Print Friendly, PDF & Email

President Obama signed into law Pub.L.111-148, the Patient Protection and Affordability Care Act of 2010 (PPACA), on March 23, 2010, and Pub. L. 111-152, the Health Care and Education Reconciliation Act of 2010 (HCERA), on March 30, 2010. These two laws will change both the availability of health insurance and how health care is delivered in America. They include substantial changes for Medicare and Medicaid.

This is the third in a series of Alerts about provisions in the new laws. This Alert focuses on the new Center for Medicare & Medicaid Innovation (CMI) within the Centers for Medicare & Medicaid Services, established by section 3021 of PPACA. The CMI is part of a larger health reform effort to link payment to quality outcomes under the Medicare and Medicaid programs.

Advocates have long wished for an office within CMS that focuses on issues pertaining to those who are dually eligible for Medicare and Medicaid. Such an office could provide better guidance about the rules of both programs to states and to providers for the purpose of improving access by dual eligibles to high quality health care. PPACA creates two new entities whose mandate is wholly or in part to address issues relating to dual eligibles: the Federal Coordinated Health Care Office and the Center for Medicare & Medicaid Innovation. This Alert will describe only the latter entity. The former was discussed briefly in an earlier Alert.

According to the PPACA, the purpose of the Center for Medicare & Medicaid Innovation "is to test innovative payment and service delivery models to reduce program expenditures under the applicable titles while preserving or enhancing the quality of care furnished to individuals under such titles." (PPACA, Sec. 3021(a)). Advocates should seek to be engaged in every aspect of the work of the CMI. Its decisions and programming will have profound implications at all levels of the Medicare and Medicaid programs.

CMI to Promote Innovative Care Delivery Models

The CMI is to begin carrying out its duties not later than January 1, 2011. These duties include consulting with representatives of relevant federal agencies, as well as clinical and analytical experts who have expertise in medicine and health care management. The CMI is to use open door forums or other mechanisms to seek input from interested parties.

The purpose of the CMI is to test innovative payment and service delivery models to reduce program expenditures while preserving or enhancing the quality of care furnished to individuals. In selecting models, CMI is to give preference to models that also improve the coordination, quality, and efficiency of healthcare services furnished to "applicable individuals". Applicable individuals are those who are entitled to, or enrolled in benefits under Part A or B of the Medicare program or who are eligible for medical assistance under a State Medicaid plan or waiver; or who meet the criteria of both programs.

Under phase I of its work, the CMI is to test payment and service delivery models to determine the effect of applying such models to program expenditures under Medicare and Medicaid and the quality of care received by individuals receiving benefits under those programs. Selected models address a defined population for which evidence shows that there are deficits in care leading to poor clinical outcomes or potentially avoidable expenditures. Models may also include those that promote broad payment and practice reform in primary care, including patient-centered medical home models for high-need applicable individuals; medical homes that address women's unique health care needs; and models that transition primary care practices away from fee-for-service based reimbursement and toward comprehensive payment or salary-based payment.

CMS may contract directly with groups of suppliers and providers of services to promote innovative care delivery models, such as through risk-based comprehensive payment or salary-based payment. CMS may use geriatric assessments and comprehensive care plans to coordinate the care (including through interdisciplinary teams) of applicable individuals with multiple chronic conditions and who have at least one of the following: inability to perform two or more activities of daily living or cognitive impairment, including dementia.

Delivery models are to support care coordination for applicable individuals who are chronically ill and at high risk of hospitalization. The models should operate through a health information technology-enabled provider network that includes care coordinators, a chronic disease registry, and home tele-health technology. Models may vary payment to physicians who order advanced diagnostic imaging services according to the physician's adherence to appropriateness criteria for the ordering of such services. In addition, models should include the utilization of medication therapy management services.

Models for the delivery of care should also promote the establishment of community-based health teams to support small-practice medical homes. They may do so by assisting the primary care practitioner in chronic care management activities, including patient self-management. Models should assist applicable individuals in making informed health care choices. This could be achieved by paying providers of services and suppliers for using patient decision-support tools, including tools that improve applicable individual and caregiver understanding of medical treatment options.

CMI to Allow State Evaluation and Testing of Care Delivery Models

CMS is to allow States to test and evaluate models for fully integrating care for dual eligible individuals, including providing management and oversight of all funds under the applicable programs with respect to such individuals. This approach would give states control over federal Medicare dollars for the first time ever, and, if not implemented carefully, could result in the disintegration of Medicare as a uniform, national program. Models under this portion of the new provision are intended to allow States to:

