The Center for Medicare and Medicaid Innovation

The Patient Protection and Affordable Care Act of 2010 (ACA) equipped the Centers for Medicare and Medicaid Services (CMS) with a range of cost-cutting and quality-enhancing tools, the most significant of which might be its new Center for Medicare and Medicaid Innovation (Innovation Center).

This summary paper provides a status report on the Center for Medicare and Medicaid Innovation. The paper first defines the goals Congress envisioned for the Innovation Center and the new tools it was given, emphasizing how the enhanced authority compares with CMS’ traditional demonstration programs. Next, the paper outlines the Innovation Center’s organization and staffing, and how it sets priorities and decides on funding.

Congress established the Innovation Center in the ACA primarily to test new payment and delivery models. The law charges the Innovation Center with identifying, developing, assessing, supporting, and spreading new models that might reduce expenditures under Medicare, Medicaid, or the Children’s Health Insurance Program (CHIP) while improving or maintaining care quality. The law suggests, but does not require, that the Innovation Center explore 18 priorities, including multi-payer initiatives. The Innovation Center's leadership have made it very clear that they are proceeding with "a sense of urgency" to address the Triple Aim to: (1) improve the individual experience of care; (2) improve the health of populations; and (3) reduce per capita costs of care for populations.

The ACA appropriated $10 billion for the Innovation Center every 10 years, into perpetuity. Although $10 billion per decade represents a major spending commitment, it is still only about 0.1 percent of Medicare and Medicaid spending—far less than most organizations commit to research and development.