CMS Insights

At a November 16 forum on Clinician Leadership sponsored by Brookings, Dr. Richard Baron, Group Director of Seamless Care Models at the CMS Innovation Center provided several insights into CMS thinking.  Most notably, Dr. Baron said that CMS is running as fast as possible away from the FFS payment system, which is not considered a viable model. Medicare is moving away from a producer model to a patient centered model. The demonstrations that the Innovation Center are rolling out are the direction that CMS would like to see, possibly in five years (e.g. bundled payment, accountable care organizations and models that reward value and quality rather than volume).  CMS is aware that hospital and physician consolidation poses a risk of price increases in some markets, but Dr. Baron is hopeful that the provider community is ready to move to a more sustainable model of health care financing and delivery.  

 Dr. Baron also said there has been an important change in a ruling from their General Counsel.  In the past, the lawyers felt that the Innovation Center did not have grant making authority but only authority to run programs.  A recent decision reversed this ruling.  I am surmising that the recent $1 billion Innovation Challenge opportunity that the Center just released is a result of this new legal interpretation.  It is hard to imagine that since the Congress approved $10 billion to fund delivery and payment system innovation that the lawyers would put handcuffs on how it could be spent. Fortunately the cuffs have been removed and the Innovation Center will be able to fund smaller and more projects that are developed by stakeholders in the field.

Dr Baron noted that CMS has been told that many providers are already building in a 10 -20 percent cut in Medicare revenue into their plans with the expectation that budget cuts will be necessary to assure the sustainability of the Medicare program.