By John Reichard, CQ HealthBeat Editor

May 17, 2013 -- There's something about Marilyn Tavenner that the White House could use a whole lot of right now as it absorbs successive waves of Republican criticism of its implementation of the health care law.

She clearly has the ability to engage opponents of the overhaul and to earn their good will, as last week's overwhelming Senate vote confirming her as Centers for Medicare and Medicaid Services (CMS) administrator attests.

And her two decades of experience as an executive with the nation's biggest for-profit hospital chain are reassuring to the big companies whose cooperation the Obama administration is counting on to implement the historic law.

She's got a third advantage as well: her clinical training and experience as a nurse.

In an exclusive interview with CQ HealthBeat at her office the day after she was confirmed, Tavenner outlined her priorities and discussed the many challenges she faces in carrying out the overhaul. She didn't dispute the first two advantages, but she made a point of mentioning the third.

She sees her firsthand understanding of what it takes to deliver care as a plus in dealing with hospitals and doctors who face many changes under the overhaul, including getting paid less if they deliver inefficient, substandard treatment.

But her nursing background suggests other qualities that also may play into whatever success Tavenner has in the coming months in reducing unease about the complex law. A former emergency room nurse who has guided patients through medical crises, she's a reassuring presence amid shifting circumstances. To many, she projects calm and efficiency under pressure, though she said in the interview that she doesn't feel calm at all.

Lessons of the Confirmation Process

Asked about the advantages of Senate confirmation, Tavenner doesn't oversell her new status. Nor did she make too much of the strong support she got from Republicans, 38 of whom joined 53 Democrats and independents in the recent 91-7 vote to confirm her.

"I'm not saying I can talk the Republicans into the Affordable Care Act,'' she says. "I think we all pretty much know that's not going to happen." What the confirmation process taught her, and perhaps what helped her garner so much support, is that "people just want you to be honest about what the issues are," she says.

But GOP praise for Tavenner, a southern Virginian who was long a part of the heavily Republican world of for-profit hospital executives, is genuine. While Tavenner received many congratulatory emails after the vote, House Speaker Eric Cantor, a fellow Virginian, called her personally to congratulate her.

But most important, Tavenner says, were the congratulatory emails she got from CMS staff, one of whom exultantly tweeted after the vote: "I HAVE A BOSS!"

There are more than 5,000 people who work at the agency, she adds. "And those folks are looking for a permanent administrator so they know what is expected of them each day and understand what the strategy is for the next one, two or three years."

Such stability has been missing since 2006, the last time CMS had a confirmed administrator. "I can't imagine running a private agency or running a private business with an acting administrator for seven or eight years," Tavenner says. "You wouldn't do that. You'd want someone in place who could say, 'This is our vision, this is where we are going.'"

Stability also is important to corporate executives and provider groups, she adds. Organizations such as the American Medical Association, the Federation of American Hospitals and the American Hospital Association "want to know who they're dealing with as we go through a lot of changes over the next few years."

Confirmation also tightens her links to Congress. It "means they can call me over and hold me more accountable, and I certainly expect that and look forward to that. But that wasn't done so much in an acting role. So I'll have a stronger interaction with members of Congress, and that's important."

No Time Off for the Next 139 Days

Asked the top two or three ways she thinks she can be most productive in the four and a half months before enrollment in the health care law exchanges begins Oct. 1, Tavenner glances at the calendar and interjects: "One hundred and thirty-nine days. That includes weekends and holidays, because we're working all of those.

"Obviously, one big area is doing regular updates with members of Congress. First of all, I want to build on the good will that has started. Second, there is a lot of information that we will need to be sharing over the next 140 days, information they can take back to their constituents, information about what happens inside the exchanges. Over the summer there starts to be a lot of this granular detail that folks will need to understand.

"The second way that I want to spend the next four months is obviously making sure that we're on target with the mechanics of opening the exchange, and I'm feeling good about that.

"The third area is outreach and education. We talk about people who are going to sign up for health insurance; well, that's one stakeholder. But we've also got folks like the Chamber of Commerce in key markets who can be very helpful in this, particularly in reaching smaller businesses.

