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CMS hands out nearly $300 million for health care innovation awards

Nearly $300 million will be awarded to states as the first recipients of the state innovation model awards, funded through the Centers for Medicare & Medicaid Services and the Department of Health and Human Services. Arkansas, Maine, Massachusetts, Minnesota, Oregon, and Vermont are receiving the awards to test and expand services like accountable care organizations (ACOs) within their state.

The goal of the health care innovation initiative is to improve “health system performance for residents of participating states,” according to the CMS. States will design, test and assess multi-payer, health care delivery services and payment models through the initiative.

ACOs have been a point of interest recently, particularly in Massachusetts. Last year, ACOs were signed into state law to go into effect in 2016. This law requires ACOs to more actively manage patients’ general wellness, as opposed to the current fee-for-service model. ACOs will receive one payment for a patient’s procedure, from beginning tests to the end of rehab and physical therapy. Federal intiatives to create such a system aim to reduce health care costs through greater management of primary care and fewer hospital admissions.

The government has been working on similar funding support for health information exchanges, another data sharing model through which stakeholders hope to better manage care. However, while government grants and awards help jump-start exchanges, eventually that support runs out, something being encountered by state and regional HIEs. The government had been supporting 90% of HIE costs and the remainder had been self-funded, but HIEs are preparing for that ratio to be inverted. Some HIEs have turned to payers and providers to help support their cause, while Illinois cut potential expenses by outsourcing jobs as they built their HIE. Eventually, any model of care management or information exchange will have to become self-sustainable.

Regional health information organizations (RHIOs) have also dealt with funding concerns, complicating their role in the Nationwide Health Information Network plan. They failed to receive any funding from the HITECH Act. A web-based model for exchanging health information was discussed after RHIOs failed to act as quickly as HIEs in finding a solution for their lack of funding.

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