Federal health officials emphasized that the grants will help spur innovation in both the public and private sectors. The awards are sponsored by President Obama's signature healthcare reform law.
"I'm excited to see the innovative ideas these applicants will bring to the table," Sebelius said in a statement Wednesday.
"Organizations from the public and private sectors throughout the country are finding creative solutions to our healthcare system challenges and these awards will continue to stimulate these ideas."
Sebelius and acting Medicare and Medicaid administrator Marilyn Tavenner praised the Affordable Care Act for curbing healthcare cost growth. They cited last year's "far below" average increase in Medicare spending per beneficiary (0.4 percent).
The first round of awards gave grants to 107 out of nearly 3,000 applicants, according to HHS. The program is administered by the Medicare and Medicaid agency.