Daily Message

Dec. 18, 2014: HHS Awards $665 Million for State-Led Health System Redesign Efforts

The U.S. Department of Health and Human Services announced $665 million in funding to states to design and test new models in healthcare payment and service delivery aimed at improving care and reducing costs.

The State Innovation Models grants are funded under the Affordable Care Act. Twenty-eight states and territories are part of today’s award announcement. New Jersey received $3 million as one of 17 Model Design Award winners.

The initiative supports states in planning or implementing a customized proposal for creating statewide health transformation to improve healthcare. Example initiatives include: improving primary care though patient-centered medical homes or other integration; providing technical assistance and data to advance care coordination or transitions; and creating quality measure score cards to be used in value-based payment methodologies.

"We're seeing states do some very innovative things when it comes to improving the ways we deliver care, pay providers and distribute information,” said HHS Secretary Sylvia Mathews Burwell. “These funds will support states in integrating and coordinating the many elements of healthcare – including Medicaid, Medicare, public health and private health care delivery systems – to the benefit of patients, businesses and taxpayers alike."

Participating states are expected to engage a broad group of stakeholders including healthcare providers and systems, long-term service and support providers, payers, state hospital and medical associations and consumer advocacy organizations. Under the program, efforts supported by the federal funding must demonstrate improved health, improved care and lower costs for Medicare, Medicaid and Children’s Health Insurance Program (CHIP) beneficiaries. In addition, the Centers for Medicare and Medicaid Services will identify best practices among state-led transformations that are potentially scalable to all states.