WASHINGTON – Healthcare information technology will take the lion’s share of the  $103 million in federal backing for Medicaid projects that Health and Human Services Secretary Michael Leavitt announced Thursday.

The government awarded the “transformation grants” to 27 states across the country to help implement new ways to improve Medicaid efficiency, economy and quality of care. In most states the grants will mean new technology.

North Dakota, which received the least – $75,000 – plans to spend it all on a Web-based electronic pharmacy claim submission interface. West Virginia, which claimed the most – nearly $14 million – identified five separate initiatives including one titled “Healthier Medicaid Members through Applied Technology.”

“Automation” and “electronic” were two words commonly used in the grant applications from the states.

“The Department sees the Medicaid Transformation Grant presented by CMS as an opportunity to further improve service delivery and outcomes through enhanced technology and business processes,” Montana wrote in its application. The state received $1,481,152 to “enhance EHR-clinical decision making."

New York will use its $5.5 million grant for fingerprint authentication at the point of service.

In Alabama, which received $7, 587,000, Gov. Bob Riley posted the announcement on his Web site.

“Early in my administration, we set out on a mission to reform the way health and human services are provided in this state,” Riley said in the statement. “Our innovative plan not only seeks to increase efficiency and reduce duplication, but rightfully keeps the health and well-being of the patient at the forefront.”

Riley said Alabama would  “create a statewide electronic health information system that links Medicaid, state health agencies, providers and private payers while establishing a comprehensive, quality improvement model for the Alabama Medicaid program.”

“These transformation grants express the core goal of this administration to give states the kind of flexibility they need to deliver high quality care in an efficient and economical way,” Leavitt said. “With these grants states can streamline and modernize their systems, stabilize the exponential growth of the program and protect it into the future.”

In part, the funds will support more widespread use of electronic health care records that can be accessed by whole treatment teams, a move within the medical community to improve quality of care and reduce the potential for medical errors.

  Permissible uses of grant funds included:

• Reducing patient error rates through the implementation of technology (electronic health records, clinical decision support tools or e-prescribing programs).
• Improving rates of collection from estates of amounts owed under Medicaid.
• Reducing waste, fraud, and abuse under Medicaid, such as reducing improper payment rates.
• Increasing the utilization of generic drugs through education programs and other incentives. This reduces Medicaid expenditures for covered outpatient drugs, particularly in the categories of greatest drug utilization.
• Improving access to primary and specialty physician care for the uninsured using integrated university-based hospital and clinic systems.
• Implementation of a medication risk management program as part of a drug use review program.