Developing Innovation Models

New payment and service delivery models are developed by the Innovation Center in accordance with the requirements of section 1115A of the Social Security Act. During the development of models, the Innovation Center builds on the ideas received from stakeholders, and consults with clinical and analytical experts, as well with as representatives of relevant Federal agencies. Learn more about how an idea becomes a model.

In all models, the Innovation Center selects participating organizations through open processes. In all cases, the process follows established protocols to ensure that it is fair and transparent, provides opportunities for potential partners to ask questions regarding the Innovation Center’s expectations, and relies on multi-stakeholder expertise to select the most qualified partners. The Innovation Center does not fund unsolicited proposals, but does use these ideas to inform model development.

Additionally, Congress has defined – both through the Affordable Care Act and previous legislation – a number of specific demonstrations to be conducted by the Centers for Medicare and Medicaid Services (“CMS”). Some of these demonstrations are designed to test proposed improvements in care delivery and payment. Others are designed to confirm findings from previous demonstrations or to help monitor the effectiveness of Medicare, Medicaid, and the Children’s Health Insurance Program. These activities are funded by specific statutory authorities and are conducted by the Innovation Center. The findings from these demonstrations will inform the development and testing of new models.

The opportunity to improve care while lowering costs has never been more promising than today. To help catalyze the speed and reach of clinical innovation, Congress provided the Secretary of Health and Human Services with the authority to expand the scope and duration of a model being tested, including the option of testing on a nationwide basis through rulemaking. In order for the Secretary to exercise this authority, a model must either reduce spending without reducing the quality of care, or improve the quality of care without increasing spending, and must not deny or limit the coverage or provision of benefits. These determinations are made based on evaluations performed by CMS and the certification of CMS’ Chief Actuary with respect to spending.

Originally posted on: August 14, 2023  |  Reviewed and revised on: March 4, 2024