Medicare Health Care Quality Demonstration

Section 646 of the Medicare Modernization Act (MMA) mandated a 5-year demonstration program under which the Centers for Medicare & Medicaid Services (CMS) would test major changes to improve quality of care while increasing efficiency across an entire health care system.


CMS intended to use this demonstration to identify, develop, test, and disseminate major and multi-faceted improvements to the health care system. Broadly stated, the goals of the Medicare Health Care Quality demonstration were to:

  • Improve patient safety;
  • Enhance quality;
  • Increase efficiency; and
  • Reduce scientific uncertainty and the unwarranted variation in medical practice that results in both lower quality and higher costs.

Initiative Details

These projects involved the use of alternative payment systems for items and services provided to beneficiaries, and potentially involved modifications to the traditional Medicare benefit package. The provision included a budget neutrality requirement over the 5-year duration of the program. Physician groups, integrated delivery systems, and regional health care consortia were eligible to apply for the demonstration.

Results from the respective participants are listed below:

Additional Information


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