Insurers Applaud New CMMI Push for Risk-Based Contracting

  • The Biden administration has revamped the strategy of the Center for Medicare and Medicaid Innovation: In the coming years, CMMI will focus on consolidating models, increasing insurer and provider participation in models, and advancing equity — and it aims to have most Medicare and Medicaid members served by value-based payment models by the end of the decade. Health care insiders applauded the new direction, saying the “strategy refresh” should bring the agency closer to its original mission and make its budget go further.

    CMMI has tested more than 50 models since its creation in 2010 as part of the Affordable Care Act. Experts outside the agency have criticized the proliferation of models: The Medicare Payment Advisory Commission (MedPAC) recommended in June that HHS “should implement a more harmonized portfolio of fewer alternative payment models that are designed to work together to support the strategic objectives of reducing spending and improving quality.”

    In addition, MedPAC also called on CMMI to streamline its reporting, recommending “the same set of national provider identifiers to compute both performance-year and baseline assignment for accountable care organizations in the Medicare Shared Savings Program.”

    “It’s pretty bold, to have pretty much everybody in Medicare, and most people in Medicaid, in some kind of value-based payment model by 2030,” Katherine Hempstead, Ph.D., tells AIS Health, a division of MMIT. Hempstead is a senior policy adviser at the Robert Wood Johnson Foundation. “I think it’s doubling down on the original premise. That’s the way I read it — to say, ‘We definitely think value-based care is the way to go, but we need to make it easier.’”

    Hempstead thinks the new approach may “reduce the barriers to participating for providers.” In addition,  “that focus on equity was definitely something that wasn’t as explicit originally.”

    Hempstead describes the new strategy as, “instead of having 50 different models, have fewer models that more people can participate in. Reduce all the cacophony in the marketplace with a lot of different payment models and a lot of different sorts of signals and incentives to providers — create fewer but stronger signals.”

    David Ault, an attorney and counsel at Faegre Drinker, tells AIS Health that the new approach draws a contrast between the Trump and Biden administrations’ strategies for CMMI. Ault worked at CMMI during both the Obama and Trump administrations.

    “This administration is taking an approach more similar to the Obama administration, not surprisingly,” Ault says, observing that many Biden administration figures, including CMMI Director Liz Fowler, previously worked in the Obama administration.

    He says the Biden administration is “taking this position of, ‘We want more providers, and therefore more beneficiaries in value-based care. And even if the amount of savings per provider is not as great, we’re still going to end up having more savings.’ It’s a different approach to getting to greater Medicare savings.”

    By contrast, Ault explains, the Trump administration “was very heavily focused on reducing expenditures for the Medicare program through competition. What they wanted to do was bring in the participants into models that were going to be the most competitive with each other, and therefore drive down costs. They wanted to see big savings to Medicare — they were happy to see fewer organizations [but] with greater savings.”

    Ault adds that the Biden administration seems to be mindful of “the idea that history and studies have shown that, for an organization to be successful in value-based care, it takes a few years. You bring in organizations and give them the opportunity to transform the way they’re delivering care. And if you make it sustainable for those organizations, then ultimately, they’ll be able to be successful. And by successful, I mean providing high-quality care while reducing expenses to Medicare. Another main goal is [to address the] ongoing problem of the size of the model portfolios — how many models there are, and how they bump into each other and intersect with each other. Obviously, the more models there are, the more they overlap.”

    Experts Await More Specifics

    Lauren Cricchi, a consultant at Avalere Health, tells AIS Health that the new approach at CMMI fits the administration’s larger goals — though she emphasizes that the specifics of coming models will indicate how much success CMMI will have with the new strategy.

    “It definitely was in line with what we’ve seen from them [the Biden administration] thus far,” Cricchi says. “But it definitely was helpful to see some examples of potential actions that they might take to meet their aims over the next decade. I think we’re still waiting to see concrete steps from the Innovation Center to see how they actually put this plan into action. For example, we’ve been waiting with bated breath to see what they do with the future of the oncology care model. And with the direct contracting model, if they’ll reopen that. They’re pretty tight-lipped on specific models.”

    CMS has said it will cancel the Next Generation ACO Model in 2022, and has directed participants to apply to the Global and Professional Direct Contracting Model (GPDC) for 2022 instead. So far, the GPDC offers high levels of risk sharing — 50% or 100% — and “benefit enhancements” such as telehealth. In addition, it features a waiver of the three-day Skilled Nursing Facility rule and flexibilities not available in NextGen that are aimed at improving care coordination, reducing unnecessary utilization and generating more savings. The GPDC also features a capitated, risk-adjusted monthly payment for covered services.

    Updates Are More Likely Than Overhauls

    Cricchi says CMS is reviewing the model, though the agency seems to be focused on the metrics that are used to evaluate quality and effectiveness rather than the design of the model itself.

    “A lot of what they put on pause was more to reassess and figure out how these models will fit into their strategy,” Cricchi says. That approach is different from “not continuing to move them forward. So I think they’re really reassessing and trying to improve the portfolio that they already have. We shouldn’t expect to see an overhaul of what they have now, necessarily. I think that there will be, hopefully, some updates to the models that already exist to incorporate the stakeholder feedback that they’re getting. Because a lot of the criticism that they’ve gotten is that, while these models might make a big splash [at first], when the actual evaluation comes out, they don’t move the needle in terms of quality or cost. A lot of them are actually costing Medicare money…what qualifies as success is fairly limited. I think that this focus on health equity, and some of the stakeholder feedback may broaden the definition of success for some of these models.”

    Michael Bagel, director of public policy for the Alliance of Community Health Plans (ACHP), says that the carriers he works with are excited about the new approach.

    “The fact that CMMI has come forward and said they want to do less models but be more reflective of whole-person-centered care, and that they’re allowing other parties to come in participate — it’s exciting,” he says. “It’s an opportunity for us to have more of an ability to participate than we previously did. Many of our health plans partook in models and are currently participating in models.”

    Plans May Get More Chances to Join In

    The new approach should give even more ACHP members more opportunities to participate in models, he adds.

    “One of the big challenges with CMMI, for a long time, has been that there’s been very little risk perspective,” Bagel says. “Providers who joined it — there was low risk, either downside or upside. The ability to make money was limited, just to secure more participation. For our members, as they work with providers that are really looking at value-based systems — how can they be more thoughtful about really getting providers incentivized to be thoughtful about whole-person care? How do they think about coordination? How are they incentivizing outcomes instead of processes, or patient experience instead of just quantitative measurement?”

    Bagel says that the difficulty in measuring intangible goals like patient satisfaction also applies to equity concerns.

    “One of the biggest struggles in health equity today is we don’t know how to measure it,” Bagel says. “We don’t know how to distinguish, demographically, how things are being delivered in a comprehensive way. One of the downsides of everyone making their own efforts is that we can’t know who’s making the best progress, who has the best return on investment, who’s making the biggest progress because we don’t have a baseline measurement to compare and share these successes.”

    “The more CMMI can encourage that for all providers — and partner with health plans to learn and disseminate best practices — will lead everyone towards a more affordable, comprehensive, high-quality health care system,” Bagel says.

    Contact Ault at, Bagel via Tricia Busch at, Cricchi at and Hempstead at

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  • Peter Johnson

    Peter has been a reporter for nearly a decade. Before joining AIS Health, Peter covered a wide variety of topics in his hometown of Seattle, where he continues to live. Peter’s work has appeared in publications including The Atlantic and The Stranger. Peter attended Colby College.

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