Appendix A. Summary of Select Affordable Care Act Payment and Delivery System Reform Provisions

PAYMENT REFORM
Provision	Status	Impact to Date
Hospital Readmissions Reduction Program Reduce payments to hospitals with excess readmissions, effective for discharges beginning on October 1, 2012 (fiscal year [FY] 2013). Payment changes apply to all general hospitals paid under the Medicare Prospective Payment System. Excess readmissions are defined as those that exceed the national mean readmission rate, risk-adjusted for the demographic characteristics (for example, age and sex) and severity of illness of the hospital's patients. The penalty is calculated based on the amount of Medicare payments received by the hospital for the excess readmissions. The penalties are collected from the hospitals through a percentage reduction in their base Medicare inpatient claims payments, up to a cap. Penalty cap of 1% of aggregate inpatient prospective payment systems (IPPS) base payments for the first year, 2% for the second year, and 3% for each year thereafter.	In FY 2013 and 2014, payment changes applied to readmissions of Medicare patients age 65+ with diagnoses of acute myocardial infarction, heart failure, or pneumonia. Two additional conditions added for FY 2015: elective hip or knee replacement and congestive obstructive pulmonary disease. In FY 2015, 2,610 hospitals, or three-quarters of those subject to the payment change, will face the penalty. Thirty nine hospitals received the maximum reduction of 3% in 2014 (average is 0.63%). That means that from Oct. 1, 2014, through Sept. 30, 2015, they will receive lower payments for every Medicare patient stay—not just for those patients who are readmitted. Over the course of the year, the fines are expected to total about $428 million. In FY 2017, may add coronary artery bypass graft (CABG) surgical procedures to the list of measures subject to payment reductions.	Reports suggest that there have been small yet significant declines in both all-cause readmissions and risk-adjusted readmissions for the three conditions initially reported under the Hospital Readmissions Reduction Program (HRRP). Hard to disentangle effects from the HRRP from other related efforts (e.g., public reporting of readmission measures and various payment reforms). Most outcome studies examine readmission penalties and hospital characteristics. Various studies have found that safety-net hospitals face higher risk of being penalized under the HRRP. According to the Centers for Medicare and Medicaid Services (CMS): After holding steady at 19% over 2007–2011, national readmission rate started falling in 2012 (18.7% in 2012 and 18.0% in 2013). Improvement has been broad-based across geography, demographics, and clinical conditions. Estimate 150,000 fewer readmissions occurred during 2012–2013 than if readmission rate had remained at 19%. Reduction in inpatient readmissions does not seem to be driven by substitution by outpatient emergency department visits or observation stays.
Hospital-Acquired Conditions Reduction Program With this provision, the Affordable Care Act (ACA) aims to strengthen the Hospital-Acquired Conditions (HAC) Program that predated the passage of the ACA. In FY 2015, hospitals that rank in the lowest-performing quartile of HACs, based on data collected two years prior, will be paid 99% of the payment that would otherwise apply (i.e., would be subject to a 1% payment reduction). This HAC Reduction Program adjustment will be applied after adjustments are made under the Hospital Value-Based Purchasing (VBP) Program and the Readmissions Reduction Program. The HAC Reduction Program is separate from and in addition to the HAC Program, which withholds payments to hospitals for select conditions not present upon admission to the hospital.	Began October 2014. HAC-related financial penalties start 2015.	Recent data from the Department of Health and Human Services (HHS) show first-ever decline in composite rate of HACs nationally: a decrease of 17% from 2010 to 2013. Safety-net hospitals and hospitals with smaller profit margins have higher rates of HACs. As such, these hospitals may be more affected by the new HAC Payment Adjustment policy.
