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CMS says it will change direction of CMMI, wants providers to have greater flexibility in payment model design

CMS innovation center programs in limbo as officials say free market approach will encourage competition among healthcare providers.

Susan Morse, Senior Editor

CMS Administrator Seema Verma. Photo via <a href="" target="_blank">Twitter</a>CMS Administrator Seema Verma. Photo via Twitter

The Centers for Medicare and Medicaid Services is redesigning its innovation center to give providers greater flexibility in payment models while encouraging greater competition among healthcare systems to drive down cost. 

"This administration plans to lead the innovation center in a new direction," said CMS Administrator Seema Verma in an op-ed published in The Wall Street Journal.

The Centers for Medicare and Medicaid Innovation came out of the Affordable Care Act and introduced many new models shifting payment from fee-for-service to value-based care.

But CMS is now looking for feedback on what models work and which ones don't. It will accept comments through Nov. 20.

"Providers need the freedom to design and offer new approaches to delivering care," Verma said. "Our goal is to increase flexibility by providing more waivers from current requirements."

Current models have encouraged consolidation in the healthcare system, she said. 

CMS wants to see more competition between providers to compete for patients in a free market system. Transparency is needed for consumers to be more cost-conscious, she said.

The innovation center is interested in testing models in eight focus areas including increased participation in advanced alternative payment models, consumer-directed care and market-based innovation, physician specialty models, prescription drug models, Medicare Advantage innovation models, state-based and local innovation, including Medicaid focused models, mental and behavioral health models and program integrity.

"We will move away from the assumption that Washington can engineer a more efficient healthcare system from afar -- that we should specify the processes healthcare providers are required to follow," Verma said.

The move away from federal control to giving providers greater flexibility follows a push by the Department of Health and Human Services to do the same for states by urging state officials to apply for Section 1332 waivers to ACA requirements.

Legislation is also moving towards giving states fewer restrictions in the Section 1332 waivers established under the ACA. An estimated 23 states have begun steps towards getting a waiver. Seven have applied and two have gotten waivers.

Verma said Medicare and Medicaid are both facing a fiscal crisis, with Medicare's trust fund projected to run out of money in 11 years and Medicaid representing the second largest budget item after education in most states.

CMMI's new direction is to promote patient-centered care and test market-driven reforms to empower beneficiaries as consumers, provide price transparency, increase choices and competition, reduce cost and improve outcomes, CMS said.

Twitter: @SusanJMorse
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