HHS awards $110 million for delivery system reform

Funds will go toward testing models designed to deliver better care outcomes and lower costs

New delivery system reform efforts made possible by the Affordable Care Act offering states and industry innovators tools and flexibility to transform healthcare were recently announced by the Department of Health and Human Services (HHS).

Twelve prospective recipients will be receiving as much as $110 million in combined funding, ranging from $2 million to $18 million over a three-year period, under the Health Care Innovation Awards program to test models designed to deliver better care outcomes and lower costs. 

“Payers and providers continue to participate in healthcare delivery models aimed at lowering costs,” says John Santilli of Access Market Intelligence. “Care is becoming more consumer-oriented and more coordinated as settings for the delivery of healthcare shift from acute care to networks in the community.”

For example, projects will focus on providing better care for dementia patients, improving coordination between specialists and primary care physicians and improving cardiac care. Round two of the program focuses on four priority areas:

  • Rapidly reducing costs for patients with Medicare and Medicaid;

  • Improving care for populations with specialized needs;

  • Testing improved financial and clinical models for specific types of providers, including specialists; and

  • Linking clinical care delivery to preventive and population health.

The prospective recipients will test models in all of the four categories across 13 states, and additional prospective recipients will be announced later this year. The innovative projects represent the first batch of prospective recipients for round two of program funding. In 2012, 107 organizations across the U.S. received awards during round one of the initiative.   

“While the effectiveness of the CMMI’s efforts remain to be determined, the funding provided by the organization for these efforts offers the opportunities to develop and test new models of healthcare delivery to improve patient care not available from other sources,” he says. “The healthcare market often laments the lack of innovation; the initiatives developed by the CMMI are a step in the right direction.”


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