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NEW FEATURE: POLICY CORNER: An inside look at the most pressing policy issues (updated 01.04.2011)

From: The Hospitalist, January 2011

Center for Medicare & Medicaid Innovation charged with finding ways to reduce healthcare costs while maintaining or improving quality

by Josh Boswell, SHM public policy analyst

The Centers for Medicare & Medicaid Services (CMS) in November announced the official launch of the Center for Medicare & Medicaid Innovation (CMMI). The CMI was authorized under the Affordable Care Act (ACA) to test innovative ways to reduce costs, while preserving or enhancing the quality. This sounds very similar to many other reform initiatives, so why have a separate center when ACOs, value-based purchasing, and payment bundling already are in the ACA?

A quick glance at the CMMI website didn’t provide much detail beyond uplifting language about the promise that the center represents. Don Berwick, MD, the new CMS administrator, has even gone so far as to call the center the “jewel in the crown” of the ACA.

Inspirational language aside, the center can be summed up using a simple analogy: The “other” ACA initiatives (bundling, VBP, etc.) are like a factory floor. The tools are in place, the processes are more or less defined, and they will be carried out regardless of the degree of positive impact. CMMI is more like a research and development lab, with the freedom to tinker with new ideas before wide-scale implementation.

The keys to CMMI success are twofold. First, it will implement pilot projects rather than demonstrations. A pilot gives the Secretary of Health and Human Services the power to implement and expand promising projects without Congressional approval. A demonstration requires Congressional approval for its continuation.. Second, CMMI does not require proposals to be budget neutral. Initial training and staffing costs alone can disqualify a program on budget neutrality grounds. Since CMMI does not require budget neutrality, promising programs with significant start-up costs are less likely to be cast aside.

Dr. Berwick has asked for provider partnership and input, and says he “would like to help forge an unprecedented level of shared aim, shared vision, and synergy in action among the public and private stewards and leaders of healthcare.” This vision and a $10 billion appropriation over the next decade present a tremendous opportunity for SHM’s quality initiatives, and the promising hospitalist-created protocol.

However, this large appropriation presents both the greatest strength and the greatest threat to the center. With the Republican takeover of the House of Representatives, the CMMI budget likely is to be a target for the “repeal, replace, or revise” agenda. Therefore, increasing awareness of CMMI’s role will be imperative over the coming months. Hospitalists can help by educating themselves, then passing their knowledge along to those who might not understand the importance of the center. TH


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The Hospitalist newsmagazine reports on issues and trends in hospital medicine. The Hospitalist reaches more than 25,000 hospitalists, physician assistants, nurse practitioners, residents, and medical administrators interested in the practice and business of hospital medicine.

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ISSN: 1553-085X