Hospital Value-Based Purchasing Program Aims to incentivize inpatient providers to deliver high-value, rather than high-volume, care. Value-based incentive payments are made each fiscal year to hospitals that meet the performance standards articulated for that year. For FY 2015, hospitals will “contribute” $1.4 billion to the value-based purchasing pool, the equivalent of 1.5% of base operating diagnosis-related group (DRG) payments (i.e., payments to all hospitals are reduced by $1.4 billion, and only those hospitals that perform satisfactorily with respect to the VBP measure sets can regain some of this money). This ACA provision builds on earlier legislation—the 2003 Medicare Prescription Drug, Improvement, and Modernization Act and the 2005 Deficit Reduction Act. These earlier laws established a way for Medicare to pay hospitals for reporting on quality measures, a necessary step in the process of paying for quality rather than quantity. Applies to most Medicare hospitals paid under IPPS (more than 3,000 hospitals).	Studies for the first two years of the program report that payment changes accounted for less than 0.25% of previous Medicare payments. CMS has continued to amend the weights of different measures for the composite score, such that outcome measures will have a larger weight than process measures by FY 2016.	On average, public hospitals have lower composite scores than private for-profit hospitals and not-for-profit hospitals. Several reports find that safety-net hospitals face greater risk of payment reductions. Policy recommendations include improving quality measures and accounting for socioeconomic factors to prevent the policy from widening current health disparities.
Physician Value-Based Payment Program Directs the HHS Secretary to develop and implement a budget-neutral payment system that will adjust Medicare physician payments based on the quality and cost of care they deliver. Intended to provide comparative performance information (on resource use and quality of care) to physicians as part of Medicare’s efforts to improve the quality and efficiency of clinical care. Goal is for information to be meaningful and actionable so providers can improve the care they furnish. The program contains two primary components: Quality and Resource Use Reports (QRURs, also known as Physician Feedback Reports). Development and implementation of the value-based payment modifier (VBPM). This program builds on the preexisting (to the ACA) Physician Quality Reporting Initiative (PQRI) program.	CMS has laid out a timeline to expand the VBPM to smaller practices: Physicians in group practices of 100+ eligible professionals will be subject to the value modifier beginning in 2015 (based on their performance in 2013). Physicians in group practices of 10+ will be subject to the value modifier beginning in 2016 (based on their performance in 2014). For 2015 and 2016, the value modifier does not apply to groups of physicians participating in the Medicare Shared Savings Program (MSSP), Pioneer Accountable Care Organizations (ACOs) or the Comprehensive Primary Care Initiative. All physicians who participate in fee-for-service (FFS) Medicare will be affected by the value modifier starting in 2017. Solo practitioners will only have upward adjustments in 2017. The maximum downward adjustment will be 2%, with the upward adjustment dependent on how many providers are distributed across cost and quality tiers so that the program can remain budget neutral. Providers in the low-cost and high-quality tiers will receive the largest upward adjustment. In 2018, nonphysicians (nurse practitioners and physician assistants) may also have to participate.	In 2015, all groups with 100+ physicians (who are not participating in ACO or primary care transformation initiatives) had to report on a combination of cost and quality measures, and if they did not, they were subject to a financial penalty. Physician groups had to opt in to be considered for the performance adjustment in this first program year. In 2015, the physician payment adjustments ranged from a 1% decrease to a nearly 5% increase. Of the 1,010 groups with 100+ physicians that are eligible for the Physician Value-Based Payment program in 2015, 691 physician groups submitted the requisite quality and cost measures, but only 127 groups elected to be considered for performance adjustments. Of the 127 physician groups that elected performance adjustment, 11 received a negative adjust, 14 groups received a positive adjustment, 81 received no adjustment, and 21 had insufficient data for an adjustment to be determined. CMS estimates that in 2015 over $11 million will be redistributed to the 14 that experienced a positive adjustment.
