Author: Abe Sutton, Director of the Center for Medicare and Medicaid Innovation and Deputy Administrator for the Centers for Medicare & Medicaid Services
The Center for Medicare and Medicaid Innovation (the Innovation Center) has played a critical role in advancing a policy agenda that helps Americans live healthier lives. Over the last 15 years, the Innovation Center has tested alternative payment models that positioned states, payers, health systems and providers as the catalysts for change. The goal of these tests is to improve quality and outcomes and reduce costs for taxpayers. The Innovation Center has made investments in the necessary infrastructure to support broad system reform. Our vision is to take the learnings from these investments to build a health system that empowers people to drive and achieve their own health goals and Make America Healthy Again.
This vision applies across the range of populations the Innovation Center serves, encompassing a broad range of ages, geographies, and clinical and related health needs. From the growing cohort of Americans in their eighties and beyond — and often their caregivers — to those aging into Medicare at 65, to those with disabilities and varying resource needs, to children, and to those living in rural communities, the Innovation Center aims to support building healthier lives.
Reflecting on the range of populations the Innovation Center serves crystallizes the importance of the mission. Health care remains local. People want evidence-based programs, information and choices that empower them to attain the care they need in their communities. They want this care from the organizations of their choosing, delivered in a manner that is convenient, accessible, and effective. This might include care that is virtual, digital in nature, at an office, or provided in the home. Regardless, the choice should be one that people (and the caregivers who support them) are empowered to make as consumers.
To accomplish this vision, the Innovation Center will be guided by three interrelated strategic pillars. Together, the following pillars will support the varying needs of the populations the Innovation Center serves:
- Promote evidence-based prevention
- Empower people to achieve their health goals
- Drive choice and competition for people
The pillars are underpinned by a foundational principle, which is to protect the federal taxpayer, in line with the Innovation Center’s statutory mandate to produce cost savings. As responsible stewards of federal taxpayers’ dollars, the Innovation Center will focus on models that show the greatest promise for generating savings and improving quality.
The Innovation Center will work expeditiously toward the future of health — building a system in which people are empowered to achieve their health goals and providers are incentivized to compete to deliver high-quality, efficient care and improve the health outcomes of their patients.
In addition to building on the evidence base generated by 15 years of testing new payment methodologies, the Innovation Center will partner with and learn from advancements in the private sector to drive transformation across the health system.
The Innovation Center will continue to evolve and design new Original Medicare models by leveraging payment and regulatory flexibilities, such as waivers, benefit enhancements and benefit enhancement incentives. Additionally, we will expand work to test improvements in Medicare Advantage (MA), drive better spending and outcomes for prescription drugs, and promote efficiency through devices and technology, while continuing to work with states to drive multi-payer approaches to state-level delivery system transformation via existing and new model concepts. Collectively, these models will enable the Innovation Center to realize its vision of building healthier lives through the permanent Medicare, Medicaid and CHIP programs.
Promote Evidence-Based Prevention
Prevention is the cornerstone of healthy living. The Innovation Center will incentivize preventive care and health promotion to help people avoid illness and optimally manage chronic disease. The focus on prevention will include: primary prevention activities to avoid disease occurrence (e.g., health and nutrition counseling, tobacco cessation); secondary prevention to detect early signs of disease before symptoms (e.g., colon cancer screenings); and tertiary prevention, that is, disease management, to slow the progression of chronic disease and improve outcomes (e.g., diabetes and blood pressure control).
Models will promote access to and use of evidence-based preventive services known to improve outcomes for people and reduce costs to the health system. These will include successful elements of prior primary care models, specialty models, and Accountable Care Organization (ACO) models. Additionally, the Innovation Center will contribute to the evidence base of prevention and accelerate progress by testing innovative best practices in medicine and offering new provider and beneficiary incentives. The Innovation Center will embed preventive care across its portfolio by modifying existing models and developing new models that include the features described below, assessing which are working for people and the health system during implementation and evaluation.
Embed Preventive Care in All Model Designs
Moving forward, existing Innovation Center models will be modified and new ones will be designed to increase the access and uptake of primary, secondary, and tertiary prevention, including incentives for both people and providers. There will be opportunities to engage community-based initiatives. Innovation Center models will include prevention and health promotion services and activities that have evidence of improving patient outcomes, such as potentially providing functional and lifestyle medicine interventions to promote physical activity and good nutrition, addressing cardiovascular risk, providing vaccinations, and screening for cancer. This will also include evidence-based activities to slow disease progression, akin to those tested in Innovation Center models focused on kidney disease.
