Voluntary vs. Mandatory Participation

Participating in Innovation Center Models

The CMS Innovation Center designs and tests pilot programs called Alternative Payment Models (models), which reward health care providers for delivering high-quality, coordinated care. Participation in each model may either be voluntary or mandatory, depending on the model’s design.

Voluntary Models

Some CMS Innovation Center models (especially for new concepts or designs) are voluntary, allowing participants (such as providers or payers) to choose whether they want to take part. These models typically require potential participants to complete a rigorous, competitive application process.

Voluntary models can help both CMS and participants investigate new concepts or designs. They are also an option when mandatory designs are not as operationally feasible.

With voluntary participation, organizations can choose model(s) in which they wish to participate. Those that do participate can typically end their participation in a model early, for example, if the model isn’t working for them or if participating is more challenging than expected.

However, this flexibility makes voluntary models more susceptible to selection bias and difficult to evaluate for impact on cost and quality. For example, in models with two-sided risk arrangement, only groups that think they can lower costs (and thereby receive a financial reward) may choose to participate. And, if they find that the financial outcome is different than expected, they may withdraw from the model.

Selection bias can skew evaluation results such that a model’s total cost savings and other outcomes may reflect participant readiness more than the model’s potential impact. Also, the results observed may not generalize well to organizations that did not participate in the model.

Mandatory Models

Mandatory models identify and require specific providers or other organizations to participate, potentially through random selection of geographic areas. Those selected for a mandatory model are subject to the model’s terms and conditions for the duration of the pilot program.

While not required, the CMS Innovation Center sometimes uses a mandatory participation approach for a successor model after first testing the approach with a voluntary model. In other cases, the model design may require mandatory participation to produce generalizable results.

Since mandatory models reduce selection bias, they may have a better chance of lowering costs. In addition, because participants often represent a larger variety of providers across a broader geographic scope, the evaluation results are more likely to be generalizable to a larger population.

Mandatory models are typically established through rulemaking and would require rulemaking for substantial changes.

From Voluntary to Mandatory: Episode-Based (Bundled) Payment Models

The mandatory Transforming Episode Accountability Model (TEAM) builds on lessons learned from prior models including: the Bundled Payments for Care Improvement (BPCI) initiative, the Bundled Payments for Care Improvement Advanced (BPCI Advanced) Model, which was fully voluntary, and the Comprehensive Care for Joint Replacement (CJR) Model, which was primarily mandatory.

These prior models tested episode-based (bundled) payments to support patient transitions from the hospital to either home or a post-acute facility after surgery. The models demonstrated cost savings, more appropriate hospital discharge destination decisions, and reductions in avoidable rehospitalizations.

Before implementing TEAM with mandatory participation, the CMS Innovation Center analyzed successes and failures of these earlier, similar tests to ensure that participants in TEAM would be ready and that the model would work as intended. TEAM builds off the successes of both BPCI Advanced in addressing broader clinical conditions and CJR in demonstrating that a broad range of hospitals can be successful in bundled payment models.

The CMS Innovation Center expects that TEAM will help capture providers new to value-based care, as well as some former participants in BPCI Advanced and CJR, to continue improving care and reducing costs for people with Medicare who are undergoing surgeries.

Originally posted on June 2,2025