Nonpartisan Congressional Budget Office Report Shows Medicare Alternative Payment Model Programs Failed to Lower Cost

On September 28, the Congressional Budget Office (CBO), which provides non-partisan analysis and budget projections for Congress, released a report regarding the Center for Medicare & Medicaid Innovation (CMMI).  CMMI was created by the Affordable Care Act in 2010 to develop and test new healthcare payment and delivery models to improve quality and reduce costs in the Medicare, Medicaid, and Children’s Health Insurance Program (CHIP) programs.

Prior to enactment of the law, the CBO predicted that CMMI would reduce overall Medicare spending by $2.8 billion during the 10-year period of 2011-2020.  However, the new CBO report showed increased expenditures by $5.4 billion between 2011-2020, as CMMI spent $7.9 billion to operate models that reduced spending by only $2.6 billion.

Notably, CMMI does not run Medicare’s largest alternative payment model, the Medicare Shared Savings Program (MSSP), so the budgetary impact of it was not included in these figures.  (See here and here for more details.)

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