The State Innovation Models initiative will test whether multi-payer payment and service delivery models will produce greater results when implemented in the context of a state-sponsored State Health Care Innovation Plan. Only those states ready to undertake system-wide change will be considered for awards.

The advantages of multi-payer efforts include aligning payment methods to scale up innovative efforts that cannot be sustained without support from a broad array of insurance plans. Such efforts reduce cost-shifting and reinforce the expectation statewide that all providers are expected to participate in delivery system reform.

The Innovation Center has created the State Innovation Models initiative for states that are prepared for or committed to planning, designing, testing, and supporting evaluation of new payment and service delivery models in the context of larger health system transformation. The Innovation Center is interested in testing innovative payment and service delivery models that have the potential to lower costs for Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP), while maintaining or improving quality of care for program beneficiaries. The goal is to create multi-payer models with a broad mission to raise community health status and reduce long term health risks for beneficiaries of Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP).

CMS may award a total of up to $50 million for up to twenty five (25) states for Model Design cooperative agreements. CMS may award a total of up to $225 million in funding for up to five state-sponsored Model Testing cooperative agreements, awarded in this first round. All states, the District of Columbia, and U.S. Territories may submit applications for Model Design and Model Testing funding in round one through this FOA.

States can apply for either model design awards or model testing awards:

• Model design funding will support states that need financial and technical support to develop a multi-payer payment and delivery system reform model utilizing a State Health Care Innovation plan.
• Model testing funding will support states in testing their multi-payer payment and delivery system model and evaluating how it advances their State Health Care Innovation Plans.

A State Health Care Innovation Plan is a proposal that describes a state’s program to transform its health care delivery system through an approach that integrates public health policy and multi-payer payment reform. The Plan must utilize the tools and policy levers available to states to provide better health, better care, and lower costs through improvement for Medicare, Medicaid, and CHIP beneficiaries. State Health Care Innovation Plans must be included with the Model Testing proposal and will be evaluated based on the enumerated criteria in the official Funding Opportunity Announcement.

State Health Care Innovation Plans should include care models and interventions that will improve quality, reduce costs, reduce health disparities, and address the social, economic, and behavioral determinants of health. In addition, State Health Care Innovation Plans should document how the state will use its full executive and legislative authority to support health system transformation. Additional weight will be given to Model Testing proposals that integrate community health and community prevention activities in their multi-payer models. For more information on State Health Care Innovation Plans, please refer to Appendix 3 in the Funding Opportunity Announcement.

For Model Design awards, the performance period is six months, and is anticipated to run from the award date to May 14, 2013.

For Model Testing awards, states will have six months to complete their implementation activities and three years to test their model.

No.

At this time, this information is yet to be determined.

There is only one AOR associated with a single submission. The listed AOR will receive either an email confirming that the submission has been received or an email notification describing why the submission cannot be accepted.

All states, the District of Columbia, and U.S. Territories are eligible for funding; however, only governors’ offices in the states and territories and the mayor’s office in the District of Columbia may submit applications. Non-profit or other organizations are not eligible to apply.

The Governor can designate a state agency that reports to the Governor to perform administrative functions related to the grant, such as submitting the proposal through grants.gov and administering funds during the grant period. The Governor's Office is expected to exercise overall leadership of the Model Design or Model Testing process. If responsibilities are being assigned to a state agency, the Governor's application letter must (1) endorse the project and (2) authorize the other State entity to apply and administer the grant on behalf of the Governor's Office.

We hope all state officials with an interest in health care policy, including health officials, insurance commissioners, attorneys general, state legislators and others will engage in the design and implementation of State Innovation Models.

In order to be selected for funding and successful in implementation, State Innovation Models will need broad stakeholder participation from patients, businesses, insurers, providers, and consumer advocates. We hope that individuals and groups with an interest in promoting health care reform at the state level will participate in the process of model design and implementation.

Yes. The state is still eligible to apply for a Model Testing award through the Track 2 process described in the FOA. States that require the approval of a waiver in order to implement their Model Testing award, should in their application indicate how the state plans to carry out its plan in the event that the waiver is not approved. Please see page 13 of the FOA.

Yes. States receiving these awards must complete their Plan and Model Design and submit a Model Testing proposal for the planned second round Model Testing opportunity expected in the spring of 2013; however, Model Testing funding is not guaranteed. For more information, please see page 3 of the FOA.

