CMS Innovation Center’s Strategic Plan to Drive Health System Change in the Next Decade

Health Highlights

The Big Picture

Last month, the Center for Medicare and Medicaid Innovation (the Innovation Center, or CMMI) released its long-anticipated white paper, “Innovation Strategy Center Refresh,” outlining the Innovation Center’s strategic outlook and objectives for the next decade. These strategies are meant to drive CMMI toward its central vision: “A health system that achieves equitable outcomes through high-quality, affordable, person-centered care.”

The white paper builds on a previously released Health Affairs blog written by Centers for Medicare & Medicaid Services (CMS) Administrator Chiquita Brooks-LaSure and other CMS leaders on the future of innovation at CMS and how the agency intends to use CMMI to advance the Biden Administration’s goals, as well as Administrator Brooks-LaSure’s September CMS blog laying out a strategic vision for the agency as a whole. The CMMI white paper looks back at lessons learned in the decade since the Innovation Center’s establishment with the passage of the Affordable Care Act (ACA) and sets out five key strategies (see image below) to propel its work into the next decade.

Fig-1-11-29-21.pngImage Source: “Driving Health System Transformation—A Strategy for the CMS Innovation Center’s Second Decade.” CMS. Available at:

There are no specific announcements in the white paper about new models or retirement of old ones. Any action implementing the strategic plan will wait until after a CMMI stakeholder listening tour, which held its first session on November 18. In addition, since the release of CMMI’s strategic refresh, subsequent statements on CMS’ vision—most recently in a Health Affairs blog post from Administrator Brooks-LaSure and Center for Medicaid and CHIP Services (CMCS) Director Dan Tsai on the future of Medicaid and CHIP—reiterate the white paper’s emphasis on an agency-wide commitment to advancing equity, expanding access and coverage, and driving innovation.

Background and Lessons Learned in CMMI’s First Ten Years

Section 3021 of the ACA authorized the creation of CMMI to test payment and delivery models in Medicare, Medicaid, and CHIP with the goal of lowering costs and improving quality. The Innovation Center has unique statutory authorities to test and expand payment and delivery models, including by waiving certain programmatic requirements in Medicare so long as quality is maintained or improved and federal health expenditures remain constant or are decreased. In the ten years since its inception, CMMI has tested more than 50 alternative payment models. However, only six of these models generated statistically significant savings for the Medicare program and taxpayers.

Under the Biden Administration’s new leadership, including CMS Administrator Brooks-LaSure and CMS Deputy Administrator and CMMI Director Liz Fowler, CMS undertook a comprehensive internal review of the Innovation Center’s models to identify key lessons learned in the first ten years of operation. CMMI had a substantial impact over its first decade, touching 28 million patients’ lives and working with more than 528,000 providers and plans from just 2018 to 2020. The white paper describes a number of takeaways from these ten years, including the below key lessons and plans for the future:

  • Embed health equity in every model. Many of the CMMI models to date do not reflect the full diversity of Medicare and Medicaid beneficiaries, and a focus on Medicare in payment models fails to reach Medicaid beneficiaries or safety net providers. In keeping with Administrator Brooks-LaSure’s strategic pillar for CMS of advancing health equity across CMS programs and work, CMMI will require a more “deliberate and consistent approach” to evaluating and assessing the impact of models on underserved populations. This emphasis dovetails with Director Tsai’s recent statement in Health Affairs: “Health equity will be at the forefront of all policy decisions for Medicaid, not an afterthought.”
  • Streamline the model portfolio to minimize complexity and rationalize overlap. Complex payment and delivery models and overlapping models sometimes result in conflicting or even opposing incentives for providers. For example, sometimes “multiple shared savings models [operate] in the same health system.” In addition, added administrative burden deters many providers from voluntarily participating in models. In its next decade, CMMI seeks to create a more cohesive, streamlined strategy so that financial incentives are aligned and model parameters and goals are more transparent.
  • Provide tools and support for providers in assuming financial risk. For many providers, accepting downside risk is challenging without appropriate care management tools, flexibility, and “sufficient protection against the financial impact of beneficiaries with unpredictably high costs.” Front-end investments in infrastructure (e.g., electronic health records, staffing, or data support) may be necessary, but may also deter participants. As a result, the Innovation Center aims to increase support by providing more data, learning collaboratives, and flexibilities to participants.
  • Ensure broader provider participation in model design. Selection bias in some model designs and a focus on designs for Medicare providers have led to a narrower provider participation pool. To mitigate this in the future, CMMI has proposed improvements in model design to ensure participation from a broader, more diverse array of providers.
  • Address the complexity of financial benchmarks. Several methodologies involving financial benchmarks and risk adjustment have “created opportunities for potential gaming and upcoding among participants,” the opposite of the Innovation Center’s goal to provide savings to the Medicare program. Moving forward, CMMI will aim to set benchmarks that maximize provider participation while also improving testing and analysis of benchmarks and risk adjustment methods prior to model launch.
  • Encourage lasting care delivery transformation. Often, transformation can be limited to the duration of the model test. By leveraging federal partnerships and opening lines of communication with outside stakeholders, CMMI hopes to align models and lessons learned across CMS, including in Medicare fee-for-service (FFS), Medicare Advantage, and Medicaid.

The lessons learned over the past decade and analyzed in the Innovation Center’s comprehensive review informed the creation of CMMI’s five strategies for the next decade to propel innovation in the health system.

