Dive Brief:
The Center for Medicare and Medicaid Innovation is revamping its strategy aimed at driving down costs and improve quality in government healthcare programs, with a focus on preventing chronic disease.
The CMMI’s new approach breaks down into three pillars: promoting the prevention of illness and helping patients manage chronic conditions; helping beneficiaries reach health goals through access to data and technology; and supporting competition and choice for healthcare services, like ensuring independent and rural providers can participate in payment models and designing demonstrations on Medicare Advantage.
The strategy aligns with HHS Secretary Robert F. Kennedy Jr.’s Make America Healthy Again agenda, which focuses on chronic disease, CMMI Director Abe Sutton said during a call Tuesday. “Our system is facing unsustainable cost pressures,” he said. “We are pouring resources into treating disease after onset, rather than tackling the root causes and preventing it.”
Dive Insight:
The CMMI was established under the Affordable Care Act 15 years ago to test new healthcare payment and delivery models, with the goal of lowering costs and improving quality in government programs like Medicare and Medicaid.
However, the agency has faced some pushback from lawmakers, particularly Republicans, who argue the innovation center hasn’t made enough progress on its cost savings and quality goals.
Last month, Republicans on the House Ways and Means Committee sent a letter to Sutton and CMS Administrator Dr. Mehmet Oz, arguing the center should reprioritize. The letter added that the CMMI has previously promoted a political agenda, such as improving health equity, ahead of reducing healthcare spending.
Research has shown CMMI hasn’t always generated savings for the federal government. A 2023 analysis by the Congressional Budget Office found the CMMI’s activities increased direct spending by $5.4 billion, or about 0.1% of the net spending on Medicare, between 2011 and 2020.
Still, the agency has already made some changes during the second Trump administration. In March, the CMMI said it would halt four payment models early and cancel two demonstrations before they could start.
On Tuesday, the CMMI took another step toward revamping its operations. The strategy uses what the agency has learned since its inception to overhaul the American healthcare system, which has been burdened by growing costs and low-value care, Sutton wrote in a blog post.
New model designs and reviewed demonstrations could require all alternative payment models to involve downside risk, and push more Medicare and Medicaid beneficiaries into arrangements with financial risk for providers, according to a white paper on the strategy.
Disease prevention is a key focus of the plan, too, and will be incorporated into every model. The focus could include health and nutrition counseling or smoking cessation, early detection of conditions like cancer and disease management services to slow the progression of chronic conditions, like diabetes and blood pressure control, according to a white paper.
Additionally, the strategy aims to help people achieve health goals by providing them with greater access to data. That could include patient-facing mobile apps to help them manage their care or data transparency tools that could give them information about provider costs and performance, Sutton said.
The final focus of the plan involves promoting patient choice and competition among providers. The CMMI wants providers who typically haven’t participated in the agency’s payment models to join, including rural clinicians and independent practices, Sutton said.
The center will also try to simplify and standardize its portfolio of models where possible, limiting administrative burden and making participation less complex, he added.
Plus, the agency will move to promote site neutrality — offering the same Medicare reimbursement regardless of where services are delivered — and “confronting” uncompetitive state Certificate of Need laws, which require providers to get regulatory approval for major expenditures and projects, Sutton said.
Medicare Advantage, the privatized option for Medicare beneficiaries, is also on the agenda. The CMMI could test changes to payment for MA plans or updates to quality measures that might better align with better health, according to a white paper.
The new strategy at the CMMI comes as the Trump administration and congressional Republicans have moved to reshape large parts of the nation’s healthcare sector.
Early this week, the House Energy and Commerce Committee, which oversees Medicare and Medicaid, proposed its plan to cut Medicaid spending, including work requirements and a freeze on provider tax arrangements that states use to fund their share of spending.
The plan will result in millions of people losing coverage, likely preventing them from accessing healthcare services and hitting providers’ bottom lines, experts and providers say.