"I want to meet with different chambers of commerce, and I've got a couple lined up. I'm doing Florida next week, I'm doing Virginia in June. There are a couple of other states that have reached out. That's a good way to get to businesses about what's going to happen and, just as importantly, what's not going to happen."

Tavenner adds that she intends to visit hospital boards in key markets to encourage them to help with outreach. And CMS has 10 regional offices across the country with a workforce that can help. She says she intends to visit each one of them to "give them a chance to ask details around the opening of the exchanges and Medicaid expansion but also solicit their support and help, which is important."

The priorities are "how to get people engaged and involved. And we've deliberately waited until summer." If administration officials start talking now about what will be available in terms of coverage, people who want to help will want to have something to hand out right away and people who need health insurance will want to be able to sign up, and they won't be able to do that before fall, she says.

Tavenner's big push on the health care law (PL 111-148, PL 111-152) is sure to spark criticism from Republicans that she is neglecting Medicare and Medicaid to the detriment of seniors and the disabled. In voting against her confirmation, Senate Minority Leader Mitch McConnell, R-Ky., praised Tavenner but said the health care law's implementation means she'll neglect the other two programs.

Tavenner may have had that in mind during the interview when she said that she only devotes half of each day to the health care law and the other half to making sure Medicare and Medicaid are running properly.

Dealing With the Doubts

Tavenner said coverage expansion will succeed despite stories in the press expressing doubt, but she adds that it won't happen overnight.

"I have confidence," she says. "The proof is going to be in the actual execution, and I think we are going to be prepared for that.

"There's two parts to that. I have confidence that we'll open for business on Oct. 1. So that's the first piece. Will we learn things as we go along and make adjustments? Of course." As with the opening of any big new project in business or government, "you're going to make changes as you go."

"The second piece, which is how do we go out and get folks to sign up, really is in three or four different categories." For example, there are people who have pre-existing medical conditions or have been unable to afford coverage and are just waiting to get it. "I think they'll be anxious; we've just got to help them out." In other cases, there are people who have never had health insurance. "So we'll have a targeted strategy for them. So we'll have different strategies depending on which part of the market we're trying to attract, and we're trying to attract everyone we can, obviously."

Also helpful will be the lengthy open enrollment period to sign up for coverage in the first phase of the expansion: six months. "This was done with the intention that not everyone is going to be at the door Oct. 1."

Tavenner adds that "it's like any other new program. It'll take a while for folks to understand, know what to do and get signed up." But, she said, "I think it will be well-received."

Medicaid Expansion

Tavenner is candid about the pace of the Medicaid expansion. Only about half the states say they will expand on Jan. 1. Asked whether she can help get that up to two-thirds, she says, "Realistically, I think most states that are going to expand by 2014 have to have made that decision by now" because of legislatures that are going out of session.

A few more states may yet opt for expansion in 2014, but "premium assistance," the model Arkansas plans to implement in which the Medicaid population gets subsidies to buy coverage on exchanges, won't open the floodgates, Tavenner says.

Arkansas now needs a CMS waiver. "They have started to send us information, and we're working with them and we're very encouraged by it." Tavenner adds that "there will be a couple of states that watch Arkansas and maybe try to do that model, but I think it's a handful of states."

She says she's hopeful that other states will come on board in 2015.

"A lot of that work goes on at the state level," with medical associations, hospital groups and advocacy groups continuing to work with governors and state legislatures. "I think most of them understand that if it's not this year, they're going to try to work strategically with the idea of 2015.

"The good news is we have it set up so folks can come in when they are ready. It's not like they have to come in by Jan. 1 of 2014—or tough. It's whenever you can get through your approval process."

Getting Past the Rhetoric

Tavenner says that when she talks to people about what the law will do they respond positively. That's what happened, she said, when she met with a business group in Tennessee a couple of weeks ago.

