Reps ask why Medicare Innovation Center is costing money, not saving it

Liz Fowler, PhD, JD, director of the Center for Medicare & Medicaid Innovation speaks during a June 13, 2024, of the Health Subcommittee of the House Energy & Commerce Committee. This image was taken from the webcast of the hearing.

The Center for Medicare & Medicaid Innovation (CMMI) was created by the Affordable Care Act to design health care payment models that save money while improving quality of care.

But reducing costs overall has not happened since 2010 – and that’s an issue that needs to be addressed, said representatives who questioned CMMI’s purpose and functioning. On June 13, CMMI Director Liz Fowler, PhD, JD, appeared before the Health Subcommittee of the House Energy & Commerce Committee for two hours of discussion about the Center. The hearing, “Checking-In on CMMI: Assessing the Transition to Value-Based Care,” was her first appearance before that group.

The issue

In September 2023, a Congressional Budget Office (CBO) report said at CMMI’s creation, CBO estimated CMMI would produce net savings of $2.8 billion from 2011 to 2020. But in that time period, CBO estimated CMMI’s activities increased direct spending by $5.4 billion – or, CMMI spent $7.9 billion to operate payment models that reduced spending on health care benefits by $2.6 billion.

Projecting the time from 2021 to 2030, CBO forecasted CMMI will increase net federal spending by $1.3 billion. Based on the 2010 approach, CBO had predicted net savings of $77.5 billion in CMMI’s second decade of operations.

CMMI has a 10-year, $10 billion budget, though CBO noted the amount does not grow with inflation and is subject to sequestration, so the 2020 and 2030 budgets will be reduced by $590 million and $570 million, respectively.

From the director

In her testimony, Fowler said the Innovation Center has tested more than 50 payment and care delivery models that have affected more than 41 million patients and more than 314,000 health care providers in all 50 states. The models are intentionally time limited, generally lasting five to 10 years, with a goal to have enough time to evaluate the effects on care quality and program expenditures.

Fowler joined CMMI in 2021 and is leading “a strategy refresh” to review lessons of the first 10 years and chart a course for the next decade. CMMI now has five objectives: drive accountable care, advance health equity, support care innovation, address affordability, and partner to achieve transformation, she said.

“Every Innovation Center model that we have tested has yielded important learnings and ultimately informed an approach to caring for patients that is more team-based integrated and person-centered,” Fowler said. “Through our models, we know the basic building blocks that help clinicians move toward value include: upfront investments for infrastructure and data that give providers the ability to identify the sickest patients and most likely to be hospitalized or readmitted; regulatory flexibilities that let providers care for patients in a home setting and provide more services through nurse practitioners; tools and data to better understand patients’ needs and integrate primary care and specialty care; payment innovations that give providers more stable and predictable payments; and population-based payment incentives that reward better outcomes, higher quality and a better care experience.”

Questions in Congress

Subcommittee Chair Rep. Brett Guthrie (R-Kentucky) said CMMI’s goal of driving significant long-term savings across the health care system “unfortunately has not come close to materializing.”

“Under the Biden Administration, the center has undertaken an internal reevaluation. Well, I hope this strategic refresh would generate renewed commitment to better fulfilling CMMI's mission of reducing costs and improving quality in its second decade,” he said.

Among 50 models tested, just two accomplished the goals of lowering cost of care and improving patient outcomes, said Committee Chair Rep. Cathy McMorris-Rodgers (R-Washington).

“I have a hard time believing any objective observer could look at the results thus far and describe CMMI as a success,” she said. In fairness, Rodgers noted Fowler has not been the director for the entire duration of CMMI’s existence.

Subcommittee Ranking Member Rep. Anna Eshoo (D-California) and committee Ranking Member Rep. Frank Pallone (D-New Jersey) highlighted successes.

CMMI supported accountable care organizations (ACOs) that allow physicians and hospitals to coordinate care for patients to prevent unnecessary complications or hospitalizations. “If they provide high quality care to their patients at a lower cost, then they get to keep some of the savings. That's a real motivation,” Eshoo said.

CMMI has announced new models that aim to increase access to primary care, Pallone said. But he lamented a lack of competition in the health care marketplace.

Eshoo asked Fowler point blank: “Why is CMMI not generating savings?”

“I would say first of all that we have learned something from every model that we have tested,” Fowler said. “And I would also say that the innovation process itself is sometimes unpredictable.”

CMMI payment models are voluntary, so physicians opt in if they think terms look favorable, and drop out if they think the terms have turned against them or are not performing as well as they thought, she said.

In later questioning, Pallone asked extensively about the role of primary care with CMMI and how it needs long-term investment. Fowler affirmed primary care is vital for the payment models, but that it is difficult to generate savings in areas of the overall health system that are historically underfunded, such as primary care and rural health.

Doctors have their say

CMMI has a Physician-Focused Payment Model Technical Advisory Committee, known as PTAC, but it is “vastly underutilized,” said Rep. Michael Burgess, MD (R-Texas).

“The difficulty always is, when I look at what you do, in developing these models, it seems completely devoid from any part of the practice of medicine,” Burgess said. “And I'm not sure if patients feel the same way when they look at this. But just from a doc's perspective, this isn't the way the world works. So, it's not surprising to me then that number of successes that you can mark on the wall, is small.”

Rep. Raul Ruiz, MD (D-California), asked about rural and underserved communities and efforts to improve health equity in those areas.

Rep. Larry Bucshon, MD (R-Indiana) noted dramatic reimbursement cuts to physicians based on inflation, making it impossible for physicians to remain independent, and the differences between reimbursement for procedures completed at doctor’s offices or at hospitals.

“We're again talking around the fringes here,” he said. “CMMI, I appreciate what you're doing. You're doing hard work, but it's not going to save the kind of money we need to save in the health care system if we're going to get a handle on this. I think one of the reasons members are quick to criticize CMMI is because we don't understand a lot about the decisions CMMI has made when it comes to developing and running models.”

Rep. Kim Schrier, MD (D-Washington), asked about pediatric value-based care. CMMI had one care for kids model, Fowler said, but it is a gap the Center staff need to consider for future possibilities.

Fowler’s commitment and passion for quality care are clear, said Rep. Mariannette Miller-Meeks, MD (R-Iowa).

“However, one of the many challenges with existing accountable care organizations, ACO models, is that they often fail to produce real savings to the Medicare program,” she said. “And the value add for physicians to invest in value-based arrangements, and I don't mean vest only financially, I also mean invest their time and their effort, are overburdened. Some are lacking.”

Bucshon, Miller-Meeks and Rep. John Joyce, MD (R-Pennsylvania), all asked about adding more specialist physicians to CMMI’s alternative payment models.

Rep. Buddy Carter (R-Georgia), a career pharmacist, asked Fowler to solicit the advice of members of the Doctors Caucus in Congress.

“We have a lot of institutional knowledge here,” Carter said. “We want to help, and I'm very disturbed at this program somehow has escaped congressional review and congressional input and I would appeal to you to, please utilize the Congress, particularly this subcommittee.”

“We would welcome that input, thank you,” Fowler said.