Medicare Agency to End Some Demonstration Projects, Cancel $2 Generic Drug Initiative

 The Centers for Medicare and Medicaid Services plans to terminate four demonstration projects at the end of 2025, closing out models affecting primary care, kidney care and healthcare payments in the state of Maryland.

The agency will also make changes to other projects, including dropping a planned initiative that would offer certain generic drugs to Medicare enrollees for $2. CMS said its planned terminations would save nearly $750 million, and an agency official said the projects would affect millions of patients.

The projects were offered through the CMS Innovation Center, a special office that launches and tests new ideas in the agency's programs, which include Medicare and Medicaid. The center's demonstrations are intended to test changes to the agency's typical payments, rules and processes.

CMS said it was ending the projects after a "comprehensive and data-driven review of our model portfolio based on the clear statutory mandate given to the Center by Congress." A CMS official said the terminated projects were deemed unlikely to meet mandated targets of improvements in care quality and/or cost savings.

The Trump administration has said it aims to reduce government spending.

Three of the soon-to-be-terminated models were designed under the prior Trump administration, and one under President Joe Biden, the CMS official said.

The planned terminations may cause pushback from doctors and other healthcare providers that were involved in the projects, though some were expected to halt at the end of 2026. Participation in such models often involves significant planning and investment.

In a statement, CMS Innovation Center Director Abe Sutton said the agency is "committed to supporting healthcare providers in these models to deliver the highest quality care to their patients."

Patients sometimes aren't aware if their doctors or hospitals join demonstration models, since the effects can play out behind the scenes.

The kidney-care project aimed to encourage use of kidney transplants and home-based dialysis, versus getting treatment at dialysis centers. It will require a formal proposal and rule to terminate.

The two primary-care models were called "Primary Care First" and "Making Care Primary," and both aimed to bolster primary care by paying providers in different ways that were intended to reward quality and efficiency. The "Making Care Primary" model launched last July in eight states and was scheduled to go for a decade.

The CMS official said the agency aimed to work with the state of Maryland to transition to a different model for its healthcare payments.

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