"When I sit down and talk with individuals about what this is going to do, it's actually very well-received. If you can get underneath the rhetoric of the Affordable Care Act or 'Obamacare' and get down to 'this is what it does for you, this is how it works,' then it is very positive.

"And that's true regardless of party, usually regardless of occupation and pretty much regardless of age. People just need to understand what's inside. Health care's always been complicated. When I was in the private sector it was difficult to explain, and in the public sector it's difficult to explain. We have a complicated health care system."

Given that, isn't there is a limit to what Tavenner herself can do? she's asked. She may be well-liked, and she may be reassuring, but she's a second-tier government official, and there are only so many one-on-one meetings she can have.

"Exactly!" Tavenner replies, laughing. "That's why I need teams at regions who can help! That's part of the reason for the regional visits that I'm doing between now and September. We have over a hundred people inside each region. And they do everything from look at Medicaid waivers to answering FOIA requests, so they have real jobs, OK? So I'm asking them to help with this as well.

"But they have a history of that," she says, explaining that they handled much of the communications work when Health and Human Services (HHS) rolled out its program to foster adoption of health information technology through the "meaningful use" payment program, which has now spread widely throughout the health care system.

Regional staff "see it as their mission to get folks insured," and they know the key players in local health systems, Tavenner adds. "The good news is, when your opening salvo is, 'We live in the wealthiest country in the world, we are looking at making insurance affordable and accessible to all of our population, to all of our citizens,' that's a message I can start out with every time. And then I start to walk through how that works." People respond, Tavenner insists.

Outreach, though, has run into significant snags. First, Congress denied CMS almost $1 billion in fiscal 2013 funding for outreach to promote the federal insurance exchange. Then, HHS Secretary Kathleen Sebelius ignited controversy when she acknowledged asking industry groups and other organizations to contribute to the nonprofit Enroll America, created to help promote health care law participation.

HHS says Sebelius only asked "non-regulated" groups for actual financial donations, and not drug makers and insurance companies. But now there's uncertainty about how much Enroll America can raise, with all the questions from congressional Republicans about the propriety of her requests.

Tavenner deferred questions about Enroll America and the impact of the Sebelius requests to HHS.

"For us, our strategy inside CMS has not changed," she says. It's a plan, she says, that includes providing grants for the navigators and others to give personal assistance and working with people in the states, such as hospital associations and insurance companies, to help get out the word on enrollment.

Coping With the Pressures

Anyone who has observed Tavenner since she first joined CMS in early 2010 as its top operating official can't fail to notice how much work she has done to issue the huge volume of regulations that have been published under the health care law. She has a lot left to do.

Much of this has occurred and will occur in an environment of intense criticism, with Tavenner maintaining a reputation for staying calm and focused throughout. How? And who or what inspires her?

"You're assuming that I'm calm and focused!" Tavenner objects. "Putting that aside, I start out every day with 30 minutes of exercise. That helps. But second, I have always, whether in the public sector or the private sector, depended on a strong team.

"I've also tried to create an environment where people could come talk to me about what the problems were and not be concerned that I was going to not be calm and focused. So I've encouraged a lot of communication, which I won't say helps prevent all problems, but it does help identify them earlier, and you can work through them before it becomes a crisis.

"There are people who inspire me," she adds. "I've had a couple of good bosses in my life. I find the president inspirational, and I'm not saying that because I'm a political appointee. I think he's taken a lot of pressure on the Affordable Care Act, tried to do it for the right reasons. But probably the thing that is most comforting for me, not to sound too silly, is I think we're headed in the right direction.

"I spent years watching folks, good folks, who couldn't get good health insurance for whatever reason find themselves financially strapped. And I tried to help them whenever I could when I worked for Hospital Corporation of America (HCA). And HCA was great about having a very generous discount policy. But I always wondered about the people I didn't know about who were struggling to make ends meet.

"So it really helps to know that you're getting close to an endgame where you're really going to provide—I think the Congressional Budget Office's latest estimate was 25 million—that much coverage, decent coverage to that many people," she says. It's "a once-in-a-lifetime opportunity, and that means a lot to me."

