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CMS Seeks to 'Rapidly Reduce' Medicare Spending with $1B in Grants

 |  By John Commins  
   May 17, 2013

The second round of federal Health Care Innovation Awards specifically seeks clinical models that will quickly shrink Medicare costs and improve care for populations with special needs as well as population health.

 

Nearly $1 billion in grant money will be available to healthcare providers that can demonstrate a high likelihood of success in rapidly lowering costs and improving quality for chronic and special needs populations, the Centers for Medicare & Medicaid Services announced this week.

"Over the last three years, we have seen national healthcare cost growth slow significantly and we want to continue that trend by helping to improve the delivery of healthcare by testing new models of paying for quality care, CMS's newly confirmed administrator Marilyn Tavenner said in prepared remarks.

"These awards will help spur private and public sector innovation in this endeavor."

This second round of Health Care Innovation Awards differs from the first round. This time, CMS said it's looking for innovations in four areas:

  1. Rapidly reducing costs for patients with Medicare and Medicaid in outpatient hospital and other settings;
  2. Improving care for populations with specialized needs;
  3. Testing improved financial and clinical models for specific types of providers, including specialists; and
  4. Linking clinical care delivery to preventive and population health.

Colin Roskey, an attorney at Cozen O'Connor Public Strategies in the firm's Health Law Practice Group, says "results" are the focus of the second round of grants.

"Without characterizing the first round of grants, maybe one might call it more generalized and aspirational. The second round is more results-oriented in asking for models that rapidly reduced spending and improve care for populations with special needs," he says. "So already they aren't just saying population health. They are saying population health with an emphasis on patients with special needs."

"This gets more specific when you look at the models they are looking for," says Roskey, a former health policy advice and counsel to the U.S. Senate Finance Committee. "They want approaches that test specific types of providers to transform their clinical and financial models. CMS is moving in Round 2 towards a grant environment that is going to force participants to show scalable provable propositions that can work in an environment where specificity is the rule and generality is the exception."

Roskey says oncology services for special needs populations is expected to be a focus of the grants as well. "For instance, oncologists or the clinical oncology delivery system in the community, or the academic medical center, or elsewhere maybe we take care of patients with specialized needs," he says.

"Not only do they have some type of cancer, they have other co-morbid conditions. While the Innovation Center has taken on accountable care and post-acute care and the notion of bundling payments, they have not yet taken fully on some of the various manifestations of cancer care."

CMS is also expected to target providers who serve populations with significant health needs, Roskey says.

"These might be dual-eligible (Medicare/Medicaid) patients, patients who are chronically ill or reside in long-term care hospitals and/or patients who have other disabilities that prevent them from being fully functional in the work place that this innovation program could facilitate better community-base care services," he says.

"I see some psychology, I see some psychiatry, and I see a larger emphasis on poor people who are dual-eligible being able to access through their delivery system care that might facilitate improvements in their population health."

Last year CMS awarded 107 round one Health Care Innovation Awards out of nearly 3,000 applications to organizations that are currently testing innovative solutions to improve outcomes and reduce costs. Projects are located in urban and rural areas, all 50 states, the District of Columbia and Puerto Rico, CMS said.

Notable projects include:

The Courage Center in Minnesota, which provides a medical home for people with traumatic brain injury and those in wheel chairs. The patients have lower rates of depression and have reduced rates of hospitalization by 71% - from 10.8 days per year to only 3.1 days per year. 

Welvie, LLC in Ohio, which is teaming with Anthem Blue Cross Blue Shield in Ohio to enable Medicare beneficiaries to make better informed decisions about surgery and their treatment options. Since September 2012, nearly 3,500 patients have participated, with 48% considering surgery alternatives and 17% choosing less invasive options, resulting in an average savings of $7,000 for each surgery avoided. 

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.

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