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Medicaid Transformation Grants

The Deficit Reduction Act authorizes the federal government to grant states a total of $150 million in "Medicaid Transformation Grants" (MTGs) over two years for the "adoption of innovative methods to improve effectiveness and efficiency in providing medical assistance under [Medicaid]."[1] The Centers for Medicare and Medicaid Services (CMS) announced awards totaling $103 million on January 25, 2007, and there will be a second grant solicitation for the remaining $47 million. Thirty-three grants, averaging $3.1 million, were awarded to 27 states and the District of Columbia (a few states applied for and received more than one grant). The grants range from $75,000, for North Dakota, to $9.9 million for the District of Columbia. Each grant is divided into FY 2007 and FY 2008 allocations.

The majority of states are using the grants to design, develop, and/or implement health information technology (HIT) in a range of areas related to their Medicaid programs. Following is one way to categorize the grant activities:[2]

Focus of Grant Number of Grants State Grantees
Electronic medical records or health information systems and exchanges 13 AL, AZ, DC, HI, KY, MI, MN, MT, NM, TX, WV (2), WI
Pharmacy HIT tools 7 CT, FL, NM, ND, TN, UT, WV
Electronic verification of citizenship 4 AR, MA, MI, RI
Promoting good health and personal responsibility 2 WV (2)
Predictive modeling system 2 IL, KS
Program integrity (fraud reduction) 2 MD, NY
Medical information for children 1 NJ
Health provider credentialing 1 MI
Medicaid estate recovery 1 IN

Below we summarize a few of the states' grant activities. Full applications can be viewed on the CMS Web site.

Wisconsin's grant ($3.0 m) will be used to create a regional health information exchange framework, infrastructure, and system to enable multiple hospitals, clinics, and health care institutions to rapidly and securely access medical history information about patients enrolled in Medicaid and General Assistance Medical Programs in Milwaukee County. Access to patients' medical histories across health care providers should help reduce redundant tests and procedures, improve health care outcomes, and reduce health care costs.

Utah's grant ($2.9 m) will help refine and implement a Pharmacotherapy Risk Management System (Utah ePRM). This electronic surveillance tool will support medication therapy, risk management services, and innovative multifaceted interventions. It will be used to identify potential drug therapy problems, select patients and providers for in-depth clinical reviews and intervention, identify potential fraud and diversion of controlled substances, and track patterns of medication.

One of West Virginia's five grants ($3.9 m) will be used to help transform the primary care delivery system into a network of connected regional "Advanced Medical Homes" (AMHs) for Medicaid beneficiaries. The AMHs will utilize the chronic care model in providing proactive, patient-centered preventive and chronic disease care. An interactive electronic health management system with clinical reminders, patient education, and risk stratification tools is expected to help Medicaid members meet personal responsibility guidelines and health self-management goals. The AMHs will eventually be connected to the Medicaid data warehouse, promoting predictive modeling and population-based health management.

Kansas will use its grant ($0.9 m) to equip certain case managers with "Impact Pro," a computerized, predictive modeling tool that will help them monitor chronic conditions and improve preventive care. The tool uses Medicaid claims data to alert case managers to needed screenings and preventive care opportunities. The pilot program will invite case managers from selected Community Developmental Disability Organizations and Community Mental Health Centers to participate.

According to CMS spokesperson Mary Kahn, "the goal of the Medicaid Transformation Grants is to allow states a new level of participation in designing their Medicaid programs to fit the needs of their various populations." All of the Medicaid Transformation Grants incorporate an evaluation component to assess the impact of the innovations developed and implemented.

[1] Public Law 109-171 Section 6081,
[2] Categories based on initial review by Patricia MacTaggart, Health Management Associates.

For More Information
Contact: Center for Medicaid and State Operations, (410) 786-3870.
See: CMS Web site

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