The Center for Medicare and Medicaid Innovation (CMMI), also known as the “Innovation Center,” designs, implements, and tests new health care payment models for Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP).

CMMI was established by Congress in 2010 to identify ways to improve healthcare quality and reduce costs in the Medicare, Medicaid, and CHIP programs.¹

CMS has always had the authority to test payment models through demonstration programs, the CMMI, however, granted the Secretary more tools and funding to design, adapt, and test models. Moreover, the Secretary now has broader authority to expand CMMI programs into Medicare, Medicaid, and CHIP if they meet savings and quality criteria. Previously, Congressional action was necessary to expand demonstration programs into the full Medicare program.¹

CMMI has launched many of the alternative payment models through Medicare, implementing accountable care organizations (ACOs), bundled payment models, and medical homes models. CMMI is operating one of the three types of models in Medicare throughout all 50 states and the District of Columbia. CMMI is also testing payment models in Medicaid and CHIP. In addition to implementing its own alternative payment models, CMMI awards grants to state agencies, researchers, and other organizations for projects that focus on new payment models to improve care and lower costs. CMMI interventions also include multi-payer alignment models that affect patients with commercial insurance. The evidence on Medicare payment and delivery system reforms is mixed as overall net savings from CMMI reforms has been modest.¹

Two notable CMMI models have met expansion criteria by reducing program spending while preserving or enhancing quality. Those two models are the Diabetes Prevention Program (DPP) model and the Pioneer ACO model. The DPP focus was on Medicare beneficiaries at high risk of developing type 2 diabetes. DPP focused on providing patient engagement activities for losing weight and making positive dietary choices. The Secretary also certified the Pioneer ACO model for expansion into Medicare based on early savings and quality results.1 ACOs are groups of hospitals and providers who voluntarily form partnerships to collaborate and share risk and reward for the quality and cost of care delivered to their patients. The success of the Pioneer Model led to other iterations of ACO programs that saved Medicare billions which prompted further uptake nationally. Currently, almost 20% of Medicare patients are cared for by ACOs.²

CMMI has launched over 40 new payment models, involving more than 18 million patients and 200,000 health care providers.¹

For most of the CMMI models, providers are required to inform their Medicare patients if they are participating in a CMMI payment model, but it is not always clear if patients are typically aware of their attribution to one, or the implications for their care.¹

1. “What is CMMI?” and 11 other FAQs about the CMS Innovation Center. Medicare. 2018. https://www.kff.org/medicare/fact-sheet/what-is-cmmi-and-11-other-faqs-about-the-cms-innovation-center/. 

2. 8 Faqs: Medicare Accountable Care Organizations (Acos). Menlo Park, CA: Kaiser Family Foundation; 2018. https://files.kff.org/attachment/Evidence-Link-FAQs-Accountable-Care-Organizations.