There is a new sheriff in town, and she is a woman.  Under the guidance of the administrator of CMS, Seema Verma and the Secretary of Health and Human Services, Alex Azar,  a large number of innovations are being proposed at CMS.

Follow along here, here, here, here, and here.

The categories of innovation are organized into seven categories.


Accountable Care

Accountable Care Organizations and similar care models are designed to incentivize health care providers to become accountable for a patient population and to invest in infrastructure and redesigned care processes that provide for coordinated care, high quality and efficient service delivery.

Episode-based Payment Initiatives (bundled care/payments)

Under these models, health care providers are held accountable for the cost and quality of care beneficiaries receive during an episode of care, which usually begins with a triggering health care event (such as a hospitalization or chemotherapy administration) and extends for a limited period of time thereafter.

Primary Care Transformation

Primary care providers are a key point of contact for patients’s health care needs. Strengthening and increasing access to primary care is critical to promoting health and reducing overall health care costs. Advanced primary care practices � also called �medical homes� � utilize a team-based approach, while emphasizing prevention, health information technology, care coordination, and shared decision making among patients and their providers.

Initiatives Focused on the Medicaid and CHIP Population

Medicaid and the Children�s Health Insurance Program (CHIP) are administered by the states but are jointly funded by the federal government and states. Initiatives in this category are administered by the participating states.

Initiatives Focused on the Medicare-Medicaid Enrollees

The Medicare and Medicaid programs were designed with distinct purposes. Individuals enrolled in both Medicare and Medicaid (the �dual eligibles�) account for a disproportionate share of the programs� expenditures. A fully integrated, person-centered system of care that ensures that all their needs are met could better serve this population in high quality, cost-effective manner.
Initiatives to Accelerate the Development and Testing of New Payment and Service Delivery Models
Many innovations necessary to improve the health care system will come from local communities and health care leaders from across the entire country. By partnering with these local and regional stakeholders, CMS can help accelerate the testing of models today that may be the next breakthrough tomorrow.

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Initiatives to Speed the Adoption of Best Practices

Recent studies indicate that it takes nearly 17 years on average before best practices – backed by research – are incorporated into widespread clinical practice�and even then the application of the knowledge is very uneven. The Innovation Center is partnering with a broad range of health care providers, federal agencies professional societies and other experts and stakeholders to test new models for disseminating evidence-based best practices and significantly increasing the speed of adoption.

Alternative Payment Models are part and parcel of the overall process and are not mutually exclusive from ACO, Bundled Payments, Primary care transformation nor the rest of CMS innovation.


1.  ACOs

2018. There are 649 ACOs across the U.S., according to the National Association of ACOs, including Medicare ACO program participants and independent ACOs. Around 12.3 million Medicare beneficiaries � 20 percent of all Medicare beneficiaries � participate in an ACO

As of July 2019, there are 559 Medicare ACOs serving more than 12.3 million beneficiaries with hundreds more commercial and Medicaid ACOs serving millions of additional patients. This is a reduction of 90 ACOs or roughly 20%.  The survival rate is about 80% after one year.  Organizing and implementing a new “group practice” in its own right and adding the goal of increasing savings if a challenge.  Administrative costs for the organization, marketing and recruitment are substantial. It is surprising that almost 80% survived their first year of operation. Many of the still-functioning ACOs are in hazardous waters financially.  It will be interesting to see what plays out in the next five years.

2. Episode-based Payment Initiatives

Problems with bundled medical codes

Problems arise when a patient needs something extra that isn�t included in a bundled payment. Payers may not reimburse for the extra outside of the bundle. That may make a provider reluctant to provide the service if he or she cannot be reimbursed for it. They may even charge the patient extra, at full price, to provide the service. Patients need to be on the look-out for this kind of extra-billing because it can result in balance billing or upcoding, both of which are illegal.  Most hospitals already have an idea of how much specific diagnosis costs and are already being paid using a DRG (diagnosis-related code). 
Traditionally, Medicare makes separate payments to providers for each of the individual services they furnish to beneficiaries for a single illness or course of treatment. This approach can result in fragmented care with minimal coordination across providers and health care settings. Payment rewards the number of services offered by providers rather than the quality of care furnished. Research has shown that bundled payments can align incentives for providers � hospitals, post-acute care providers, physicians, and other practitioners � allowing them to work closely together across all specialties and settings. This sounds wonderful in theory, however, in the actual reality of individual practices coordinating providers and hospitals is very challenging. Rather than aligning hospitals and providers it may devolve into competition for the limited resources medicare or any other payor funds.

Initiatives to Speed the Adoption of Best Practices

The System Thinkers

Barriers at the Gate

The first hurdle to an organization adopting best practices as a routine way of doing business may be adjusting how we think and speak about this concept. The words we use to describe embracing others� practices reflect our culture�s deep ambiguity about doing so. For example, when referring to best practices, do leaders in your organization use terms such as transfer, replicate, emulate, duplicate, translate, benchmark, roll out, propagate, or disseminate? Or are they more likely to employ words like imitating, evangelize, clone, copy, and shamelessly steal? The name of Motorola�s first benchmarking initiative, �Operation Bandit,� captured this tension well. The connotations of knowledge sharing hinge tightly on people�s sense of boundaries, and on the existing customs for moving knowledge across them.