At the same time, millions of equally sincere Americans are convinced that the health care law represents a damaging level of government intrusion in the economy and in health care itself. There's no reason to think that is going to change for a number of years. Like Tavenner, opponents of the overhaul are also in it for the long haul.

By Rebecca Adams, CQ HealthBeat Associate Editor

May 17, 2013 -- Arizona senators moved Medicaid expansion one step closer to reality in that state this week while the effort fell short in Michigan.

Both states are led by Republican governors who announced earlier this year that they support expansion.

In Arizona, the Republican-led Senate voted last week to include provisions in the state's $8.8 billion budget that put in place GOP Gov. Jan Brewer's proposal to expand Medicaid coverage to people with income up to 138 percent of the federal poverty level, as called for in the health care law. The issue now goes to the Arizona House, where the prospects are less clear. Arizona's fiscal year starts July 1.

"When I announced my health care plan in January, I knew this would be a long and difficult road," Brewer said in a statement. But she added that public polls show "strong support for my Medicaid Restoration Plan across party lines and among residents from every corner of our state." If the state legislature chooses to broaden the program, Brewer said, "We can keep Arizona tax dollars in Arizona. We can use these resources to provide cost-effective health care to Arizona's working poor. We can protect our critical rural and safety-net hospitals. We can create thousands of jobs and improve Arizona's economic competitiveness."

The situation is more complicated in Michigan. The Republican-led Senate on last week narrowly approved a budget bill that doesn't broaden Medicaid eligibility. The House has already passed a budget measure without the expansion. Some Medicaid advocates hope that it could re-emerge in legislation separate from the budget process, which will wrap up in the next few weeks. The fiscal year in Michigan starts Oct. 1.

Some Michigan House Republicans are considering a bill that would expand Medicaid but it includes limits on the numbers of years that people could receive Medicaid, something the Obama administration is not likely to approve.

Similar ideas have been floated in Ohio, another state in which a GOP governor supports the expansion but the legislature has not acted. In that state, one idea that some Republicans are pushing is the notion of time limits. Others like the idea of spending Medicaid dollars to pay for coverage in the new marketplaces that will start enrollment in October, in a manner similar to what Arkansas has proposed.

Republican governors have been influenced by lobbying from local employers and health industry officials, such as hospital administrators. They also like the fact that the federal government will pick up the full tab for the first three years, although the federal contributions scale down to 90 percent in 2020.

However, many GOP legislators see the vote on Medicaid expansion as their last chance to vote against a part of the health care overhaul for philosophical and political reasons.

By Rebecca Adams, CQ HealthBeat Associate Editor

May 16, 2013 -- The Centers for Medicare and Medicaid Services (CMS) has put out most of the rules to implement coverage changes under the health care law, but a top official recently said that the public should expect more guidance on such issues as outreach and the enrollment of lawmakers and their staffs into the new marketplaces that will start accepting people in October.

Chiquita Brooks-LaSure, the deputy director for policy and regulations at the CMS Center for Consumer Information and Insurance Oversight (CCIIO), offered few new details in her wide-ranging remarks to the Medicaid and Children's Health Insurance Program  Payment and Access Commission (MACPAC). But she did respond to a question about lawmakers' enrollment in the exchanges by saying that CCIIO will be offering more information on that issue.

"They are, as you know, slated to enter the marketplaces and there will certainly be more guidance forthcoming on that," said Brooks-LaSure.

She also reminded the audience that the agency is expected to release a final rule on the navigators this summer. In March, federal officials released a proposed rule on the navigators program, including information about certification. The comment period on that proposal closed this week and federal officials are reviewing the comments.

"Throughout the summer, we will continue to put out more guidance," she said.

She also offered a reminder that the due date to apply for navigator funding through the federal marketplace is June 7.

Navigators will help consumers understand their choices and the application process as they try to enroll in Medicaid or the marketplaces this fall. They will assist consumers with their electronic and paper applications, help them find out whether they might be eligible for tax credits, and give guidance to people as they go through enrollment.

