By Robert A. Berenson and Nicole Cafarella

One of the few health policy issues that receives bipartisan support is the need to dramatically alter the way providers are paid, shifting from “paying for volume” to “paying for value” to alter the trajectory of health care spending while improving health care quality.

To facilitate this shift, the Affordable Care Act equipped the Centers for Medicare & Medicaid Services with a range of cost-cutting and quality-enhancing tools―the most significant of which might be its new Center for Medicare and Medicaid Innovation. In this blog post, we share insights from recent research funded by the Robert Wood Johnson Foundation on the Innovation Center’s new role, organization, and model selection criteria.

Based on interviews with senior leadership, it’s clear the organization sees its role as two-fold: complementing existing efforts to innovate; and delving into new ideas.

Most of the Innovation Center’s efforts to date have focused on the former―implementing congressionally-mandated demonstrations or ideas that Congress or policy experts have already conceived (e.g., accountable care organizations). More recently, the Innovation Center has begun to seek new ideas from innovators across the country and to promote bottom-up innovation―primarily through its Innovation Challenge.

The Innovation Center is arranged into three research and model-development groups:

• Patient Care Models Group―focused on models that improve care in individual episodes;
• Seamless Care Models Group―focused on models that cover populations across time and settings;
• Community Improvement Models Group―focused on models that improve the health of a community or population of patients.

The Innovation Center has also formed additional teams:

• Learning and Diffusion Group―to provide technical assistance, introduce ideas, and spread successful ones;
• Stakeholder Engagement Group―to communicate its activities to the public and to stakeholders;
• Program and Policy Group―to vet external ideas;
• Rapid Cycle Evaluation Group;
• Medicare Demonstrations Program Group―to manage demonstrations that predate the Innovation Center and/or are congressionally mandated.

The Innovation Center’s leadership has also created a Portfolio Management Committee―comprised of Dr. Richard Gilfillan (acting director of the Innovation Center) and the organization’s other senior staff. Innovation Center staff members present potential opportunities to this committee, which in turn identifies the most promising ideas for further development. The Innovation Center’s leadership has developed a list of priorities―the Portfolio Criteria―that the organization is using to build its demonstration portfolio. The Innovation Center does not expect prospective models to satisfy all of the Portfolio Criteria, but rather seeks to develop a portfolio that mirrors those priority areas.

Despite relatively broad agreement in the policy community on the Innovation Center’s objectives, some are skeptical about the role of government, as centralized in the Innovation Center, in promoting and adopting true innovation. Advocates of market-based solutions to cost and quality problems argue that innovation springs from competitive forces―from the ground up―and cannot be determined and spread from a government agency, however worthy its intentions.

Another criticism is that the speed and approach it is using―rolling out over a dozen initiatives in rapid succession―are leaving behind potential innovators that have not been ready to respond to the quick pace of new funding opportunities. They seek a more deliberative process that permits establishment of a consensus vision―and plan―for achieving a reformed health care delivery system. But exactly how such a consensus would be achieved remains unclear, given divergent views of how “paying for value” can best be achieved.

Robert A. Berenson, MD, is an institute fellow and Nicole Cafarella is a research associate at the Urban Institute. For more on CMS’ Innovation Center, see our recent issue brief for the Robert Wood Johnson Foundation.