Nov 07, 2022

The CMS Innovation Center’s Strategy to Support Person-centered, Value-based Specialty Care

Liz Fowler, JD, PhD, Purva Rawal, PhD, Sarah Fogler, PhD; Brian Waldersen, MD, MPH;, Meghan O’Connell, MPH; Jacob Quinton, MD, MSHS



In 2021, the Centers for Medicare & Medicaid Services (CMS) established a goal to have 100 percent of Original Medicare beneficiaries and the vast majority of Medicaid beneficiaries in accountable care relationships by 2030 as part of the Center for Medicare and Medicaid Innovation’s (Innovation Center) strategic refresh. This means that beneficiaries should experience longitudinal, accountable care with providers that are responsible for the quality and total cost of their care. Accountable care requires access to and coordination of primary care and specialty care to meet the full range of patient needs. As the Innovation Center enters the second year of its strategic refresh, testing models and tools to improve access to high-quality, value-based specialty care is an area of critical focus.

Medicare beneficiaries often experience fragmented and costly care, distinguished by frequent diagnostics, imaging, tests and other treatment approaches delivered by specialists across sites of care.[1] In 2019, Medicare beneficiaries saw an average of 50 percent more specialists in the outpatient setting than in 2000, doubling the number of physicians with whom primary care providers must coordinate care.[2] A 2022 study examining fragmentation of ambulatory care for Medicare fee-for-service beneficiaries found that four in ten beneficiaries experience highly fragmented care, with a mean of 13 ambulatory visits across 7 practitioners in one year.[3]

Medicaid beneficiaries also experience access barriers, with clinics serving a high-proportion of Medicaid beneficiaries routinely reporting challenges scheduling specialist visits. In a sample of community health centers (CHCs) in Medicaid expansion states, nearly 60 percent reported difficulty obtaining new patient specialty visits for their Medicaid patients, particularly for specialists in orthopedics, gastroenterology, neurology, and psychiatry. Barriers for CHCs were primarily related to payer factors - low specialist payment rates, low in-network specialist coverage, administrative burden and lack of Medicaid coverage for telemedicine. Patients most commonly cited long travel distance/time and out-of-pocket costs as barriers to specialty access. [4] Evidence generally suggests that access to specialty care in Medicaid is better than for uninsured individuals, but worse than for those with commercial insurance[5], although this may vary by provider type, specialty area, and state.[6] Service delivery and payment approaches aimed at improving access to and the experience of specialty services, for example electronic consultations (e-consults), could help address access barriers and are a core component of the Innovation Center’s specialty care strategy.

The ongoing trend of market consolidation is also a relevant factor impacting access to specialty care and the goal of achieving person-centered, value-based specialty care. The most rapid vertical integration has occurred among specialty practices, namely oncology and cardiology,[7] and this increasing shift to hospital employment may increase the costs of care without improving quality.[8] Market consolidation may dampen value-based incentives, in part because hospital-employed physicians are often paid by volume of procedures, which rewards referral volume.

The Innovation Center has tested acute inpatient and hospital outpatient department episode payment models through the Bundled Payments for Care Improvement (BPCI) Model, the BPCI Advanced Model, and the Comprehensive Care for Joint Replacement (CJR) Model. The Innovation Center has also tested condition-based episode payment models, such as those focused on oncology and kidney disease. Building on these model tests and based on key takeaways from a series of interviews with delivery system leaders and other experts,[9] the Innovation Center has developed a comprehensive specialty strategy to test models and innovations that support access to high-quality, integrated specialty care across the patient journey—both within longitudinal and procedural or acute service delivery and payment frameworks (Figure 1). In Table 1, we provide a brief description of the new strategy and the timeframe for implementation – over the next 2-3 years (short term) or 3-5+ years (long term).  

Figure 1: Aligned Elements of the Specialty Strategy and Beneficiary Care Experience[10]

Figure 1 - CMMI Specialty Care Blog


Table 1: Key Learnings and Next Steps on the Specialty Strategy

Key Learnings

Aligned Element of Specialty Strategy

Providing data on specialist performance and enhancing data sharing across practices would facilitate integration with primary care and ACOs.

Element #1: Enhance transparency of specialist data and performance measures to increase access to high-quality, accountable specialty care and integration with primary care.

Short term

  1. Enhance specialty care performance data and dashboards to give population-based model participants the ability to compare quality and costs of procedural or acute episodes of care, as well as better information on specialist performance (shadow bundles).

