HHS issues $665M in ACA funding for innovation

The Department of Health & Human Services (HHS) has allocated $665 million in Affordable Care Act funding to 28 states, three territories and the District of Columbia to design and test healthcare payment and service delivery models that will improve healthcare quality and lower costs.

When combined with awards issued in early 2013, 34 states, three territories and the District of Columbia, representing almost two-thirds of the population, are participating in efforts to support comprehensive state-based innovation in health system transformation aimed at finding new and innovative ways to improve quality and lower costs. 

The State Innovation Models initiative supports states in planning or implementing a customized, fully developed proposal capable of creating statewide health transformation to improve healthcare. The following are examples:

• Improving primary care through patient centered medical homes, building upon current Accountable Care Organization models or integrating primary care and behavioral health services.
• Providing technical assistance and data to healthcare providers and payers that are working to advance models of integrated, team-based care or transition to value-based payment models.
• Creating unified quality measure score cards that healthcare payers and providers can use to align quality improvement and value-based payment methodologies.
• Expanding the adoption of health IT to improve patient care. 
• Fostering partnerships among public, behavioral and primary healthcare providers.
• Strengthening the healthcare workforce through educational programs, inter-professional training, primary care residencies and community health worker training.

"We are committed to partnering with states to advance the goals we all share: better care, smarter spending, and, ultimately, healthier people,” said HHS Secretary Sylvia M. Burwell in a release. "We're seeing states do some very innovative things when it comes to improving the ways we deliver care, pay providers and distribute information. These funds will support states in integrating and coordinating the many elements of healthcare--including Medicaid, Medicare, public health and private healthcare delivery systems--to the benefit of patients, businesses and taxpayers alike."

These awards include both states that are designing plans and strategies for state-wide innovation and states that are taking the next step from designing to testing and implementing comprehensive state-wide health transformation plans. Over $622 million in State Innovation Model Test Awards will support eleven states-Colorado, Connecticut, Delaware, Idaho, Iowa, Michigan, New York, Ohio, Rhode Island, Tennessee and Washington-–in implementing their State Health Care Innovation Plans. These states join six previous round one Model Test awardees: Arkansas, Maine, Massachusetts, Minnesota, Oregon, and Vermont. Nearly $43 million in State Innovation Model Design Awards will support 17 states, three territories and the District of Columbia to create and refine proposals for comprehensive healthcare transformation.

States will engage a broad group of stakeholders including healthcare providers and systems, long-term service and support providers, commercial payers, state hospital and medical associations, tribal communities and consumer advocacy organizations, according to the HHS announcement. Transformation efforts supported by this initiative must improve health, improve care and lower costs for Medicare, Medicaid, and Children’s Health Insurance Program beneficiaries. In addition, CMS will identify best practices among state-led transformations that are potentially scalable to all states.

“States are laboratories of innovation and serve as critical partners in transforming healthcare,” said Patrick Conway, M.D., CMS deputy administrator for innovation and quality and chief medical officer. “States are large healthcare purchasers for their employees and residents, have broad regulatory authority over health care providers and payers, have the ability to convene multiple parties to improve statewide health delivery systems, and oversee public health, social and educational services. Partnering with states on health innovation has the potential to accelerate and transform health innovation in all of these areas.”