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State Innovation Models Initiative Round Two

State Innovation Models Initiative Round Two
For Immediate Release
Tuesday, December 16, 2014

State Innovation Models Initiative Round Two

The Centers for Medicare and Medicaid Services (CMS) announced the recipients of 11 Model Test and 21 Model Design awards under the second round of the State Innovation Models initiative on December 16, 2014.

In round two, the State Innovation Models initiative is providing more than $665 million over the next four years to support state-led, multi-payer health care payment and service delivery models that will improve health system performance, increase quality of care, and decrease costs for Medicare, Medicaid and Children’s Health Insurance Program (CHIP) beneficiaries—and for all residents of participating states. This includes both model “design” awardees (states/entities that are designing plans and strategies for statewide innovation) and model “test” awardees (states that are taking the next step from “designing” to “testing” and implementing comprehensive statewide health transformation plans). States will engage a broad group of stakeholders including health care 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 CHIP beneficiaries. Accordingly, all awardees are committed to developing and implementing innovative delivery and payment models that yield better health, better care and reduced costs.

Over $622 million in Model Test awards will support 11 states that are ready to implement their State Health Care Innovation Plans. A State Health Care Innovation Plan is a fully developed proposal capable of creating statewide health transformation for the preponderance of care within a state.  In addition, a State Health Care Innovation Plan describes a state’s strategy to utilize available regulatory and policy levers to accelerate transformation, such as plans to align quality measures, leverage the adoption and implementation of health information technology and health information exchange, and evaluate innovation efforts. CMS will work with Model Test states for four years.

Nearly $43 million in Model Design awards will support 21 awardees (including 17 states, three territories and the District of Columbia) in designing or further refining State Health Care Innovation Plans. The Model Design award recipients will engage a diverse group of stakeholders, including public and commercial payers, providers and consumers, to develop a State Health Care Innovation Plan. States receiving Model Design awards under the State Innovation Models initiative will have twelve months to submit their State Health Care Innovation Plans to CMS.

With these new awardees, now over half of states representing 61 percent of the U.S. population (38 total State Innovation Models initiative awardees, including 34 states, three territories and the District of Columbia) will be working in efforts to support comprehensive state-based innovation in health system transformation.

Note: Descriptions and project data are estimates provided by the state and are based on budget submissions required by the State Innovation Models initiative application process.

States Receiving Model Test Awards
The following states will receive Model Test awards. Continued funding will be subject to state performance, compliance with the terms and conditions of the award, and demonstrated progress towards the goals and objectives of the State Innovation Model initiative.

Over the next 48 months, the State of Colorado will receive up to $65 million to implement and test its State Health Care Innovation Plan. Colorado’s plan, entitled “The Colorado Framework,” creates a system of clinic-based and public health supports to spur innovation.  The state will improve the health of Coloradans by: (1) providing access to integrated primary care and behavioral health services in coordinated community systems; (2) applying value-based payment structures; (3) expanding information technology efforts, including telehealth; and (4) finalizing a statewide plan to improve population health. Funding will assist Colorado in integrating physical and behavioral health care in more than 400 primary care practices and community mental health centers comprised of approximately 1,600 primary care providers.  In addition, the state will work to establish a partnership between their public health, behavioral health and primary care sectors.

Over the next 48 months, the State of Connecticut will receive up to $45 million to implement and test its State Health Care Innovation Plan. Connecticut’s plan utilizes several statewide and locally targeted interventions to: (1) improve population health; (2) strengthen primary care; (3) promote value-based payment and insurance design; and (4) obtain multi-payer alignment on quality, healthy equity, and care experience measures. Specifically, the state will implement a Medicaid Quality Improvement Shared Savings Program (MQISSP). Primary care providers participating in the MQISSP will benefit from programs designed to enhance primary care capacity in the state, including learning collaboratives to foster continuous learning.  Connecticut will implement Health Enhancement Communities and Prevention Service Centers focused on improving population health. The state will expand inter-professional training, enhance primary care capacity through additional residency programs, and increase community health worker training to ensure its health care workforce can support the transformation efforts. Lastly, the state will develop a core quality measurement set for primary care providers and select specialists that will capture a cross-payer measure of care experience tied to value-based payment in a common provider scorecard.