Long term

  1. Develop and distribute industry standard definitions of condition-based episodes for ACOs to improve management of specialty care and to support sub-contracting efforts with specialists.


Episode-based payment models can be designed to align incentives between specialists and ACO initiatives

Element #2: Maintain momentum established by episode payment models:

Short term

  1. Extend BPCI Advanced for two years through 2025.
  2. Launch a new model focusing on beneficiaries with cancer—the Enhancing Oncology Model.

Long term

  1. Test a new mandatory acute episode payment model that improves acute care and care transitions, while supporting the goals of longitudinal, accountable care.

Beneficiaries with complex conditions may benefit from specialists integrated into primary care delivery pathways.

Element #3: Create innovations to improve coordination and collaboration, including at the point of referral, between primary care and specialty care physicians.

Short term

  1. Explore the use of e-consults[11] and enhanced referrals[12] in advanced primary care models to improve access to specialty care and reduce wait times for specialty visits.

Long term

  1. Test the potential to establish financial targets for high-volume, high-cost specialty care within population-based models.



ACO incentives to reduce unnecessary hospital admissions or emergency room visits and low-value imaging and ancillary services need to be stronger, given competing incentives to increase volume for some ACOs.

Element #4: Create a targeted set of financial incentives for ACOs to actively manage specialty care, through possible beneficiary alignment changes and episode cost and quality measures specific to specialist-managed conditions.

Long term

  1. For hospital-affiliated ACOs, explore sub-population condition and procedure-based spending targets, layered underneath the ACO’s benchmark, to promote active longitudinal management of high-volume and costly conditions.
  2. For physician-affiliated ACOs, encourage specialists to meet sub-population condition and procedure-based spending targets with same risk and reward as hospital-affiliated ACOs.

Element #1: Enhance Specialty Care Performance Data Transparency

The need for enhanced data and profiling tools to provide data on specialist performance emerged as a key theme in the development of the strategy. Such tools, shared with primary care providers in population-based models, would help them to identify high-value specialists to refer their patients to. Performance data can also be used to assess impact on equity. Identifying actionable, reliable, and valid measures of the cost and quality of care delivered by specialist physicians across diverse settings and practice arrangements is a core challenge.

Starting this year, the Innovation Center is assessing data shared in ongoing specialty and population-based models and programs,[13] and we are considering how to refine and enhance data to support greater coordination and integration across primary and specialty care. The Innovation Center will work with stakeholders and experts to provide critical feedback on the development of this element of the specialty care strategy. For example, as required by Congress[14], CMS developed 28 episode-based cost measures for inclusion in the Merit-based Incentive Payment System (MIPS)[15], which can serve as a foundation for deploying enhanced data and dashboards on specialist providers, with quality measures to ensure that value is defined based on both cost and quality of care.[16] Existing data are available to providers as feedback on their own performance, but not yet widely available to referring providers. The Innovation Center plans to explore and test ways to make these measures available in population-based models to bolster referrals to high-value specialists.

The Innovation Center can also provide technical support and support alignment across payers by standardizing definitions for an episode of care delivered by a specialist, whether it be in the outpatient or institutional setting. Doing so would facilitate consistency in the marketplace by allowing comparisons of spending and quality across multiple payers and supporting increased accountability for and subcontracting around conditions with downstream hospitals, specialist Physician Group Practices, and/or Post-Acute Care providers. Some ACOs have already started developing and overseeing their own “shadow” or “virtual” bundles using existing ACO- attributed lives and claims data to assign services and associated payments to clinical episodes and enable a more nuanced view of performance on procedural or condition specific care. Providing CMS-generated standardized episode data may help more ACOs gain insight into specialist care patterns, better manage beneficiaries’ specialty care needs, and drive value by establishing their own episode payment initiatives.

Element #2: Maintain Momentum on Acute Episode Payment Models and Condition-Based Models

Stakeholders and experts have asked that CMS design episode-based payment models to align incentives between specialists and population-based model initiatives. To date, the Innovation Center’s episode-based payment models have focused largely on acute care and outpatient hospital episodes to improve beneficiaries’ experience of specialty care and to provide opportunities for specialists to engage in value-based payment models. CMS implemented both mandatory (CJR) and voluntary (BPCI, BPCI Advanced) model tests, all of which drove and continue to drive essential care delivery changes in the transition between hospitals and post-acute care.[17],[18] Moving forward, CMS plans to build on this care transition transformation to better align episodic and longitudinal, population-based incentives.

