Medicare Proffers $1 Billion For Healthcare Innovation Projects

Federal health agency offers funding for new models of nonhospital care that cut federal health expenditures, improve health of specific patient populations.

Neil Versel, Contributor

May 22, 2013

3 Min Read

7 Portals Powering Patient Engagement(click image for larger view and for slideshow)

The U.S. Centers for Medicare and Medicaid Services (CMS) will spend as much as $1 billion on a second round of innovation awards for projects that show strong potential to reduce costs and improve care for Medicare, Medicaid and Children's Health Insurance Program (CHIP) patients outside hospital environments.

"CMS is interested in finding models that change the way we deliver care in America," CMS spokesman Alper Ozinal told InformationWeek Healthcare. "These awards are designed to test models."

While a previous round of 107 innovation awards in 2012 were general in nature, this time CMS is seeking to fund projects that test care-delivery models in four categories:

-- reducing government healthcare expenditures in outpatient and post-acute settings;
-- improving care for populations with specialized needs;
-- helping certain categories of providers transform their financial and clinical models; and
-- improving population health.

[ Mobile apps can help patients track, improve their health. ]

"These Innovation Awards will be given to organizations whose creative solutions to our most pressing healthcare challenges have the potential to serve as models for improving care and lowering costs across the country," Dr. Richard Gilfillan, director of the Center for Medicare and Medicaid Innovation (CMMI) within CMS, wrote in a blog post explaining the program.

"As with last year's awards, we're seeking out innovative practices that have a high likelihood of delivering better care and lower costs on a national scale. The last few years have seen us make tremendous strides towards keeping healthcare spending in check, and a lot of that is thanks to innovations that have helped improve the quality and efficiency of care delivery and payment systems."

In its official funding announcement, CMS encouraged models that employ technologies such as data analytics, health information exchange, telemedicine and clinical decision support, but with an important caveat. "Award dollars may be used to implement specific technology, software applications or other analytical tools, but only if they are being implemented and tested in the context of a healthcare service delivery model that has a clear pathway to a payment model," CMS said.

Specifically, CMS is looking for models that boost performance of physician specialties and subspecialities and for pediatricians serving "children with complex medical issues." Programs should include mechanisms for shared decision-making to get Medicare, Medicaid and CHIP enrollees -- as well as their families and caregivers -- more involved in their own care.

Special populations CMS would like to focus on include children in foster care, children at high risk of dental disease, adolescents in crisis, people with Alzheimer's disease and HIV/AIDS patients, according to the funding announcement.

For population health, CMS will consider projects that define communities by geography, disease state or socioeconomic status. The federal agency will give priority to models and programs that address prevention and control of cardiovascular disease, hypertension, diabetes, chronic obstructive pulmonary disease, asthma and HIV/AIDS, as well as the promotion of healthy behaviors that can reduce risk of developing chronic diseases.

These goals seem aligned with the Triple Aim of producing better patient outcomes and improved population health at a lower cost -- a concept devised by former CMS administrator Dr. Donald M. Berwick when he headed the private-sector Institute for Healthcare Improvement (IHI). However, CMS is not using the Triple Aim moniker with this challenge.

CMS plans on handing out about 100 awards in this round, ranging in size from $1 million to $30 million each, though the agency is not required to disburse all the money or have a minimum number of winners. The funding comes from an appropriation in the Patient Protection and Affordable Care Act, the 2010 healthcare reform legislation often called Obamacare.

The Medicare agency will accept letters of intent to apply from June 1 to 28 and applications may be submitted between June 14 and Aug. 15. CMS expects to announce the winners in two phases next January, and the three-year award period will begin April 1, 2014.

About the Author(s)

Neil Versel


Neil Versel is a journalist specializing in health IT, mobile health, patient safety, quality of care & the business of healthcare. He’s also a board member of @HealtheVillages.

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