CMMI Aims to Lower Out-of-Pocket Healthcare Spending by 2030

October 26, 2021 - Updated 11/1/2021: This article has been updated to refer to the Centers for Medicare & Medicaid Services Innovation Center (CMMI) as a singular center. A previous version referred to CMMI as "centers."

One of the main goals that Centers for Medicare & Medicaid Services Innovation Center (CMMI) established for the next decade is increasing access to care by improving affordability of care and reducing out-of-pocket healthcare spending, according to a white paper that the center released.

CMMI will aim to lower the share of beneficiaries that delay or forego care due to cost by 2030. The center will also measure whether all models have some method of lowering the costs of high-value care for beneficiaries.

“As cost pressures mount on individuals and families, CMS Innovation Center models will focus not only on reducing federal health expenditures, but also how they can help lower out-of-pocket costs for Medicare and Medicaid beneficiaries and maintain access to quality care,” the white paper stated.

CMMI experts identified five ways in which they want to improve affordability for beneficiaries.

First, the center will seek to lower program expenditures. The white paper indicated that this would have a ripple effect on beneficiaries’ costs. 

CMMI could achieve this by incentivizing beneficiaries to use lower-cost care sites. The center could also target prescription drug spending by using alternative payment models to steer beneficiaries toward less expensive drugs, like biosimilars and generic drugs.

Introducing the Part D Senior Savings Model was a past action that the center offered as an example of reducing out-of-pocket costs. The model sought to lower insulin costs for seniors in Medicare.

Second, CMMI plans to target and eliminate duplicative and wasteful care patterns. The center noted that total cost of care models could be useful in this endeavor. 

Third, the center plans to employ payment waivers that incentivize high-value care usage. Waivers could allow participants to offer home healthcare to prevent readmission after hospitalization or they could enable providers to lower out-of-pocket costs for primary care services.

Fourth, CMMI may leverage value-based insurance design (VBID) models to bring down costs and provide access to technologies and devices that can help beneficiaries manage their conditions.

“The model also requires plans to engage with their enrollees in wellness and advance care planning, and some plans are also testing access to concurrent hospice care,” the white paper stated.

Lastly, CMMI will employ financial incentives for providers to encourage them to pursue high-value care and cut down on low-value methods. Episodic payments could be key to promoting efficiency.

Improving affordability was one of five goals that CMMI announced in its white paper on CMMI strategy. In addition to affordability, the center will focus on health equity, accountable care, care innovation, and transformative partnerships.

For example, to address health equity, new models will require demographic and social determinants of health data as appropriate, they will support safety net providers and will serve overlooked populations, and they will find gaps in health equity to confront.

Transformative partnerships will include promoting and increasing the availability of multi-payer alignments by 2030 as well as gathering patient experience data.

“The CMS Innovation Center cannot achieve health transformation alone. It requires working across CMS and the entire federal government, as well as working hand-in-hand with health care teams and payers, purchasers, states, providers, patient advocates and patients,” the CMS website stated. 

“Success hinges on multi-payer alignment on clinical tools, outcome measures, payment, and policy approaches and building the capacity to transform health care.”

As payers continue to strive for value-based care, they will need to build upon the lessons from CMMI’s past innovative strategies. 

In addition to the Part D Senior Savings model, CMMI enacted the Geographic Direct Contracting model, boosted incentives for its  End-Stage Renal Disease (ESRD) Treatment Choices model, and renovated the benchmarks for its Bundled Payments for Care Improvement (BPCI) Advanced model.

The lessons from these old and new models may guide payers into the future of value-based care.