CMS Innovation Center Announces Early Termination of Key Payment Models

The CMS Innovation Center has announced a significant overhaul of its alternative payment models, signaling what many see as a recalibration of its approach to value-based care. By December 2025, several major programs will come to an early end, including the Primary Care First, Making Care Primary, and End Stage Renal Disease (ESRD) Treatment Choices models. The Maryland Total Cost of Care model, originally set to run through 2026, is also among those being terminated prematurely. According to CMS, the decision reflects a broader strategic shift aimed at aligning its initiatives with its statutory mandate to lower costs while improving healthcare quality. However, the announcement has sparked wide-ranging reactions within the healthcare community, highlighting both support and skepticism regarding the Center’s effectiveness.

Key Programs Affected

1. Primary Care First: Introduced as a five-year voluntary model, this program incentivized primary care providers to deliver high-quality care through performance-linked payments. Its primary goals included reducing hospital admissions and improving care for patients with chronic conditions. While some clinicians valued its emphasis on patient-centered care, others criticized its administrative burden.
2. Making Care Primary: Launched in 2024 with an ambitious 10.5-year timeline, this model sought to enhance primary care infrastructure, foster partnerships with specialists, and address social determinants of health. The program drew particular praise for focusing on underserved populations, but critics questioned whether it adequately accounted for systemic inequities that hinder access to care.
3. ESRD Treatment Choices: This mandatory model was designed to encourage home dialysis and kidney transplants, aiming to improve the quality of life for patients with ESRD. Despite its innovative intentions, stakeholders have noted that the program struggled to sufficiently address barriers such as patient education and disparities in organ availability.
4. Maryland Total Cost of Care: A state-specific model, this initiative made Maryland accountable for Medicare’s total care costs, promoting provider collaboration to achieve cost efficiencies. While the model showcased promising results in some areas, critics contend that scaling its lessons nationally would be difficult without state-level autonomy.

Additional Models Discontinued

Two additional initiatives, not yet implemented, will also be shelved:

• Medicare $2 Drug List: This model aimed to simplify access to affordable generic medications, with the goal of improving medication adherence. While still in its planning phase, it had drawn interest from patient advocacy groups for its potential to address rising drug costs.
• Accelerating Clinical Evidence: Focused on incentivizing pharmaceutical companies to complete post-approval trials for drugs under the Accelerated Approval Program, this initiative has faced criticism for lacking clear accountability mechanisms.

The Integrated Care for Kids (InCK) model, which targets early interventions for at-risk children, may also face budget reductions or other modifications, underscoring the tightrope CMS is walking between innovation and fiscal responsibility.

Mixed Reactions and Financial Debate

The CMS Innovation Center estimates these early terminations will save taxpayers approximately $750 million. However, the financial track record of the Center itself has been brought under scrutiny. In a June 2024 congressional hearing, Elizabeth Fowler, Ph.D., J.D., director of the Innovation Center, acknowledged limited cost savings achieved by its models. A 2023 Congressional Budget Office (CBO) report revealed that instead of saving $1.3 billion in its first decade, the Center actually increased spending by $5.4 billion. Projections for its second decade also fell far short, with an anticipated increase in spending of $1.3 billion instead of the expected $77.5 billion in savings.

Critics, such as Cathy McMorris Rodgers, chair of the House Energy and Commerce Committee, have expressed frustration over the Center’s performance. “The results speak for themselves. Despite a $10 billion budget and broad authority, the Center has yet to deliver on its promise of reducing costs and improving outcomes. How do we move forward from here?” she questioned during a congressional session.

Yet others have come to the Center’s defense. Dr. Rahul Rajan, a healthcare policy analyst, argued, “The failure to meet initial projections doesn’t negate the importance of experimentation in our healthcare system. These models have provided invaluable insights, even if they didn’t achieve immediate savings.”

The Path Forward: Renewed Focus

In the wake of these changes, the CMS Innovation Center has announced plans to recalibrate its focus. It intends to adopt guiding principles centered around:

• Disease prevention through evidence-based practices.
• Empowering patients with access to information that supports informed decision-making.
• Encouraging competition to improve care quality and lower costs.

The Center’s leadership emphasized the importance of learning from past challenges. “While we’ve faced setbacks, we remain steadfast in our mission to innovate and drive value-based care,” said Fowler in a recent statement. She further noted that the Center’s new strategy aims to prioritize high-impact initiatives and streamline its operations to meet its statutory mandate.

The early termination of these models is undoubtedly a pivotal moment for CMS, reflecting both the challenges and complexities of healthcare innovation. While some programs showed promise in fostering collaboration, improving access, or addressing social determinants of health, the question remains whether the Center’s approach to piloting so many initiatives simultaneously diluted its ability to achieve substantial results.

Stakeholders across the board agree on one point: the path to value-based care is far from straightforward. As the CMS Innovation Center moves forward with a renewed strategy, it faces the dual challenge of rebuilding trust and demonstrating measurable outcomes. Whether this streamlined approach will finally meet its goals or be yet another chapter of unmet expectations is a question only time can answer.