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States Get Federal Backing to Build More Efficient, High Quality Medicaid Systems

HHS Secretary Mike Leavitt today awarded $103 million to 27 states across the nation to fund implementation of new ways to improve Medicaid efficiency, economy and quality of care.

States will use the funds to implement innovative systems to get more value out of the money they spend providing health care to their low-income elderly, children and disabled citizens.

Congress approved a total of $150 million for these Medicaid “transformation grants” in the Deficit Reduction Act of 2005 (DRA) to be distributed over fiscal years 2007 and 2008. Today’s award of the first $103 million will be followed later in the year with a second solicitation for the remaining $47 million. States will receive the funds over the next two years.

“These transformation grants express the core goal of this administration to give states the kind of flexibility they need to deliver high quality care in an efficient and economical way,” Secretary Leavitt said. “With these grants states can streamline and modernize their systems, stabilize the exponential growth of the program and protect it into the future.”

In part, the funds will support more widespread use of electronic health care records that can be accessed by whole treatment teams, a move within the medical community to improve quality of care and reduce the potential for medical errors.

Permissible uses of grant funds included:

• Reducing patient error rates through the implementation of technology (electronic health records, clinical decision support tools or e-prescribing programs).
• Improving rates of collection from estates of amounts owed under Medicaid.
• Reducing waste, fraud, and abuse under Medicaid, such as reducing improper payment rates.
• Increasing the utilization of generic drugs through education programs and other incentives. This reduces Medicaid expenditures for covered outpatient drugs, particularly in the categories of greatest drug utilization.
• Improving access to primary and specialty physician care for the uninsured using integrated university-based hospital and clinic systems.
• Implementation of a medication risk management program as part of a drug use review program.

The awards granted today vary in amount depending on each state’s application. Some states submitted more than one grant proposal and will receive funds for each project.

No state matching funds are required for these special grants. More information on the grants and how state Medicaid agencies can apply for the next round of awards is on the Centers for Medicare & Medicaid Services Web site at: www.cms.hhs.gov/MedicaidTransGrants.

To see the indivdual state awards, please click the following link:

State awards

"States Get Federal Backing to Build More Efficient, High Quality Medicaid Systems", January 25, 2007
Contact: HHS Press Office, (202) 690-6343
http://www.hhs.gov
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