On March 12, the Centers for Medicare & Medicaid Services (CMS) announced that certain Medicare value-based payment models will terminate early and signaled a new strategy will be announced soon. Specifically, the Centers for Medicare & Medicaid Services Innovation Center (CMMI), which administers CMS’ value-based initiatives, will terminate the “Primary Care First,” “Making Care Primary,” “End-Stage Renal Disease (ERSD) Treatment Choices,” and “Maryland Total Cost of Care” models by December 31, 2025. Although the models were created to support CMMI’s goal of testing new ways to improve care and reduce healthcare costs, CMS has elected to terminate the models early based on an analysis of evaluation reports and financial forecasting that indicate increased spending. Specifically, CMS projects that ending these models early would save approximately $750 million dollars. In addition, CMMI signaled plans to announce a new strategy based on goals of “making Americans healthier by preventing disease through evidence-based practices, empowering people with information to make better decisions, and driving choice and competition.”
The models selected for early termination by the end of 2025 focus on payer alignment, primary care, or kidney disease, and are generally within two years of their originally scheduled end date as detailed below:
- Maryland Total Cost of Care (2019–2026). The Maryland Total Cost of Care (TCOC) Model is a Maryland-specific model aimed at achieving fixed amounts of savings to each relevant Medicare beneficiary’s total cost of care. Subject to discussions with state authorities, the TCOC will still transition to the AHEAD Model that will begin its implementation period in January 2026.
- Primary Care First (2021–2026). This is a voluntary model that rewards value and quality by offering an innovative payment structure to support the delivery of advanced primary care. Primacy Care First is based on the principles underlying the prior Comprehensive Primary Care Plus (CPC+) model design: prioritizing the clinician-patient relationship, enhancing care for patients with complex chronic needs, and focusing financial incentives on improved health outcomes.
- ESRD Treatment Choices (2021–2027). ERSD Treatment Choices (ETC) model is a mandatory model intended to encourage greater use of home dialysis and kidney transplants for Medicare beneficiaries with End Stage Renal Disease, while also aiming to reduce Medicare expenditures and preserve or enhance the quality of care furnished to beneficiaries. CMS also announced that the ETC model will be formally terminated through future notice and comment rulemaking.
- Making Care Primary (2024–2034). What was originally slated to be a 10.5-year model, Making Care Primary (MCP) focuses on improving care management and coordination, with the intention of equipping primary clinicians with tools to form partnerships with healthcare specialists and leveraging community-based connections to address patients’ health needs.
CMS stated in its recent press release that participants in these models will receive follow up communication regarding the model-specific winddown. We note that while the Primary Care First and Making Care Primary models focus on primary care, CMS has indicated that “primary care remains a foundational component of the Center’s strategy.” CMS explained that coverage for the Advanced Primary Care Management (APCM) services announced last year are still available and may bundle payments for many services tested by CMMI primary care models. CMS has not at this time commented on its plans for the Medicare Shared Savings Program or the ACO REACH Model.
CMS also intends to abandon two drug pricing models that were announced in 2023 but have not yet been rolled out. These drug pricing models include the Medicare $2 Drug List, aimed at promoting cheaper generic medicines within Medicare Part D, and the Accelerating Clinical Evidence drug pricing model, aimed at lowering Medicare Part B payments for medications approved under expedited Food and Drug Administration (FDA) reviews.
In addition to ending or renouncing the above models early, CMS is considering whether to reduce the size of the Integrated Care for Kids model (or InCK), a child-centered local service delivery model focused on children covered by Medicaid and/or the Children’s Health Insurance Program (CHIP).
Last but certainly as noteworthy, CMS indicated that CMMI plans to announce a new strategy focused on preventing disease, empowering patient decision-making, and driving choice and competition. The CMS press release suggests that CMS is aiming to streamline the focus of CMMI’s models in order to “help build a health system that improves quality and lowers costs while helping Americans live healthier lives.” CMS also indicated that termination of the models above may result in transitioning providers and beneficiaries into more “permanent” programs.
If you have any questions about how the termination of these models will impact your business, please contact the authors.