Administration Announces $1B Initiative to Launch Health Care Innovation Awards Round Two

The Department of Health and Human Services (HHS) has announced a nearly $1 billion initiative that will fund awards and evaluation to build on the Obama administration’s work to transform the healthcare system by delivering better care and lowering costs. This second round of Health Care Innovation Awards will fund applicants that have a high likelihood of driving healthcare system transformation and delivering better outcomes.

Made possible by the Affordable Care Act, the Health Care Innovation Awards provides another opportunity to improve the quality of healthcare and bring down costs for taxpayers and patients.  The healthcare law includes many tools to avoid costly mistakes and readmissions, keep patients healthy, reward quality instead of quantity, and create health information technology infrastructure that enables new payment and delivery models to work. The provisions in the Affordable Care Act are already working to reduce costs:  Medicare spending per beneficiary increased by just 0.4 percent last year, far below historical averages.

Last year, the Centers for Medicare & Medicaid Services (CMS) awarded 107 round one Health Care Innovation Awards out of nearly 3,000 applications to organizations that are currently testing innovative solutions to improve outcomes and reduce costs. 

This second round of Health Care Innovation Awards differs from the first round in that CMS is specifically seeking innovations in four areas: rapidly reducing costs for patients with Medicare and Medicaid in outpatient hospital and other settings; 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.  Like the first round, these awards will emphasize results and ensure program integrity.

“We are pleased to be initiating round two of the Health Care Innovation Awards today as we see innovative solutions in delivering and improving care deployed all over the country,” Marilyn Tavenner, CMS acting administrator, said in a statement.  “Over the last three years, we have seen national healthcare cost growth slow significantly and we want to continue that trend by helping to improve the delivery of healthcare by testing new models of paying for quality care, and these awards will help spur private and public sector innovation in this endeavor.”