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Innovation Center Plans Second Round of Grants

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.

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