To maintain momentum among providers and health systems that are committed to value-based care and have invested in transformation of episodic care, CMS has announced that BPCI Advanced will be extended for two years, with technical revisions aimed at sustaining and growing participation. These important changes included revisions to the pricing methodology to balance participation incentives with the need to meet statutory requirements by reducing the discount for medical clinical episodes from 3 to 2 percent and reducing the Peer Group Trend Factor Adjustment cap for all clinical episodes from 10 to 5 percent, among others. A new application opportunity will be available in early 2023, and new convener participants will be required to be Medicare-enrolled providers or suppliers or ACOs, which will support increasing integrated care for beneficiaries through ACO management of specialty conditions and care.

During the period that the BPCI Advanced model is extended, the Innovation Center will pursue the development of a mandatory episode payment model designed to build on the lessons learned from BPCI, BPCI Advanced, and CJR. A successor episode payment model would aim to improve care across transitions, which is a common point in the care journey where lapses in quality occur and which are often beyond the reach of primary care-based ACOs. Based on learnings from our voluntary episodic models and stakeholder feedback, a mandatory approach can further improve and standardize care for beneficiaries across hospital-based and post-acute care transitions, while also avoiding risk selection in participation decisions. We will also focus on how a mandatory model design can increase beneficiary access and provider participation in value-based payment arrangements, especially in underserved areas, and advance health equity. The Innovation Center is examining potential design features to focus on the beneficiary’s transition of care, such as a shorter, 30-day episode to target readmissions and complications while limiting overlap and facilitating a smooth transition back to their population-based, longitudinal providers. Design features under consideration will seek to balance the incentives and requirements to advance equity and to ensure synergistic overlap between care delivery models. The Innovation Center plans to continue to seek external stakeholder feedback to optimize these design parameters for beneficiaries and providers. 

Finally, we will continue our commitment to implement models that focus on special populations or specific conditions where specialist providers typically provide the majority of care for beneficiaries over a defined period of time. In June 2022, we announced the Enhancing Oncology Model (EOM), which will begin in 2023. EOM builds on lessons learned from the Oncology Care Model (OCM), which ended in mid-2022, and feedback from the oncology community to further advance the journey in value-based care in oncology. We also continue our focus on improving care for beneficiaries with kidney disease through innovative models including the Kidney Care Choices (KCC) model, launched in January 2022, which builds upon the existing Comprehensive ESRD Care (CEC) Model to reduce the cost and improve the quality of care for patients with late-stage chronic kidney disease and ESRD. Provider organizations with specialized expertise, as opposed to primary care-based ACOs, appear to more effectively manage beneficiaries with intensive, complex needs, such as those requiring kidney care.[19]

Element #3: Create Financial Incentives within Primary Care for Specialist Engagement

For more than a decade, the Innovation Center has tested models to increase access to advanced, integrated primary care. Lessons learned from previously tested and current models are informing future primary care model designs, as is the National Academies of Sciences, Engineering, and Medicine (NASEM) report on primary care published in 2021. Ensuring Medicare and Medicaid beneficiaries have access to high-quality primary care that is integrated, coordinated, and person-centered is a critical first step to realizing improved and equitable population health outcomes.

The integration and coordination of primary and specialty care has not been an explicit focus of previous primary care model tests and remains a barrier to beneficiaries receiving high-quality care.  Beneficiaries are referred to 50 percent more specialists today than in 2000, making outpatient specialty care increasingly more fragmented[20]. Additionally, evidence supports that beneficiaries experience inefficient care, poorer quality of care, and waste due to limited communication between primary care providers and specialists[21]. Underserved beneficiaries, in particular, face significant challenges accessing outpatient specialty care, often leading to worse outcomes [22]

More directly engaging specialists in primary care value-based payment models requires both short- and long-term strategies. In the short term, the Innovation Center intends to test strategies that incentivize integration and coordination between primary care and specialty care both before and after the point of initial referral. Strategies could include increasing transparency on specialist performance to aid primary care physicians in making informed referral decisions and incentivizing the use of e-consults to support comprehensive care and to potentially prevent an unnecessary specialty referral.[23]  These strategies alone, however, are not expected to fully engage specialists in value-based care. Given such, in the long term, the Innovation Center will examine capitated payments to specialists for defined conditions within the context of longitudinal, population-based models.

