HHS to grant $840M to improve healthcare systems

States will be eligible to win federal grants under a new program intended to improve the healthcare system while reducing costs.

The Department of Health and Human Services plans to dole out up to $730 million to states under its State Innovation Model initiative, which is intended to help states come up with better public and private healthcare payment and delivery systems.

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Separately, another $110 million is being awarded to a dozen projects for three years to test healthcare delivery systems. 

The department says its goals are to improve healthcare while decreasing costs for people covered under Medicare, Medicaid and the Children’s Health Insurance Program.

“As a former governor, I understand the real sense of urgency states and local communities feel to improve the health of their populations while also reducing health care costs, and it’s critical that the many elements of health care in each state – including Medicaid, public health, and workforce training – work together,” said HHS Secretary Kathleen Sebelius, a former Democratic Kansas governor.

HHS says up to 12 states will be picked for its state-sponsored Model Testing awards worth $700 million and up to 15 states will be picked for its state-sponsored Model Design awards worth another $30 million.

Under the first round of the initiative in 2012, 107 organizations in 50 states, the District of Columbia and Puerto Rico received awards to come up with better healthcare delivery systems. 

The program to test new healthcare delivery systems, according to the Centers for Medicare and Medicaid Services, will be implemented in 13 states. Awards range between $2 million to $18 million, and include projects to improve care for dementia patients, coordination between specialists and primary care physicians, and cardiac care.

- This article was updated May 23, at 11:52 am.