New CMMI Models Signal a Structural Shift for Hospitals

The Centers for Medicare and Medicaid Innovation (CMMI) is reshaping how hospitals are paid, evaluated, and held accountable. The latest generation of payment models extends beyond incremental updates, increasing accountability for cost, quality, and population health outcomes. For healthcare professionals, keeping pace means moving beyond traditional utilization review and stepping into a more strategic role – one centered on clinical alignment and population health. 

During a recent webinar, Angela D. Sorbelli, J.D., LL.M., MBA, CHC, Vice President of Regulatory Affairs at CorroHealth, described the current moment as a recalibration, rather than a routine update. CMMI, established under the Affordable Care Act, has long tested alternative payment models but what feels different now is the pace of change and the expanding scope of participation. New models are rolling out more quickly, participation is expanding, and downside risk is no longer confined to early adopters. 

From Pilot to Standard Practice 

Created in 2010, the Innovation Center serves as the experimental arm of CMS, designed to test new payment and delivery models with a dual mandate: improve quality and reduce cost.  

Results over the past decade have been uneven, but that track record has only intensified the push toward broader adoption. The Innovation Center retains authority to scale successful demonstrations nationally without returning to Congress for new legislation. Today’s pilot can become tomorrow’s baseline.  

Of the more than 20 models currently being tested, four are generating the most activity for hospitals and health systems: AHEAD (Achieving Healthcare Efficiency through Accountable Design), ASM (Ambulatory Specialty Model), TEAM (Transforming Episode Accountability Model), and WISeR (Wasteful and Inappropriate Service Reduction). 

AHEAD Extends Global Budgets Beyond Maryland 

A ten-year, state-level initiative, AHEAD establishes global budgets with multi-payer alignment and increases investment in primary care. The goal is to improve cost predictability while strengthening population health infrastructure. Hospitals in participating states receive set payments spanning inpatient and outpatient services across Medicare, Medicaid, and commercial payers, with implementation phasing through 2035. 

That predictability comes with broader accountability. Financial performance now reflects an organization’s ability to manage utilization, expand primary care access, and support well-coordinated transitions after discharge. Avoidable admissions and poorly managed handoffs carry direct financial implications under a global budget structure. And while individual providers retain discretion over participation, once a state commits, participating hospitals are expected to align with the model’s financial and reporting requirements.  

The Ambulatory Specialty Model (ASM) Redefines Accountability 

Beginning in 2027, ASM will hold outpatient specialists financially accountable for two conditions where fragmented care has long driven unnecessary costs: chronic low back pain and congestive heart failure. The five-year mandatory model introduces two-sided risk for physicians in selected regions who meet volume thresholds, with payment adjustments reaching up to nine percent in either direction. 

The implications for hospitals extend well beyond physician compensation. Employed cardiologists, orthopedic surgeons, neurologists, and pain specialists may all fall within scope, and performance is evaluated at both the individual and group level. Care pathways need to be standardized across settings, medication adherence and follow-up protocols require closer monitoring, and data systems must be capable of tracking episode costs and quality metrics with sufficient accuracy to inform performance management.  

Sorbelli believes hospitals should treat available preparation windows as an asset. Upgrading IT infrastructure and conducting honest performance analytics now can mean the difference between entering the model with confidence and scrambling to catch up once financial consequences are already in motion. 

TEAM Makes Surgical Episode Risk Routine 

Participation in the Transforming Episode Accountability Model (TEAM) has been mandated for more than 700 acute care hospitals across 45 states. The model covers high-volume procedures including joint replacement, spinal fusion, coronary artery bypass grafting, and major bowel surgery, holding hospitals accountable from admission through 30 days post-discharge. The model also requires referrals to primary care after discharge, a deliberate effort to support continuity and reduce avoidable readmissions over the long term. 

Operational discipline now extends well beyond the operating room. Skilled nursing facility partnerships, home health coordination, and patient education directly shape financial results, and downside risk is embedded across multiple performance years. 

WISeR Brings AI to Prior Authorization 

A six-year program operating across six states, WISeR analyzes 15 procedural areas where waste, fraud, and abuse have historically driven unnecessary spending. The model incorporates enhanced technologies, including artificial intelligence, to support prior authorization and preclaim review processes. Technology may affirm submissions that clearly meet established Medicare coverage criteria. Any request that cannot be affirmed through automated review must undergo evaluation by a U.S. board-certified physician.  

Hospitals should note that the technology is designed to affirm submissions, not deny them without clinical validation. All nonaffirmations are decided on by a U.S. board-certified licensed physician, keeping human medical judgment at the center of each determination. Early implementation has surfaced confusion around which procedures fall within scope.  

Documentation quality is central: claims that align with coverage criteria move efficiently, while those that don’t may enter extended review cycles. Providers who maintain affirmation rates of 90 percent or above may qualify for gold card status, reducing future administrative burden. 

What These Models Mean for Utilization Management 

The shift reshapes how margin stability is achieved. Financial performance now reflects an organization’s ability to manage utilization patterns, expand access to primary care, and ensure patients experience well-coordinated transitions after discharge. Avoidable admissions and poorly managed handoffs translate directly into budget pressure under a global payment structure, where inefficiencies accumulate quickly and affect overall results. 

In this environment, utilization management must evolve. As Sorbelli noted during the webinar, the work extends beyond retrospective review and denials management. It increasingly involves guiding care progression, supporting documentation accuracy across an entire episode, and helping clinical and financial leaders align around performance under value-based models. This is pushing physician advisors and care management teams into a position of strategic stewardship. 

Operational Focus Is Now a Must 

Taken together, these four models point in the same direction. Hospitals are being asked to carry more financial accountability and operate with greater visibility into cost and quality, while they must coordinate care in ways that extend well beyond their own facilities. Expectations now connect state policy decisions with day-to-day specialty practice and the realities of post-acute follow-up. 

For organizations intent on staying ahead, the work begins with fundamentals. Clinical documentation must accurately reflect patient complexity so that risk adjustment aligns with clinical reality. Efforts to manage utilization need to align with broader population health objectives, reducing unwarranted variation and preventable readmissions, rather than simply trimming volume. Leadership teams should use pre-implementation periods to assess infrastructure readiness. That includes evaluating EHR reporting capabilities, ensuring episode-level visibility, strengthening care coordination workflows, and confirming that financial reconciliation data can withstand scrutiny. An honest assessment of those systems often reveals limitations that were less visible under prior payment models. 

Sorbelli stressed during the webinar that the pre-implementation windows built into several of these programs are meaningful. They offer time to test workflows, clarify physician expectations, and ensure that data used for reconciliation and reporting can withstand scrutiny. Organizations that treat this period as active preparation, rather than passive waiting, tend to enter performance years with fewer surprises. For many organizations, that preparation increasingly requires regulatory, clinical, and operational expertise working in concert. 

The current portfolio from CMMI reflects a durable shift in federal payment policy. Hospitals that approach these models with operational discipline are better positioned to protect margins while improving care coordination. Those that delay preparation may face steeper adjustment curves once performance periods begin.  

Missed the live session? The full webinar is available via CorroHealth On-Demand.