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CMS Innovation Models: What You Need to Know About Alternative Payment Models 


In the ever-evolving landscape of healthcare, the Centers for Medicare & Medicaid Services (CMS) plays a pivotal role in driving innovation to improve care quality while controlling costs. One of the key strategies CMS employs is the development and implementation of Alternative Payment Models (APMs). These models are designed to incentivize healthcare providers to deliver high-quality and cost-efficient care. 

CMS: The Driving Force Behind Healthcare Innovation

CMS, a federal agency within the U.S. Department of Health and Human Services, administers programs that provide health coverage to more than 135 million Americans. Health coverage includes Medicare for those 65+; Medicaid for low income individuals; Children’s Health Insurance Program (CHIP) for children in families with income too high to be eligible for Medicaid; and the Basic Health Program (BHP), which enables states to offer affordable health benefits. CMS continually seeks innovative ways to transform the healthcare system to achieve better outcomes for beneficiaries while reducing healthcare spending. This has led to the development of various Innovation Models aimed at reshaping healthcare delivery and payment structures.

The History of CMS Innovation Models

CMS has a rich history of experimentation with payment and service delivery models, driven by the need to address the complex challenges facing the healthcare system. This journey began with the introduction of the Medicare Shared Savings Program (MSSP) in 2012 and has since evolved to encompass a wide range of models.

The MSSP was a seminal moment in CMS’s journey toward Alternative Payment Models (APMs). It established Accountable Care Organizations (ACOs), which are groups of healthcare providers working together to coordinate care for Medicare beneficiaries. The goal was to reward ACOs for achieving cost savings while maintaining or improving care quality. This marked the beginning of a transformative era in healthcare delivery and payment.

Building upon the success of the MSSP, CMS introduced various other models, each with its unique focus and approach:

  1. Bundled Payments: Bundled payments, introduced in various forms, involve CMS paying a single bundled payment for an episode of care, rather than making separate payments for services. This approach incentivizes providers to collaborate and reduce costs without compromising quality. Examples include the Comprehensive Care for Joint Replacement (CJR) and the Bundled Payments for Care Improvement (BPCI) models. Under CJR, for instance, hospitals must ensure that “patients receive high-quality, coordinated care by all health care providers from the time of the procedure through recovery, including physical therapy and any other at-home rehabilitation care,” according to CMS.
  2. Patient-Centered Medical Homes (PCMHs): PCMHs emphasize comprehensive, patient-centered care, particularly in primary care settings. Practices that achieve PCMH recognition receive additional payments for delivering coordinated, high-quality care. The model encourages a team-based approach to healthcare, where primary care providers serve as the central point of contact for patients, coordinating all aspects of their care and ensuring it is patient-centered and culturally appropriate.
  3. Comprehensive Primary Care Plus (CPC+): CPC+ built on the PCMH model and offered increased support and financial incentives to primary care practices. It encouraged advanced care delivery and payment innovations, such as enhanced access to care, care coordination, and population health management.
  4. Oncology Care Model (OCM): The OCM aimed to transform cancer care by providing financial incentives for healthcare providers to deliver higher-quality, more coordinated care to cancer patients. It emphasized care coordination, patient engagement, and data-driven practice improvement to optimize outcomes for cancer patients.

The New GUIDE Model for Dementia Care

One of the latest innovations in APMs is the GUIDE Model for dementia care, which is set to launch in the summer of 2024. Dementia is a growing public health challenge, with millions of individuals affected by Alzheimer’s disease and dementia. Existing care models often fall short in meeting the complex needs of patients and their families, making the development of specialized dementia care models essential.

The GUIDE Model, which stands for “Guiding an Improved Dementia Experience,” is designed to address these shortcomings by fostering comprehensive, evidence-based dementia care. This model recognizes that individuals living with dementia need multi-faceted care teams and aims to transform the way healthcare is delivered.

The GUIDE Model is designed to:

  • Enhance Care Coordination Among Providers: Individuals with dementia often require care from various specialists and settings. The model emphasizes care coordination to ensure that patients receive seamless, well-coordinated care. It involves a Care Navigator and a dementia-specialized clinician.
  • Improve the Quality of Dementia Care: Quality of care is a top priority in the GUIDE Model. It encourages evidence-based practices and focuses on delivering high-quality care that aligns with the unique needs of dementia patients.
  • Support Caregivers Through Education and Resources: Dementia care involves not only the patient, but also their caregivers. The GUIDE Model recognizes the critical role of caregivers and provides resources and education to support them in their caregiving journey, including a 24/7 support line. It also includes respite care so that caregivers can take necessary breaks when needed.

CMS’s commitment to driving healthcare innovation through APMs is evident through its rich history of experimentation with various models that promote collaboration, improving care quality, and reducing costs. The newly proposed GUIDE Model for dementia care exemplifies CMS’s dedication to addressing emerging healthcare challenges and improving the lives of beneficiaries and their families.

As healthcare continues to evolve, understanding the history and examples of these models is crucial for providers, payers, and patients alike. CMS’s ongoing efforts in developing and refining APMs are paving the way for a healthcare system that prioritizes both the health of its beneficiaries and the sustainability of the healthcare industry. 

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