Public Policy Update

The CMS Innovation Center: 12 Years Later

What role does CMMI play in today’s healthcare environment?

By Topic: Law Policy and Regulation ValueBased Purchasing Strategy and Innovation


The CMS Innovation Center, also known as CMMI, was established by Congress in 2010 as part of the Affordable Care Act. Created to identify ways to improve healthcare quality and reduce costs in Medicare, Medicaid and the Children’s Health Insurance Program, its statutory focus was to develop and test new healthcare payment and service delivery models, such as alternative payment models, to improve patient care, lower costs and better align payment systems to promote patient-centered practices.

In 2021, the CMS Innovation Center underwent a “strategy refresh” led by Deputy Administrator and Director of CMMI Elizabeth Fowler, PhD, JD. Built on lessons learned from its first decade in existence and over 50 models launched, the new strategy was created with a vision “for a health system that achieves equitable outcomes through high quality, affordable person-centered care.” 

The CMS Innovation Center’s new post-pandemic approach to value-based purchasing is sensitive to improvements needed in the structure of its value-based programs and responsive to provider hesitance to participate.

The objectives of the new strategy are clear, funding for CMMI is secure, and overall, the CMS Innovation Center’s new post-pandemic approach to value-based purchasing is sensitive to improvements needed in the structure of its value-based programs and responsive to provider hesitance to participate. What isn’t evident is the role that CMMI will play in transforming a field that’s simultaneously navigating pandemic-induced workforce shortages, upticks in medical debt, an uncertain value-based care agenda and declining public confidence. 

The 2021 Strategy Refresh 
Funding for CMMI, established under the ACA, is not subject to annual appropriations that can become mired in partisan bickering. However, the six directors who have led CMMI in its 12-year history have nonetheless steered the center toward executive branch goals. The Biden administration is no exception: The focus for CMMI’s efforts under the new strategy reflect the White House’s priorities for the Centers for Medicare & Medicaid Services.

Fowler, who is leading CMMI’s updated strategic objectives, is an experienced Capitol Hill health policy expert, having worked in key roles in the Obama administration after stints at the Commonwealth Fund, Johnson & Johnson and Wellpoint Inc., now Anthem. She has organized CMMI’s programs into eight buckets: prevention and population health, patient care models, seamless care models, a state innovations group, a research and rapid cycle evaluation group, a policy and programs group, a learning and diffusion group, and a business services group. 

She has also initiated a top-to-bottom review of each alternative payment model and program under CMMI’s oversight and issued the strategy refresh March 16, 2022, to alert industry stakeholders and policymakers to the center’s new priorities during her term as its leader. Following are five strategic objectives that will guide CMMI’s implementation of its new vision.

Drive Accountable Care: Increase the number of beneficiaries in a care relationship with accountability for quality and total cost of care.

Advance Health Equity: Embed health equity in every aspect of CMS Innovation Center models and increase focus on underserved populations.

Support Care Innovations: Leverage a range of supports that enable integrated, person-centered care such as actionable, practice-specific data, technology, dissemination of best practices, peer-to-peer learning collaboratives and payment flexibilities.

Improve Access by Addressing Affordability: Pursue strategies to address healthcare prices, affordability, and unnecessary or duplicative care.

Partner to Achieve System Transformation: Align priorities and policies across CMS and aggressively engage payers, purchasers, states and beneficiaries to improve quality, achieve equitable outcomes and reduce healthcare costs.

A Unique Application of Common Themes
The themes reflected in these strategic objectives are often discussed in healthcare circles and among lawmakers. However, their manifestation in how the Fowler-led CMMI will apply them is unique, as demonstrated by the following three examples.

There will be heightened attention given to equity in the design and implementation of all programs. CMMI will specify how equity is to be measured for participation in its programs, taking into consideration how underrepresented perspectives are embedded in governance, leadership, patient benefits and provider performance measurement, and how care management is adjudicated to account for the unique clinical and social needs of diverse populations. 

There will be increased attention given to provider participation in programs that show the most promise in improving value, i.e., lower costs and better outcomes. CMMI will make certain programs mandatory and limit the role of business partners, such as private investors, consultants, etc. Additionally, the center will specify the rights and rules for participation based on input from a wide range of clinical decision-makers, including physicians, advanced practice nurses, pharmacists, nutritionists, etc.

There will be a focus on reducing Medicare spending by calibrating shared savings and bonus programs in various APMs with total costs of care that are verifiable, geographically discreet and accessible for comparisons. CMMI will aggressively monitor and litigate gaming of enrollment, risk scoring and coding to optimize shared savings. Additionally, the center will add methodologies to APMs for measuring affordability and shared savings linked to affordable care improvements. It will also structure shared savings models sensitive to cost categories to be included in total cost of care calculations and aggregated total cost of care.

CMMI’s Relevance Today 
CMMI has been in the spotlight for 12 years, usually because of announcements for new value-based programs and rule changes for existing programs. Most of its pilots had limited success; only six out of the more than 50 models launched during its first 10 years generated statistically significant savings to Medicare and taxpayers, including bundled payment and accountable care organization models. Four of these programs met the requirements to be expanded in duration and scope, according to a CMS white paper on CMMI’s strategy. However, their collective impact on health spending has been negligible: Spending is forecast to increase 4.6% annually through 2030—higher than annual increases in the gross domestic product and household wages. As Medicare faces budget shortfalls in its Part A program starting in 2026, CMMI programs will have done little to help. 

The premise for CMMI—develop and test new ways of doing things—is solid. However, the reality is that in most healthcare organizations, risk avoidance and revenue protection are stronger motivations than participating in CMMI’s programs. 

Paul H. Keckley, PhD, is managing editor of The Keckley Report (

Lessons Learned From CMMI’s First 10 Years

Established in 2010, CMMI developed and tested more than 50 models, which the center says have “yielded important policy and operational learnings that provide a foundation for the strategy refresh.” Following are a list of lessons learned during CMMI’s first decade: 

  1. Ensure health equity is embedded in every model. 
  2. Streamline the model portfolio and reduce complexity and overlap to help scale what works. 
  3. Tools to support transformation in care delivery can assist providers in assuming financial risk.
  4. Design of models may not consistently ensure broad provider participation. 
  5. Complexity of financial benchmarks have undermined model effectiveness.