Model Design awards will support states that need financial and technical support to engage stakeholders and to create a State Health Care Innovation Plan. Model Testing awards will provide funds for the state to implement the State Health Care Innovation Plan and to test and evaluate their proposed service delivery and payment models. The decision on which application to submit should be based on whether the state is ready to implement a proposed plan. In completing this analysis states should refer to the State Innovation Models webinar presentation http://innovations.cms.gov/initiatives/state-innovations/index.html, which provides an overview of the requirements for proceeding with either a Model Design or Model Testing award.

The application should describe the state’s broad strategy for delivery system evolution into a higher quality, higher value health care delivery system where care is delivered according to a community-led integrated care strategy.

No, there will be no start-up period for model design awards. However, technical assistance will be available to awardees. Once awardees have been selected and notified, we will start working with the selected states to determine the technical assistance needed.

No. The Model Design award is meant to assist states that require technical and financial assistance in order to develop a State Healthcare Innovation Plan. States are expected to present an approach that is organized to continually improve cost, quality, and population health outcomes for Medicare, Medicaid, and CHIP beneficiaries. In addition, the Model Design application must present plans to coordinate and build upon any CMS existing waivers and other HHS and CMS health care reform initiatives taking place within the state, such as the Medicare-Medicaid Financial Alignment Initiative for states. Pre-testing assistance is for states that do not qualify for a full Model Testing award, but meet enough of the Testing award requirements to merit further technical and financial assistance in order to assist them in reaching a level of preparedness to meet the Model Testing requirements. The eligibility standards, deliverables and other requirements for pre-testing assistance awards are based on the review of the state’s Model Testing application. For more detailed information, please see pages 8-9 and 17 of the FOA.

No, there is not a required format for the Plans; the FOA does describe the components states should consider in developing plans. Some states currently have plans that include input based on extensive outreach and stakeholder engagement. It is possible that this would be considered a State Health Care Innovation Plan, but it has been given another name. States should review the FOA to determine if a state’s current plan would meet the described criteria.

States that receive Model Design funding must produce and deliver a State Health Care Innovation Plan that includes their proposed multi-payer payment and service delivery models. These states must also submit a proposal for the planned second round of Model Testing awards in the spring of 2013.

There is a preference for applications that build on existing CMS models. As described in the FOA, states that employ these existing models will be eligible for Track 1 Model Testing awards that allow for testing to begin within 6-months of the award being made. However, the preference for existing models is just one evaluation factor, and states requesting new authorities are eligible to receive Model Testing awards in round one. Also, the expected second round of testing will offer another opportunity for new, and different models; with the added possibility of receiving  pre-testing assistance funding now to further develop the models and identify needed authorities for round two Model Testing applications.

No. States are able to apply for one type of competitive activity offered in the funding opportunity announcement; and only one request per state is permitted for each round of model testing award applications. States that apply for model testing awards that are not awarded in this round may receive pre-testing assistance awards instead before the anticipated next round of funding. CMS anticipates that it may offer a second round of funding for model testing in 2013. This anticipated second round of funding would offer a Model Testing solicitation for states that receive a model design or pre-testing assistance award in the first round of funding. Additionally, other states may apply for a model testing award in a subsequent round even if they did not apply or was not selected for model design or model testing funding in the first round.

No. States may find waivers are not needed for their test. Preference will be given to states that are ready to go without a waiver. States will need to determine whether a Medicaid waiver is necessary for the success of their State Health Care Innovation Plan. In the event the state determines it needs a waiver, it must submit a formal waiver application and describe the waiver its State Innovation Models request. States requesting Medicaid waivers will be put into the New Model track and given an additional six months for CMS to review their waiver requests consistent with current practice. If a state identifies that a Medicaid waiver is essential to the success of its Plan, such a waiver must be approved before the Model Test can begin.

Yes, in this case the state could limit its financial template information to the full Medicaid benefit population. However, as described in the FOA, the purpose of the model is to improve care for the Medicare, Medicaid and CHIP populations. Submissions will be reviewed based on the goals of the model as described in the FOA.

As described in the FOA, we are looking for models that have the potential to produce better health, better care and reduced cost through improvement for Medicare, Medicaid and CHIP beneficiaries. States must produce a comprehensive state health care innovation plan that describes how they will produce these outcomes. While it is not a requirement to include activities related to the Medicare population in a submission, a submission should describe how it will meet the requirements of the model as described in the FOA.

While it is permissible to use the August 2012 – July 2013 as a baseline, we prefer a base year that is complete so that data is complete and not estimated.

