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Obama Administration Offers $1 Billion for Healthcare Innovation

HHS awards designed to transform delivery and payment systems.


The Burrill Report

“Organizations from the public and private sectors throughout the country are finding creative solutions to our healthcare system challenges.”

U.S. Secretary of Health and Human Services Kathleen Sebelius announced that nearly $1 billion will be made available in the second round of Health Care Innovation Awards for projects that have a “high likelihood” of cutting cost while delivering better outcomes.

The awards, a product of the Affordable Care Act, range from approximately $1 million to $26.5 million for a three-year period. Last year, the Centers for Medicare & Medicaid Services awarded 107 Health Care Innovation grants out of nearly 3,000 applications to organizations that are currently applying innovative solutions to improve outcomes and reduce costs.

“Organizations from the public and private sectors throughout the country are finding creative solutions to our healthcare system challenges and these awards will continue to stimulate these ideas,” says Sebelius.

Among the first round of awards were The Courage Center in Minnesota, that dramatically cut hospitalization rates for people with traumatic brain injury through the use of a medical home, and Welvie, a company that teamed with Anthem Blue Cross Blue Shield in Ohio to save an average of $7,000 per patient, by better informing patients about surgery and their treatment options.

In the second round, CMS is looking to reward new payment models to support the service delivery models funded by the initiative. All applicants are required to submit, as part of their application, the design of a payment model that is consistent with the new service delivery model that they propose.

Unlike the initial awards, in the second round CMS is seeking innovations in four areas: rapidly reducing costs for patients with Medicare and Medicaid in outpatient hospital and other settings; improving care for populations with specialized needs; testing improved financial and clinical models for specific types of providers, including specialists; and linking clinical care delivery to preventive and population health.

The awards are open to entities that have developed innovations that will drive significant improvement in population health, quality of care, and total cost of care. HHS says 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.

May 17, 2013

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