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March 20, 2025 – The Centers for Medicare & Medicaid Services (CMS) Innovation Center made headlines last week by announcing that it would end eight models early. The Innovation Center put out a fact sheet explaining its rationale behind these decisions. At the end of the fact sheet, the Innovation Center states that it will lay out a strategy for testing innovative payment models in both Medicare and Medicaid. Neither the announcement nor the fact sheet indicates when the Innovation Center will release that strategy, but they do offer hints about the Center’s priorities. To help me glean clues from what the announcement and fact sheet say – and what they don’t say – I’m bringing in my colleague Simeon Niles. Simeon recently authored a +Insight outlining potential Innovation Center focus areas under the Trump administration.
What it Says: The Innovation Center states that it aims to end the following models early, by December 31, 2025, and that most models selected for early termination are within two years of their end date.
Models Identified to End Early (Original Performance Period)
CMS also states that it is “considering options to reduce the size of the Integrated Care for Kids (2020 – 2026) awards or make other changes to the model.”
In addition, the CMS Innovation Center “will no longer pursue two previously announced but not yet implemented models given the flexibility provided by President Trump’s rescission of Executive Order 14087 on January 20, 2025”:
What it doesn’t say: The Innovation Center doesn’t provide any more specific information about why each individual model was terminated. The Innovation Center references protecting taxpayers throughout the announcement and fact sheet, implying that a lack of cost savings, either actual or projected, was a major factor in its decisions.
What it says: Speaking of cost savings, the Innovation Center states that “based on an analysis of published evaluation reports and financial forecasting, CMS estimates a savings of almost $750,000,000 by ending the selected models early.”
What it doesn’t say: The Innovation Center does not provide a breakdown of the $750 million estimate in savings. Some models were winding down anyway, while others, like the Making Care Primary Model, were just beginning. Thus, some of these estimates for cost savings may have been based on projections from the CMS actuaries, budgeted model implementation costs, or other sources, and may not reflect the actual results from the model thus far.
What is says: The Innovation Center states that provider participants who are in models that are ending “should expect follow-up communication from their models with timelines, technical assistance and other information regarding the wind-down and close-out. Additionally, the Innovation Center will support participants of ending models and advise those in state-specific total cost of care and primary care models of other regulatory options for advanced primary care payment.”
What it doesn’t say: Participants in every Innovation Center model invest time and resources to be successful. This includes making significant changes to their staffing and operations, information technology systems, and/ or care delivery pathways. It is unclear what alternative options these participants have at this point that (1) ensures that they get some return on their current investment, and (2) does not require significant additional investments for yet another temporary model.
What it says: The Innovation Center states that it “determined its other active models can meet the Center’s statutory mandate—either as is or with future modification—and therefore will continue moving forward.” This effectively means that all other models, even the “mandatory” models that require participation, such as the Transforming Episode Accountability Model (TEAM), which begins on January 1, 2026, and the Increasing Organ Transplant Access (IOTA) Model, which begins on July 1, 2025, will proceed.
What it doesn’t say: The Innovation Center does not specify why other models are moving forward or how they align with the Center’s “statutory mandate.” The continuation of mandatory models such as TEAM and the IOTA Model raises the question of whether the Innovation Center supports the concept of mandatory models. If the Innovation Center does support mandatory models, will it develop more? If so, what conditions or services will be the next focus?
What it says: Some of the terminated models were designed specifically to advance primary care. The Innovation Center states that “primary care remains a foundational component of the Center’s strategy. The early termination of Primary Care First and Making Care Primary does not signal a retreat from the Center’s support of primary care providers, but rather a need to focus on different approaches that are consistent with the CMS Innovation Center’s statutory mandate and produce savings. Ending these models early offers the opportunity to get beneficiaries into more permanent programs to support their health and care” (emphasis added).
What it doesn’t say: The Innovation Center does not commit to putting forth other primary care models. Models tested by the Innovation Center are by nature temporary, so the Center’s reference to “more permanent programs” might imply that the next step is for beneficiaries to move to established Medicare programs. It doesn’t provide examples, but if we had to guess, perhaps the Innovation Center is referring to the Medicare Shared Savings Program or Medicare Advantage.
While the Innovation Center affirms primary care as a “foundational component” of its strategy, it does not make a similar statement about specialty care, even though it will end the ESRD Treatment Choices Model early. What, if anything, does this silence suggest about the Center’s plans to create more specialty care model models? Currently the Innovation Center is only testing a handful of specialty care models, but many stakeholders, including medical societies, have asked CMMI to adopt more, as Simeon notes in his +Insight. It is therefore possible that more specialty care models are coming down the pike.
As we wait to learn more about the Innovation Center’s strategy and priorities, here are our “best guesses” on what those priorities could be, based on what the administration said and didn’t say in this major announcement:
Thus, the SSA allows models to be expanded even if they don’t decrease spending, as long as they are found to improve quality. However, this administration may view models that don’t decrease costs as unsuccessful, since it is laser-focused on reducing costs for tax-payers. If models don’t appear to save money, or can’t be considered for expansion based on their potential for cost-savings, we now know that the Innovation Center isn’t afraid to end these models quickly.
The SSA also does not require models to be designed to achieve savings “initially.” In other words, the Innovation Center can test models projected to initially increase costs if there is long-term potential for quality improvement and cost reductions. However, it is unlikely that the Innovation Center under this administration will test any model that could increase costs at any point during its initial testing.
All in all, while this first major announcement from the Innovation Center does not provide an actual strategy, it does provide some indication what models the Center might decide to test going forward and how it will define success and failure.
Until next week, this is Jeffrey (and Simeon) saying, enjoy reading regs with your eggs.
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Until next week, this is Jeffrey (and Lynn) saying, enjoy reading regs with your eggs.