Strategies for the Next Decade

Drive Accountable Care

The Innovation Center aims to increase the number of people in a care relationship with accountability for quality and total cost of care. To measure this progress, CMMI has set the goal of having all Medicare FFS beneficiaries (with Parts A and B) and the “vast majority” of Medicaid beneficiaries in a “care relationship with accountability for quality and total cost of care.” Whether through advanced primary care or accountable care models, this strategy focuses on providing value to the patients by measuring outcomes that are meaningful (like functional status, out-of-pocket costs, or patient-reported outcomes) while reducing costs.

Advance Health Equity

CMMI seeks to advance health equity by embedding a consideration of health equity in “every aspect” of the Innovation Center’s models. The Innovation Center notes that considering equity in all stages—including model ideation, development, recruitment, implementation, and evaluation—is key to this goal. For example, CMMI will review eligibility criteria and the application process itself to ensure that these components do not inadvertently discourage participation, particularly for providers who serve underserved populations. To achieve this, the white paper outlines efforts across four domains:

  • Develop new models and modify existing models to address health equity and social determinants of health
  • Increase the number of beneficiaries from underserved communities who receive care through value-based payment models
  • Evaluate models specifically for their impact on health equity and share data and “lessons learned” to inform future work
  • Strengthen data collection and intersectional analyses for populations defined by demographic factors such as race, ethnicity, language, geography, and disability

Support Care Innovations

This third strategy acknowledges that providers will need additional tools and a range of supports to facilitate person-centered care. To do so, CMMI will set targets to improve models’ performance  based on patient experience measures—for instance, are providers able to deliver integrated, whole-person care in the preferred setting of the patient (e.g., at home or in a community-based setting)? The Innovation Center will also promulgate actionable, practice-specific data; coordinate peer-to-peer learning collaboratives; and accelerate the sharing of best practices in order to support providers and keep patients at the center of care.

Improve Access by Addressing Affordability

To mitigate cost pressures on patients and families, the Innovation Center will pursue strategies to address health care prices and affordability and to reduce unnecessary or duplicative care. Administrator Brooks-LaSure’s earlier blog post noted that CMMI “seeks to meet its statutory mandate [to reduce program expenditures] while simultaneously addressing affordability directly.” To measure progress in this area, the Innovation Center will set targets to reduce the percentage of beneficiaries who forgo care due to cost by 2030.

Partner to Achieve System Transformation

Finally, CMMI seeks to align priorities and policies across CMS and engage with a variety of outside stakeholders (payers, purchasers, providers, state, and beneficiaries) to improve quality. System transformation requires transformation across a broad range of entities, and the Innovation Center seeks to collaborate more with Medicaid partners, across CMS and the entire Department of Health & Human Services (HHS), and to incorporate lessons learned across other federal models.

Notably absent from the strategic paper is an in-depth discussion of CMMI model tests on prescription drugs in Medicare or Medicaid. CMMI does mention that reducing the overall cost of drugs would have the effect of reducing patient out-of-pocket costs. And it states that: “The Innovation Center will prioritize models that test ways to lower beneficiary and program spending on drugs and incentivize the use of biosimilar and generic drug utilization.” CMMI suggests doing so by building on the current Senior Savings Model, launching bundled payment and shared savings models that put physicians at risk for total costs of care (including Parts B and D drugs), and employing incentives for biosimilar and generic usage, all ideas posed in last month’s Comprehensive Plan for Addressing High Drug Prices. This lack of detailed discussion likely reflects the view of the Administration that it should keep discussion of this activity to a minimum while Congress debates potential changes to the Part D benefit.

Historical Perspective on CMMI’s Strategy

CMMI has undergone previous internal and external assessments, some of which have highlighted comments similar to those discussed above. Some of the issues relate to challenges with CMMI’s original mission. As an essay by Michael Chernew, the chair of the Medicare Payment Advisory Commission (MedPAC), noted, CMMI’s initial task was to test and refine promising ideas quickly, and to test as many of them as possible. This “let many flowers bloom” philosophy was implemented in a manner intended to encourage buy-in from skittish stakeholders in the wake of ACA passage: a plethora of models and funding opportunities (through the Health Care Innovation Awards), all strictly voluntary.

Since most models were grounded in fee-for-service Medicare, with its commitment to beneficiary freedom of choice among providers, CMMI quickly became aware of the risk of overlaps where beneficiaries could be assigned to multiple models, and began discussing plans to address the problem. Similarly, regional imbalances in model participation have been evident from the early days of CMMI’s model rollouts. Both of these challenges have proven difficult to tackle; narrowing the range of models tested limits the number of providers entering voluntarily, and making these narrower models mandatory can trigger reactions ranging from stakeholder pushback to congressional intervention. This latest white paper does not specify what CMMI has taken from earlier efforts to address these challenges.

CMMI’s high prioritization of equity and attention to beneficiary out-of-pocket costs are distinct advances from earlier strategy documents.


The vision laid out in this white paper for CMMI aligns with the Administration’s stated focus to date on achieving person-centered, patient-driven, equitable improvements to the health system.

In order to achieve this, these strategies will probably result in what Dr. Fowler described as a bolder, more streamlined approach. This means fewer model tests overall, and a de-emphasis on testing a number of small and independent interventions. The models CMMI does launch will be larger, more aligned with one another, and driven by a cohesive strategy for broad system transformation.

While existing models will not be ended early, modifications may be made to existing models in order to align more closely with the new strategic objectives. With this renewed emphasis on improved data, peer-to-peer collaboration, support, and innovation, the CMMI vision hopes to propel broad system change in the next decade.



pursuant to New York DR 2-101(f)

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