Analysis of CMMI Models Projects Costs Rather than Savings

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Avalere estimates that the CMMI will produce net costs of approximately $9.4 billion through 2026, in contrast to the CBO’s projected net savings of $34 billion.

Avalere estimates that the Center for Medicare & Medicaid Innovation (CMMI) will produce $9.4 billion in net losses to the federal government over the 2017–2026 budget window—a sharp contrast to the 2016 Congressional Budget Office (CBO) projection of $34 billion in net savings.

Since the establishment of the CMMI, the CBO has projected the financial impact of the CMMI on Medicare spending 3 times: in 2010, 2015, and 2016 (Table 1). The CBO noted that its estimates rely on “judgments of how effectively the [CMMI] will identify, refine, and expand approaches that reduce spending. Such judgments are inherently uncertain, however.” In 2020, Avalere conducted its own analysis combining CBO principles with available program evaluations and budget impact analyses to assess the CMMI’s impact on Medicare spending (Table 1).

Table 1. Projections of CMMI’s Financial Impact
CBO 2010 CBO 2015 CBO 2016 Avalere 2020 Avalere 2022
Net Impact (Projected) -$1.3 billion -$27 billion -$34 billion -$18 billion +$9.4 billion
Budget Window 2010–2019 2016–2025 2017–2026 2017–2026 2017–2026

Sources: CBO 2010, CBO 2015, CBO 2016, and Avalere 2020­.

In a new analysis, Avalere refreshed its projection of the CMMI’s impact on Medicare savings with several updates. Supplementing its 2020 analysis, Avalere incorporated data from more recent evaluation reports and current active models.1 The net Medicare losses of $9.4 billion estimated by Avalere’s updated analysis reflect Medicare program expenditures and CMMI outlays (which Avalere assumed to be $11 billion over the period analyzed, consistent with CBO assumptions). Outside of costs associated with CMMI operations, the estimated losses are largely a result of models that did not generate expected savings and model savings that did not outweigh the cost of shared savings payments to participants. Experts have also cited concerns about the evaluation methodology contributing to the lack of measured savings.

Avalere’s 2022 estimates produced the following 4 components:

  1. Savings and Losses from CMMI Models to Date: CMMI models have generated $1.7 billion in net Medicare losses from 2017 through 2021. Models that have resulted in Medicare savings include Home Health Value-Based Purchasing, Maryland All-Payer, Maryland Total Cost of Care (TCOC), and Vermont All-Payer. Models that have resulted in Medicare losses include Comprehensive Primary Care Plus, Next Generation Accountable Care Organizations (ACOs), Bundled Payments for Care Improvement (BPCI), BPCI Advanced, Part D Enhanced Medication Therapy Management, and the Oncology Care Model. Avalere used savings and losses published to date to calculate projected model savings or losses for models without published evaluation results for 2020 and 2021.
  2. Continuation/Expansion of Existing Models: Avalere projects that the continuation and expansion of existing CMMI models will generate $2.5 billion in net Medicare savings from 2022 through 2026. Examples of continuing models include BPCI Advanced (ending December 2023), Comprehensive Care for Joint Replacement (ending December 2024), and Maryland TCOC (ending December 2026). Avalere assumed that these models’ cost effects will remain similar to those evidenced in recent evaluation reports.
  3. Implementation of Proposed Models: Avalere projects that proposed models will generate $0.3 billion in Medicare savings from 2021 through 2026. As of April 2022, proposed or new models for which data are not available included the Global & Professional Direct Contracting (GPDC) model, its successor the ACO Realizing Equity, Access, and Community Health (REACH) model, and the End-Stage Renal Disease Treatment Choices (ETC) model. Avalere’s estimates for ETC relied on regulatory impact analyses by the Centers for Medicare & Medicaid Services. These analyses were conducted before the June 2022 announcement of CMMI’s Enhancing Oncology Model (EOM) and, thus, do not reflect projections for that model.
  4. Future Successful Models: Avalere projects that CMMI will launch new, not yet proposed models that could generate $0.6 billion in Medicare savings between 2023 and the end of 2026. To estimate savings for unknown future models, Avalere assumed that a single model’s savings will be 5% of gross 2021 model savings, and that 4 models would launch by the end of 2026.
Figure 1. Components of Avalere's $9.4B Cost Estimate for CMMI Models, 2017–2026
Figure 1. Components of Avalere's $9.4B Cost Estimate for CMMI Models, 2017–2026

Over the past decade, the CMMI has implemented more than 50 models. However, the savings achieved by some models have been outweighed by the spending demands of others. In 2021, the CMMI released its Strategy Refresh for the next decade, which emphasized health equity and streamlining future models to better achieve its goals of reducing costs and improving quality. As the CMMI works to design future models to meet these goals, it should consider how to apply its experience and knowledge from prior and current alternative payment models.

Funding for this research was provided by the Pharmaceutical Research and Manufacturers of America. Avalere retained full editorial control.


Avalere reviewed CMMI model evaluation reports available as of April 2022 to estimate net savings to the Medicare program after making shared savings payments to model participants. Avalere’s review included the Maryland and Vermont models but excluded other state-based initiatives, such as the State Innovation Models and the Financial Alignment Initiative. Actual savings and losses estimated included directional estimates as well as statistically significant estimates. Estimated savings or losses for model years without evaluation results (i.e., from 2020 onward) were projected based on published savings or losses to date. Avalere included savings estimates for known models that had launched as of April 2022, but that do not have evaluation reports (i.e., GPDC, ACO REACH, ETC), assuming that each model’s savings will be 5% of 2021 gross model savings. Avalere also assumed that CMMI may launch up to 4 models before the end of 2026 yielding additional savings based on observed 2021 gross model savings. Avalere’s analysis was conducted before CMMI’s announcement of the EOM, and thus the EOM is not explicitly reflected in the analysis. Avalere accounted for CMMI spending estimates of $1.1 billion per year over 2017–2026, consistent with previous CBO estimates.


  1. Previous Avalere analyses included the International Pricing Index Model (IPI), which contributed to savings projections. As the current administration has signaled that it does not intend to pursue the IPI Model, Avalere did not include this model in its refreshed estimate.

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