative – Composed of a federal and commercial payor-led initiative which offers a care management fee to commercial payors and others in the community that are able to guarantee 24-hour access for primary care services.  There is an opportunity to share the savings generated by this initiative.
  • FQHC Advanced Primary Care Practice Demonstration – Supports community health centers to improve care coordination using a Patient-Centered Medical Home (PCMH) model, for which there are accreditation standards developed by NCQA.  Five hundred centers have been identified and will receive $42 million in funds over the next 3 years to achieve improved primary care coordination.
  • Multi-Payor Advanced Primary Care Practice Demonstration – Helps primary care practices transition to PCMH models and is state-led.
  • Independence at Home Demonstration – Improves home care for patients with multiple chronic conditions.
  • Dual Medicare-Medicaid Enrollee Programs – Consists of two initiatives which incentivize states to both improve care coordination for dual enrollees and propose new payment models that further reinforce care coordination.
  • Strong Start Initiative – Composed of two programs intended to reduce early elective deliveries and improve prenatal care.
  • Innovation – Includes several programs CMMI has introduced that are intended to accelerate innovation.  The largest of these is the Health Care Innovation Challenge, with $1 billion in available funds that will be awarded to successful proposals for healthcare innovation.  Another is the Innovation Advisors Program, a targeted program also intended to accelerate innovation wherein participants are selected, trained by CMMI, and then encouraged to share best practices.

Benefits of CMMI

  • CMMI has a structured approach for program development, feedback solicitation, and regulation design.  As an example, over 1,300 comments were received for the ACO Shared Savings Program, with the final regulation reflecting many changes and launching new ACO programs (Pioneer and Advance Payment).
  • The scale of federal programs is large enough to initiate systematic change.
  • Innovation without the federal regulations that accompany new programs would be very difficult.
  • Federal leadership can incentivize and enable public-private partnerships, as well as new delivery and reimbursement models, while also providing patient protection and quality targets.

Challenges of CMMI

CMMI has a vested interest in reducing federal healthcare spending.  Cost reduction may not be immediately achievable, as care coordination requires more infrastructure and systems than what might currently be in place.  Many institutions may need to spend much more than has been estimated in order to move to value-based purchasing models and coordinate care for the population.

New models do not come with guarantees or even safety nets for healthcare providers.  Some models may be very difficult to successfully implement and may put the provider institution at risk.  The sense of urgency to change, largely driven by unsustainable healthcare cost escalation, won’t be enough for every institution to move away from current practices.

Patient choice is protected in almost all CMMI models, which is likely to continue.  Implementing new models that maintain patient choice are risky and may not pay off.  Competing on value is an idea that works in most industries but not as well in healthcare.  The healthcare industry has many complicating factors that distort market dynamics, such as physician-patient relationships, privacy, local practice variation, and access to care.

What to Watch For

The role of CMMI is to continue to push innovation for Medicare and Medicaid programs.  As such, we anticipate that new programs will continue to emerge from CMMI, although the pace of new programs is likely to slow down at some point.

In many ways, these new programs are leading change in both the federal and commercial payor markets.  It is important to watch for major trends in the CMMI initiatives, as they are likely to be reflected in the commercial market.

Look for programs that you believe your institution can be successful at.  The right set of initiatives can offer a relatively smooth transition into the new healthcare economy, where care is reimbursed based on patient outcomes, population health improves, and healthcare costs begin to decline as a percentage of U.S. economic activity.


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