Investing in Health Outcomes

Investing in Health Outcomes

CMS launched the Investing in Health Outcomes (IHO) initiative, which seeks to shift Medicaid's quality strategy toward outcomes that matter most to beneficiaries—prioritizing improvements in health. By aligning quality measurements around meaningful health outcomes, rather than the volume of reporting requirements, CMS and its partners aim to reduce reporting burden while improving accountability for better health across Medicaid and CHIP populations.

CMS invites states, health plans, and other quality stakeholders to commit to a voluntary pledge to further shift Medicaid's quality infrastructure toward an outcomes-oriented approach to align spending and value for Medicaid dollars. The pledge framework highlights an effort to focus on prevention, chronic disease management, and behavioral health.

Investing in Health Outcomes Pledge 

We, the undersigned stakeholders in the Medicaid and CHIP ecosystem, commit to aligning our quality improvement efforts to deliver better health outcomes for the nearly 80 million individuals enrolled in Medicaid and CHIP. We recognize that the scale and mission of Medicaid and CHIP demand a quality system that is focused, evidence-based, and accountable. We agree to advance the following set of principles to improve quality in Medicaid and CHIP: 

1. Prioritize outcomes over process today and in the future:

   Emphasize health outcomes focused on primary prevention, chronic disease management, and behavioral health, starting with existing measures today and ensuring outcomes-oriented measures for future development. 

2. Rationalize measure inventories: 

   Converge on a set of measures that reduces regulatory burden without sacrificing accountability. 

3. Modernize the quality measurement enterprise towards digital: 

   Adopt digital quality measurement using near-real-time data as the default approach, replacing administrative claims and chart abstraction wherever feasible today, recognizing foundational tech investments will be required over time. 

4. Align financial accountability to outcomes measures:

   Ensure that payment meaningfully rewards performance on health outcomes-oriented measures.

    

   A Growing Coalition of States Have Joined the Pledge

   CMS has joined with 36 state partners to launch the Investing in Health Outcomes initiative, a pledge that is focused on advancing the Medicaid quality agenda to focus on health outcomes for Medicaid beneficiaries.

   As of September 24, 2026:

   • 37 states have signed the pledge
   • ~56M Medicaid & CHIP beneficiaries covered across pledged states
   • ~$701B in Medicaid spending for FY2024 across pledged states
   

   Signed Investing in Health Outcomes pledge

Focusing Medicaid Quality on Better Health Outcomes

Across the country, Medicaid and CHIP quality reporting has expanded significantly. A May 2026 analysis by CMS of Medicaid managed care contracts across 42 states and programs identified approximately 450 quality reporting requirements representing 258 unique quality measures. While these measures provide valuable information, they span a wide range of purposes—from administrative reporting and patient experience to care processes and utilization—and a smaller share is directly tied to improvements in beneficiaries' health outcomes.

These findings highlight an opportunity to simplify and strengthen quality measurement by emphasizing measures that more directly reflect whether people are healthier because of the care they receive.

CMS also has identified key factors that make this moment an inflection point to improve the Medicaid quality infrastructure:

• Continued demand for improved outcomes for Medicaid dollars: Rising medical costs and utilization pressure are creating shared urgency to align spending and value.
• Growing recognition the quality metrics system is overburdened: Measure proliferation of quality metrics has been cited as an area of reform to reduce burden for providers and payers alike.
• New tools that can make a different quality system possible: Advances in artificial intelligence, interoperability standards, and digital quality measures are making it possible to move quality from a retrospective exercise to a real-time improvement engine.

Improving Quality in Medicaid Requires Participation from a Variety of Stakeholders

CMS recognizes that advancing a Medicaid quality agenda requires mobilization across a variety of stakeholders, including State governments, managed care organizations (MCOs), measure stewards, and providers.

Participating States can use these principles to develop targets of health outcomes and identify opportunities to incorporate outcome-oriented measures into their Medicaid programs.