The Centers for Medicare and Medicaid Innovation (CMMI), a unique creature of the Patient Protection and Affordable Care Act (PPACA), which authorizes CMMI to spend $10 billion to test and evaluate innovations in payment and service delivery arrangements, commented recently on its multi-payor initiative, originally announced July 19, 2012. The grant program is a $275 million initiative offered to states specifically focused upon creating complete realignment of payment between providers and all its payor sources - state, federal, commercial and employers through self-insured plans. The initiative is focused on improving care while lowering costs through transformative payment and delivery system reforms with states in two phases - Track 1 would be accessed by states that are "ready to go," while Track 2 would be accessed to test new models and to accommodate the need for additional state waivers.

Recently, Dr. Richard Gilfillan, Director of CMMI, lauded the response he has seen from states at a speech to the National Academy for State Health Policy. The application period closed on September 17. Up to 25 states will receive $2 million to develop these programs and the remaining $225 million will be divided among the five states with the most promising "ready to go" state transformation models, he reported.

Significantly, in a signal of innovations to come, Dr. Gilfillan spoke about the importance of the multi-payor initiatives. He identified the barriers that exist when all payors do not agree on a similar approach to payment and how it ends up confounding efforts to realign delivery models. Consequently, a common payment approach that rewards the practice for a new treatment model will ease the transition to these new models when all payors participate.

Additionally, Gilfillan revealed that CMMI is actively working with the Office of Personnel Management on a more unified approach to healthcare purchasing to encourage that purchasers "emerge from their silos" and is thinking about how to convene them in one room.

Against the backdrop of an election that could determine the ultimate fate of PPACA, the work of CMMI aimed at aligning payment incentives to encourage coordinated care among payors outside of the federal/state construct could potentially reach far beyond the confines of PPACA and portend a significant shift in payment models and service delivery arrangements in the coming years.