Editor’s note: This article has been updated with comment from the CMS.
Dive Brief:
- The Center for Medicare and Medicaid Innovation, which aims to reduce spending or improve quality of care, increased net federal spending during its first 10 years of operation, and it will likely continue to boost spending over its next decade, according to a report by the Congressional Budget Office.
- The CBO estimated that CMMI’s activities increased direct spending by $5.4 billion, or about 0.1% of the net spending on Medicare, between 2011 and 2020.
- CMMI’s work is projected to increase net federal spending by $1.3 billion, or 0.01% of net spending on Medicare from 2021 to 2030, according to the report.
Dive Insight:
CMMI was created by the Affordable Care Act in 2010, with the goal of promoting value-based care and building pilot programs that would test new approaches in Medicare, Medicaid and the Children’s Health Insurance Program.
Between 2011 and 2020, the center launched nearly 50 models, though only six generated statistically significant savings and four were certified for expansion, according to the CBO report. The CMS has estimated that more than 41.5 million people have been impacted by or received care in innovation center models since late 2020.
Though the report concluded the center had increased net federal spending during its first years in operation, the agency noted its estimates of the financial impact of CMMI includes some uncertainty, some of which could inflate the increase in federal spending.
“For example, the agency’s analysis did not capture savings that might have accrued to Medicare through its permanent ACO program, known as the Medicare Shared Savings Program,” according to the report. “Although that program is not part of CMMI’s activities, its design has been informed by the experience of ACOs that the center has operated.”
The CBO’s report reflects a change from its earlier estimates. When the ACA was first enacted, the agency projected that the center would generate net savings between 2010 and 2019. If the CBO extended its estimates through CMMI’s first 10 years, it should have reduced federal spending by $2.8 billion, or 0.05% of net Medicare spending.
The agency argued its previous method of projecting spending changes included “considerable uncertainty” because CMMI was newly created.
The CBO also predicted that savings would increase as the center built and expanded more models; but the agency’s analysis found the rate of model certification actually declined over time. Most of CMMI’s models have been voluntary — making them less likely to generate savings when providers chose only to participate in programs where they saw positive financial outcomes for themselves.
The CBO also noted it didn’t anticipate the way CMMI models could create conflicting incentives within the same health systems, and that payment policy outside of the center’s control could also make it challenging for model participants to develop cohesive strategies.
The CMS is reviewing CBO’s report, CMMI Director Liz Fowler told Healthcare Dive in a statement.
“The first ten years of testing and learning have laid a strong foundation for the CMS Innovation Center to lead the way towards broad and equitable health system transformation,” she said. “Each model that has been tested has yielded important policy and operational insights, helping to address not only continued challenges with health costs and quality of care, but also the impacts of inequity and health disparities.”
The CMMI recently shifted its strategic focus to hone in on health equity while driving accountable care models. Earlier this month, Fowler teased new models in behavioral and maternal health that would launch later this year.