CMS officials have previously said that awards are expected by Aug. 15, about six weeks before the exchanges begin enrolling people on Oct. 1. CMS officials said they would award $54 million in navigator grants in states where the federal government will operate the exchange or where there will be a federal-state partnership. That money had to be shifted from the federal prevention and public health fund created in the health care law (PL 111-148, PL 111-152) when Congress refused to provide money for enrollment.

Premium Assistance

Also during the meeting, MACPAC analyst Chris Peterson provided information to the commissioners about premium assistance, a technique in which Medicaid or the Children's Health Insurance Program pays for private insurance premiums for a beneficiary. In the past, that has typically been used to pay for employer-sponsored insurance, but some states are looking to use the idea by paying for Medicaid beneficiaries' coverage in the new marketplaces.

About 39 states used premium assistance in 2009, according to the Government Accountability Office, but its use was rare. Premium assistance accounted for about 0.06 percent of Medicaid spending in fiscal 2009.

Now states such as Arkansas want to use Medicaid dollars to buy insurance for newly eligible people in the exchanges. Arkansas passed a state law last month endorsing that plan but the state has not yet submitted a detailed proposal to CMS for approval, noted MACPAC Chairwoman Diane Rowland.

MACPAC Commissioner Sara Rosenbaum proposed that the panel devote "considerable MACPAC resources" to studying the issue of premium assistance and coordination between Medicaid and private insurance in the future.

The issue is complicated and policy analysts have many questions about the impact on consumers.

"I think we're going to confront this more and more and more," said Rosenbaum.

By Jane Norman, CQ HealthBeat Associate Editor

May 15, 2013 -- The number of emergency room visits due to dental problems nearly doubled in the United States in a 10-year period, according to a research paper recently released by the American Dental Association.

The dental group said that the number of visits related to problems with teeth grew from 1.1 million in 2000 to 2.1 million in 2010. As a share of all ER visits, dental-related visits grew from 1.06 percent to 1.65 percent during that time period, according to statistics derived from the National Hospital Ambulatory Medical Care Survey.

Young adults ages 21 to 34 are accounting for the increase in visits, likely because many don't have dental insurance, the paper said.

The findings again highlighted national problems with low-income people's access to dental care. Some 130 million Americans lack dental insurance, and Medicaid provides limited or no adult dental coverage. The health care law (PL 111-148, PL 111-152) did not provide for oral health care for adults either, even though dentists say it's just as important as care for the rest of the body.

But there are divisions between dentists and other types of providers over how to proceed. A separate report issued by the nonprofit consumer group Community Catalyst made the case for using mid-level dental workers to help alleviate the problem of access. Also known as dental therapists, the mid-level providers—similar to nurse practitioners or physician assistants in the medical field—are not yet widely authorized by states and their expansion is opposed by dentists.

The Community Catalyst report said that in Minnesota and Alaska, the two states where therapists practice, a third of services provided were preventive, most commonly sealants and fluoride varnishes for teeth. The therapists' clients are made up mostly of publicly insured children, low-income adults, Native Americans and others who don't have access to dental services, the report said.

Robert A. Faiella, president of the American Dental Association, said in an interview that dentists are launching a three-pronged national campaign to battle the problem of access: treat those in need of dental care who most need it right away, prevent disease before it starts through community fluoridation and tooth sealants and educate patients about how oral health fits into their overall health condition.

Tight budgets for Medicaid make it unlikely that states will expand their coverage for the poor, Faiella acknowledged. Dentists want to participate in Medicaid but in many states it's very difficult just to enroll, he said, with months needed to become credentialed. One model for changing that is in Oklahoma, where there are just two pages needed for Medicaid enrollment and Faiella said that "absolutely" makes a difference.

"Understanding where state budgets are, we are still advocating for improvements in the system," he added.

There are also a number of programs where local dentists are working with hospitals to divert patients away from ERs there and provide care instead in private offices with a sliding scale for fees, he said. A Michigan program asks that patients provide community services in exchange for their dental work.

