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HHS Announces New Funding for Healthcare Innovation

May 27, 2014
by Rajiv Leventhal
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The Department of Health & Human Services (HHS) has announced two new delivery system reform efforts that offer states and innovators tools and flexibility to develop and test healthcare innovation models.

First, HHS announced 12 prospective recipients receiving as much as $110 million in combined funding, ranging from an expected $2 million to $18 million over a three-year period, under the Health Innovation Awards program to test innovative models designed to deliver better care outcomes and lower costs. 

Examples include projects to provide better care for dementia patients, improve coordination between specialists and primary care physicians, and to improve cardiac care. The 12 innovative projects represent the first batch of prospective recipients for round two of Health Care Innovation Awards program funding.  In 2012, 107 organizations located in urban and rural areas, all 50 states, the District of Columbia and Puerto Rico received awards through round one of the initiative.  

Round two of the Health Care Innovation Awards program focuses on four priority areas: rapidly reducing costs for patients with Medicare and Medicaid; improving care for populations with specialized needs; testing improved financial and clinical models for specific types of providers, including specialists; and linking clinical care delivery to preventive and population health. The 12 prospective recipients will test models in all four categories and spanning 13 states, with additional prospective recipients to be announced in the coming months.

HHS has also made up to $730 million available as part of the State Innovation Model initiative to help states design and test improvements to their public and private healthcare payment and delivery systems.  Project goals are to improve health, improve care, and decrease costs for consumers, including Medicare, Medicaid, and Children’s Health Insurance Program (CHIP) beneficiaries. 

As part of the State Innovation Model initiative, states, territories and the District of Columbia can apply for either a Model Test award to assist in implementation or a Model Design award to develop or enhance a comprehensive State Health Care Innovation Plan.  Up to 12 states will be chosen for state-sponsored Model Testing awards ($700 million available), and up to 15 states will be chosen for state-sponsored Model Design work ($30 million available).

“As a former governor, I understand the real sense of urgency states and local communities feel to improve the health of their populations while also reducing healthcare costs, and it’s critical that the many elements of healthcare in each state—including Medicaid, public health, and workforce training— work together,” Secretary Kathleen Sebelius said in a statement.  “To help, HHS will continue to encourage and assist them in their efforts to transform healthcare.

“These efforts will strengthen federal, state, and local partnerships, encourage broad stakeholder engagement, and capitalize on federal resources to ensure greater transformation of delivery of healthcare services,” added Centers for Medicare & Medicaid Services (CMS) Administrator Marilyn Tavenner.

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