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The Innovation Center at One Year: Much Progress, More to Be Done


One year ago, the Center for Medicare and Medicaid Innovation was launched to find new ways to reduce costs and improve quality. As the National Scorecard on U.S. Health System Performance released last month by the Commonwealth Fund's Commission on a High Performance Health System shows, health care in the United States is the most expensive in the world, and the quality of care available to many Americans does not match that high level of spending. But the potential for achieving access to better care, as well as lower costs, exists—we already see it at work in select high-performing organizations and regions.

Established by the Affordable Care Act, the Innovation Center is charged with identifying, developing, testing, and disseminating alternative models of paying for, organizing, and delivering care. By funding many pilot projects and helping to encourage broader adoption of the best initiatives, the Innovation Center can help produce needed reform by working in partnership with providers, payers, and patients.

The first anniversary of the Innovation Center provides an opportunity to review its progress and note areas for future development and consideration.

Reviewing the Innovation Center's Performance to Date

  • Number of initiatives. In its first year, 12 initiatives have been announced by the Innovation Center (see Table 1 below). These initiatives involve thousands of health care providers and have the potential to improve care for millions of Americans. The number of projects that have been announced reflects the Innovation Center's emphasis on moving quickly; more rapid implementation of demonstrations was a major goal for the Innovation Center and, considering the time and complexity required to develop and implement new initiatives, the Innovation Center's performance has been encouraging. We look forward to seeing these projects begin and learning of their progress.
  • Range of initiatives. The Innovation Center's new programs include patient-centered medical homes, alternative models for accountable care organizations (ACOs), bundled payment initiatives, and mentorship programs. These initiatives represent the top priorities outlined in the legislation, as well as those innovations most frequently cited by national experts as ripe for testing. The Innovation Center's mission will involve identifying which versions of which models might be successful in different circumstances and in which combinations with other initiatives.
  • "Intellectual energy." The Innovation Center has welcomed public engagement in the consideration of new ideas. With a new Web site, the Innovation Center makes it easy for visitors to submit ideas for potential innovations, and hundreds of people have shared their ideas with Innovation Center staff. This openness can help the Innovation Center learn from the field and also foster more collaborative partnerships with providers, other public and private payers, and Medicare, Medicaid, and privately insured patients.
  • Provider relationships. The proposed rule for the Medicare Shared Savings Program for accountable care organizations was criticized by providers and other stakeholders for being prescriptive and burdensome and not offering enough rewards for performance improvement. While the Shared Savings Program is not an Innovation Center initiative, two companion initiatives released soon after through the Innovation Center—the Pioneer ACO program and the Advanced Payment ACO Model—were intended to address some of those concerns. These programs exemplify how the Innovation Center has the potential to facilitate the development of efforts that can work for all stakeholders involved. (The subsequent release of a final rule that provided much more flexibility and reduced the burden for potential participants in the Medicare Shared Savings Program also was encouraging to potential partners in CMS innovations.)
  • Payment reform. Changing the way we pay for and provide health care to reward high-quality, efficient care is an essential step toward a high-performance health system. The majority of Innovation Center initiatives are testing new payment models, including bundled payments, shared savings programs, and partial capitation. The payment models in the current initiatives are tied to high-quality, efficient, and patient-centered care. This emphasis on payment and the explicit connection to quality improvement is both critical and welcomed, since it addresses one of the greatest shortcomings of our current health care delivery system, which generally pays for greater volume of services rather than the most efficient and effective services.
  • Multipayer partnerships. A theme from many of the innovations announced thus far is a call for partnership between public (Medicare/Medicaid) and private, commercial payers. This focus is giving the private sector hope of effectively working with the federal government to find solutions that will work for all stakeholders, as well as providing a more effective way to address the underlying causes of cost growth, which affect both the public and private sectors.

