HHS Announces $840M Initiative To Improve Care, Reduce Costs

On Thursday, HHS announced that it will provide up to $840 million over four years to improve care quality and efficiency and share best practices among providers, The Hill reports (Viebeck, The Hill, 10/23).

A majority of the funding will be provided by the Center for Medicare and Medicaid Innovation, while $40 million of the funds will come from the Quality Improvement Organization program (Young, CQ HealthBeat, 10/23). Under the Affordable Care Act, CMMI received $10 billion to develop and test new health care delivery models as part of an effort to move away from the traditional fee-for-service model, improve quality of care and lower costs (California Healthline, 8/12).

Details of New Initiative

The goal of the Transforming Clinical Practice Initiative is to help providers identify ways of improving quality of care and quickly spread those findings across the U.S. health system through the creation of physician networks, according to AP/U-T San Diego (AP/U-T San Diego, 10/23).

CMS Deputy Administrator for Innovation and Quality and Chief Medical Officer Patrick Conway said the initiative is expected to save between $1 billion and $5 billion over four years and could result in reducing five million avoidable hospitalizations. He described the initiative as "part of a larger strategy for health system transformation" (Evans, Modern Healthcare, 10/23).

HHS said strategies to improve quality of care and reduce costs under the initiative could include:

• Expanding the use of electronic health records;
• Enhancing care coordination among providers; and
• Increasing opportunities for patients to communicate with their physicians (The Hill, 10/23).

CMS will provide funding for two categories of physician networks.

The first category, Practice Transformation Networks, will include health systems, group practices and other providers that already have improved care delivery through EHR implementation, care coordination and patient monitoring to reduce unnecessary hospitalizations and readmissions. These networks will then assist providers who need more expertise and share best practices, including providers in rural areas with medically underserved populations (HHS release, 10/23). Federal officials said at least 20% of network applicants' clinicians should practice in medically underserved areas, small groups or rural areas. 

Such networks will receive up to $670 million in total funding, and CMMI expects to award 35 grants that range from $2 million to $50 million. A maximum of 10% of the funds will be able to go toward improving health IT, according to Modern Healthcare.

The second category, Support and Alignment Networks, will include medical professional associations and other organizations that will work to identify ways to improve care delivery and disseminate such information to a broad group of providers. The program will provide $30 million in funding, ranging from $1 million to $3 million, for up to 30 networks (Modern Healthcare, 10/23).

Application Details, Grant Award Timeline

CMS began accepting applications on Thursday, and applications are due by Jan. 6, 2015. CMS expects to announce award recipients in the spring or summer of 2015 (CMS fact sheet, 10/23).

Reaction

Barbara McAneny, chair of the American Medical Association's Board of Trustees, said, "AMA has been urging the administration to assist physician practices in adopting new payment and delivery models, and we're pleased that they have created a program that supports physician leadership." She added that AMA "strongly believe[s] that practice transformation can lead to improvements in the quality of care for patients, control health care costs and enhance practice sustainability as physicians embrace innovative new models" (The Hill, 10/23).

Meanwhile, Brookings Institution Managing Director for Clinical Transformation Kavita Patel said that the tight application deadline might prevent providers who have not already begun to plan such peer-education networks from receiving grant funds. He said the funds likely would subsidize pre-existing provider education networks and could help independent physician practices develop the expertise and capital to hold off on merging with hospitals (Modern Healthcare, 10/23).