Trump administration charts a new course at the Center for Medicare & Medicaid Innovation

The Trump administration has started to streamline the portfolio of alternative payment models sponsored by the Center for Medicare & Medicaid Innovation (CMMI), recently announcing the early expiration of four models.

CMS said the decision resulted from an assessment of whether the models could meet statutory criteria to be expanded into the full Medicare program. Those criteria generally require CMMI models to lower Medicare costs while maintaining or improving care quality.

“As is the nature of innovation, not every model will work, and the Center must be efficient and effective in its response,” according to a fact sheet. “The Center regularly assesses and may amend model activities in response to a model’s projected savings, quality outcomes data, legal compliance, operational feasibility and gaps in expected versus actual impact.”

Models ending by Dec. 31, 2025, include:

• Maryland Total Cost of Care (2019-26)
• Primary Care First (2021-26)
• ESRD Treatment Choices (2021-27)
• Making Care Primary (2024-34)

In addition, the Medicaid-focused Integrated Care for Kids Model (2020-26) is under consideration to be scaled back or modified.

A pair of models under development, the Medicare $2 Drug List and Accelerating Clinical Evidence pilots, will not be implemented. Both models emerged from an executive order signed by then President Joe Biden on lowering drug costs. That order was rescinded by President Donald Trump.

Among the models unaffected by the announcement is the Transforming Episode Accountability Model (TEAM), a mandatory bundled payments model for more than 700 hospitals in selected markets. It’s slated to begin Jan. 1, 2026, with significant preparations underway at participating hospitals.

CMS said savings from ending the four models early will total almost $750 million.

Changing course

The policy represents a shift from the Biden administration, which, under CMMI Director Elizabeth Fowler, sought a holistic approach to assessing the efficacy of models.

Fowler wanted to develop “a broader measure of success that may yield a pathway for thinking about scaling and also about success — but also give comfort to some of those who may feel like there hasn’t been enough return on investment,” she said Feb. 24 during a session at the Fourth Virtual Value-Based Payment Summit. “At the end of my tenure, I really came to the conclusion that we had made an enormous impact on the healthcare system that wasn’t quite being measured in more traditional ways that we think about evaluation.”

Fowler also discussed that notion in June 2024 remarks after accepting HFMA’s Richard L. Clarke Board of Directors Award. For example, she said, a 17% reduction in Medicare and Medicaid spending between 2010 and 2019 likely arose, in part, from spillover impacts of CMMI models on care delivery, as well as adoption of model-specific approaches in the commercial health plan sector.

The Trump administration has a different view of the evaluation process.

“We believe [following statutory criteria] will enable us to really focus most on what works and find those models that can eventually be scaled and become a mandatory part of the way we pay providers,” Stephanie Carlton, CMS acting administrator, said March 12 during an event hosted by the University of Michigan’s Center for Value-Based Insurance Design.

Of more than 20 active models, the only one that has met the criteria for expansion is the Home Health Value-Based Purchasing Model.

Affected models

The Maryland Total Cost of Care Model was unlikely to be renewed after 2026 regardless of which administration was in place, with Maryland hospitals preparing to transition to the State Advancing All-Payer Health Equity Approaches and Development (AHEAD) total-cost-of-care model.

The Primary Care First Model (PCF) is the latest iteration of CMMI primary care models that began with Comprehensive Primary Care, with a focus on enhancing the patient-clinician relationship to better manage chronic, complex health conditions. A Year 2 evaluation report noted that PCF payments increased Medicare expenditures by 1.5%, and the model did not meaningfully reduce acute hospitalizations or readmissions. One issue was that many practices joined the model with prior experience in practice transformation, thus limiting room for immediate improvement.

ESRD Treatment Choices is a mandatory model designed to promote greater use of home dialysis and kidney transplantation. The model has had a limited impact on utilization, especially of home dialysis, and no impact on Medicare spending, according to a Year 2 evaluation. Renal disease care is also represented in the CMMI lineup by the Kidney Care Choices Model.

The eight-state Making Care Primary Model is perhaps the most noteworthy entry on the list of cancellations. It began in July 2024 and would have continued for nine more years after 2025.

Designed to improve care management and care coordination, the model includes protocols for coordinating with community-based agencies to address health-related social needs (HRSNs). Biden administration efforts to address HRSNs are being deemphasized by the Trump administration, with CMS recently rescinding two bulletins that encouraged HRSN coverage in state-based Medicaid demonstrations.

In December 2024, the Biden administration announced the termination of the Medicare Advantage Value-Based Insurance Design Model, citing high costs.

Looking ahead

Future CMMI models are likely to incorporate HHS Secretary Robert F. Kennedy Jr.’s strategic focus on reducing the prevalence of chronic disease in the U.S.

“The Innovation Center [CMMI] plans to announce a new strategy based on guiding principles to make Americans healthier by preventing disease through evidence-based practices, empowering people with information to make better decisions, and driving choice and competition,” according to a March 12 news release. “This announcement streamlines the focus of CMMI’s models and will help build a health system that improves quality and lowers costs while helping Americans live healthier lives.”

Although the announcement includes the withdrawal of two models being developed to improve the affordability of prescription drugs, other such models likely will be introduced.

“There’s a cross-cutting priority that the president has articulated on lowering the cost of prescription drugs,” Carlton said. “There are a lot of tools that we can use to advance that goal, and so we are going through a process to evaluate all of them.”

During Trump’s first term, CMMI sought to address the cost of Part B drugs by launching the International Pricing Index (IPI) Model and then the Most Favored Nation (MFN) Model. The MFN Model also would have applied to Part D drugs. Both models faced significant industry opposition, with the administration voluntarily withdrawing the IPI Model before its start date. Litigation thwarted implementation of the MFN Model, and in late 2021, the Biden administration rescinded it.