The government will award nearly $300 million to 25 states to improve healthcare delivery. Called State Innovation Model awards, the funding is made available under the Affordable Care Act.

The awards are intended to provide flexibility and support to states to help them deliver high-quality healthcare, lower costs and improve their health system performance, HHS Secretary Kathleen Sebelius said in a news release.

"As a former governor, I understand the real sense of urgency that states feel to improve the health of their populations while also reducing total healthcare costs, and it’s critical that the many elements of healthcare in each state – including Medicaid, public health, and workforce training – work together," Sebelius said. "We are encouraged by the progress states have made and look forward to continuing to work with them as they move forward."

[See also: HHS announces state funding initiative, with care innovation at core.]

Model Testing awards will support Arkansas, Maine, Massachusetts, Minnesota, Oregon and Vermont in implementing their plans for healthcare delivery system transformation. The six selected states will use funds to test multi-payer payment and service delivery models, including approaches already under way at CMS, such as accountable care organizations, on a broader scale within their state. Through the program, CMS will learn whether these new models produce greater results when implemented broadly and combined with additional statewide reforms.

More than $250 million in Model Testing awards will support states that are ready to implement their State Health Care Innovation Plans. A State Health Care Innovation Plan is a proposal that describes a state’s strategy to use all of the levers available to it to transform its healthcare delivery system through multi-payer payment reform and other state-led initiatives.

The states will develop Health Care Innovation Plans and use them to apply for an anticipated second round of Model Testing awards. States receiving Model Design awards will also have six months to submit their State Health Care Innovation Plans to CMS.

The following states will receive model design awards to further develop proposals for comprehensive healthcare transformation: California, Connecticut, Delaware, Hawaii, Idaho, Illinois, Iowa, Maryland, Michigan, New Hampshire, Ohio, Pennsylvania, Rhode Island, Tennessee, Texas and Utah.

Also, Colorado, New York and Washington will receive model pre-testing awards. The funding will help them continue to work on a comprehensive State Health Care Innovation Plan. States receiving pre-testing awards under the State Innovation Models initiative will have six months to submit their State Health Care Innovation Plans to CMS.

"States have taken important steps in partnership with HHS, private payers, Medicaid, CHIP and their public health departments," said CMS Acting Administrator Marilyn Tavenner. "The State Innovation Model awards are designed to bring additional flexibility to states on their path to improving their healthcare systems."

[See also: CMS' Tavenner spotlights innovation.]

HHS is also releasing a new report titled, "Medicaid Moving Forward," which underscores the innovative efforts states and HHS have already undertaken to improve care and lower costs in their Medicaid programs.

The Medicaid Moving Forward report highlights recent initiatives under way to support state efforts to achieve the goals of improving care and lowering costs in Medicaid and the Children’s Health Insurance Program (CHIP). It outlines specific examples of how states are using these tools to advance their own state initiatives.