CMS Innovation Models 101: Keeping up with the Evolving Healthcare

Abhinav Shashank
Fri 23 Jun 2017
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There has been great progress lately on reforming healthcare and making the US healthcare system a paragon of better quality care – where the care is provided and paid for in a smarter way. A decade ago, there were few significant efforts to improve care and reduce costs. Today, the Centers for Medicare and Medicaid Services (CMS) have largely led the initiative of aligning incentives, improving the health system and implement the best care management strategies and leading healthcare into a dawn of value-based care. CMS has launched more than 30 new payment models in the past six years, and Medicare exceeded the goal to tie more than 30% of fee-for-service payments to alternative payment models by the end of 2016 and is now on the path to reach 50% by the end of 2018.

The CMS Innovation Center has been instrumental in implementing various payment models and expects an enormous number of clinicians to be participating in value-based payment models. The value-based transition is already underway, and it’s not too late for practices to start deciding which way to go. The only question is- which path would be the best?

Taking the VBR way


CMS Innovation Center has implemented several payment models to encourage healthcare move towards a value-focused ecosystem and ensure a perfect balance between cost and quality in healthcare. It has been a long journey from establishing Medicare in 1965 to introduction to Health Maintenance Organization Act of 1973 to signing Affordable Care Act into law in 2010 and introducing value-based payment models. All these new efforts are built on the foundation of over five decades of clinical insights, extensive research and payment process experience.

The various CMS Innovation Models:

CPC+ (Comprehensive Primary Care Plus)

The CPC+ initiative, built on the foundations of Comprehensive Primary Care model, is a big step up and encourages providers to deliver high quality, patient-centered care and cut down on the use of unnecessary or redundant services. The five-year CPC+ model will run in up to 20 regions with an extensive focus on the following five goals:

  • Ensuring access and continuity of care.
  • Comprehensive care delivery and management.
  • Improving care coordination.
  • Enhancing patient and caregiver engagement.
  • Delivering planned care and improve population health.

With two participation option- Track 1 and Track 2, CPC+ pushes forward on enhancing primary care delivery with health IT and bring about efficient care management. CPC+ Round 1 has 2,866 Primary Care Practices, and CMS would be selecting up to 1,000 PCPs for CPC+ Round 2.


Medicare Shared Savings Program (MSSP) was initiated with an aim to drive physicians, hospitals, health systems and other providers to form an Accountable Care Organizations (ACOs), encouraging them to assume responsibility for overall care, cost, and quality of patient care and offering rewards for ACOs that successfully reduce the growth rate of their healthcare expenses along with meeting high performance standards providing quality care.

MSSP has three primary goals:  

  • Better care for patients
  • Better health for communities
  • Lower Medicare expenditures

MSSP offers three participation options- Track 1, 2, and 3. The Track 2 and 3 are two-sided risk models, offering a maximum profit sharing rate of 60% and 75% respectively as compared to Track 1 with 50%. To enroll in the MSSP, ACOs must serve at least 5,000 Medicare Fee-For-Service patients subject to meeting all other eligibility and other program requirements, and with an agreement of at least 3 years.

Next Generation ACO model

Next Generation ACO Model is one of the most progressive payment model, offering a new opportunity for ACOs in accountable care. Along with offering better success opportunities for providers here are some other goals Next Generation ACO Model offers following opportunities:

  • Coordinated care
  • Stable and predictable benchmarks
  • Appropriate and consistent fiscal targets

As of now, there are 44 ACOs participating in this Model. A step up from Pioneer and MSSP, the Next Generation Model allows provider groups to assume higher levels of financial risk (80-100%) and rewards.


Merit-based Incentive Payment System, introduced with MACRA, streamlines three independent programs, Meaningful Use (MU), the Physician Quality Reporting System (PQRS), and the Value-Based Modifier (VBM). Besides this, one more component will be there to bring improvements in practice.

There will be four categories of scoring eligible clinician performance in MIPS:

  • Quality- 60%
  • Advancing Care Information- 25%
  • Clinical Practice Improvement Activities- 15%
  • Resource Use- 0%

Initially, the quality component will have 50% weight, CPIA 15%, ACI 25% and Resource Use 10%. Some of these figures would change by 2021 and Quality, and Resource Use would be 30%, while the rest would remain the same.

Chronic Care Management (CCM)

The Chronic Care Model (CCM) was introduced by CMS that proposes to reimburse providers every month on delivering care services for Medicare beneficiaries diagnosed with two or more chronic conditions. The physicians are billed for at least 20 minutes of clinical staff time, per calendar month with the following requirements:

  • Two or more chronic conditions that are expected to last at least 12 months, or until the death of the patient.
  • Chronic conditions that place the patient at significant risk, potential death, decompensation or functional decline.
  • Establishment, implementation, revision, or tracking of a comprehensive care plan.


Aside from MIPS, the other payment track has Alternative Payment Models (APMs). Advanced APMs, a subset of APMs, are offered for providers for Medicare Part B payment adjustments. Every year, CMS would provide a list of care models each year that qualify for Advanced APM incentive payments.

Advanced APMs models for 2017 include:

  • Comprehensive Primary Care Plus (CPC+)
  • Shared Savings Program – Track 2 and Track 3
  • Next Generation ACO Model
  • Comprehensive ESRD Care (CEC) – Two-Sided Risk
  • Oncology Care Model (OCM) – Two-Sided Risk
  • Comprehensive Care for Joint Replacement (CJR) Payment Model (Track 1- CEHRT)
  • Vermont Medicare ACO Initiative (as part of the Vermont All-Payer ACO Model)


The eligibility and rewards for each model differs and the providers participating in an Advanced APM have the opportunity to earn the 5% incentive payment in 2019 for participation in 2017 if:

  • providers receive 25% of their Medicare Part B payments through an Advanced APM, or
  • 20% of their Medicare patients are billed through an Advanced APM

See your potential revenue under CMS payment models here:

Challenges along the way

There are yet several challenges that healthcare providers facing when deciding to participate in any payment model. Primarily, the continued existence of FFS with Value-based care is a serious obstacle.

More than anything, the major challenge ACOs face is the virtual inaccessibility of data. Due to several network barriers and the lack of real-time information documentation, healthcare organizations find it difficult to learn about patient episodes, predict financial performance and share aligned methodologies for calculating benchmarks. Data management and reporting mechanisms are still significant barriers.

Lastly, providers face troubles in bringing staff members onboard and motivating them, across the organization, to collectively work towards their goals- clinical as well as financial.

The road ahead

CMS and several federal agencies have high hopes and goals- tying 30% of all Medicare provider payments through alternative payment models and 50% before 2018 concludes. With 74 health care initiatives and programs in different stages of research, testing, and adoption, CMS is halfway along its strategy to push providers and payers to engage in a healthcare reform that focuses on lowering costs and improving quality. Value-based care is inevitable- the key here is to develop a strategic backbone with a defined, focused team that includes IT, clinical and operational efficiencies and work on capturing, maintaining and analyzing data. Only with a multidisciplinary team-based approach can healthcare transition to value-based care completely.


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Tags: Accountable Care, Healthcare
Abhinav Shashank
CMS Innovation Models 101: Keeping up with the Evolving Healthcare

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