Faiella said dentists are opposed to training more dental therapists because the need is not for more providers but rather a better way to get dental care to poor people. "We just need inroads into the susceptible populations to have them receive access into the system that already exists," he said. For example, the safety net could be expanded if private dentists were to contract with federally qualified health centers and community health centers, he said.

Nonetheless, the Community Catalyst report said that legislation is pending in eight states to expand the use of dental therapists and several other states are studying the model to see if mid-level providers might be useful.

By Jane Norman, CQ Roll Call

May 14, 2013 -- When enrollment in the health care law's new insurance exchanges opens in October, the prospects for success will turn on a crucial element: people who actually understand health insurance coverage and can explain it in plain language to consumers.

Many Americans who will be signing up may never have had insurance in the past or aren't fluent in English or might have trouble figuring out which plan will be best for their pocketbook and health condition. They probably will be using computers or paper application forms to enroll in health care coverage through the exchanges, which serve as marketplaces for the purchase of health insurance for individuals and small businesses.

The Obama administration doesn't want them to give up in frustration.

So the states and the Department of Health and Human Services will oversee the training of what's expected to be thousands of paid health insurance experts who will be available to guide Americans through the enrollment process. Counselors working in community health centers or hospitals also will be trained. Advocates are hoping there will be enough helpers to satisfy what could be a deluge of demand from worried and confused applicants. "It's a challenge. It's a huge challenge," Kathleen Gmeiner of Ohio Consumers for Health Coverage said at a recent forum sponsored by the Kaiser Family Foundation.

Here are some questions and answers about who will be helping Americans understand their new choices:

How do "navigators" fit into the system of exchanges that was set up under the health care law?

Consumers will fill out applications either online, on paper or by phone to apply for health insurance through the exchanges. Each state will have its own marketplace and its own set of available health insurance policies; some will be overseen by the federal government and others by states.

Insurance is often hard to understand and everyone has a different situation. So the law created government-paid helpers called "navigators" who will educate consumers about how to apply and assist them through the process. Navigators won't work on commission and they can't favor any one insurer or be paid by insurers.

Navigators may be public or private organizations or self-employed individuals. Eligible groups include unions, tribal organizations, church groups and chambers of commerce. At least one group in every state must be a consumer-oriented nonprofit. They will advise applicants on whether they are eligible for the Medicaid program or whether they might qualify for government tax credits that will help them pay for their insurance.

Navigators are supposed to provide impartial information and guidance to consumers, not tell them which plan to pick.

Are there navigators in every state? Are there other types of helpers?

There will be navigators in the 34 states in which the federal government is running the marketplaces or the state is engaged in a partnership with the federal government. In those states, the Department of Health and Human Services(HHS) is making available $54 million.

The money is allocated based on the total number of uninsured people under the age of 65 in each state, and each state gets at least $600,000. Some experts are worried this won't be enough to reach all the uninsured. Applications are due June 7.

In the 16 states and the District of Columbia that have set up their own exchanges, there will also be navigators—but they may not be fully operational right away. That's because of a funding quirk in the law. Those states receive what are known as federal exchange establishment grants, and that money can't be used to pay for navigator programs.

So, HHS created the "in-person assister" program for those states, to help them beef up their consumer assistance in their first year of operation. States can apply for and use exchange establishment grants for these assister programs as well as state funds. The assisters probably will do many of the same things as navigators.

There is a third category of helpers called "certified application counselors." They are not paid by the government but instead work for community health centers, hospitals or similar institutions, and they would be certified to help with exchange enrollment in those places.
How will navigators and other government-paid helpers be trained? How much will they be paid? What are their qualifications?

Both navigators and assisters will have to complete a Web-based training program that will take up to 30 hours, and they will be certified by passing exams approved by HHS. They'll be trained on respecting people's privacy and on customer service. And they have to pledge to stay free of conflicts of interest.

Those who apply to be navigators will be asked to provide information on their track records of developing and maintaining relationships with employers, employees, consumers, the uninsured and self-employed people, especially those who are low income. They'll also be asked about public education they've conducted in the past.

