The Congressional Budget Office’s review of the effects of the Medicare Shared Savings Program (MSSP) and its estimate of the budgetary effects of the Center for Medicare & Medicaid Innovation’s first decade of operation suggest that they were not factors in the unexpected slowdown in federal healthcare spending.
In Oct. 18 written testimony to the U.S. Senate’s Budget Committee, Chapin White, the CBO’s director of health analysis, noted that the CBO has previously pointed to several contributing factors to the slowdown in federal healthcare spending.
A key factor underlying Medicare’s slower-than-expected growth was slower growth in net spending on prescription drugs; for Medicaid, a key factor was less-than-anticipated spending for long-term services and supports, White wrote.
The CBO reviewed evidence on the performance of the MSSP and found that the program was associated with small net budgetary savings in the early years of its operation. To arrive at that assessment, CBO largely relied on peer-reviewed literature that compared changes in spending among beneficiaries attributed to ACOs with changes in spending among a control group of beneficiaries not attributed to an ACO. More recent evidence is limited and is challenging to interpret, White’s testimony says. “It has become increasingly difficult to find a reasonable control group to use in evaluations, and evaluations are complicated by providers’ ability to opt in and out of the program.”
CBO currently estimates that CMMI’s activities increased direct spending by $5.4 billion, or 0.1 percent of net spending on Medicare, between 2011 and 2020. Specifically, CMMI spent $7.9 billion to operate models, and those models reduced spending on healthcare benefits by $2.6 billion. The estimate reflects CBO’s review of published evaluations of 49 models initiated in CMMI’s first decade after it was established under the ACA, as well as corresponding historical budget data.
CBO estimates that over the current baseline projection period, 2024 to 2033, CMMI will increase net federal spending by less than $50 million. Over that period, the estimated effect of CMMI’s activities transitions from an annual net increase to an annual net decrease, reflecting ongoing growth in the number of certified models that continue to produce savings over time.
Despite the CBO’s estimation that the creation of alternative payment models has not had a significant impact on the federal healthcare spending slowdown, White did note that some researchers have posited that the existence of CMMI may have led to broader systemwide changes that are not attributable to a specific model. Such changes may have led to increases or decreases in federal healthcare spending, which are not reflected in CBO’s estimates of the budgetary effects of CMMI.
White’s testimony noted that potential legislative changes to CMMI fall into three categories: modifications to specific models, changes to the parameters within which CMMI operates, and a repeal of CMMI’s statutory authority or rescissions of unobligated funding. In general, CBO’s analysis considers available evidence on specific models. When such data are not available or the legislation is not related to a specific model, CBO relies on a more general framework using information about CMMI’s prior activities and performance. Estimated effects would depend on the details of the legislation.