Category Archives: Centers for Medicare and Medicaid Innovation (CMMI)

CBO Report finds CMMI hasn’t saved Medicare any money

Posted on by • Posted in ACA, Accountable Care Organization (ACO), Centers for Medicare and Medicaid Innovation (CMMI), Congressional Budget Office (CBO), Health Policy, High Prices, Medicare, Utilization Trends • Leave a comment

https://mailchi.mp/9fd97f114e7a/the-weekly-gist-october-6-2023?e=d1e747d2d8

Late last week, the Congressional Budget Office (CBO) released its analysis of the Center for Medicare and Medicaid Innovation (CMMI)’s spending outlays, revealing that in its first decade of operations it produced a $5.4B net increase in federal spending instead of a projected $2.8B reduction. 

Moreover, CBO revised its CMMI projection for 2021-2030 from a $77.5B net spending reduction to a $1.3B increase, predicting CMMI may only begin to generate annual savings in 2031. CBO says its updated projections largely reflect revised expectations on CMMI’s ability to identify and scale models that actually reduce Medicare spending.

CMMI was created by the Affordable Care Act (ACA) in 2010 to test new payment models and other initiatives for reducing the federal government’s healthcare costs, but of the nearly 50 models it has run, only four have become permanent programs.

The Gist: This critical report confirms what many in the healthcare world already believed: the ACA’s value-based care initiatives have largely struggled to reduce Medicare spending. 

There are plenty of policy factors to blame, including the lack of mandatory participation for providers and conflicting incentives across care models, but one factor left out of the CBO report is CMMI’s disproportionate emphasis on accountable care organizations (ACOs) to produce meaningful cost savings, even as years of data proved otherwise. 

ACOs are designed to reduce spending primarily through utilization management, but research has shown that prices, not utilization, are responsible for the US’s high medical spend relative to other countries.

While CMMI’s mission is still laudable and important, the center must make good on its 2021 “strategic refresh” if it hopes to continue receiving Congressional support.

Biden administration announces three new drug pricing pilots

Posted on by • Posted in Centers for Medicare and Medicaid Innovation (CMMI), Health Insurance Coverage Adequacy, Health Policy, Healthcare Reform, High Drug Prices, Out of Pocket Expenses • Leave a comment

https://mailchi.mp/89b749fe24b8/the-weekly-gist-february-17-2023?e=d1e747d2d8

This week, the Biden administration released a roadmap for implementing three new drug pricing pilots through the Centers for Medicare and Medicaid Innovation (CMMI). These models seek to offer certain common generic drugs to Medicare beneficiaries for two dollars per month, test new ways for how Medicaid pays for expensive cell and gene therapies, and explore alternative reimbursement models for drugs that receive accelerated Food and Drug Administration approval. 

The Gist: On the heels of last week’s State of the Union Address, the announcement of these pilots exemplifies the kind of health policy efforts we expect across the remainder of President Biden’s current term: smaller, incremental initiatives to curb healthcare costs at the margins.

But given that all these initiatives have lengthy timelines, in part to allow for industry input, they will likely require the support of the next administration, Biden’s or otherwise, to reach full implementation.