Bundled Payments for Care Improvement (BPCI) Initiative Tests bundled payment in the Medicare program, which means a single payment is made for an episode of care (e.g., a set of services delivered by designated providers in specified health care settings, usually delivered within a certain period of time and related to treating a patient’s medical condition or surgical procedure). The goal of this three-year initiative is to encourage hospitals and physicians to work together to coordinate care, improve care transitions and reduce unnecessary re-hospitalizations.	There are four types of bundled payment arrangements: Model 1. The episode of care is defined as the inpatient stay in the acute care hospital. Medicare will pay the hospital a discounted amount based on the payment rates established under the Inpatient Prospective Payment System used in the original Medicare program. Under certain circumstances, hospitals and physicians will be permitted to share gains arising from the providers’ care redesign efforts. There are 15 providers participating. Model 2. The episode of care will include the inpatient stay in the acute care hospital and all related services during the episode. The episode will end either 30, 60, or 90 days after hospital discharge. Participants can select up to 48 different clinical condition episodes. There are over 2,000 providers participating. Model 3. Similar to Model 2, except the episode of care will begin at initiation of post-acute care services. Over 4,000 providers are participating. Model 4. CMS will make a single, prospectively determined bundled payment to the hospital that would encompass all services furnished during the inpatient stay by the hospital, physicians, and other practitioners. Related readmissions for 30 days after hospital discharge will also be included. Can choose up to 48 conditions. Seventeen providers are participating. BPCI includes two phases for Models 2, 3, and 4. Phase 1 is a “preparation” period and Phase 2 is the implementation or “risk-bearing” period. The complete transition of all episodes for all Episode Initiators to Phase 2 will be completed by January 2015.	BPCI is Medicare's largest voluntary payment program with more than 6,937 participating providers. The program launched with approximately 450 providers in early 2013. Few providers are in Phase 2 as of now. Providers show limited interest in hospital-only bundling models (Model 1 and Model 4). Post-acute care providers and physician groups are joining BPCI in large numbers. Model 1. Small sample size precludes evaluations at this time. Model 2. Percent of patients discharged to post-acute care declined from 66% to 47% during intervention quarter, a significant difference from comparison group. Model 3. Neither the 30-day readmission rate nor the average number of post-acute care days were statistically significant from baseline or comparison group. Model 4. Small sample size precludes evaluations at this time.
Reductions in Growth to Medicare Payment Rates for Certain Services The payment rates that Medicare reimburse providers in the FFS program are determined by formulas specified by law. The ACA applies downward adjustments to the payment rate update for certain providers. These provisions include the “productivity adjustments,” which are permanent and apply to all providers except physicians. The productivity adjustments reduce default year-over-year price updates to account for economy-wide productivity growth. In addition the ACA called for specific reductions in payment rate updates for certain providers in certain years. For example, hospital payment rates are to be reduced by 0.1 percentage points to 0.75 percentage points from 2010 to 2019. These reductions are in addition to the productivity adjustments.	The productivity adjustments started to be implemented in 2011. The ACA specified flat rate reductions for payment updates to hospitals and other providers beginning in 2010 through 2019.	The savings from these cuts include the direct effects of lower payments to providers in traditional Medicare, as well as indirect savings from reduced payments to Medicare Advantage plans. These provisions were expected to reduce Medicare spending by $24 billion in 2014.
Reductions in Payment to Medicare Advantage Plans The ACA modified the methodology for calculating benchmarks to reduce the gap in payment between Medicare Advantage (MA) and traditional Medicare. Additionally, the law provided financial incentives for plans to improve their quality. These include new quality incentive payments beginning in 2012 for plans with quality ratings of 4 or more stars on a 5-star system.	In 2011 there was a one-year freeze (i.e., no update from 2010) in payment rates. The payment reductions are being phased in over a six-year period, starting in 2012. As of 2014, the payment reductions have been fully implemented in more than half of all counties.	In 2009, the Medicare Payment Advisory Commission (MedPAC) estimated that payments per enrollee to MA plans were 114% of what spending would have been for those enrollees had they been covered in the FFS program. In 2014, MedPAC estimated that the gap has been reduced to 106%. The Congressional Budget Office expected these changes to save $16 billion in 2014. There were concerns that MA plans would drop out of the program because of the payment reductions, however, access to MA plan choice remains strong and enrollment has grown by about 30% since 2010. In 2014, over half of all MA enrollees are enrolled in plans with four or more stars, which represents a significant increase from the 24% of enrollees who were in such plans in 2011.