Model tests may include options for working directly with individual people as well as with community-based organizations to resolve nutrition needs, provide disease management counseling and lifestyle education and services (e.g., exercise and nutrition support), or offer access to evidence-based alternative medicine. Additionally, models will test beneficiary engagement incentives tied to health promotion and prevention, such as sustained lifestyle changes that measurably improve health status and outcomes. Consideration will be given to prevention and health promotion across the life span and directed towards the existing disease burden of the people we serve — including prevention and optimal management of chronic diseases in childhood as well as services to slow decline of function and cognition in older Americans.
Last, models could grant providers access to new waivers that give flexibility to deliver and incentivize preventive care. For instance, we will explore waivers for accountable care entities that assume global risk to provide durable medical equipment (DME) that may bypass National Coverage Determinations if they support transition to or remaining in the home. Other examples are reduced cost-sharing for high-value or preventive services and payments to caregivers to better support those experiencing cognitive or functional decline.
Measure the Impacts of Preventive Care
The Innovation Center has tremendous potential to shape the care people receive. To do so, model tests and evaluations must be designed to identify the most successful preventive care policies and demonstrate their impacts on health outcomes and costs. Models will ensure that quality measures and evaluations are focused on the preventive health outcomes that matter most to people, such as days at home for frail beneficiaries or minimizing disease burden for children or seniors. In some cases, the impact of prevention will take place over a longer period, and we will seek intermediate markers to track success. Due to the size, reach and scale of its models, the Innovation Center is also uniquely positioned to leverage qualitative and quantitative data to measure the impact of provider and beneficiary incentives on patient outcomes. With this data, we can build the evidence base necessary to scale models/model elements into permanent programs.
Future model features:
- Directly engage with providers and beneficiaries on disease prevention activities, including collaboration with community-based organizations
- Include waivers to incentivize preventive care
- Offer access to evidence-based alternative medicine
- Evaluate for preventive outcomes, such as days at home for frail beneficiaries
Empowering People to Achieve Their Health Goals
The health system is fragmented and challenging for people to navigate. Therefore, Innovation Center models and initiatives will feature tools, information and processes that better connect people to their health data and empower them to make informed health decisions alongside the patient-provider relationship. This includes unlocking data access across all models and aligning financial incentives for people and their providers to achieve optimal health.
Unlock Data Access
Access to relevant and usable data can help people better understand their health status, set goals with their providers, avoid out-of-pocket costs, and engage in their care more effectively. These are key strategies to fulfilling the Innovation Center’s mission to improve quality and reduce health system costs. Building on the experience from past initiatives to drive data transparency for people (e.g., Blue Button and public reporting websites), the Innovation Center will leverage new technology to help people drive their individual health goals. Models could test how tools — such as mobile device applications, shared decision-making tools, and health education materials — can empower people to better manage chronic conditions and improve their health and well-being. Decision making may be further improved with access to transparent and accessible data on providers and services, including community-based providers and organizations. Innovation Center models can provide data on cost and quality performance of providers and foster the development of consumer tools that are used across the health system. In addition, Innovation Center models will continue to push forward data transparency among providers so that information on health care utilization will also flow more effectively from hospitals and outpatient specialty services to the beneficiary’s primary care provider and between health plans and providers.
Align Financial Incentives with Health
To fully realize the health benefits of data access (e.g., physical, mental and functional health goals), individual and provider incentives must be aligned. The Innovation Center will continue to test and scale models in which all beneficiaries are receiving care from entities with direct accountability for health outcomes and costs. Global risk and total cost of care models in Original Medicare, Medicare Advantage and Medicaid provide the flexibility in payment and care delivery to optimally use data and other tools to promote health.
As we contract with organizations bearing two-sided risk or receiving total capitation in Medicare and Medicaid, we will continue to support the growth of provider-payment approaches that incentivize prevention and health. This will entail new Innovation Center mechanisms for supporting patient-centered payments within Medicare Advantage and within ACOs and other longitudinal entities (e.g., incorporating plan adoption of advanced payment into quality incentives or requiring a minimum percentage of provider payments be risk-based). The Innovation Center will also explore testing specialty-focused longitudinal care within Medicare Advantage and Medicaid.
Innovation Center models will also seek to increase the affordability of care. Mechanisms could include waivers that support predictable cost-sharing for certain services, drugs, or devices that improve outcomes and reduce costs as well as value-based drug and insurance designs. This could also include structural reform to drug pricing that supports innovation and access.
