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HHS Announces $840 Million Initiative to Improve Patient Care and Lower Healthcare Costs

Written by: Carrie A. Roll and Andrew J. Shin

Last week, the Department Health and Human Services (HHS) announced that it will invest $840 million over the next four years to support 150,000 clinicians through a combination of incentives, tools, and information to encourage clinicians and other health care providers “to move from volume-driven systems to value-based, patient-centered, and coordinated health care services.” 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. Mr. Conway described the initiative as "part of a larger strategy for health system transformation."

As noted in the announcement, the initiative is one part of a strategy advanced by the Affordable Care Act (ACA) to further the goal of putting quality care first and prioritizing efforts to reduce healthcare costs. Under ACA, the Center for Medicare & Medicaid Innovation (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.

Some stakeholders believe this newest initiative is the next logical step following on the heels of the massive $1 billion Partnership for Patients campaign that included over 3,700 hospitals in various quality-improving initiatives. Responding to some criticism that the majority of efforts from the Obama Administration have been focused on hospitals, the Transforming Clinical Practice Initiative (TCPI) targets smaller practices through peer-based learning networks that include physicians, physician assistants, nurse practitioners, and clinical pharmacists. Interestingly, eligible applicants for TCPI are more similar to those who were able to participate in the Partnership for Patients, as opposed to individual clinical practices themselves.

Details of the Initiative

The goal of TCPI, is to “identify existing health care delivery models that work” and spread these models to other health care providers and clinicians. Specifically, the initiative aims to:

  • Provide clinicians better access to patient information;
  • Increase the number of ways patients can communicate with their clinicians;
  • Improve patient care coordination among primary care providers, specialists, and the broader medical community; and
  • Use electronic health records on a daily basis to examine data on quality and efficiency.

The initiative will provide funding for two categories of physician networks.

  • Practice Transformation Networks. The Centers for Medicare & Medicaid Services (CMS) will award cooperative agreements to group practices, health care systems, and other providers that have already “successfully achieved measureable improvements in care” through use of electronic health records, care coordination, and patient monitoring “to prevent unnecessary hospitalization and readmissions. These networks will then work with other health care providers – particularly those in rural communities and those who serve medically underserved populations – to provide expertise in these areas and share best practices. Practice Transformation 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.
  • Support and Alignment Networks. CMS will award cooperative agreements to networks formed by medical professional associations and other organizations that will work to align their memberships, communication channels, and continuing medical education credits to “create an infrastructure to help identify evidence-based practices and policies and disseminate them nationwide, in a scalable, sustainable approach to improved care delivery.” These networks will receive up to $30 million in funding, ranging from $1 million to $3 million, for up to 30 networks.

Application Details and Timeline

CMS began accepting applications on October 23, 2014, for the Practice Transformation Network and the Support Alignment Network, and the application period runs through January 6, 2015.  Additionally, although not required, potential applicants are “highly encouraged” to submit nonbinding Letters of Intent by November 20, 2014. The funding opportunity announcements and detailed application instructions are located on CMS will also hold a series of informational session webinars for potential applicants on November 6, 2014 and November 20, 2014.

As noted in the announcement, by participating in the Transforming Clinical Practice Initiative, organizations can receive technical assistance and peer-level support in transforming their practices to deliver efficient and patient-centric care and thus position themselves for success in the future health care market.  CMS expects to announce award recipients in the spring or summer of 2015. The following organizations should consider applying for the initiative:

  • Health Systems
  • Regional Extension Centers
  • Quality Improvement Organizations
  • Large Group Practices
  • Regional and State-Based Health Collaboratives
  • Hospital Systems

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Theresa advises clients on all aspects of the pharmaceutical supply chain, including counseling industry stakeholders on a range of business, legal, transactional, and compliance matters. She provides clients with strategic counseling and creative business modeling that considers legal restrictions and regulatory risk in light of innovation and business goals.