CMS to Fund Innovative Health Care Initiatives

The Centers for Medicare and Medicaid Services (CMS) May 15 announced a funding opportunity that will award up to $1 billion in grants to test new payment and service delivery models that will deliver better care and lower costs for Medicare, Medicaid, and Children’s Health Insurance Program (CHIP) enrollees. The second round of the Health Care Innovation Awards will be administered by the Center for Medicare and Medicaid Innovation (CMMI) to support public and private organizations in four defined areas that have a high likelihood of driving health care system transformation, the agency said. Funds will go to those applicants that demonstrate that they can improve quality of care and deliver sustainable net savings to CMS within three years. The grant program was included in the Affordable Care Act. CMS in 2012 awarded 107 first-round Health Care Innovation Awards, out of nearly 3,000 applications, to organizations that are currently testing innovative solutions to improve outcomes and reduce costs. The 107 projects will save Medicare, Medicaid, and CHIP $1.9 billion over the three-year length of the agreements. Grantees include collaborations of hospitals, doctors, nurses, pharmacists, technology innovators, community-based organizations, and patient advocacy groups in urban and rural areas. CMMI announced the first round of awards in May 2012 with the second and final batch of awards under round one announced a month later. More Specific Proposals Although the projects CMMI funded in the first round were broadly targeted to improve health outcomes, the second round is more specific, CMMI Director Richard Gilfillan said during a May 15 briefing. Specifically, in the second round, CMS is seeking proposals for models that:

• »Are designed to rapidly reduce Medicare, Medicaid, and/or CHIP costs in outpatient and/or post-acute settings;

• »Improve care for populations with specialized needs;

• »Test approaches for specific types of providers to transform their financial and clinical models; and

• »Improve the health of populations.

CMS also said it is specifically seeking new payment models to support the service delivery models funded by the initiative. All applicants must submit, as part of their application, the design of a payment model that is consistent with the new service delivery model that they propose. Eligible applicants include, but are not limited to, provider groups, health systems, payers and other private-sector organizations, faith-based organizations, states, local governments, public-private partnerships, and for-profit organizations, CMS said. CMS said it will accept letters of intent from June 1 until June 28. Applications will be accepted from June 14 until Aug. 15, CMS said.