The Center for Medicare and Medicaid Innovation (CMMI) was created by the Affordable Care Act (ACA) in 2010. It was included as a pay-for under the assumption that CMMI would be successful at saving Medicare and Medicaid significant amounts of money over several years.[1] Thus far it has not been overwhelmingly successful at that task. Instead, the unique insulation CMMI has from Congressional oversight or judicial reviews calls for lawmakers to place more guardrails on the program in the months and years ahead.
CMMI’s current assignment is to find avenues for Medicare and Medicaid to save money by, for example, experimenting with different billing structures. Specifically, its mission is to certify experiments that improve quality of care without increasing costs, or decrease costs without affecting quality of care. Once the Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS) have certified an experiment does so, CMS is authorized to implement it nationwide as a more regular part of Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP). CMMI has tried close to 40 different programs since its inception in 2011, of which two have been certified for regular implementation.
CMMI is authorized to run its experiments on a voluntary or mandatory basis. Those affected by the program have no avenue to petition for exemption. Of the over 35 million Americans who have had their healthcare experiences impacted by CMMI experiments, almost 50 percent are privately insured.[2] Although CMMI’s mission is to improve Medicare and Medicaid, they frequently test programs that end up affecting non-Medicare patients who are required to participate.
CMMI was given broad authority by the ACA, and, as mentioned above, it is shielded from both Congressional oversight and judicial review. It is authorized to spend $10 billion every 10 years through mandatory spending, meaning Congress has effectively surrendered its power of the purse over CMMI. CMMI can bring a program nationwide without congressional approval, an unusual exemption for an agency that can significantly change the course of Medicare or Medicaid spending.
This broad authority has been abused by both Democratic and Republican administrations. The Trump administration’s Most Favored Nation scheme to implement prescription drug price controls was done through CMMI. It seems likely that the Biden administration could view CMMI as a useful tool to implement its health care priorities, especially considering their narrow margins in Congress and the distinct lack of health care initiatives in the American Rescue Plan, the administration’s recent jobs and families proposals, and from discussions on various infrastructure bills.
Looking forward, there is hope for legislative guardrails on CMMI’s authority. Concern over CMMI’s broad jurisdiction is bipartisan. The most promising legislation (H.R. 5741) on curbing CMMI power was introduced in the 116th Congress by Rep. Terri Sewell (D-AL) and was cosponsored by nine Democrats and eight Republicans. This bill broadens Congressional oversight by allowing Congress to pass a joint resolution within 45 days of CMMI implementing a new program to disapprove of said program. It also makes significant strides in curtailing CMMI’s ability to require patient and provider participation in its tests. H.R. 5741 would open CMMI programs up to judicial review too, holding CMMI accountable to both the legislature and the courts in a proper checks-and-balances structure.
On top of H.R. 5741’s reforms, NTU supports completely eliminating CMMI’s ability to make participation mandatory for patients and providers. Currently, CMS officials are prohibited from ensuring the budget impact of a program CMMI wants to test is deficit-neutral, unless they want to expand a model under so-called Phase 2 expansion. NTU supports reversing that policy and making budget considerations a requirement for Phase 1 approval.
Congress could also ask the Congressional Budget Office (CBO) to reconsider its treatment of potential (but uncertain) CMMI savings. In 2018, NTU Foundation published a paper by health policy expert Doug Badger highlighting CBO’s unusual treatment of CMMI. In short, CBO trusts that CMMI will be successful at saving money within Medicare. As a result, its scoring of the agency’s proposals is based not on quantifiable success, but faith in hypothetical future success. To make matters worse, CBO adjusts its baseline for scoring other Medicare-related bills to include presently-hypothetical CMMI savings, making bills that will genuinely save money on Medicare appear less impactful than they actually are. The special treatment afforded to CMMI seems to be pervasive across the federal government.
Any form of guardrails on CMMI’s power would be welcome. The agency has existed outside of checks and balances for several years, and it is time Congress exercised its Article I authority by passing legislation with more robust oversight of CMMI.