CHANGES IN ORGANIZATION OF HEALTH CARE DELIVERY
Provision	Status	Impact to Date
Accountable Care Organizations—A network of providers (primary care physicians, hospitals, specialists, and others) that agree to work together and take responsibility for the quality and total costs of care for a designated patient population. When ACOs meet quality benchmarks and keep spending below budget targets, the organization can share in the savings with Medicare.
Medicare Shared Savings Program (MSSP) Established in 2012 as a new provider category, the Medicare Shared Savings Program targets FFS Medicare providers to become ACOs. If MSSP ACOs meet predetermined quality thresholds and achieve savings below budgeted targets, the provider network shares the savings 50-50 with Medicare. To obtain 60% share of the savings, MSSP ACOs must also agree to share in excess costs if spending exceeds budget targets.	There are 405 Medicare ACOs in the MSSP program serving 7.2 million Medicare beneficiaries (14% of the Medicare population).	Year 1 results show: MSSP has generated over $700 million in savings relative to the spending benchmarks in the general Medicare program, which is roughly 1% of the cost of care for participating beneficiaries. While slightly more than half of ACOs (118) were able to keep costs below spending targets, only 52 ACOs (24%) qualified for shared savings, earning over $315 million in shared-savings bonuses. While ACOs were rewarded for simply reporting quality measures in the first performance year, they did exhibit promising results in quality. For example, MSSP ACOs achieved higher average performance rates on 17 of the 22 clinical quality measures (spanning high-cost chronic conditions, preventive care, and patient safety) reported by other Medicare FFS providers reporting through this system. Patients in ACOs report better access to care than those not in an ACO. Among patients with multiple chronic conditions in an ACO, overall ratings of care significantly improved, compared to similar patients not in an ACO.
Pioneer ACOs The Pioneer ACO program is a Center for Medicare and Medicaid Innovation (CMMI) initiative that can inform refinements to MSSP. Pioneer ACOs engage in payment arrangements with Medicare with higher levels of risk and reward, as well as test alternative design elements (e.g., patient attribution).	The Pioneer ACO is entering its third performance year with 19 organizations. The program started with 32 participants. Of the 13 that have left the program, 11 applied to participate in the MSSP program and 2 declined to continue as ACOs.	Year 2 results (2013) show that 11 of 23 Pioneers earned financial bonuses that totaled $68 million while 3 ACOs faced penalties (roughly $7 million). Net savings across two years have been approximately $200 million. Nine Pioneers saved money in both years. The average savings rate for those that earned shared savings bonuses in any year was 3.9% (relative to their benchmarks) in each year.
Advance Payment ACOs This model tests whether advance payments will assist participation in the Medicare ACO programs for physician-led (i.e., do not include inpatient facilities and have more than $50 million in total annual revenue) and rural organizations (mainly hospital systems) with limited access to start-up capital. These models can be characterized as “prepaid shared savings” models. As a second iteration of this program, CMS has developed the ACO Investment Model. Through this model, CMS will invest up to $114 million in infrastructure and redesigned care processes at up to 75 MSSP participants, also aimed at small and rural providers. This program not only will help new participants to participate, but also will enable ongoing participants to move toward higher-risk models.	There are 35 upside-only ACOs participating, and one two-sided risk organization. CMS will recoup payments through offsets of an ACO’s earned shared savings. If not in the first year, then in subsequent years. There is a range of advance payment models available to participating ACOs with different loan and payment schedules. The advance ACO payments go toward previously agreed-upon infrastructure improvements and care plans that include services not normally covered, such as consultations with others to manage chronic diseases or Medicare data mining that can identify patients at risk of accruing large hospital bills.	Ten ACOs achieved savings. Eight achieved bonuses (two failed to report requisite quality measures).
Next Generation ACO On March 10, 2015, CMS announced the Next Generation Model ACO, which is aimed at attracting organizations experienced with coordinating care for populations of patients.	What distinguishes the Next Generation ACO from the Pioneer and MSSP programs is that the model offers financial arrangements with higher levels of risk and reward. Selected organizations will also be offered a variety of payment arrangements to help them gradually transition away from FFS reimbursement toward capitation. There is also a greater emphasis on beneficiary incentives than in the other programs (e.g., patients receive reward payments for obtaining care from an ACO, greater access to telehealth). The ACO must have a minimum of 10,000 beneficiaries to apply.	CMS is accepting two waves of applications—June 1, 2015, and June 1, 2016.

