The CMS Innovation Center: Innovative Savings Projections?

Avalere has released a report: CMMI’s Financial Impact on Medicare Spending Challenging to Project, which concludes “CMMI’s impact on Medicare spending has not reached earlier projections by the Congressional Budget Office (CBO), demonstrating the difficulty in projecting savings from untested and future unknown alternative payment models.”

Before we delve into the details of Avalere’s findings, let’s take a step back and peek into what goes on these days at The Center for Medicare & Medicaid Innovation (CMMI), which they now like to refer to as the CMS Innovation Center.

The CMS Innovation Center tells us they develop new payment and service delivery models brought about by the Affordable Care Act and other legislation, overseeing a number of specific demonstrations to be conducted by CMS; and implement the Quality Payment Program brought about by MACRA. The demonstrations and QPP were developed with an underlying assumption of savings to be accrues, and Avalere is now finding the savings have missed their targets.

The CMMI site provides tables itemizing the Alternative Payment Models in the Quality Payment Program, which list 50 specific Alternative Payment Models (APMs), plus Other Payer Advanced APMs including 7 Medicaid Other Payer Advanced APMs; 59 Medicare Health Plan Payment Arrangements; and 2 CMS Multi-Payer Payment Arrangements.

The CMMI Site indicates 90 specific demonstration models, which fall under seven categories:

1. Accountable Care
2. Episode-based Payment Initiatives
3. Primary Care Transformation
4. Initiatives Focused on the Medicaid and CHIP Population
5. Initiatives Focused on the Medicare-Medicaid Enrollees (dual eligible)
6. Initiatives to Accelerate the Development and Testing of New Payment and Service Delivery Models
7. Initiatives to Speed the Adoption of Best Practices

Given this scope, Avalere tells us that "CBO’s 2010 projection was $1.3 billion in net federal government savings from CMMI over the 2010-2019 budget window. In 2015, CBO began projecting more substantial savings from CMMI: $27 billion in net federal government savings over the 2016-2025 budget window; and then in 2016, $34 billion in net federal government savings over the 2017–2026 budget window."

Avalere however “estimates net Medicare savings of $18.0 billion from CMMI for the 2017-2026 budget window, lower than the $34 billion projected by the CBO in 2016. Net Medicare savings reflects expected reduced Medicare program expenditures net of CMMI outlays.” They break down their projection as follows:

1. The continuation and expansion of already-existing CMMI demonstrations generate $4.4 billion in gross Medicare savings between 2017 and 2026. 
2. Proposed demonstrations generate $21.4 billion in gross Medicare savings for 2017–2026. 
3. CMMI will launch new, not yet proposed demonstrations that generate $3.3 billion in gross Medicare savings for 2017–2026.

Of course, the aftermath of a Presidential election year could bring about any number of scenarios that could spin CBO or Avalere projections sideways.