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CMS Innovation Center Spending Ticks Up as Obama Era Nears End

By Kerry Young, CQ Roll Call

February 10, 2016 -- The Obama administration is picking up the pace of spending through its $10 billion Center for Medicare and Medicaid Innovation (CMMI), which may prove to be a short-lived initiative for testing ways to improve health care by tying federal payments to the quality of services.

The center is expected to spend about $1.60 billion in fiscal 2017, up 13 percent from $1.41 billion in fiscal 2106, according to the final budget from the Obama administration, which was released Tuesday. The $3 billion to be paid by CMMI over just those two years exceeds the combined annual outlays from the program in its first six years of operations. The program was created by the 2010 health law.

The Obama budget unveiled Tuesday shows an expectation for a fairly rapid depletion of CMMI's uncommitted money. The balance dropped from $5.67 billion at the end of fiscal 2015 to $3.84 billion in fiscal 2016, and then is projected to fall to $2.36 billion by fiscal 2017. 

Department of Health and Human Services (HHS) Secretary Sylvia Mathews Burwell has said there's a deliberate push to get large CMMI projects ready to begin operations in the final months of the Obama administration.

"This is about getting the changes rolling," said Burwell at a Feb.5 meeting with reporters. 

A major new initiative is slated to begin this year that would compel about 800 hospitals to keep closer tabs on how people on Medicare fare after undergoing hip and knee replacements, with part of their reimbursement at stake for poor results. 

Part of the spending increase is due to a maturing of CMMI programs. Among the more than 25 projects already in motion are test programs to try to better coordinate care of people on Medicare who have cancer or failing kidneys.

"They have developed a creative, very interesting portfolio of projects that I believe will be important in fundamentally changing the organization of U.S. health care for the better," Lawrence Casalino, a professor of health policy at Weill Cornell Medical College told CQ HealthBeat in an email, adding that CMMI has done "a very good job spending the money at a reasonable pace."

Casalino had last year raised concerns about whether CMMI was getting plans in place quickly enough to spend its $10 billion. CMMI's roots in the 2010 health overhaul have attracted some GOP opposition despite some bipartisan support for the program's core mission. The health law  provided an initial $10 billion for CMMI to be used through fiscal 2019, with an expectation that another $10 billion would be provided for the following decade. Budget politics make this second tranche of funds unlikely to materialize, even if a Democrat follows Obama as president.

In a May 2015 article published in the New England Journal of Medicine, Casalino had suggested that "it may be better to spend the money sooner rather than later" at CMMI. CMMI had only committed about a third of its $10 billion as of fiscal 2014.

The following month, House GOP appropriators made a bid to rescind $6.8 billion from CMMI. While this was unsuccessful, it could set a precedent for eyeing CMMI's untapped funds as an offset.

Some of CMMI's programs are on track to run well beyond the end of Obama's tenure.  A five-year program intended to encourage more coordination in the care of cancer patients is slated to start in mid-2016. A large program involving so-called accountable care organizations is set to end in 2020.

The CMMI initiative may have effects by changing the expectations about the quality of care attached to future policy decisions about Medicare payments, Burwell said.

"I feel like there are some standards that, even if we are gone, people are going to pursue if it is successful," she said.

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