Additional considerations that are essential for success include:

  • Continued, ongoing transparency. While the Innovation Center should be commended for publicly announcing its initiatives and reaching out to payers, employers, providers, and consumers, ongoing transparency will be needed. In particular, the public will want information about implementation contracts (Who is providing the technical assistance? At what level are they funded? What is the awarded scope of work?), the participating grantees, and evaluation contracts (Who are they? What is the timeline?). Information also must be made available on a timely basis to participants in the initiatives, so they can manage the projects on an ongoing basis and identify changes that need to be made as the initiatives develop.
  • Sharing of early lessons. It will be important to show some results early to keep the momentum going. Of course, the Innovation Center will need to temper expectations. Early lessons are not the same as results, but they can be useful; as they emerge, they can indicate progress in achieving program goals and also be incorporated into existing initiatives to enhance their success.
  • Ongoing monitoring and timely evaluation. Comprehensive evaluations, which ultimately are required to establish the potential of new approaches to paying for and delivering health care, take time. But the innovation process, if it is to be successful, requires strategies that produce credible, if interim, information to monitor and assess the results of new approaches on an ongoing basis. Evaluation should be viewed in this light: as an ongoing effort, rather than a discrete exercise. Decisions will need to be made about whether and how innovations that are currently in place need to be modified, as well as whether and how they should be disseminated more broadly, and the Innovation Center will not always be able to wait for more comprehensive traditional evaluations. The Innovation Center, in collaboration with the CMS Office of the Actuary, should work to develop and test such methods for assessing the impact of alternative payment models on quality, cost, and patient experience. One such model is the "Coverage with Evidence Development" approach used by Medicare to enable beneficiaries to have access to services that potentially improve care while requiring that data be provided on an ongoing basis on the impact of those services over time—with the option of withdrawing coverage if the evidence turns out not to support the initial coverage decision. Other examples of more flexible approaches may be available in the private sector.
  • Coordination of multiple initiatives. To achieve high performance in the U.S. health care system, we will need more than the successful completion of any one initiative from the Innovation Center's portfolio. The success of multiple innovations—taken together and in combination—could be mutually reinforcing and help accelerate performance improvement in a given community. With that in mind, the Innovation Center should encourage participation in multiple initiatives. While this may complicate evaluations, since it will be harder to know exactly which innovation contributed to any observed improvement, allowing multiple initiatives to coexist (and interact) can make enormous sense from an implementation and system improvement perspective. Asking candidate participants to outline how the various initiatives in their areas will fit together at the health system and individual provider levels could help assure alignment and synergy.
  • More new programs. The ongoing challenge will be to continue to implement a wide variety of initiatives, while selecting the ones that have the most promise of success, making sure that support is provided to enable their effective implementation, monitoring their performance so that midcourse corrections can be made as appropriate, and producing sufficient evidence to establish whether and how they should be expanded more broadly throughout the program. In particular, it will be important to do more with Medicaid—not just show a preference for applicants who include Medicaid in their efforts, but develop targeted initiatives for Medicaid and dually eligible Medicare and Medicaid beneficiaries. Initiatives that incorporate long-term care may be a good place to start. Additionally, models testing ways to get consumers more directly involved in accountable care should be tested.
  • Continued focus on relationships. The continued cultivation of the relationships between the Innovation Center and provider groups will be required for health system improvement, as will the active involvement of all system stakeholders, including private payers, the business community, and consumer groups. The relationship between the federal government and the states is also crucial to the development of national initiatives that can be effective at the local level, and will require ongoing effort.
  • Spread and moving beyond pilots to program change. As we learn more about the impact of alternative payment and delivery models, it will be critical to enhance the spread of effective models, and the adoption of different aspects of successful models that have the promise of working in different circumstances. This effort also will require flexibility, both in understanding that a single model or set of features may not be equally successful in different areas, and in allowing providers in different circumstances to pursue different paths to high performance. It will also require a clear understanding of what constitutes success, as much information as possible on the implementation and impact of different approaches, and development of the relationships described above to support the involvement of all stakeholders.

The purpose of the Innovation Center is to help achieve higher quality and lower costs throughout the health sector. The task is not an easy one. It requires transforming a fragmented "cottage industry" that has not previously been rewarded—in fact, that often has been punished—for providing efficient, effective care into a coordinated, patient-centered, high-performing delivery system. The Innovation Center must make sure that promising models are implemented without lengthy delays and administrative hurdles, that those who are willing to implement those models are provided with information and other support in implementing their programs and monitoring their results, and that models that show they can be effective are continued and applied more broadly. To be successful in that endeavor, the Innovation Center needs to maintain and expand on its openness to other stakeholders, which has been key to its success so far. The Innovation Center is off to a good start, but it needs to build on its momentum as it attempts to move the country toward a new health care delivery system.

