The Innovation Center allows the Medicare and Medicaid programs to test models that improve care, lower costs, and better align payment systems to support patient-centered practices. The Innovation Center carefully evaluates innovative reform efforts widely used in the private sector, and is unique in its ability to develop provider-proposed approaches and quickly adjust models in response to feedback from clinicians and patients.
The Innovation Center was established by section 1115A of the Social Security Act (as added by section 3021 of the Affordable Care Act). Congress created the Innovation Center for the purpose of testing “innovative payment and service delivery models to reduce program expenditures …while preserving or enhancing the quality of care” for those individuals who receive Medicare, Medicaid, or Children’s Health Insurance Program (CHIP) benefits.
Congress provided the Secretary of Health and Human Services (HHS) with the authority to expand the scope and duration of a model being tested through rulemaking, including the option of testing on a nationwide basis. In order for the Secretary to exercise this authority, a model must either reduce spending without reducing the quality of care, or improve the quality of care without increasing spending, and must not deny or limit the coverage or provision of any benefits. These determinations are made based on evaluations performed by the Centers for Medicare & Medicaid Services (CMS) and the certification of CMS’s Chief Actuary with respect to spending.
Innovation Center is currently focused on the following priorities:
- Testing new payment and service delivery models, including Quality Payment Program Advanced Alternative Payment Models
- Evaluating results and advancing best practices
- Engaging a broad range of stakeholders to develop additional models for testing
Testing New Payment and Service Delivery Models
New payment and service delivery models are developed by the Innovation Center in accordance with the requirements of section 1115A of the Social Security Act. During the development of models, the Innovation Center builds on the ideas received from stakeholders and consults with clinical and analytical experts, as well as with representatives of relevant Federal agencies.
The Innovation Center solicits and selects organizations to participate in model tests through open, competitive processes. The process follows established protocols to ensure that it is fair and transparent, provides opportunities for potential partners to ask questions regarding the Innovation Center’s expectations, and relies on multi-stakeholder input to inform selection of the most qualified partners. Many factors are used in the selection of models (PDF) to be tested. The Innovation Center does not fund unsolicited proposals, but does use such ideas to inform model development.
Congress has also assigned – both through the Affordable Care Act and previous legislation – a number of specific models to be implemented by CMS.
Some of these models are designed to test improvements in care delivery and payment. Others are designed to confirm findings from previous tests to help monitor the effectiveness of Medicare, Medicaid, and CHIP. These activities are funded by specific statutory authorities and are conducted by the Innovation Center. The findings will inform possible changes in health care payment and policy, as well as the development and testing of new models when necessary or appropriate.
The Innovation Center also plays a critical role in implementing the Quality Payment Program, which Congress created as part of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) to replace Medicare’s Sustainable Growth Rate formula to pay for physicians’ and other providers’ services. In this new program, clinicians may earn incentive payments by participating to a sufficient extent in Advanced Alternative Payment Models (APMs). In Advanced APMs clinicians accept some risk for their patients’ quality and cost outcomes and meet other specified criteria.
The Innovation Center is working in consultation with clinicians to increase the number and variety of models available to ensure that a wide range of clinicians, including those in small practices and rural areas, have the option to participate.
Evaluating results and advancing best practices
The Innovation Center conducts an evaluation of each new payment and service delivery model tested. Statute specifies that measures in each evaluation must include an analysis of the quality of care furnished under the model (including the measurement of patient-level outcomes and patient-centeredness criteria) as well as changes in spending.
In addition to the rigorous evaluation of the impact of each model on outcomes of interest, the Innovation Center provides frequent feedback to providers who participate in each model in order to support continuous quality improvement, with the understanding that learning and adaptation are essential to enable providers and health systems to achieve the greatest efficiencies and improvements possible in each new payment model. The Innovation Center leverages claims data to deliver actionable feedback to providers about their performance, and encourages participating providers to use their own performance data to drive continuous improvement in their outcomes.
Every test of a new service delivery or payment model developed by the Innovation Center also includes a plan of action to ensure that the lessons learned and best practices identified during the test can be spread as widely and effectively as possible to support improvement for both CMS and the health care system at large. Evaluation results are shared with participating providers on an ongoing basis in order to promote more rapid learning. The Innovation Center has also created learning collaboratives for providers in our models to promote broad and rapid dissemination of evidence and best practices that have the potential to deliver higher quality and lower cost care for Medicare, Medicaid and CHIP beneficiaries.
The Innovation Center has actively sought input from a broad array of stakeholders from across the country. Since its formation, the Innovation Center has held numerous regional meetings and “listening sessions,” engaging thousands of innovators from around the country. In addition, hundreds of ideas for improving health care have been shared through the Share Your Ideas section of this website.
The Innovation Center has also sought input from experts and stakeholders in the design of individual models, conducting webinars, open door conference calls, and other activities to facilitate communication and inform model development.
The Innovation Center is a component of the Centers of Medicare & Medicaid Services, an Agency of the U.S. Department of Health & Human Services. See our general organization structure and read the bios of our leadership. The Innovation Center is directed by Brad Smith. Learn More about Our Team ...
If you have a question about a particular Innovation Model, please find the direct email address for that Model mentioned on its details page. For other inquiries, you can find information about getting in touch with CMS on cms.gov. Learn More ...