Since establishment through the Affordable Care Act, the Center for Medicare & Medicaid Innovation (CMMI) has been testing new ways to deliver and pay for care in Medicare, Medicaid and the Children’s Health Insurance Program, with the goal of reducing spending and improving care quality. A new report from the Congressional Budget Office (CBO) indicates that, over the last ten years, CMMI’s pilot programs cost more than Traditional Medicare with a fee for service payment system.
CBO looked at evaluations of 49 CMMI delivery and payment models, alternatives to Traditional Medicare’s fee-for-service payment system, and found that Medicare spending is up $5.4 billion between 2011 and 2020. At the time Congress created CMMI, lawmakers believed that CMMI would save the government money in its first decade. They believed a $7.5 billion investment in new models would result in $10.3 billion less spending.
In this next decade, CBO projects $1.3 billion in net additional spending as a result of CMMI’s pilot programs rather than the $77.5 billion in net savings originally projected. Based on this information and, even more so, what we know about some of the models CMMI is testing, it’s not clear that CMMI is offering the value people hoped it would.
It’s no surprise that CMMI’s alternative payment models are costing more than Traditional Medicare’s fee for service payment system. The big models all rely on multiple third-party intermediaries to oversee care. These intermediaries drive up administrative costs and are often profit-making entities, such as private equity firms, or large non-profit systems.
What’s worrisome is that some of the CMMI payment models, such as the ACO REACH model, incentivize companies to withhold needed care in order to maximize profits. That’s a recipe both for driving up Medicare spending and for endangering the health and well-being of older adults and people with disabilities.
Here’s more from Just Care:
- Traditional Medicare at risk with ACO REACH
- People in Medicare Advantage trade away access to care
- Health insurers increasingly deny coverage for critical care
- Private equity-owned hospice and home health agencies drive up Medicare spending, jeopardize quality of care
- How should Medicare innovate to improve quality and reduce spending?
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