Future model features:
- Increase beneficiary access to information and tools, including mobile-device applications, for disease management and healthy living
- Publish data about providers and services, including cost and quality performance, to support beneficiary decision making
- Issue waivers to support predictable cost-sharing for certain services drugs, or devices
Drive Choice and Competition
The Innovation Center can play a significant role in testing models and features aimed at promoting competition in health care markets. Models can provide an opportunity for independent providers and practices to be rewarded for better care while also promoting patient choice in both coverage and sites of care. In parallel, Innovation Center models can drive more meaningful options for people and increase competition through market access for additional providers while simplifying model participation to make it less burdensome and more sustainable. Models can also structure more effective market mechanisms for prescription drug sectors to address misaligned incentives that inhibit price competition.
Increase Independent Provider Participation in Value-based Payment Programs
Independent provider practices, community health centers, rural providers and provider-led ACOs are key partners in maintaining choice in health care. Innovation Center models will be designed to level the playing field for providers practicing independently and outside of health system or health plan ownership to increase competition in markets. Models may expand the use of advanced shared savings and prospective payments to support independent provider practice participation in models. This could include collecting losses over longer time periods for independent providers, enabling upfront investment in patient care with advances based on collateralization methods the Innovation Center designates. New models or tracks within models will spur competition by stimulating and supporting a wider variety of participating providers and practices, such as those in rural communities as well as those who focus on complex care and specialty populations.
Promote Choice in Care
Medicare Advantage models will be designed to increase high-value coverage options and to help beneficiaries select plans that best meet their health needs. Features of a model could include testing changes to payment for MA plans, such as testing the impact of inferred risk scores, regional benchmarks, or changes to quality measures that better align with promoting health.
People should also have more choice on where they receive care and who comprises their care team. Innovation Center models can require site-neutral payments across settings to reduce costs and reinvest hospital capacity in outpatient and community-based care through changes to certificate of need requirements. Models can support expanded scopes of practice, virtual care, and at-home care so people can receive care more flexibly.
Improve Administration of Value-based Payment Programs
Participation in Innovation Center models often comes with financial risk and reward — but also with administrative burden that can make participation costly and difficult. Across its portfolio, the Innovation Center can increase predictability for participants by minimizing significant mid-model changes. Additionally, the Innovation Center will standardize model design features where appropriate (e.g., quality measures, benchmarking and attribution) to reduce the administrative burden of participating in advanced alternative payment models and support multi-payer alignment.
Consistent with its statutory requirements to realize cost savings through model tests, the Innovation Center will assess models across their life cycles for early and ongoing indicators of savings to the taxpayer. As models are determined to demonstrate value to the system and to encourage investment in new areas, the Innovation Center will consider allowing models to operate until final evaluation results are available, if no successor model is designed and early results do not preclude certification. This will support final decisions about a model’s future when the most comprehensive results are available.
Future model features:
- Expand using advanced shared savings and prospective payments to support independent provider practice participation in models
- Reinvest hospital capacity in outpatient and community-based care by changing certificate-of-need requirements
- Standardize design features, such as quality measures, to reduce administrative burden
Protecting the Federal Taxpayer
Protecting the federal taxpayer is a foundational principle and statutory intent that underpins all Innovation Center models and initiatives. Aligning existing models and initiatives with our strategic objectives will shift financial risk from taxpayers. The work described in the pillars above has potential to birth a system that drives savings based on health promotion and relies less on expensive models of care. We will also ensure protection of the taxpayer through key additional features. Model reviews and new model designs could:
- Require that all alternative payment models involve downside risk and that a growing proportion of Medicare and Medicaid beneficiaries are in global downside risk arrangements
- Require that providers bear some of the financial risk and that conveners cannot hold all financial risk
- Reduce the role of state government in rate setting for health care services
- Refine and simplify model benchmarking methodology
- Ensure funds reach those most in need through proper and non-discriminatory provision of funds for health care services
- Prioritize high-value care and services and incentivize reductions of unnecessary utilization
- Ensure all model tests are fiscally sound with a pathway to certification
Conclusion and Next Steps
The Innovation Center’s next phase will focus on testing models that transform the U.S. health system into one that builds healthier lives — through prevention, individual empowerment, and choice and competition. Along with private sector activity, we will realize a vision in which people achieve their health goals and the providers caring for them are directly accountable for their health outcomes and the costs of their care.