CBO Says CMMI Will Save $34 Billion Over 10 Years

In testimony before the House Budget Committee, the Congressional Budget Office (CBO) estimated that the Center for Medicare and Medicaid Innovation (CMMI) will save the federal government $34 billion over the next ten years (2017-2026).

CMMI was established by the Affordable Care Act to test “innovative payment and service delivery models to reduce program expenditures…while preserving or enhancing the quality of care” for individuals enrolled in Medicare, Medicaid, or the Children’s Health Insurance Program (CHIP). Congress authorized $10 billion for such test from 2011-2019.

CBO based its estimate on savings achieved so far by CMMI, which rest primarily on one demonstration project, called the Pioneer Accountable Care Organization model, that offered doctors, hospitals, and other providers shared financial incentives to improve quality and reduce spending. CBO is basing its estimate on a projection that CMMI will achieve similar successes in the years ahead and that HHS will roll successful demonstration projects out more widely.

During the hearing, Mark Hadley, CBO’s deputy director, said that his organization expects “many or most” of the CMMI demonstrations to fail, but that it will still produce the estimated savings.

The projection drew skepticism from committee Republicans and from at least one other witness, according to the Healthcare Financial Management Association.

Joe Antos, a scholar from the right-leaning American Enterprise Institute and a former CBO and Medicare agency official, said at the hearing that the future savings projection was a “shot in the dark.”

“They are extrapolating from information that is not current with CMMI’s activities and they have no information—as none of us have the information—about CMMI’s future activities,” Antos said.


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