On May 12, 2025, the Center for Medicare and Medicaid Innovation (Innovation Center) released a new strategy to outline the Trump Administration's vision to test alternative payment models in Medicare and Medicaid.
Abe Sutton, Director of the Innovation Center and Deputy Administrator for the Centers for Medicare & Medicaid Services (CMS), authored a white paper titled, "CMS Innovation Center Strategy to Make America Healthy Again," which provides an updated vision for the Innovation Center. A core feature of this updated strategy is its focus on preventative care to stave off certain conditions that can help reduce disease risk and costly treatments. The white paper states that the Innovation Center will build on the work done in the last 15 years and test new models that would "improve quality and outcomes and reduce costs for taxpayers" and empower people to "achieve their own health goals and Make America Healthy Again." Recognizing that some previous Innovation Center models have shown promise for supporting preventive care, many did not meet the criteria for nationwide expansion and widespread adoption. Director Sutton's white paper outlines three strategic pillars: 1) promote evidence-based prevention; 2) empower people to achieve their health goals; and 3) drive choice and competition for people.
The Innovation Center held a webinar on May 13 to announce the new strategic direction and answer questions from stakeholders (see webinar recording and presentation slides). In the below summary, we provide high-level takeaways and summarize the Innovation Center's white paper.
Takeaways
- New payment models under the Trump Administration will focus on prevention and holistic medicine. This means future models may provide reimbursement for programs that promote nutrition and physical activity and encourage disease screenings.
- The updated strategy is a marked shift from the Biden Administration, which directed the Innovation Center to test models focused on race, gender and sexual orientation and to address gaps in health equity. The Trump Administration has already ended early Biden-era models that further diversity, equity, and inclusion (DEI) goals.
- Providers and others healthcare stakeholders should expect to hear announcements in the coming months about new Innovation Center models that focus on addressing chronic disease and advancing holistic medicine. They should also expect changes to existing models to align with Trump Administration priorities.
White Paper: "CMS Innovation Center Strategy to Make America Healthy Again"
In line with the broader "Make America Healthy Again" (MAHA) agenda, the Innovation Center's new strategic direction focuses on prevention, individual empowerment, and choice and competition. The white paper emphasizes the Innovation Center's goals to protect the federal taxpayer and to produce cost savings. To this end, it states that the Innovation Center will focus on models that "show the greatest promise for generating savings and improving quality." It also emphasizes private sector activity to drive transformation across the health system. The Innovation Center states that it would leverage a variety of payment and regulatory flexibilities (e.g., waivers, benefit enhancements, and benefit enhancement incentives) to achieve these goals.
Moreover, it promises to expand work to test improvements in Medicare Advantage (MA), "drive better spending and outcomes for prescription drugs", and "promote efficiency through devices and technology." It will also continue to work with states to "drive multi-payer approaches to state-level delivery system transformation." The Innovation Center's new strategic direction will be guided by the following three interrelated strategic pillars.
Promote Evidence-Based Prevention
The Innovation Center states that it will promote preventative care to help people avoid illness and optimally manage chronic disease. Specific prevention care activities include health and nutrition counseling, tobacco cessation, cancer screenings, and diabetes and blood pressure control. Models will promote access and use of evidence-based preventive services known to improve outcomes for people and reduce costs to the health system. These will include successful elements of prior primary care models, specialty models, and Accountable Care Organization (ACO) models. The Innovation Center also plans to embed preventive care across its portfolio by modifying existing models and creating new ones that will include such features.
Empower People to Achieve Their Health Goals
Innovation Center models and initiatives will feature tools and processes that will better connect people to their health data and thereby "empower them to make informed health decisions." This will include unlocking data access across all models and align financial incentives for patients and their providers. Future models may increase beneficiary access to information and tools, including mobile-device applications, for disease management and healthy living. The Innovation Center may also issue waivers to support predictable cost-sharing for certain services drugs or devices.
Drive Choice and Competition for People
The Innovation Center intends to test models and features aimed at promoting competition in health care markets. Future models will be designed to "level the playing field" for providers practicing independently and outside of health system or health plan ownership, thereby increasing competition in markets. Additionally, future models may expand the use of advanced shared savings and prospective payments to support independent provider practice participation in models. The Innovation Center states that it will test MA models and models that structure more effective market mechanisms for prescription drugs. It also plans to standardize model design features (e.g., quality measures, benchmarking and attribution) to reduce the administrative burden of participating in advanced alternative payment models and support multi-payer alignment.
Conclusion
In the coming months, the Innovation Center will likely provide additional details, including model requirements and funding, about the models it intends to test in request for applications and other notices. Our team will continue to monitor updates that impact our clients and healthcare stakeholders.
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