Element #4: Create Financial Incentives for Specialists to Affiliate with Population-based Models and Move to Value-Based Care

Over the longer term, CMS may enhance incentives to manage specialty care within population-based models through several mechanisms. First, beneficiary alignment changes may be an effective lever to influence and integrate specialty care. Beneficiary alignment algorithms may start to include expanded specialty care services and institutional care to encourage management of specialty-focused conditions.

Further, the Innovation Center will work with stakeholders to explore developing subpopulation targets for high-volume or high-cost conditions. Through these targeted cost and quality measures, ACOs may begin to focus efforts on managing the highest cost, most complex care, particularly for cardiovascular, orthopedic, and pulmonary conditions. However, the first element (see above) to provide tools that provide information on specialist performance is a necessary first step, and in some cases may be sufficient for some ACOs to focus on subpopulations. For those ACOs still developing this type of capacity, future population-based models may require Innovation Center support. These efforts will have to recognize how increasing hospital vertical integration will affect incentives and care design. For instance, evaluation results reveal differences in ACO[24] and advanced primary care model performance[25] for hospital-affiliated versus independent practices. These results suggest different supports may be needed for independent, physician-led versus hospital-affiliated population-based model participants.

Moving Forward

The Innovation Center has identified four key areas to improve access to high-quality integrated specialty care and is proposing a comprehensive specialty strategy to address each area: 1) enhance transparency in clinician performance, 2) continued deployment of episode payment models that align with ACOs and primary care, including mandatory models, 3) supporting specialists to further embed in primary-care focused models, and 4) creating incentives within population-based models to encourage specialty care integration.

While we work on improvements to value-based payment models and to restructure payment, our goal remains ensuring every beneficiary gets the best possible care, while advancing equity, promoting affordability, and expanding access to whole-person care.


[1] Papanicolas I, Woskie LR, Jha AK. Health Care Spending in the United States and Other High-Income Countries. JAMA. 2018 Mar 13;319(10):1024-1039. doi: 10.1001/jama.2018.1150. PMID: 29536101.

[2] Barnett ML, Bitton A, Souza J, Landon BE. Trends in Outpatient Care for Medicare Beneficiaries and Implications for Primary Care, 2000 to 2019. Ann Intern Med. 2021 Dec;174(12):1658-1665. doi: 10.7326/M21-1523. Epub 2021 Nov 2. PMCID: PMC8688292.

[3] Timmins L, Urato C, Kern LM, Ghosh A, Rich E. Primary care redesign and care fragmentation among Medicare beneficiaries. Am J Manag Care. 2022 Mar 1;28(3):e103-e112. doi: 10.37765/ajmc.2022.88843. PMID: 35404554.

[4] Timbie JW, Kranz AM, Mahmud A, Damberg CL. Specialty care access for Medicaid enrollees in expansion states. Am J Manag Care. 2019 Mar 1;25(3):e83-e87. PMID: 30875176; PMCID: PMC6986199.

[5] Ndumele CD, Cohen MS, Cleary PD. Association of State Access Standards With Accessibility to Specialists for Medicaid Managed Care Enrollees. JAMA Intern Med. 2017 Oct 1;177(10):1445-1451. doi: 10.1001/jamainternmed.2017.3766. PMID: 28806455; PMCID: PMC5710214.

[6] McConnell KJ, Charlesworth CJ, Zhu JM, Meath THA, George RM, Davis MM, Saha S, Kim H. Access to Primary, Mental Health, and Specialty Care: a Comparison of Medicaid and Commercially Insured Populations in Oregon. J Gen Intern Med. 2020 Jan;35(1):247-254. doi: 10.1007/s11606-019-05439-z. Epub 2019 Oct 28. PMID: 31659659; PMCID: PMC6957609.

[7] Nikpay SS, Richards MR, Penson D. Hospital-Physician Consolidation Accelerated in The Past Decade in Cardiology, Oncology. Health Aff (Millwood). 2018 Jul;37(7):1123-1127. doi: 10.1377/hlthaff.2017.1520. PMID: 29985694.

[8] Whaley CM, Arnold DR, Gross N, Jena AB. Physician Compensation in Physician-Owned and Hospital-Owned Practices. Health Aff (Millwood). 2021 Dec;40(12):1865-1874. doi: 10.1377/hlthaff.2021.01007. PMID: 34871086.

