A model approach
Grants aim to bolster care quality, slash costs
As state governors wrestle with Medicaid expansion and health insurance exchange implementation, they now have another federal funding opportunity to test new healthcare payment and delivery models in their states.
HHS announced last week the State Innovation Models initiative, a $275 million competitive funding program that will allow the 50 governors and the mayor of Washington, D.C., to apply for either “model design” or “model testing” awards for models that aim to improve care and lower costs for Medicare, Medicaid and Children’s Health Insurance Program beneficiaries.
The CMS Innovation Center will oversee the program, which will award up to a total of $50 million for up to 25 states in the design category and up to a total of $225 million for up to five states over three to four years for the testing applications.
“These awards are an incentive for states to recruit partners and accelerate the work that many of them are already doing to improve healthcare and lower costs,” CMS acting Administrator Marilyn Tavenner said in a news announcement.
Funding for the model design awards is meant to provide financial and technical support to states in their planning efforts. In their
proposals, states must include a range of players in the process, such as healthcare providers, consumers, employers, unions, community leaders and public and private payers.
HHS also urged states to build on existing state waivers and federal health reform initiatives. They must also develop and submit a healthcare innovation plan that shows how the state intends to transform its healthcare delivery system with a strategy that delivers higher quality and better value for care. According to HHS, these plans will form the basis for a second round of funding that is expected next spring.
Meanwhile, states applying for model testing awards must have a state healthcare innovation plan and show how their proposed approach would address social, economic and behavioral determinants of health and reduce disparities. They must also describe the policy, regulatory or legislative authority that will support the model; explain how the model will build on existing healthcare reform initiatives; and describe a process for performance monitoring and data collection.
“As a former governor, I’ve seen states in action and know what great laboratories they are for innovations we can put into practice nationwide,” HHS Secretary Kathleen Sebelius said last week in a statement. Within the testing models, the CMS will offer two tracks: one for those states that are ready to go and one for new models.
Both sets of applications are due by Sept. 17, and HHS expects to announce the grants in November. The period of performance for the model design awards will last from the time the award is granted through May 14, 2013, while the model testing awards allow up to six months for implementation and readiness and 36 months for testing after the award date, or through May 15, 2016.