CMMI Shares Lessons on Value-Based Care from Its First Decade

In its first decade, the Center for Medicare and Medicaid Innovation (CMMI) introduced and honed models to support value-based care, exploring multiple avenues for lowering costs and refining risk adjustment strategies.

“2020 marked the tenth anniversary of the Center for Medicare and Medicaid Innovation (CMMI), and it proved to be a very important year both for the Innovation Center and the broader value-based care movement,” reflected Brad Smith, CMS deputy administration and director of CMMI.

“At the start of the year, we began a comprehensive process to review every model the Innovation Center has launched over the past decade, including all of our current models.  Through this process, we were able to capture a range of key lessons learned.”

Four new CMS models that were introduced in 2020 targeted lowering costs.

The Part D Senior Savings model sought to reduce out-of-pocket healthcare spending on insulin. It lowered insulin costs to $35 per month. In 2020, over 1,630 prescription drug plans with 13.2 million enrollees participated in this model.

The Geographic Direct Contracting model, Direct Contracting Duals model, and Community Health Access and Rural Transformation (CHART) model focused on specific populations in order to achieve better health outcomes.

The former model emphasized care coordination and value-based care. The second model targeted better processes, health outcomes, and healthcare spending for dual eligibles specifically. The third model, CHART, reinforced rural healthcare by providing funds and flexibilities for strategies such as transformative care delivery reform.

In addition to introducing new models, CMMI also exercised and improved upon previously established models.

For example, CMMI added a list of participants and improved benchmarks and risk-adjustment methodologies for the Direct Contracting Global and Professional model.

The center also boosted incentives for home dialysis with its End-Stage Renal Disease (ESRD) Treatment Choices model, originally introduced in 2019. Furthermore, CMMI explored site-neutral, modality agnostic, episode-based payments for cancer radiotherapy treatment in its Radiation Oncology model.

CMMI expanded to the national level two models which the center considered successful: the Prior Authorization of Repetitive, Scheduled Non-Emergent Ambulance Transport model and the Home Health Value-Based Purchasing model. These programs attempted to solve for unnecessary ambulance utilization and quality of care in home health agencies, respectively.

The center also looked to transformed three models in order to promote value-based care and usher in more sustainable solutions.

CMMI reworked benchmarks in the Bundled Payments for Care Improvement (BPCI) Advanced model to avoid Medicare Trust Fund losses. The center expected that these changes would be a stepping stone towards a more sustainable model.

When CMMI adjusted its Rigorous Data-Tested Benchmarks, it improved several important models that rely upon these benchmarks. Additionally, the center created the Next-Generation Risk Adjustment Methodology to help prevent coding intensity from unduly impacting payments.

“The Innovation Center also took swift action to provide adjustments and flexibilities to models to address the Public Health Emergency caused by COVID-19,” CMMI noted. “These financial methodology, quality reporting, and timeline changes to 16 models demonstrated that the Innovation Center and value-based care can be agile and resilient to address any crisis.”

The center also reconfigured its budget and processes—specifically contracting, data system duplications, and other common functions—resulting in an operating budget that was 18 percent lower than before the changes.

These models may be important to private payers because CMS often leads the way in testing innovative solutions. This has been the dynamic in value-based reimbursement for years.

However, while these lessons from CMMI’s first decade remain relevant for private payers, the traditional dynamic may be shifting. Data from a recent Insights report shows private payers pulling ahead of CMS in value-based care arrangements.

Private payers were far more likely to be involved in riskier models than public payers.

For example, 58 percent of private payers said that they participated in bundled payment models, whereas less than a third of public payers could say the same (32 percent). And over half of the private payer participants said that they were engaged in shared loss agreement (52 percent), versus 11 percent of public payers.

As payers surge toward more widespread value-based care, they may wish to mirror CMMI by continuing to revisit benchmarks and risk adjustment methodologies and by honing their targeted solutions.