State innovation model initiative: a state-led approach to accelerating health care system transformation.

On December 16, 2014, the Centers for Medicare & Medicaid Services (CMS) announced that it would provide more than $665 million to support states in transforming their public and private health care delivery systems. This funding represents the second round of an expansive delivery systems test conducted by the CMS Innovation Center, the State Innovation Model (SIM) initiative. SIM aims to evaluate whether delivery system transformation is accelerated when implemented in the context of federal-state collaboration. The Innovation Center, created by the Affordable Care Act (ACA), was established to test innovative delivery and payment models to reduce spending and enhance the quality of care for Medicare, Medicaid, and Children’s Health Insurance Program (CHIP) beneficiaries. Since 2012, the CMS through the SIM initiative has partnered with 38 states and territories to support the design and implementation of payment, delivery, population health, and health information technology transformation.1 States supported through SIM are required to develop a State Health Innovation Plan (SHIP), a comprehensive transformation strategy for achieving better health, better care, and lower costs. States may receive aModel Design award, which supports states in developing a SHIP, or a Model Test award, which supports multipayer SHIP implementation. States are encouraged to engage all clinicians and organizations that furnish health care services within the state in their transformation activities. The majority of the nearly $1 billion in funding to datesupports the 17ModelTest states.Arkansas,Maine, Massachusetts,Minnesota,Oregon, andVermontwere selected in April 2012. In December 2014, CMS announced11additional test states:Colorado,Connecticut, Delaware, Idaho, Iowa,Michigan,NewYork,Ohio,Rhode Island,Tennessee,andWashington.2 Inaddition to funding, states receive technical and evaluation assistance from CMS throughout the duration of the cooperative agreement. In this Viewpoint, we highlight innovations states are designing and implementing (eTable in the Supplement) and key lessons they have learned. Despite differences in health care delivery landscapes, the Model Test states are undertaking many similar transformation activities. Each Model Test state has devised a plan to transition at least 80% of payment from traditional fee-for-service to valuebased reimbursement.3 To support this goal, states are actively engaging clinicians and health care organizations, consumers, purchasers, and insurers to advance a shared statewide transformation strategy. The Model Test states have incorporated several key strategies to effect system-wide transformation, including the following. IntegrationofCommunity-BasedServices.Model Test states must outline a plan to efficiently and effectively integratepublichealth, community-based,andbehavioral health services across the entire care continuum. PopulationHealthFocus.ModelTest statesare requiredtodevelopastatewidepopulationhealthplantargeting the preventable drivers of poor health in their populations. Several plans focus on obesity prevention and promoting tobacco cessation, and others concentrate efforts on unique needs within the state.4 Enabling Strategies to Support System Transformation. Model Test states must develop enabling strategies such as workforce development plans, health information technology improvements, and data analytics to enhance health care delivery. Several states have established “transformation” hubs to provide support services for states’ health care partners. QualityMeasurementAlignmentStrategy.The 11 newModelTest statesmustalsooutlineastatewideplan for aligning quality measures by convening public and private payers to accelerate quality improvement and ease administrative burden for all clinicians. As states pursue transformation, they will be offered technical assistance and opportunities to learn frompeer states implementing similar innovative strategies. The Innovation Centerwill work alongside states to revise or modify their plans as necessary to achieve project milestones and goals. To transition to paying for value, not volume, the states are experimenting with several alternative delivery models, many trying more than one simultaneously. These models include patient-centeredmedical homes (PCMHs), a primary care delivery approach that supports improved patient-centered communication and care coordination; health homes (HHs), enhanced care coordination and management models for Medicaid beneficiaries with certain complex chronic illnesses; accountable care organizations (ACOs), financial models that allow groups of hospitals, physicians, and other health care professionals opportunities to work together to treat patients and share financial responsibility for patients’ medical care5; episode-based payments (EBPs), models that reimburse for a set of bundled medical services delivered during discrete periods of time for particular conditions; and accountable care communities (ACCs), an alignment of health care and community-based agenVIEWPOINT