Six value-added payment approaches evaluated by CMS result in significant savings

The Centers for Medicare & Medicaid Services established the CMS Innovation Center to explore value-based arrangements to reduce program expenditures while preserving or enhancing the quality of care. Although research focuses on Medicare programs, the results ultimately could inform employer-sponsored strategies as well.

In the last decade, the center has launched more than 50 model tests, with approximately 33 models operational (either launched or continued). These model tests have studied potential improvements in health care payment and delivery for advanced primary care, episode-based care, accountable care, state-based transformation efforts, population health and health care for specific populations, such as Medicare beneficiaries with end-stage renal disease, diabetes and heart disease.

“Though many models have been tested, only a few have clearly emerged as successful at reducing costs and improving outcomes,” according to the center’s 2022 report to Congress. Six models led to statistically significant savings:

• Pioneer ACO;
• ACO investment;
• Medicare prior authorization: repetitive scheduled non-emergent ambulance transport;
• Home health value-based purchasing;
• Maryland all-payer; and
• Medicare care choices.

The Pioneer ACO and Medicare care choices models also showed significant improvements in care quality. An additional four models led to gross, but not net, savings:

• Comprehensive care for joint replacement;
• Comprehensive end-stage renal disease care;
• Oncology care; and
• Million hearts: cardiovascular disease risk reduction.

CMS estimates that during the period of this report, more than 41.4 million Medicare and Medicaid beneficiaries and individuals with private insurance in multi-payer model tests have been affected by, have received care from or will soon be receiving care furnished by the more than 314,000 health care providers and/or plans participating in the CMS Innovation Center payment and service delivery models and initiatives. Because a number of these programs, models and initiatives involve multiple payers or focus on broad areas of quality improvement, millions of other Americans are benefiting from the CMS Innovation Center’s activities.

Related: How and why direct payments benefit patients, doctors and advisors

“Model tests and initiatives driven by the CMS Innovation Center materially contribute to ongoing improvements in the health care system,” the report concludes. “Models under way and in development at the CMS Innovation Center will help transform health care delivery and payment, moving the country toward a system in which beneficiaries — and eventually all Americans — receive equitable, value-based care driven by evidence, performance, reduced cost and increasing quality.”