July 26, 2012

State Innovation Model Initiative Announced

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The U.S. Department of Health and Human Services (HHS) is rolling out a $275 million competitive funding initiative for states to design and test multi-payer payment and delivery models that would deliver high-quality healthcare while improving health system performance.

Called the “State Innovation Models Initiative,” the program’s goal is to create multi-payer models to reduce long-term health risks for beneficiaries of Medicare, Medicaid and the Children’s Health Insurance Program (CHIP), according to a news release posted on the HHS website. The initiative seeks to help states design and test improvements to their healthcare systems that would bolster healthcare quality and decrease costs, the department indicated.

Through this initiative, states will work with a coalition composed of employers, insurers, community leaders, service organizations, healthcare providers, consumers, tribal governments and other entities to design or test multi-payer payment and delivery system improvements to Medicare, Medicaid and CHIP beneficiaries while eliminating unnecessary spending, according to HHS.

HHS officials said states can apply for either model testing awards to assist in implementing their already developed models or model design awards, which will provide funding and technical assistance as they determine what type of system improvements would work best for them.

Up to five states will be chosen for the initial round of model testing awards, and up to 25 states will be chosen for model design awards. Up to $275 million in funding is available, including $50 million for model design and $225 million for model testing.

The Centers for Medicare & Medicaid Services (CMS) expects to offer a second opportunity for all states to apply for a model testing award next year, according to HHS. State innovation models’ initiative applications will be evaluated and reviewed by an independent review panel, CMS and the agency’s independent Office of the Actuary, officials said.

“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.

Reference:

innovation.cms.gov/initiatives/State-innovations.

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Chuck Buck

Chuck Buck is the publisher of RACmonitor and is the program host and executive producer of Monitor Monday.