HHS Announces $275M State Healthcare Innovation Initiative

HHS Secretary Kathleen Sebelius has announced the start of a state healthcare innovation initiative aimed at encouraging states to improve healthcare systems while trimming the cost of care.

A total of $275 million is available in funding for the State Innovation Models initiative, including $50 million for design and $225 million for testing selected state models.

As many as five states will be chosen for an initial round of testing and up to 25 states will be chosen for "model design awards," according to HHS.

Model initiatives can include employers, insurers, community leaders, healthcare providers, consumers and tribal governments, according to HHS. The purpose of the state-driven initiatives is to test multi-payor payment and delivery system improvements for Medicare, Medicaid and Children's Health Insurance Program beneficiaries.

The State Innovation Models initiative is meant to supplement healthcare innovation already happening in states, such as statewide primary care networks and coordinated care models, according to HHS.

HHS officials anticipate another opportunity for states to apply for state innovation model funding next year.

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