Over the next 48 months, the State of Delaware will receive up to $35 million to implement and test its State Health Care Innovation Plan. Delaware will: (1) support ten community-based population health programs (Health Communities); (2) develop an IT infrastructure to support a cross-payer scorecard of core measures available to providers with related tools for patient engagement and price and quality transparency; and (3) engage payers in the development of  a pay-for-value model and a total-cost-of-care model for providers (including independent primary care providers), with the goal of attributing all Delawareans to a primary care provider (PCP) during the performance period. In addition, the state will offer technical assistance to providers focusing on models of integrated, team-based care and transition to value-based payment models.  Delaware will implement workforce development strategies to build competencies and address the current workforce shortage and will also develop educational programs to address the needs of model participants.

Over the next 48 months, the State of Idaho will receive approximately $39.6 million to implement and test its State Health Care Innovation Plan. Idaho will achieve statewide health care system transformation that will deliver integrated, efficient and effective primary care services through patient-centered medical homes (PCMHs). Specifically, Idaho will build 180 nationally recognized PCMH practices, including 75 virtual PCMHs, by the end of the Model Test. Practices will be selected from each of the seven health districts in Idaho during the test period. The state will also support providers through expanded connectivity via electronic health information exchange, and by aligning the support of public and private payers to accelerate practice transformation.

Over the next 48 months, the State of Iowa will receive up to $43.1 million to implement and test its State Health Care Innovation Plan. Iowa’s plan for health system transformation builds upon the Accountable Care Organization (ACO) model that currently covers the state’s expanded Medicaid population, called the Iowa Health and Wellness Plan. This population-based model also will align with quality measures and payment methodology (shared savings and calculation of total-cost-of-care) utilized by the Wellmark commercial ACOs.  In addition, the state will work with the same data analytics contractor as Wellmark so that provider organizations have consistent and usable data to transform their practice from volume-based reimbursement to value-based reimbursement. By the end of the performance period, the Medicaid ACOs will be accountable for the long term care and behavioral health services of their attributed patients.  Iowa will use SIM funding to integrate community-based resources into the ACOs by providing technical assistance through various partners. The state also will leverage and spread existing community transformation initiatives focused on the social determinants of health.

Over the next 48 months, the State of Michigan will receive approximately $69.9 million to implement and test its State Health Care Innovation Plan. Michigan will implement its Blueprint for Health Innovation with the creation of Accountable Systems of Care (ASCs). ASCs will be networks of providers utilizing patient-centered medical homes supported by payment models that align incentives. The ASCs are further supported by Community Health Innovation Regions (CHIRs), which are cross-sector partnerships that address population health and connect patients with relevant community services. The state will test whether ASCs working with CHIRs can achieve better health outcomes at lower cost for three targeted populations of patients: those with adverse birth outcomes, frequent emergency department users, and those with multiple chronic conditions. Through SIM funding and resources, Michigan will deliver technical assistance, workforce training, quality improvement skills, and data analytics to providers throughout the state.

New York
Over the next 48 months, the State of New York will receive approximately $99.9 million to implement and test its State Health Care Innovation Plan. New York will adopt a tiered Advanced Primary Care (APC) model for primary care. This model will include behavioral and population health, and be complemented by a strong workforce and engaged consumers, with supportive payment and common metrics. The state will: 1) institute a statewide program of regionally-based primary care practice transformation to help practices across New York adopt and use the APC model; 2) expand the use of value-based payments so that 80% of New Yorkers are receiving value-based care by 2020; 3) support performance improvement and capacity expansion in primary care by expanding New York’s  primary care workforce through innovations in professional education and training; 4) integrate APC with population health through Public Health Consultants funded to work with regional Population Health Improvement Program contractors;  5) develop a common scorecard, shared quality metrics and enhanced  analytics to assure that delivery system and payment models support three-part aim objectives; and 6) provide state-funded health information technology, including greatly enhanced capacities to exchange clinical data and an all-payer database.

