Skip to main content

Nixon Peabody LLP

  • People
  • Capabilities
  • Insights
  • About
Trending Topics
    • People
    • Capabilities
    • Insights
    • About
    • Locations
    • Events
    • Careers
    • Alumni
    Practices

    View All

    • Affordable Housing
    • Community Development Finance
    • Corporate & Finance
    • Cybersecurity & Privacy
    • Entertainment & Media
    • Environmental
    • Franchising & Distribution
    • Government Investigations & White Collar Defense
    • Healthcare
    • Intellectual Property
    • International Services
    • Labor, Employment, and Benefits
    • Litigation
    • Private Wealth & Advisory
    • Project Finance
    • Public Finance
    • Real Estate
    • Regulatory & Government Relations
    Industries

    View All

    • Aviation
    • Cannabis
    • Consumer
    • Energy
    • Financial Services
    • Healthcare
    • Higher Education
    • Infrastructure
    • Manufacturing
    • Nonprofit Organizations
    • Real Estate
    • Sports & Stadiums
    • Technology
    Value-Added Services

    View All

    • Alternative Fee Arrangements

      Developing innovative pricing structures and alternative fee agreement models that deliver additional value for our clients.

    • Continuing Education

      Advancing professional knowledge and offering credits for attorneys, staff and other professionals.

    • Crisis Advisory

      Helping clients respond correctly when a crisis occurs.

    • DEI Strategic Services

      Providing our clients with legal, strategic, and practical advice to make transformational changes in their organizations.

    • eDiscovery

      Leveraging law and technology to deliver sound solutions.

    • Environmental, Social, and Governance (ESG)

      We help clients create positive return on investments in people, products, and the planet.

    • Global Services

      Delivering seamless service through partnerships across the globe.

    • Innovation

      Leveraging leading-edge technology to guide change and create seamless, collaborative experiences for clients and attorneys.

    • IPED

      Industry-leading conferences focused on affordable housing, tax credits, and more.

    • Legal Project Management

      Providing actionable information to support strategic decision-making.

    • Legally Green

      Teaming with clients to advance sustainable projects, mitigate the effects of climate change, and protect our planet.

    • Nixon Peabody Trust Company

      Offering a range of investment management and fiduciary services.

    • NP Capital Connector

      Bringing together companies and investors for tomorrow’s new deals.

    • NP Second Opinion

      Offering fresh insights on cases that are delayed, over budget, or off-target from the desired resolution.

    • NP Trial

      Courtroom-ready lawyers who can resolve disputes early on clients’ terms or prevail at trial before a judge or jury.

    • Social Impact

      Creating positive impact in our communities through increasing equity, access, and opportunity.

    • Women in Dealmaking

      We provide strategic counsel on complex corporate transactions and unite dynamic women in the dealmaking arena.

    1. Home
    2. Insights
    3. Alerts
    4. CMS announces alternative payment model strategic direction

      Alerts

    Alert / Healthcare

    CMS announces alternative payment model strategic direction

    May 28, 2025

    LinkedInX (Twitter)EmailCopy URL

    By Whitney Phelps and Freddy Lopez

    The Innovation Center will focus on promoting evidence-based prevention, empowering beneficiaries, and expanding choice and competition.

    What’s the impact?

    • New payment models will emphasize evidence-based prevention, require providers to take on risk, and promote cost savings and quality improvements.
    • Initiatives will support multi-payer approaches, independent and rural providers, increase data transparency, and broaden care options, including virtual and at-home care.

    DOWNLOAD

    CMS announces alternative payment model strategic direction (PDF)

    The Centers for Medicare & Medicaid Innovation (the Innovation Center, formerly known as CMMI), a component of the Centers of Medicare & Medicaid Services (CMS), an Agency of the US Department of Health & Human Services (HHS) recently released a White Paper setting forth its strategic direction for 2025 and beyond. The paper doubles down on the commitment to value-based care by learning from the previous 15 year test models to transform healthcare delivery through three strategic pillars: promoting evidence-based prevention, empowering beneficiaries, and expanding choice and competition. 

    CMS’s Innovation Center outlines its goals

    The Innovation Center will focus on:

    • New reimbursement models in Original Medicare that drive multi-payer approaches at the state level, including testing dual models in Medicare Advantage and Medicaid. 
    • Initiatives that provide value for prescription drugs and promote efficiency through devices and technology.
    • Engaging independent providers, along with aggregators, and targeting discrete patient populations. 

    Healthcare costs will be driven down through prevention (eliminating or reducing the costs associated with severe diseases) and by increased competition creating broader provider choices, and existing models will be modified to emphasize preventive care and ensure cost savings.

    Underlying this vision is a commitment to protect federal taxpayers by: disincentivizing unnecessary care; requiring all providers in a model to assume some level of downside risk, including individual providers and not just conveners or aggregators; reducing the state’s role in rate setting for healthcare services; and refining and simplifying benchmark methodologies. In other words, the Innovation Center will support models that generate savings and improve quality.

    Promote evidence-based prevention

    The Innovation Center’s strategy is to promote prevention at every stage—primary to avoid disease occurrence, (e.g., health and nutrition counseling, tobacco cessation); secondary (screenings to detect disease early), and tertiary (disease management) (e.g., diabetes and blood pressure control). By incentivizing both providers and beneficiaries to engage in evidence-based preventive services, the Innovation Center aims to improve patient outcomes and reduce long-term health system costs. Models will seek to engage beneficiaries to incent healthy lifestyles and community-based organizations to address nutritional needs, and provide disease management education and exercise support. 

    Empower beneficiaries

    The Innovation Center recognizes the challenges posed by a fragmented health system and seeks to bridge these gaps through enhanced data transparency and patient engagement tools to empower individuals to make informed decisions and actively participate in their health journeys. In addition, models will look to provide cost and quality performance data to foster consumer engagement tools and transparency of data between providers and providers and patients. The Innovation Center will look to issue waivers to support their initiatives, including for predictable cost-sharing for beneficiaries receiving certain services, drugs, or devices. Lastly, all models will require that beneficiaries receive care from entities accountable for health outcomes and costs, through global risk and total cost of care models. 

    Expand choice and competition

    The Innovation Center proposes a suite of initiatives to increase market competition and patient choice. The strategy includes expanding value-based payment programs to independent providers, community health centers, and rural practices, by supporting these providers in value-based arrangements through shared savings and prospective payments. Additionally, the Innovation Center plans to promote site-neutral payments, broaden care delivery options—including virtual and at-home care—and standardize administrative processes, including quality measures, to reduce burdens on providers. In addition, future models will look to change certificate of need requirements, which raise jurisdictional challenges between the state and federal governments. 

    Continued emphasis on value-based care models

    The release of the White Paper by the Innovation Center signals a continued public policy focus on value-based care. Stakeholders can position themselves for value-based payments by watching how new models evolve, including the regulatory adjustments and technological advancements made and are needed to support the broader adoption and effectiveness of value-based care models. 

    The Innovation Center announced that new models will be forthcoming. Nixon Peabody is closely following updates coming out of the CMS Innovation Center and has tremendous experience advising providers in this arena.

    For more information on the content of this alert, please contact your Nixon Peabody attorney or the authors of this alert.

    Locations

    Albany

    Practices

    HealthcareMedicare, Medicaid, and Other Government Payors

    Industries

    Healthcare

    Insights And Happenings

    • Article

      Staying Ahead of EHS Risks and Enforcement

      May 28, 2025
    • Alert

      Select health-related provisions in New York’s FY 2025–26 Budget

      May 20, 2025
    • Alert

      CMS proposes updates to the Transforming Episode Accountability Model

      May 2, 2025
    The foregoing has been prepared for the general information of clients and friends of the firm. It is not meant to provide legal advice with respect to any specific matter and should not be acted upon without professional counsel. If you have any questions or require any further information regarding these or other related matters, please contact your regular Nixon Peabody LLP representative. This material may be considered advertising under certain rules of professional conduct.

    Subscribe to stay informed of the latest legal news, alerts, and business trends.Subscribe

    • People
    • Capabilities
    • Insights
    • About
    • Locations
    • Events
    • Careers
    • Alumni
    • Cookie Preferences
    • Privacy Policy
    • Terms of Use
    • Accessibility Statement
    • Statement of Client Rights
    • Purchase Order Terms & Conditions
    • Nixon Peabody International LLC
    • PAL
    © 2025 Nixon Peabody. All rights reserved