The government has divvied up more than $665 million to states for designing and testing ways to improve healthcare quality, accessibility and affordability. The awards will go to 28 states, three territories and the District of Columbia.

Health & Human Services Secretary Sylvia M. Burwell announced the awards Dec. 16. They are the second batch of grants HHS offered to find new and innovative ways improve quality and lower costs. The first round came in early 2013.

[See also: HHS awards $300M for innovation.]

The State Innovation Models initiative is aimed at helping states plan and implement proposals capable of creating statewide healthcare transformation.

Examples initiatives include:

• Improving primary care through patient centered medical homes, building upon current accountable care organization models or integrating primary care and behavioral health services.
• Providing technical assistance and data to healthcare providers and payers that are working to advance models of integrated, team-based care or transition to value-based payment models.
• Creating unified quality measure score cards that healthcare payers and providers can use to align quality improvement and value-based payment methodologies.
• Expanding the adoption of health information technology to improve patient care.
• Fostering partnerships among public, behavioral and primary healthcare providers.
• Strengthening the healthcare workforce through educational programs, inter-professional training, primary care residencies and community health worker training.

"We are committed to partnering with states to advance the goals we all share: better care, smarter spending and, ultimately, healthier people," Burwell said in announcing the new grants. "We're seeing states do some very innovative things when it comes to improving the ways we deliver care, pay providers and distribute information. These funds will support states in integrating and coordinating the many elements of healthcare – including Medicaid, Medicare, public health and private healthcare delivery systems – to the benefit of patients, businesses, and taxpayers alike."

The awards include both states that are designing plans and strategies for state-wide innovation and states that are taking the next step from designing to testing and implementing comprehensive state-wide health transformation plans. 

More than $622 million in State Innovation Model Test Awards will support 11 states – Colorado, Connecticut, Delaware, Idaho, Iowa, Michigan, New York, Ohio, Rhode Island, Tennessee and Washington – in implementing their State Health Care Innovation Plans. These states join six award recipients from the first round of awards: Arkansas, Maine, Massachusetts, Minnesota, Oregon and Vermont.

Nearly $43 million in State Innovation Model Design Awards will support 17 states, three territories and the District of Columbia to create and refine proposals for comprehensive healthcare transformation.

States will engage a broad group of stakeholders including healthcare providers and systems, long-term service and support providers, commercial payers, state hospital and medical associations, tribal communities and consumer advocacy organizations. Transformation efforts supported by this initiative must improve health, improve care and lower costs for Medicare, Medicaid and Children’s Health Insurance Program beneficiaries. In addition, CMS will identify best practices among state-led transformations that are potentially scalable to all states.

"States are laboratories of innovation and serve as critical partners in transforming healthcare," said Patrick Conway, MD, CMS deputy administrator for innovation and quality and chief medical officer, in a news release. "States are large healthcare purchasers for their employees and residents, have broad regulatory authority over healthcare providers and payers, have the ability to convene multiple parties to improve statewide health delivery systems, and oversee public health, social and educational services. Partnering with states on health innovation has the potential to accelerate and transform health innovation in all of these areas."

The State Innovation Models initiative is one part of an overall effort to help lower costs and improve care through the Affordable Care Act.

According to HHS, initiatives, such as ACOs, the Partnership for Patients, have helped reduce hospital readmissions in Medicare by nearly 8 percent between 2007 and 2013, which translates into 150,000 fewer readmissions. Quality improvements have resulted in saving 50,000 lives and $12 billion in health spending from 2010 to 2013, according to preliminary estimates.

[See also: HHS: Medical errors decline.]

Access more information on the HHS initiative here.