The Center for Medicare and Medicaid Innovation (Innovation Center) at the Centers for Medicare and Medicaid Services (CMS) has released its third report to Congress.  The Innovation Center was created by section 3021 of the Affordable Care Act. Under the ACA, the Innovation Center received $5 million in fiscal year 2010, and then a total of $10 billion over the fiscal years 2011 through 2019 (an average of $1.11 billion each fiscal year), and then an additional $10 billion each decade thereafter.

The report focuses on activities through fiscal year 2016 (ending September 30, 2016) but also references a number of important activities started during that time period that were announced later in 2016. During this period, the Innovation Center has tested or announced 39 payment and service delivery models and initiatives. To improve care and value, these model tests focus on reducing program expenditures while improving the quality of care. The models and initiatives are based on three core strategies for improving our health system: improving the way health care providers are paid, improving the way care is delivered, and increasing the availability of information to guide decision-making.

The CMS Innovation Center’s portfolio of models and initiatives has included participation from health care providers, states, payers, and other stakeholders in all 50 states, the District of Columbia, and Puerto Rico. A total of 18 million CMS beneficiaries and individuals with private insurance included in multi-payer models, have been impacted by, have received care, or will soon be receiving care furnished by more than 207,000 health care providers participating in Innovation Center payment and service delivery models and initiatives. In September 2016, the Congressional Budget Office (CBO) reported that the Innovation Center’s activities are expected to reduce federal spending by an estimated $34 billion from 2017 through 2026.

In addition, the Medicare Shared Savings Program, separately authorized by the ACA, currently serves about 7.7 million beneficiaries across more than 430 Medicare Accountable Care Organizations (ACOs). Therefore, in total there are more than 25.7 million Americans who are impacted by Innovation Center model tests and initiatives and the Shared Savings Program.

In 2015, Congress passed the bipartisan Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), which repealed the Sustainable Growth Rate formula for physician payment updates and added a Merit-Based Incentive Payment System (MIPS) designed to more closely link health care payment to quality and value. From 2019-2024, eligible clinicians who achieve threshold levels of participation in Advanced Alternative Payment Models (Advanced APMs) will be eligible to receive an incentive payment. Many of the Innovation Center models will be designated as Advanced APMS, with additional designations expected in the future.

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