CMMI Issues Second Round of Health Care Innovation Awards

On May 15, the Center for Medicare & Medicaid Innovation (CMMI) at the Centers for Medicare & Medicaid Services (CMS) announced that it will be awarding up to $900 million in new funding for a second round of Health Care Innovation Awards. These awards will be made to applicants who propose new payment and service delivery models that have high likelihood of improving care and reducing costs for Medicare, Medicaid and Children’s Health Insurance Program (CHIP) beneficiaries, with a strong focus on Medicaid and CHIP populations.

The second round of awards will build on an earlier round of funding awarded in 2012. The first round of Innovation Awards supports 107 models, ranging from $1 million to $26.5 million over a three year period. This round included a wide range of models, including models that enhance primary care, coordinate care across multiple settings, deploy new types of health care workers, help patients and providers make better decisions, and test new service delivery technologies.

While the first round encouraged applicants to focus on new models of workforce development and deployment that sufficiently support their service delivery model proposal, CMS has identified four broad innovation categories as a priority for the second round, including:

  • Models that are designed to rapidly reduce Medicare, Medicaid, and/or CHIP costs in outpatient and/or post-acute settings. Although CMS may consider proposals in other outpatient/post-acute care areas, priority areas include diagnostic services, outpatient radiology, high-cost physician-administered drugs, home based services, therapeutic services, hospice and post-acute services. CMS selected these priorities because of significant spending growth and geographic variation, as well as a perception that there continue to be untapped opportunities to improve payment and delivery in these areas.
  • Models that improve care for populations with specialized needs. Priority areas are high-cost pediatric populations, children in foster care, children at high risk for dental disease, adolescents in crisis, persons with Alzheimer’s disease, persons living with HIV/AIDS, persons requiring long-term support and services and persons with serious behavioral health needs. CMS seeks to expand its activities in this area because of high unmet need and significant spending growth.
  • Models that test approaches for specific types of providers to quickly transform their financial and clinical models. Priority areas are models designed for physician specialties and subspecialties, and for pediatric providers who provide services to children with complex medical conditions, including shared decision-making mechanisms for patient and caregiver engagement in treatment choices where appropriate.
  • Models that improve the health of populations by linking clinical care to preventive health. Priority areas are models that lead to better prevention and control of cardiovascular disease, hypertension, diabetes, chronic obstructive pulmonary disease, asthma and HIV/AIDS; models that promote behaviors that reduce risk for chronic disease, including increased physical activity and improved nutrition; models that promote medication adherence and self-management skills; models that prevent falls among seniors; and models that link clinical care with community-based initiatives.

Successful applicants must build the capacity and infrastructure needed to implement their model within the first six months of the performance period. CMS has indicated that preference will be given to those applicants who demonstrate that they can be operational sooner.  Net savings and cost reductions must be realized within three years although CMS may consider prevention models that realize savings on a longer timeline on a case-by-case basis.

Given CMS’ focus on post-acute care settings, home health and hospice providers should evaluate whether this funding announcement could support payment and delivery system transformation initiatives within their facilities and networks. Careful consideration should also be given to identifying other organizations that may be interested in partnering on a project.

CMS is accepting Letters of Intent until June 28, 2013. Applications are due on August 15, 2013.

For additional information about the funding opportunity announcement, please contact Mary Langowski, Chair, DLA Piper’s Health Care Regulatory and Policy group, at (202) 799-4362 or

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