  1. Test and evaluate systems of all-payer payment reform for the medical care of residents of the State, including dual eligible individuals;
  2. Align nationally recognized, evidence based guidelines of cancer care with payment incentives under the Medicare program in the areas of treatment planning and follow-up care planning for applicable individuals, including the identification of gaps in applicable quality measures;
  3. Improve post-acute care through continuing-care hospitals that offer inpatient rehabilitation, long-term care hospitals, and home health or skilled nursing care during an inpatient stay and the 30 days immediately following discharge;
  4. Fund home health providers who offer chronic care management services to applicable individuals in cooperation with interdisciplinary teams;
  5. Promote improved quality and reduced cost by developing a collaborative of high-quality, low-cost health care institutions that is responsible for developing, documenting, and disseminating best practices and proven care methods, and implementing such best practices and proven care methods within such institutions to demonstrate further improvements in quality and efficiency;
  6. Provide assistance to other health care institutions on how best to employ such best practices and proven care methods to improve health care quality and lower costs;
  7. Facilitate inpatient care, including intensive care, of hospitalized applicable individuals at their local hospital through the use of electronic monitoring by specialists, including intensivists and critical care specialists, based at integrated health systems;
  8. Promote greater efficiencies and timely access to outpatient services (such as outpatient physical therapy services) through models that do not require a physician or other health professional to refer the service or be involved in establishing the plan of care for the service, when such service is furnished by a health professional who has the authority to furnish the service under existing State law; and
  9. Establish comprehensive payments to Healthcare Innovation Zones, consisting of groups of providers that include a teaching hospital, physicians, and other clinical entities, that, through their structure, operations, and joint-activity deliver a full spectrum of integrated and comprehensive health care services to applicable individuals while also incorporating innovative methods for the clinical training of future health care professionals.

In selecting models for testing, the CMI may consider the following additional factors:

  1. Whether the model includes a regular process for monitoring and updating patient care plans in a manner that is consistent with the needs and preferences of applicable individuals;
  2. Whether the model places the applicable individual, including family members and other informal caregivers of the applicable individual, at the center of the care team of the applicable individual;
  3. Whether the model provides for in-person contact with applicable individuals;
  4. Whether the model utilizes technology, such as electronic health records and patient-based remote monitoring systems, to coordinate care over time and across settings;
  5. Whether the model provides for the maintenance of a close relationship between care coordinators, primary care practitioners, specialist physicians, community-based organizations, and other providers of services and suppliers;
  6. Whether the model relies on a team-based approach to interventions, such as comprehensive care assessments, care planning, and self-management coaching; and
  7. Whether, under the model, providers of services and suppliers are able to share information with patients, caregivers, and other providers of services and suppliers on a real time basis.

Budget Neutrality is Not a Requirement for Care Delivery Model Testing

There is no requirement that a model be "budget neutral" as a condition for it to be chosen initially for testing. However, after testing has begun, the model may be terminated or modified if CMS determines that the model is not expected to:

  1. Improve the quality of care without increasing costs to Medicare or Medicaid;
  2. Reduce Medicare or Medicaid spending without reducing the quality of care; or
  3. Improve the quality of care and reduce spending.

CMS is to conduct an evaluation of each tested delivery model. The evaluation must include an analysis of:

  1. The quality of care furnished under the model, including the measurement of patient-level outcomes and patient-centeredness criteria determined appropriate by CMS; and
  2. The changes in spending under the applicable titles by reason of the model.

CMS must make the results of each evaluation under this paragraph available to the public in a timely fashion and may establish requirements for states and other entities participating in the testing of models under this section to collect and report information that the CMS determines is necessary for monitoring and evaluation.

Taking into account the evaluations required under phase 1, CMS may, through rulemaking, expand (up to and including implementation on a nationwide basis) the duration and the scope of a model that is being tested or a demonstration project, if:

  1. The Secretary determines that such expansion is expected to reduce spending under Medicare or Medicaid without reducing the quality of care; or improve the quality of care and reduce spending; and
  2. The Chief Actuary certifies that such expansion would reduce program spending.

Waiver of Certain Statutory Requirements

CMS may waive certain statutory requirements including specified Medicare and Medicaid provisions as may be necessary solely for purposes of carrying out the testing of delivery models as described above.

The new provision gives CMS the authority to implement, on a nationwide basis, Medicaid payment models developed under waiver authority. Should a state demonstrate to the satisfaction of CMS that implementation of the payment model would not be administratively feasible or appropriate, the model will not be implemented in that state.

No Administrative or Judicial Review of Model Selection, Sites, or Participants

The new statute precludes administrative or judicial review of:

  1. The selection of models for testing or expansion;
  2. The selection of organizations, sites, or participants to test those models selected;
  3. The elements, parameters, scope, and duration of such models for testing or dissemination;
  4. A determination regarding budget neutrality;
  5. The termination or modification of the design and implementation of a model; and
  6. A determination about expansion of the duration and scope of a model, including the determination that a model is not expected to meet criteria described in this provision.

Reporting to Congress on CMI Activities

Beginning in 2012, and not less than once every other year thereafter, the Secretary must submit to Congress a report on these CMI activities. Each report is to describe the delivery models tested, including the number of individuals participating in the models and payments made under Medicare and/or Medicaid for services on behalf of such individuals, any models chosen for expansion, and the results from evaluations. In addition, each such report is to provide recommendations for legislative action to facilitate the development and expansion of successful payment models.


Advocates should follow these developments closely and should seek to participate in all levels of the development and testing of care delivery models. The work of CMI will pose challenges for advocates, particularly those who advocate on behalf of persons with low incomes, those with disabilities and persons who are members of racial and ethnic minorities. A major concern is that innovations and models be developed and judged using beneficiary-centered standards, rather than standards that look to achieve monetary savings. Vulnerable populations are often forced into care delivery vehicles that do not adequately address their needs. The work of the new Center for Medicare & Medicaid Innovation will not be effective in improving quality if "innovations" diminish access or otherwise impede individuals' ability to get needed care.

Comments are closed.