The CBO Report and Lessons for CMMI’s Future

After over a decade of projecting that the models initiated by the Center for Medicare and Medicaid Innovation (CMMI) would reduce Medicare spending, eyebrows were raised in health policy circles when the Congressional Budget Office (CBO) issued a recent report estimating that in its first decade of operation, CMMI’s efforts had actually elevated federal spending by $5.4 billion between 2011 and 2020. CBO initially estimated that the agency’s work would result in a net spending decrease of nearly $3 billion over the 2011 through 2020 budget window. Over the 2021 through 2030 budget window, CBO had previously projected that CMMI models would reduce federal spending by $77.5 billion. CBO’s revised estimates now project that CMMI models will increase federal spending by $1.3 billion from 2021 through 2030. There are a couple of important takeaways from this report that can enhance CMMI’s work and lead to more successes moving forward.

First, we’ve already witnessed that CMMI can have its greatest impact in helping to transition the healthcare system from its traditional fee-for-service orientation to a value-based framework. Continuing this progress will lead to greater cost-efficiency within the system, while attaining positive patient outcomes, enhancing equity, and without undermining healthcare quality. In the years to come, this is where CMMI should focus the lion’s share of its work, developing sustainable models that will achieve meaningful savings through patient-centered coordinated care and that have bipartisan support.

And, second, it is critical to get health provider participation in innovative payment and delivery models. CBO also notes that CMMI “might achieve larger net budgetary savings in its second decade by drawing on the lessons from past models when designing new ones.” We must ensure that providers’ incentives to participate in the models are not outweighed by burdens of operating under the model. When new models create onerous burdens on those organizations that might otherwise want to engage, the result is lack of participation. As CBO pointed out in its report, there have been instances in which CMMI models have created inconsistent and even contradictory mandates for providers to follow, creating unnecessary paperwork and expense. Listening to health providers, being responsive to their concerns and ideas, and incentivizing them to participate in new demonstration projects is critical in CMMI’s second decade. Mandatory participation models may seem appealing (although MedPAC has noted some of the limitations and lack of evidence), but it would be better if we are to see savings to create models that are appealing to providers and their patients.

Providers with more value-based care arrangements fared better during the pandemic than those relying on fee-for-service volume-based arrangements. Legislation that helps focus CMMI’s mission on driving toward value-based care should be considered as a way to improve CMMI’s success as opposed to tying its hands.