Applicants for navigator grants are also supposed to demonstrate that they will be able to reach out to people with disabilities and that their services will be accessible to them.

It's not clear what the pay will be, but HHS estimated in a proposed rule that it would average $29 an hour for all staff, from higher-paid senior executives on down. Similarly, it is not yet known how many navigators or assisters there will be, but the number is expected to be in the tens of thousands.

How will people who don't have insurance find advice on how to sign up?

The idea is the helpers will be out in the community actively looking for people to sign up at church meetings, in barbershops, even knocking on doors, according to recent congressional testimony. In addition, the federal government, the states and private advocacy groups such as Enroll America are expected to roll out education programs in July, August and September that will publicize how to find help. Enrollment begins Oct. 1.

Will the helpers be fluent in languages other than English?

There is no firm requirement for fluency in other languages. But the helpers are supposed to know about the cultures in their states and provide information to consumers in their preferred language, either verbally or by translation when necessary. HHS says in proposed rules that interpretation available by telephone may be used, or a family member might be relied on to help. Applicants will be asked about their experiences in working with people with limited English proficiency. There will be a call center and a language line that can arrange to provide answers in more than 150 languages, officials have said.

People who don't have insurance through their jobs often sign up now through insurance agents. Will that change? Will they be required to use a navigator instead?

Insurance agents and brokers who are continuing to actively sell health insurance cannot be navigators or assisters. However, once consumers have been told they are eligible for a tax credit and are ready to pick a plan, the agent can help them select insurance coverage as long as they abide by certain federal and state rules. But agents can't provide any financial incentives to steer people into particular plans. No one will be required to use a navigator.

By Rebecca Adams, CQ HealthBeat Associate Editor

May 15, 2013 -- The Center for Medicare and Medicaid Services (CMS) Innovation Center is preparing to distribute $1 billion in grants for projects designed to improve care and lower costs for federal health programs, agency officials said last week.

The second round of grants follows an initial round that was announced last year. At that time, 107 organizations received funding from a total pot of $895 million. CMS Innovation Center officials said the projects would save $1.9 billion over three years.

Richard Gilfillan, who directs the Innovation Center, said it is too early to tell whether the projects announced a year ago would actually save the amount of money that was initially projected. He said some of the projects are "still in relatively early stages."

CMS officials are authorized under the health care law (PL 111-148, PL 111-152) to expand projects that are determined to save money and improve the quality of care into broader national policies. But Gilfillan told reporters that federal officials "do not have any results that we would use to pursue the path" of national expansion in the near future.

CMS officials are soliciting ideas that can "deliver sustainable net savings" within three years, according to a fact sheet about the awards. Almost any kind of group can apply, including providers, health systems, companies, faith-based organizations, payers, state or local governments, and for-profit corporations. Letters of intent for this latest found are due June 28 and applications are due Aug. 15. CMS officials expect to announce the winners near the end of the year or early next year.

The new awards that CMS will provide must fall into one of four categories designed to:

• Rapidly reduce Medicare, Medicaid, and/or CHIP costs in outpatient and/or post-acute settings. The center designated several outpatient settings that would be priorities, including diagnostic services, outpatient radiology, high-cost physician-administered drugs, home-based services, therapeutic services and post-acute care.
• Improve care for populations with specialized needs, such as foster children, high-cost pediatric patients, teens in crisis, Alzheimer's patients, people with HIV/AIDS, people needing long-term care services and those with behavioral health needs.
• Test approaches for specific types of providers, such as oncologists or cardiologists, to change their financial and clinical models.
• Improve the health of populations, such as through prevention. Applicants could narrow their proposals to groups defined geographically, clinically (to improve the health of those with certain diseases) or by socioeconomic class.

Gilfillan would not predict what the average grant amount would be. CMS officials will be holding webinars to help applicants understand the requirements of the grant opportunity. Applicants need to spell out how their proposal would create new benefit designs or payment systems that could be expanded in the future.