Primary Care Transformation Through Implementation of Medical Homes
Comprehensive Primary Care Initiative (CPC) This four-year, multi-payer initiative is testing a new delivery and payment model to promote better access, care coordination, chronic disease management, and new ways to engage patients and caregivers. To help participating practices, CPC offers enhanced payment ($20 per-member per-month [PMPM] with an option for shared savings in Years 3 and 4), technical assistance, and ongoing data about practice performance.	The initiative involves 30 payers (including CMS) and 492 providers serving 2.5 million patients in seven markets: Arkansas; Colorado; New Jersey; Capital District-Hudson Valley Region of New York; Cincinnati–Dayton Region of Ohio and Kentucky; Tulsa, Oklahoma; and Oregon.	Year 1 evaluation results show that in the first 12 months of the initiative (October 2012–September 2013), the participating practices generated $14 PMPM in savings, which covers a majority of the $20 PMPM care management fee paid by CMS, although not enough to yield overall net savings. There was considerable variation in savings across the seven markets with some showing significant savings (e.g., Oklahoma) and some showing increased expenditures (e.g., Ohio). For the median practice, enhanced funding was equivalent to 19% of total non-CPC practice revenue, or about $70,045 per clinician, in CPC’s first program year.
Multi-Payer Advanced Primary Care Practice Demonstration This is a multi-payer initiative where Medicare joined state-sponsored pilots involving Medicaid and private payers. All payers are providing a PMPM fee to help support primary care sites provide care aligned with the medical home model.	Participants: Eight states (Maine, Michigan, Minnesota, New York, North Carolina, Pennsylvania, Rhode Island, and Vermont). 41 payers (public and private). 3,800 providers. 700 practices. 2.2 million patients (more than 400,000 Medicare beneficiaries).	Recent evaluation results estimate that the initiative generated $4.2 million in savings, translating to a return on investment of $1.35 for every $1 Medicare paid out. The rate of growth in the Medicare FFS health expenditures was significantly reduced in Vermont and Michigan due to reduction in inpatient expenditures. However, there is less evidence that the state initiatives were able to reduce hospitalizations, readmissions, and emergency department visits.
Federally Qualified Health Center (FQHC) Advanced Primary Care Practice Demonstration Provides $6.00 PMPM for eligible Medicare beneficiaries served by community health centers for three years to promote FQHCs to become recognized by the National Committee for Quality Assurance (NCQA) as patient-centered medical homes.	469 participating FQHC sites with 2,700 individual clinicians in 44 states. This three-year initiative concluded in October 2014.	73% of the 492 participating health centers achieved Level 3 Patient-Centered Medical Home recognition based on NCQA standards, short of the 90% goal set in 2011. By May 2014, FQHCs in this demonstration had provided care to 207,000 Medicare FFS beneficiaries.
Independence at Home Demonstration The Innovation Center is supporting medical practices to test the effectiveness of delivering team-based comprehensive primary care services at home to high-need Medicare beneficiaries. The three-year demonstration will reward health care providers that demonstrate improvements in quality of care while reducing costs.	17 home-based primary care practices have completed the second year of the demonstration. Includes 347 providers caring for 8,300 patients.	The Independence at Home Demonstration is due to end in 2015. Release of results has been delayed for internal reasons, but is anticipated starting in 2015.

Other Provisions Related to Primary Care Transformation
Health Homes Health homes target low-income patients with complex needs, such as chronic conditions or mental health or substance abuse problems. Under this optional new benefit, state Medicaid programs can designate certain providers to serve as health homes. Building on the patient-centered medical home, health homes integrate physical and behavioral health care (both mental health and substance abuse) and long-term services and supports for high-need, high-cost patients. The federal government pays 90% of the costs of these additional services for two years with the expectation that the state will sustain the program.	At least 19 states received planning grants to prepare for their health home program. 16 states have had State Plan Amendments approved for health home programs.	While results are available for a few states, program-wide results should be available in Spring 2015. More than one million Medicaid beneficiaries have been enrolled in a health home.