 Table 1. Overview of Center for Medicare and Medicaid Innovation–Sponsored Initiatives



Application Due Date 

 Implementation Start Date (duration)


ACO Initiatives

 Advance Payment ACO Model

This initiative, which is available to ACOs participating in the Medicare Shared Savings Program, will test whether upfront payments to support organizational transformation increase participation.

Starting in late Fall 2011; must follow application to Medicare Shared Savings Program

Early 2012. Payments to selected ACOs will begin at the start of the first performance period and end in June 2014.

 Pioneer Accountable Care Organization Model

This initiative complements the Medicare Shared Savings Program by testing more advanced ACO models. ACOs spending 1% over or under historical core spending (determined from historical per capita payments) will either acquire their savings or pay back overspent funds. ACOs are encouraged to develop and submit alternate payment methods.

June 10, 2011

Early 2012 (three years, with possible two year extension)

 Bundled Payments for Care Improvement

This initiative seeks to improve patient care by testing four different bundled payment models to encourage improved care coordination and efficiency. Model 1 covers inpatient hospital services; model 2 covers inpatient hospital and postacute services; model 3 covers postacute services; and model 4 covers inpatient hospital and physician services.

November 18, 2011, for Model 1; March 15, 2012, for Models 2–4

Early 2012
(three years, with possible two-year extension)

 Primary Care Initiatives

 Comprehensive Primary Care Initiative

Multipayer initiative fostering collaboration between public and private health care payers to strengthen primary care. CMS will pay a risk-adjusted, monthly care management fee averaging $20 per beneficiary, per-month (PBPM) for the first two years; $15 PBPM for years three and four. After year two, market Medicaid savings will be available to practices. LOI-November 15, 2011; Application- January 17, 2011 (four years)

 Federally Qualified Health Center (FQHC) Advanced Primary Care Practice Demonstration

The initiative will promote 500 FQHCs' transformation to medical homes through $6 PMPM payment for each eligible Medicare beneficiary. September 9, 2011 November 1, 2011 (three years)

 Multipayer Primary Care

Medicare has joined eight state multipayer medical home demonstrations (ME, VT, RI, NY, PA, NC, MI, and MN). The goal is to test if an all-payer PCMH pilot can improve quality, access, and safety while decreasing cost and unnecessary utilization. August 17, 2010 Midyear 2011 (three years) 

 Dual Eligibles Initiatives

Financial Models to Support State Efforts to Integrate Care for Medicare–Medicaid Enrollees CMS will test two models to encourage states to align the financing of Medicare and Medicaid and integrate primary, acute, behavioral health, and long-term services and supports. October 1, 2011 2012
State Demonstrations to Integrated Care for Dual Eligibles The Medicare–Medicaid Coordination Office selected 15 states (CA, CO, CT, MA, MI, MN, NY, NC, OK, OR, SC, TN, VT, WA, WI) to receive up to $1 million to develop new ways to meet the needs of and reduce costs for the dual eligible population. Awarded One-year timeline (April 2012)

 Other Initiatives

Innovation Advisors Program The program will create a network of experts in improving the delivery system for Medicare, Medicaid, and CHIP beneficiaries. Selected members will receive a $20,000 stipend for their home organization or group. November 15, 2011 December 2011 (one year)
Reducing Preventable Hospitalizations in Nursing Facility Residents This initiative seeks to improve the quality of care for people in nursing home facilities by reducing preventable inpatient hospitalizations.

July 29, 2011

(one year)
The Health Care Innovation Challenge This initiative will award up to $1 billion in grants (each about $1 million to $30 million) to engage a broad set of innovation partners to identify and test new care delivery and payment models that originate in the field and produce better care, better health, and reduced cost. A focus will be on new models of workforce development and on innovators who can rapidly deploy care improvement models (within six months of award) through new ventures or expansion of existing efforts. January 27, 2012 Early 2012 (three years)
Partnership for Patients This initiative seeks to bring together physicians, nurses, and other clinicians working in and out of hospitals to decrease by 40% preventable hospital conditions and reduce by 20% readmissions due to preventable complications during a transition from one care setting to another. CMS will dedicate as much as $500 million in funds to test different models to achieve these goals. Ongoing  Ongoing

Publication Details



M. Zezza, M. K. Abrams and S. Guterman, The Innovation Center at One Year: Much Progress, More to Be Done, The Commonwealth Fund Blog, November 2011.