Innovation Center Established to Improve Health Outcomes and Reduce Costs

Innovation Center Established to Improve Health Outcomes and Reduce Costs

By Karen VanLandeghem, MPH
Senior Advisor, National Center for Health Reform Implementation, AMCHP

The Center for Medicare and Medicaid Innovation (CMMI) was established under the Affordable Care Act (Section 3021) to test innovative payment and service delivery models for Medicare, Medicaid and CHIP programs. Established in November 2010 as part of the Center for Medicare and Medicaid Services (CMS), the mission of CMMI is to "produce better experiences of care and better health outcomes for all Americans and at lower costs through improvements." CMMI has a mandatory appropriation under ACA of $10 billion over the next 10 years.  

The Center is designed to be a public/private/consumer partnership to explore new payment and service delivery models in three main areas: 

  • Improved Care for Individuals: Focusing on patients in traditional care settings (e.g., hospitals, doctor’s offices, etc.), CMMI seeks improvements to care safety, efficiency, effectiveness, affordability, and making care more patient-centered. CMMI also plans to promote "bundled payments," a collaborated care effort where multiple providers bundle multiple procedures for one medical episode into a single payment, eliminating the need for traditional fee-for-service with multiple billing submissions. 
  • Coordinating Care to Improve Health Outcomes for Patients: CMMI seeks to develop new care models that make it easier for providers in different settings to coordinate care efforts for a single patient. New health home models and Accountable Care Organizations will be a major focus. 
  • Community Care Models: Focusing on improvements to public health, CMMI will examine how to best identify health crises as well as innovations in interventions for prevalent chronic diseases and conditions. 

A number of CMMI initiatives are in progress or underway. These initiatives include the following: 

  • Medicaid Health Home State Plan Option: Mandated by Section 2703 of ACA, this provision gives states the option to allow Medicaid beneficiaries with "at least two chronic conditions, one chronic condition and the risk of developing a second, or one serious and persistent mental health condition" to select a specific provider as a “health home” to help coordinate their treatments. Services under the health home as defined by CMS are: comprehensive care management, care coordination and health promotion, comprehensive transitional care from inpatient to other settings, individual and family support, referral to community and social support services, and the use of HIT. Participating states get an enhanced FMAP rate of 90% for the first 8 quarters that the option is in effect. Other health care services for program participants will continue to be matched at the State's regular matching rate. CMS released its initial guidance on Section 2703 to states in a November State Medicaid Director letter along with a draft template for States to use in designing and developing health home State Plan Amendments (SPAs). More recently, CMS/CMMI leaders and others were featured in a webinar on health homes under Section 2703 sponsored by the National Academy for State Health Policy.

  • Multi-Payer Advanced Primary Care Practice Demonstration: An eight-state demonstration project wherein Medicare, private insurance plans, and state Medicaid programs will join together to evaluate the effectiveness of integrated care provided by health care professionals in up to 1,200 medical homes. Eight states (Maine, Vermont, Rhode Island, New York, Pennsylvania, North Carolina, Michigan, and Minnesota) were selected to participate in the CMMI demonstration project to evaluate the effectiveness of doctors and other health professionals across the care system working in a more integrated fashion and receiving more coordinated payment from Medicare, Medicaid, and private health plans. 

AMCHP’s National Center for Health Reform Implementation is closely tracking the work of the CMMI and the implications for maternal and child health populations and the work of state MCH programs and other key stakeholders. Regular updates will be provided in future issues of Pulse and Members Briefs. Additional information about the CMMI can be found here