Key Takeaways
- Strategic Shift, Not Retreat: CMMI’s decision to end four payment models reflects a deliberate pivot toward national, full-risk arrangements—not a withdrawal from value-based care
- Model Consolidation for Efficiency & Impact: The agency is streamlining its portfolio in response to fiscal pressures and congressional scrutiny, with an expected $750 million in savings—while reaffirming primary care as a continued priority
- Preservation of Core Models: The continuation of ACO REACH signals its central role in advancing provider accountability, risk-sharing, and system-wide transformation
- Evolving Toward Sustainability: By focusing on high-performing, scalable models, CMMI aims to build a more coherent and sustainable infrastructure for value-based care
What Was Announced—and Why It Matters
Last month, the Centers for Medicare & Medicaid Innovation (CMMI) announced that it will end four payment models ahead of schedule: the Maryland Total Cost of Care Model, Primary Care First, Making Care Primary, and the ESRD Treatment Choices (ETC) Model. The decision follows internal evaluation of performance, cost, and scalability across the agency’s portfolio of alternative payment models.
Given the scope of the changes—and the inclusion of two primary care-focused models — the announcement may appear to signal a pullback from value-based care.
However, our analysis — based on CMMI statements, primary and secondary research, and careful review of the policy decisions to date under the new administration — suggests that the move reflects a strategic realignment. Rather than diffusing resources across a wide range of initiatives, CMMI is concentrating on models with clearer pathways to national scale and stronger alignment with outcomes-based reform. The agency has also reaffirmed its commitment to primary care as a foundational element of its long-term vision.
Model-by-Model Context: Why These Models Were Sunsetted
The decision to end these four models reflects a range of practical and strategic considerations — particularly around scalability, financial impact, and alignment with broader payment reform goals.
Maryland Total Cost of Care Model
CMMI’s termination of the Maryland Total Cost of Care Model appears driven more by its limited national relevance than by opposition to the total-cost-of-care approach. While the payment model is innovative in setting global budgets for hospitals, its limited geographic scope has constrained its scalability and potential for national impact.
Primary Care First and Making Care Primary
The closure of Primary Care First and Making Care Primary may be more surprising, given the centrality of primary care to value-based care reform. However, in its announcement, CMMI emphasized that the decision reflects a shift toward approaches with greater potential for cost savings and system-wide transformation — not a shift away from alternative payment models in primary care.
Early evaluations of Primary Care First showed limited reductions in total cost of care, and highlighted challenges in aligning with broader payment frameworks. Making Care Primary was similarly constrained in scope. MCP offered limited downside and upside financial risk, reducing the likelihood of significant cost or quality gains at scale.
The discontinuation of both models signals CMMI’s evolving view that primary care transformation is most effective when integrated into larger, full-risk architectures, rather than implemented as standalone pilots.
ESRD Treatment Choices (ETC) Model
While there has been limited public commentary on CMMI’s decision to end the ESRD Treatment Choices (ETC) Model, the move likely reflects growing concern about the model’s limited impact. CMS has not released public performance data; however, a JAMA Health Forum study found no statistically significant differences in the use of home dialysis or kidney transplants between ETC-participating regions and control regions during the model’s first two years.
The study also observed that longstanding disparities in access to these treatments persisted, and that dialysis clinics serving higher-risk populations were more likely to incur penalties—raising equity concerns.
Despite the promise of the ETC model, these early findings suggest it fell short of its transformative potential. Its sunset aligns with CMMI’s broader strategy: focusing on models that can deliver measurable outcomes and align with the agency’s long-term policy and fiscal goals.
Strategic Consolidation, Sustained Commitment
The model cuts come as CMMI faces growing expectations to deliver quantifiable results. In announcing the terminations, the agency projected $750 million in federal savings — an assertion of fiscal discipline intended to respond to rising scrutiny.
Lawmakers have expressed growing frustration with CMMI’s performance and cost-effectiveness, with several senators questioning whether the agency is delivering sufficient return on taxpayer investment. HHS Secretary Mehmet Oz has publicly affirmed the administration’s support for CMMI, describing its recent changes as part of a broader effort to improve its efficiency and long-term impact.
These sentiments echo long-held criticisms from many within the policy community. Health policy experts and peer-reviewed analyses have raised concerns that an overabundance of overlapping models can create administrative complexity without driving proportional system transformation—prompting calls for more focused investment in fewer, more scalable approaches.
Rather than sustaining a wide array of pilots with diffuse focus, CMMI appears to be consolidating its energy and investment around models that offer greater potential for national scalability and long-term cost containment. Among the clearest signals of this strategic recalibration is the agency’s decision to preserve and continue the ACO REACH model—a central component of its evolving reform architecture.
ACO REACH as a Signal of Direction
In our view, one of the clearest signals of this strategic consolidation lies in what CMMI chose to preserve. The ACO REACH model, set to run through 2026, remains intact — a clear endorsement of its central role in the agency’s vision.
REACH, a direct successor to the Trump-era GPDC model, retains core features such as prospective global payments and two-sided financial risk. Under the Biden administration, the model was modified to enhance health equity, strengthen provider governance, and slightly reduce Medicare’s guaranteed savings. Despite these adjustments, its underlying structure — and bipartisan relevance — has endured.
Policy analysts frequently point to REACH as a leading model for advancing provider accountability and two-sided risk arrangements. Many anticipate future refinements — such as improvements to benchmarking, greater alignment with Medicaid and commercial payers, or the integration of inferred risk methodologies — rather than wholesale replacement.
CMMI’s decision to continue REACH signals a durable shift toward consolidated, high-accountability payment models as the backbone of its reform agenda.
Fewer Models, Greater Alignment
This shift is not merely reactive—it represents a maturing strategy. Instead of experimenting broadly, CMMI is curating a more coherent model environment that prioritizes integration, scale, and synergy with existing infrastructure.
The continued support for models like GUIDE (Guiding an Improved Dementia Experience) is instructive. GUIDE was preserved not only for its focus on high-need populations, but because it complements broader value-based frameworks like ACO REACH. It offers a template for how new models can reinforce, rather than fragment, the payment landscape.
CMMI’s emerging posture suggests that success will no longer be measured by the number of models launched—but by how effectively those models transform care delivery at scale.
From Proliferation to Prioritization
CMMI’s recent model terminations mark a careful trimming back of efforts that have outgrown their utility—an intentional shift from broad experimentation toward a more focused, sustainable path for value-based care. The agency is concentrating its resources on models with the greatest potential for national impact, provider accountability, and systemic savings.
By cutting away what hasn’t delivered meaningful results, CMMI is clarifying its commitment to payment reform while strengthening the foundation for future growth. The continued support for REACH and GUIDE reflects a disciplined, architecture-focused strategy—one in which new models are expected to reinforce the system, not grow in isolation.
This more deliberate approach sets the stage for a cohesive, resilient framework—capable of weathering political transitions and sustaining Medicare for the long term. In doing so, CMMI is not stepping back from innovation; it’s cultivating a healthier system by design.
A Steady Partner for What Comes Next
With the above context in mind, for some primary care organizations, the early wind-down of Primary Care First and Making Care Primary has added uncertainty — at a time when rising costs, limited capital, and programmatic volatility are compounding pressure.
At Pearl Health, we were founded to help primary care organizations thrive in value-based care. Our core business is empowering providers to succeed in models like MSSP and ACO REACH, with the infrastructure, data intelligence, and enablement needed to take on risk, improve outcomes, and unlock savings.
If your organization is re-evaluating its CMMI program participation, we’d welcome the opportunity to connect. Reach out to explore how Pearl can support your goals in the year ahead.
