Dive Brief:

• The CMS Innovation Center is canceling four payment models early and halting two demonstrations before they begin, the agency said Wednesday, in the Trump administration’s latest rollback of federal spending in healthcare.
• Four models — Maryland Total Cost of Care, Primary Care First, End-Stage Renal Disease Treatment Choices and Making Care Primary — will end by Dec. 31, according to a news release. The CMS estimates terminating the programs early will save nearly $750 million, though regulators did not quantify where those savings will come from.
• The CMMI will also no longer implement the Medicare $2 Drug List and the Accelerating Clinical Evidence demonstration after President Donald Trump revoked a Biden-era executive order that ordered the agency to consider new models to limit drug spending.

Dive Insight: 

The CMMI was created under the Affordable Care Act in 2010 to test new payment and delivery models to lower costs and improve quality in government healthcare programs. The agency currently operates 23 active models.

The canceled models tested several different healthcare delivery and payment options, and affected millions of patients across the country. Two models — Primary Care First and Making Care Primary — focused on improving primary care, like helping clinicians shift to value-based payment arrangements and increasing access to advanced services.

The Maryland Total Cost of Care demonstration set a per capita limit on Medicare costs in the state. The demonstration saved Medicare $689 million over its first three years in operation, according to an analysis prepared for the CMS.

However, not all models saved money. The ESRD Treatment Choices experiment, which aimed to promote home dialysis and kidney transplants among Medicare beneficiaries with end-stage renal disease, didn’t decrease spending or boost the use of home dialysis over its first two years, according to a model analysis. However, the report released early last year found it was early to form conclusions about the impact of the demonstration.

The CMS will propose terminating the ESRD Treatment Choices model through rulemaking, the CMS said Wednesday.

In addition to the model cancelations, the CMS is considering ways to change or reduce the size of the Integrated Care for Kids model, which aims to prevent or detect behavioral and physical health conditions early among children covered by Medicaid.

The Trump administration said cutting the demonstrations will streamline the focus of CMMI’s models and reduce spending, according to the press release.

Participants in the experiments will have through the end of the year to transition to other models, the CMS said. 

The changes at the CMMI come after the agency has received some criticism from lawmakers. Last summer, lawmakers on a House subcommittee, particularly Republicans, noted the CMMI had failed to save money during its first 10 years in operation. 

A report by the Congressional Budget Office published in 2023 found the CMMI increased direct spending by $5.4 billion, or about 0.1% of the net spending on Medicare, between 2011 and 2020. Additionally, the analysis noted few models have been certified for expansion. 

The CMMI has been productive when it comes to doing plenty of experiments and demonstrations, Paul Ginsburg, senior scholar at the USC Schaeffer Center for Health Policy and Economics, told Healthcare Dive last month.

But “the challenge is …  how do we actually put value-based payments, or whichever terms you’d want to use, in place as a core part of Medicare provider payments, as opposed to just continuing to do more demonstrations?” he said.