Over the next 48 months, the State of Ohio will receive up to $75 million to implement and test its State Health Care Innovation Plan. Ohio will transform the state’s health care system by rapidly scaling the use of patient-centered medical homes (PCMHs) and episode-based models and by developing cross-cutting infrastructure to support implementation and sustain operations.  By the end of the Model Test, Ohio plans to launch 50 episodes of care and implement PCMHs statewide.  Reports for the first six episodes of care will be delivered to providers in November 2014. PCMHs will expand geographically, reaching statewide coverage by 2018. In addition, the state is focused on incorporating population health measures into regulatory and payment systems in order to use those measures to align population health priorities across clinical services, public health programs, and community-based initiatives.

Rhode Island
Over the next 48 months, Rhode Island will receive up to $20 million to implement and test its State Health Care Innovation Plan. Rhode Island will implement a population health plan based on the results of community health assessments, including the integration of primary care and behavioral health. In addition, the state will expand the use of health homes by providers in the state, thus serving a substantial majority of the state’s population. In order to facilitate and support much of this transformation activity, the state will establish a Transformation Network to provide technical assistance and analytical capabilities to payers and providers participating in the value-based models. The state will augment its Health Information Technology (HIT) infrastructure to include an all-payer claims database, statewide health care quality measurement, patient engagement tools, and state data management and analytics.  

Over the next 48 months, the State of Tennessee will receive up to $65 million to implement and test its State Health Care Innovation Plan. Tennessee will execute multi-payer payment and delivery reform strategies. The state will accelerate transformation in primary care by developing pediatric and adult patient-centered medical homes (PCMHs) and health homes that will integrate value-based behavioral and primary care services for people with Severe and Persistent Mental Illness. In addition, Tennessee plans to implement 75 multi-payer episodes of care to reward high-quality and efficient acute health care over the test period. Tennessee will also implement quality and acuity-based payment and delivery system reform for long-term services and support (LTSS), targeting nursing facility services and home and community based services for seniors and adults with physical, intellectual and developmental disabilities. Finally, the state is planning to develop a statewide plan for improving population health in order to address disparities and state-specific population health needs.

Over the next 48 months, the State of Washington will receive approximately $64.9 million to implement and test its State Health Care Innovation Plan. The Healthier Washington project will move health care purchasing from volume to value, improve health of state residents, and deliver coordinated whole-person care. Washington will make targeted investments in the following areas: (1) community empowerment and accountability, through the implementation of regionally organized Accountable Communities of Health; (2) practice transformation and support through a “support hub”; (3) payment redesign, through shared savings and total-cost-of-care models in collaboration with delivery system and payer partners; (4) analytics, interoperability and measurement; and (5) project management, through a public-private leadership council with a dedicated interagency team and legislative oversight.

States receiving Model Design Awards:
Seventeen States, 3 Territories and the District of Columbia will receive nearly $43 million in Model Design Awards. Below are the funding amounts:


Award Amount

American Samoa






District of Columbia














New Hampshire


New Jersey


New Mexico


Commonwealth of the Northern Mariana Islands






Puerto Rico






West Virginia




About the Innovation Center
The Innovation Center was created by the Affordable Care Act to test innovative payment and service delivery models to reduce program expenditures while preserving or enhancing the quality of care provided to Medicare, Medicaid and the Children’s Health Insurance Program (CHIP) beneficiaries.  The Center is committed to refining the Medicare, Medicaid and CHIP programs to deliver better care for beneficiaries while reducing costs.  The Innovation Center also offers technical support to states and health care providers improve the coordination of care and share lessons learned and best practices throughout the health care system.

For More Information
More information on the State Innovation Models initiative can be found at: