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Medicare Alignment for SIM Models through Customized Statewide Models

Medicare Alignment for SIM Models through Customized Statewide Models

In the April 10, 2015 guidance, CMS Innovations presented a set of principles that CMS Innovations would consider in review of a proposal for Medicare participation in a SIM model requiring specific new waiver authority to align Medicare with a state model. As stated in that guidance, a proposal for Medicare alignment in a SIM model should be a test of a new or novel model or a test of a Medicare program adapted for the unique needs of a state. CMS Innovations also believe the statewide nature of a SIM model could present a novel model to test. For States interested in pursuing Medicare alignment through a customized statewide model, below CMS Innovations present further guidance on how States can consider these principles for Medicare participation as part of their operational planning of their models or as part of the development and implementation of their models.

Patient centered

A State’s proposal would be assessed for their commitment to improvement across a robust set of quality and patient experience measures in order to ensure that any cost savings are generated by improvements in both patients’ health care experience and population health, as well as specific targets for improvement. With this in mind, States should consider the quality performance guidelines in their SIM model, and how their model fosters quality improvement. States may consider building the appropriate quality measure set, implementing quality reporting and determining how quality performance may be tied to payment in their SIM model. States should consider the necessary infrastructure to collect quality measures on a multi-payer basis and to share information on patient outcomes and utilization with providers. Additionally, States should consider how the model accounts for patient engagement and how patients are involved for model improvement. For a proposal for Medicare participation, States should be able to set specific statewide targets for improvement, and should consider their strategy for stakeholder engagement and alignment on a uniform quality measure set.

Accountable for the total cost of care

Medicare participation will be measured against states’ commitment to reducing the total cost of care for CMS beneficiaries under their model. As part of their model development, States should consider the methodology to measure total cost of care on a multi-payer basis that is appropriate for its model. Additionally, States should consider the infrastructure and staffing required to collect healthcare expenditure data and calculate total cost of care over time on a multi-payer basis. Lastly, States should consider obtaining the necessary data use agreements (DUAs) to analyze Medicare claims data. For a proposal for Medicare participation, States should be able to set specific, actuarially sound, statewide targets to reduce total cost of care for Medicare beneficiaries.


A State’s proposal would be assessed for the extent to which the payments to providers in a model support and reward better care, smarter spending and healthier people. CMS will evaluate the extent to which models emphasize statewide delivery system transformation. States should consider its strategy and milestones to shift from delivery system transformation on a multi-payer basis, as well as whether they are providing sufficient resources for providers to implement delivery system transformation. States should consider their ability to measure the proportion of payers that are participating in the model, proportion of providers that are participating in the model and proportion of residents that are covered by the model.


Broad payer and provider participation is critical for health care transformation in a State. A State’s proposal would be assessed on the extent to which providers and payers are participating or would participate in the SIM model. In addition, the State’s Governor should provide support for Medicare participation. States can consider their strategy for multi-payer stakeholder engagement and multi-payer commitment for investment in the SIM model.

Feasible to Implement

Because Medicare alignment in a state designed model could require significant operational investment, CMS would assess the administrative feasibility of a state’s proposal. States should consider their commitment to operational investment of SIM model such as appropriate budget, work plan, staffing, IT infrastructure, data analytics support, stakeholder engagement efforts and strategy for program sustainability. States can consider their regulatory authority to implement a multi-payer model with Medicare participation, particularly if States are interested in seeking rate-setting authority. Additionally, States should consider whether changes to their Medicaid program are required.

Feasible to Evaluate

The terms of any proposal should include a discrete performance period and clarity about the baseline against which CMS will measure the State’s performance. States should consider the performance period for the model and the data to support the calculation of a baseline. States should consider how data sharing between CMS and the State would occur for purposes of an evaluation.

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Source: Update to Guidance

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