Community-Based Care Transitions Program Supports community-based organizations to reduce readmissions by improving quality of care and transitions of high-risk Medicare beneficiaries from the inpatient hospital setting to home or other care settings.	Launched in 2011, applications are accepted on a rolling basis for two-year agreements that can be extended annually. 72 participants; $300 million in total funding available through 2015.	Hospitals partnering with four of the 48 community-based organizations evaluated had significantly reduced 30-day readmissions.
Medicaid Incentives for the Prevention of Chronic Diseases Model Grants to help Medicaid beneficiaries with evidence-based healthy lifestyle programs.	10 states commit to program for at least three years beginning in 2011. Most states are targeting multiple conditions/health behaviors and using patient and provider incentives. Evaluations just starting due to delayed implementation in most states.	November 2013 CMS report unable to recommend whether or not program should be extended past January 1, 2016. Previous Medicaid beneficiary incentive programs had mixed results.
WORKFORCE POLICY
Provision	Status	Impact to Date
National Health Service Corps National Health Service Corp (NHSC) resources are used to recruit primary care providers to serve underserved areas or populations through reduction or elimination of student debt. The Affordable Care Act increased the award amount available to NHSC members by creating the mandatory NHSC Fund.	As of October 2014, more than 9,200 Corps clinicians are actively serving 9.7 million patients. The NHSC has been fully funded by the ACA NHSC Fund since FY 2011, with $1.15 billion awarded so far.	Between 2009 and 2013, this additional funding has supported over 14,000 new providers, including 8,900 primary care clinicians, through loan repayment and scholarships. For FY 2015, the President’s budget requests a total of $810 million—a 166% increase over FY 2014—from the ACA fund, a new mandatory fund, and discretionary appropriations. This increased request highlights the need for continued attention to these federally designated Health Professions Shortage Areas.
National Health Care Workforce Commission Commission of experts to review, assess, and report to Congress on variety of issues including workforce supply and distribution, education and training capacity, and implications of federal policies impacting the health care workforce.	The commission has not been convened.	None.
Medicare Primary Care Incentive Program A quarterly incentive payment program to augment Medicare payment for primary care services when furnished by primary care practitioners, beginning in 2011 and ending in 2015. Bonus eligibility is determined on an annual basis. Primary care practitioners with a Medicare specialty designation of family medicine, geriatric medicine, pediatric medicine, internal medicine, nurse practitioner, clinical nurse specialist, or physician assistant, are eligible for the incentive payment if primary care services accounted for at least 60% of the practitioner's total allowed charges in the qualifying calendar year. Incentive payments are equal to 10% of the Medicare paid amount for primary care services.	In FY 2012 Medicare paid more than $664 million to eligible Primary Care Incentive Program (PCIP) participants, which averaged $3,938 per eligible practitioner. In 2011, Medicare paid over $560 million. Data for 2013 is forthcoming. Funding is authorized through the end of FY 2015.	The ratio of primary care physicians has remained constant since the implementation of the program. PCIP bonus payments are reportedly not sufficient to influence individual practitioner’s decisions to deliver primary care services. Other challenges are the disproportionate exclusion of primary providers in rural areas and the potential for the FFS policy to incentivize volume-driven care.
Increased Medicaid Payment for Primary Care Federal funding to elevate primary care provider (PCP) Medicaid payment rates to Medicare levels. Funding only provided for 2013 and 2014. The increase was intended to ensure sufficient provider participation as the Medicaid population expands.	As of June 2014, the federal government had spent an estimated $5.6 billion on the fee bump. Supplemental payment ended on December 31, 2014.	15 states using state funds to partially or fully continue increased payment rates through 2015. 24 states have decided to revert back to pre-2013 reimbursement rates for primary care. 12 states are undecided about whether they will continue the pay raise or revert back to pre-2013 levels. Mixed results on whether or not provider participation with Medicaid increased as a result of the payment bump. One study in 10 states showed improved appointment availability by 8% among providers already accepting Medicaid patients during the increased fee period, compared with only 1% among privately insured patients.