[9] Centers for Medicare and Medicaid Services. Pathways for Specialty Care Coordination and Integration in Population-Based Models. June 17, 2022. Accessed September 29, 2022.

[10] Patient pathway figure adapted from Comprehensive Specialized Care: The Missing Piece in Value-Based Care Reform [PowerPoint slides]. Duke-Margolis Center for Health Policy, UT Health-Dell Medical Musculoskeletal Institute, Signify Health (2022).

[11] Anderson D, Villagra VG, Coman E, Ahmed T, Porto A, Jepeal N, Maci G, Teevan B. Reduced Cost Of Specialty Care Using Electronic Consultations For Medicaid Patients. Health Aff (Millwood). 2018 Dec;37(12):2031-2036. doi: 10.1377/hlthaff.2018.05124. PMID: 30633678.

[12] AAMC Project CORE: Coordinating Optimal Referral Experiences. Accessed September 29, 2022.

[13] These initiatives include BPCI Advanced, the Medicare Shared Savings Program, and the upcoming ACO Realizing Equity, Access, and Community Health (REACH) Model.

[14] Section 1848(r) of the Social Security Act, as added by section 101(f) of MACRA

[15] CMS developed 28 episode-based cost measures: of these, 23 are currently used in MIPS and 5 were submitted to NQF (National Quality Forum) measure review in the Spring 2022 cycle. CMS is currently developing 5 episode-based measures as part of Wave 5 (2022-23), which are targeted for submission to NQF measure review in the Spring 2023 cycle.

[16] Center for Medicare and Medicaid Services Quality Payment Program Feedback:

[17] CMS Bundled Payments for Care Improvement Advanced Model: Third Evaluation Report. The Lewin Group. February 2022. Accessed October 11, 2022.

[18] CMS Comprehensive Care for Joint Replacement Model: Performance Year 4 Evaluation Report. The Lewin Group. September 2021. Accessed October 11, 2022.

[19] Ullman DF, Boyer GJ, Negrusa B, Hirth RA, Wiens J, Marrufo G. Medicare's Specialty-Oriented Accountable Care Organization: First-Year Results For People With End-Stage Renal Disease. Health Aff (Millwood). 2022 Jun;41(6):893-900. doi: 10.1377/hlthaff.2021.01856. PMID: 35666977.

[20]Barnett ML, Bitton A, Souza J, Landon BE. Trends in Outpatient Care for Medicare Beneficiaries and Implications for Primary Care, 2000 to 2019. Ann Intern Med. 2021 Dec;174(12):1658-1665. doi: 10.7326/M21-1523. Epub 2021 Nov 2. PMID: 34724406; PMCID: PMC8688292.

[21]Vermeir P, Vandijck D, Degroote S, Peleman R, Verhaeghe R, Mortier E, Hallaert G, Van Daele S, Buylaert W, Vogelaers D. Communication in healthcare: a narrative review of the literature and practical recommendations. Int J Clin Pract. 2015 Nov;69(11):1257-67. doi: 10.1111/ijcp.12686. Epub 2015 Jul 6. PMID: 26147310; PMCID: PMC4758389.

[22] Cyr ME, Etchin AG, Guthrie BJ, Benneyan JC. Access to specialty healthcare in urban versus rural US populations: a systematic literature review. BMC Health Serv Res. 2019 Dec 18;19(1):974. doi: 10.1186/s12913-019-4815-5. PMID: 31852493; PMCID: PMC6921587.

[23] Anderson D, Villagra VG, Coman E, Ahmed T, Porto A, Jepeal N, Maci G, Teevan B. Reduced Cost Of Specialty Care Using Electronic Consultations For Medicaid Patients. Health Aff (Millwood). 2018 Dec;37(12):2031-2036. doi: 10.1377/hlthaff.2018.05124. PMID: 30633678.

[24] Avalere analysis of CMS 2018 Shared Savings Program Accountable Care Organization Public Use File. Accessed September 29, 2022

[25] Table 5.3 Summary of CPC+ impacts on service use and Medicare expenditures for Medicare FFS beneficiaries over the first four program years, for select practice subgroups. Independent Evaluation of Comprehensive Primary Care Plus (CPC+). Fourth Annual Report. Mathematica Policy Research. May 2022. Accessed September 29, 2022.