With little oversight, unelected bureaucrats at a little-known federal agency are imposing unpredictable nationwide changes to policies that affect patients and providers. Larger healthcare entities can absorb these changes in ways small business innovators cannot. The irony is that this agency was supposed to be all about supporting “innovation,” yet it is undermining the very activity needed to solve our toughest healthcare challenges.
The Center for Medicare and Medicaid Innovation, a creation of Obamacare, is doing the exact opposite of what it is charged with doing. CMMI is generating more waste rather than reducing it, as well as impeding the progress and innovative outcomes that come from private-sector risk-taking and investment.
AFTER A BIG, BEAUTIFUL START, CONGRESS MUST END THIS BILLION-DOLLAR BOONDOGGLE
CMMI was created to test narrow “demonstration” programs to determine what works before being sent to Congress for legislative action. Instead, CMMI has morphed into a regulator increasingly used by bureaucrats to impose broad-scale policy changes that create substantial disruption and administrative burden for healthcare businesses and entrepreneurs.
The recent rollout of the Global Benchmark for Efficient Drug Pricing and Guarding U.S. Medicare Against Rising Drug Costs models should serve as a warning. These major, mandatory payment experiments pushed through by CMMI reflect the same flawed approach that has characterized the agency’s failed initiatives for more than a decade.
Marketed as a way to tie Medicare drug prices to foreign benchmarks, the GLOBE and GUARD models follow a familiar pattern: top-down bureaucracy, shifting priorities, and minimal accountability, all of which threaten the private-sector innovation that drives progress and economic growth. Rather than testing limited, voluntary demonstrations, CMMI continues to impose broad, nationwide changes that negatively affect taxpayers, innovators, and patients.
This drift from CMMI’s original mission has come at a major cost. A report from the Congressional Budget Office (CBO) reveals that between 2011 and 2020, CMMI lost $5.4 billion instead of delivering projected savings, and only six of more than 50 models avoided increasing costs or reducing care quality. Several high-profile programs, including Primary Care First and Making Care Primary, were terminated early after failing to achieve meaningful results.
Such mandatory models impose one-size-fits-all frameworks that disrupt care, impose new administrative barriers and burdens, and introduce sudden changes to payment structures and eligibility rules. That volatility not only affects large institutions but trickles down throughout the healthcare ecosystem, affecting suppliers, developers, and small firms that support care delivery and innovation.
Small businesses, in particular, operate on limited margins and long investment horizons. When federal agencies repeatedly shift priorities or impose sweeping mandates, capital becomes more cautious and harder to access, and promising innovations struggle to reach patients. Markets, investors, and risk-takers do not respond well to regulatory whiplash.
To unleash innovation and entrepreneurship, Congress and its Republican leadership in particular can immediately fix this. Oversight should be restored, clear limits placed on the scope of CMMI experiments, and mandatory nationwide demonstrations suspended unless there is compelling evidence they can improve care without increasing costs or distorting markets. Lawmakers can also ensure that future models are narrowly targeted, evaluated, and voluntary for providers, giving innovators the regulatory predictability they need to invest and grow.
MEDICARE ADVANTAGE CUTS COULD JEOPARDIZE THE MAGA AGENDA
Entrepreneurs, especially in the health sector, are navigating tight capital markets, cost pressures, and various economic uncertainties. Adding regulatory whiplash on top of these challenges risks slowing innovation pipelines, reducing job growth, and weakening America’s competitiveness in healthcare and life sciences.
Elected officials have an opportunity to protect patient choice, work to bring down costs by cutting bureaucracy and waste, and ensure that America’s innovation economy continues to progress. Entrepreneurs need certainty and continuous improvements in the policy environment. Republicans must restore accountability to CMMI, prevent further disruption, and send a clear signal that Washington understands how markets and innovation work.
Karen Kerrigan is President & CEO of Small Business and Entrepreneurship Council.