Teaching Health Centers The ACA incentivizes the development and expansion of teaching health centers that operate a primary care residency program through this $230 million, five-year initiative.	The first awards were given in 2011 to 11 teaching health centers; by academic year 2014–2015, 60 such programs are up and running in 24 states.	The 60 current centers are supporting 550 residents. 75% of these Teaching Health Centers are federally qualified health centers or look-alikes.
Distribution of Additional Residency Positions This program redistributes unused Medicare resident slots to hospitals meeting certain criteria.	Beginning July 1, 2011, the resident caps of hospitals with unused residency slots was permanently reduced by 65% of the number of unused slots. Redistributed slots prioritize hospitals that have rural training tracks, have geriatric training tracks, serve health professional shortage areas, or are creating or expanding primary care programs.	As of August 2011, 267 hospitals had their full-time equivalent (FTE) caps reduced by an aggregate 726 direct and 628 indirect graduate medical education FTEs. Those resident slots were redistributed to 58 hospitals, 70% of which are in states with resident-to-population ratios in the lowest quartile. Hospitals receiving new resident slots must certify that they continue to meet requirements by June 30, 2016.

WORKFORCE POLICY
Provision	Status	Impact to Date
Center for Medicare and Medicaid Innovation (CMMI) Established to identify and evaluate new payment and service delivery models for Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP) while enhancing quality of care for beneficiaries. HHS Secretary authorized to expand successful innovations if they reduce costs and/or improve outcomes.	Since 2010, CMMI has launched an array of initiatives that are currently in various stages of development, implementation, and evaluation. More information on specific initiatives can be found on CMMI’s website: innovation.cms.gov. Required to submit a Report to Congress on the center’s activities at least once every other year beginning in 2012.	In the 2014 Report to Congress, CMMI estimated that 2.5 million patients, in all 50 states, were receiving care from the more than 60,000 providers participating in CMMI initiatives.
State Innovation Models Initiative (part of CMMI) Provides federal dollars and technical assistance for health system transformation efforts to help states partner with private payers to achieve better health care outcomes at lower costs.	Through two rounds of funding, 39 states have received State Innovation Model (SIM) grants. 33 states have received design grants or pretesting grants. 17 states have progressed to receive testing grants of at least $20 million.	SIM grants have spurred transformation at several levels and are already causing spillover effects. For example, Connecticut’s design process accelerated the organization of providers into ACO-like entities, as well as lead FQHCs to investigate alternative payment methodologies. Some states have also seen more appropriate care delivery: In 2013, Oregon increased primary care utilization and decreased emergency department visits.
Medicaid Innovation Accelerator Program (part of CMMI) New technical assistance program launched by CMS in July 2014 to support states in accelerating payment and delivery system reforms for Medicaid beneficiaries.	The first four issues CMCS has decided to address through the Innovation Accelerator Program (IAP) are: substance use disorders, super utilizers of health care services, community integration to support long-term services and supports, and physical/mental health integration.	First program, addressing substance use disorders, launched October 2014.
Patient-Centered Outcomes Research Institute (PCORI) Public-private partnership created to encourage research on diagnosis and treatment options and to accelerate patient-centered outcomes research and methodological research.	As of February 24, 2015, PCORI had awarded 365 research projects in 39 states, totaling $735 million across five broad National Priorities for Research.	While preliminary feedback shows that PCORI has successfully engaged patients and other stakeholders in the development of research questions in the review of proposals, no results are currently available on the impact of funded projects on patients or providers.
Medicare-Medicaid Coordination Office Created to increase coordination between Medicare and Medicaid for the 9.6 million low-income, aged, and disabled beneficiaries who are eligible for both programs and who account for a disproportionate share of spending in the two programs.	Launched two demonstrations, in collaboration with CMMI, to integrate care for the dual-eligible population in 18 states: the Initiative to Reduce Avoidable Hospitalizations among Nursing Facility Residents and the Financial Alignment Initiative for Medicare-Medicaid Enrollees.	Each state participating in the demonstrations has submitted an evaluation plan but early results on beneficiary experience or the impact on cost and quality are not yet available.
National Strategy for Quality Improvement in Health Care (NQS) Led by the Agency for Healthcare Research and Quality and designed to align quality improvement efforts across multiple federal agencies, state agencies, local entities, and the private sector. Guided by three aims to provide better, more affordable care to create healthy people and healthy communities. To achieve these aims, the NQS applies six priorities that address the range of quality concerns that affect most Americans.	The first NQS was published in March 2011 and is updated annually with a Report to Congress and agency-specific quality plans. Future releases of the NQS annual progress report will feature updates on how federal agencies, states, and the private sector have implemented the NQS over the prior year. Updated measurement data that tracks progress against NQS aim and priorities will be available in the National Health Care Quality and Disparities report, published annually by the Agency for Healthcare Research and Quality.	Work in at least one NQS priority area – patient safety – has had a significant impact on hospital-based care between 2010-2013, citing a 17% decrease in harm experienced by hospital patients nationwide, 50,000 avoided deaths, and 1.3 million fewer patients experiencing harm from hospital-acquired conditions. These improvements have saved an estimated $12 billion in unnecessary health care costs.
Prevention and Public Health Fund Established to provide sustained national investment in prevention and public health to improve health outcomes and health care quality. Major investments support diabetes prevention, immunization programs, tobacco use prevention, heart disease and stroke prevention, and the Community Transformation Grants.	Total investment of $10.5 billion is expected through 2021. Through 2015, over $5 billion has been awarded.	An estimated 1.6 million people quit smoking following a Centers for Disease Control and Prevention 2012-2013 awareness campaign. Community Transformation Grants have paid out over $370 million to local programs, benefiting 130 million Americans. Navigator and enrollment assistance programs provided for in-person assistance in states utilizing the federally facilitated marketplace.
Community Transformation Grants Grants to local government and community-based organizations for evidence-based preventive programs to promote health and reduce health disparities.	Awards made in 2011 and 2012 in at least 31 states for funding through 2014. Grant-funded programs range from anti-smoking to reducing sugary drink intake to promoting worksite wellness and physical activity.	40% of all Americans touched by a Community Transformation Grants.

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5.	Agency for Healthcare Research and Quality. Interim update on 2013 annual hospital-acquired condition rate and estimates of cost savings and deaths averted from 2010 to 2013. Rockville, Md.: AHRQ, 2014.
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8.	Centers for Medicare and Medicaid Services. Changes for the physician value-based payment modifier in the CY 2015. Baltimore, Md.: CMS, 2014.
9.	Centers for Medicare and Medicaid Services. 2015 value modifier results. Baltimore, Md.: CMS, 2015.
10.	Medicare Payment Advisory Commission. Report to Congress: Medicare and the health care delivery system. Washington, D.C.: MedPAC, 2014.
11.	Centers for Medicare and Medicaid Services. Bundled payments for care improvement initiative fact sheet. Baltimore, Md.: CMS, 2014.
12.	Ibid.
13.	Centers for Medicare and Medicaid Services. CMS innovation center model participants dataset. Baltimore, Md.: CMS, no date (accessed March 16, 2015, at https://data.cms.gov/dataset/BPCI-Initiative-Filtered-View/e5a5-c768).
14.	Dummit L, Marrufo G, Marshall J, et al. CMS bundled payments for care improvement (BPCI) initiative models 2–4: Year 1 evaluation and monitoring report. Falls Church, Va.: The Lewin Group, 2015.
15.	White C, Cubanski J, Neuman T. How much of the Medicare spending slowdown can be explained? Insights and analysis from 2014. Menlo Park, Calif.: Kaiser Family Foundation, 2014.
16.	Ibid.
17.	Office of the Assistant Secretary for Planning and Evaluation. The Medicare Advantage program in 2014. Washington, D.C.: ASPE, 2014.
18.	Ibid.
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55.	Ibid.