We would prefer use of the units provided in the tables, but if an applicant selects to use another unit, they should clearly state what units are being used and the reasons for doing so.

No. More detailed information on page limits can be found on pages 57 and 61-73 of the FOA.

No. This FOA provides two different funding opportunities; a state can apply for a Model Design award or a Model Testing award. State Health Care Innovation Plans must be included with the Model Testing proposal. States that submit a qualified application for Model Testing may receive a full Model Testing award or be eligible for pre-testing assistance (if it is determined that such assistance would allow the state to improve its proposal for re-submission in round two of Model Testing in Spring of 2013). See page 3-7 of the FOA for more information.

References should be included within the narrative page limits.

Yes. The Governors of each state would need to work together to complete the application and coordinate to include endorsement letters from the Governors of each state included in the proposal.

Yes. Examples of the types of models that states may propose can be found on page 11 & 12 of the FOA.

Please roll up your categories in Tables 2 & 3 into the categories provided in Table 4 and note the process you followed.

There are no specific requirements regarding the format and length of the text portions of the financial template. Text should be written to accompany the spreadsheet to provide context, a full explanation of the assumptions and method used to make the projections.

The 10% cap applies to the budget as a whole.

Yes, the salary cap applies to everyone, including the applicant and subcontractors.

No, the funds dedicated to evaluation activities should be an amount sufficient to complete the evaluation. The state’s proposal should describe how the proposed amount will meet the requirements of the evaluation activities as described in the FOA.

This is at the applicant’s discretion, provided that all necessary elements are addressed.

Tables and figures may be single-spaced when they amplify explanations in the narrative; however, tables or figures that contain information that belongs in the narrative are still subject to the page length limitations described in the FOA. Applications that exceed these limits will be deemed ineligible.

The application should include information on a per member per month basis.

No. These are not eligible expenses.

Applications for both model design proposals and model testing proposals are due September 17, 2012 at 5:00pm ET.

Yes. The State Innovation Models application must be submitted through http://www.grants.gov. A Central Contracting Registration (CCR) and Data Universal Numbering System (DUNS) number is required to complete the application process. CMS encourages all organizations to register in the CCR and obtain a DUNS number as soon as possible. Organizations must have a CCR and DUNS number in place in order to submit an application. CMS recommends allowing at least two weeks to complete the Grants.gov application process. For more information about the application process through grants.gov, the CCR, and/or DUNS number, please refer to the Funding Opportunity Announcement.

State Innovation Models defines “preponderance of care” as most of the care.

No. The Health Care Innovation Plan should cover the entire state and describe an environment where the preponderance of care in the state will be delivered in accord with the Plan’s goals. However, the models built within the context of the Plan may vary across a state to account for geographic and/or other regional variations.

Yes they do and are encouraged to do so. States should work to reach agreement with CMS on any needed Medicare payment and service delivery models or modifications. States may request Medicare alignment with their proposed payment and service delivery models. CMS will separately evaluate such proposals in accordance with the statutory requirements for Medicare under title XVIII of the Social Security Act as well as the Innovation Center’s authority to test new payment and service delivery models under Section 1115A of the Act, but approval of new models is not guaranteed. More information can be found on pages 12-13 of the FOA.

The model’s intent is to affect the preponderance of care in a state. There are a number of ways a state could address this requirement, and states should describe how they will achieve this goal through their proposed models.

For Model Testing applications, the models must be for multi-payer projects and letters of participation and support should be included as part of the application. This participation will be more complete if states include self-funded plans in the process. For Model Design applications, states should document the participation of a broad group of stakeholders in the design process, including private insurers.

While it is not a requirement for states to solicit other sources of funding to assist in the implementation of the Model Design of Model Testing award, states are not precluded from inviting other payers to participate in the success of the award.

No. States cannot use this funding to supplant funding levels for activities that are already provided by states or other payers. However, they can use funding to supplement existing efforts to enhance the broader transformation of the delivery system.

These funds will be used by states to develop and implement State Health Care Innovation Plans.

Allowable costs associated with model design awards could include:

• State staff costs to engage in model design
• Staff participation in relevant learning collaboratives and workshops and other relevant learning and diffusion opportunities
• Investments in State data collection and analysis capacity and cost and utilization pattern analysis
• Consumer and provider engagement and focus group costs
• Actuarial modeling
• Performance measure development and evidence-based improvement research
• Business process analysis and requirement system analysis
• Policy, legal, and regulatory research to address legislative and legal frameworks for models
• Planning and convening for creating a statewide all–payer data-base
• Planning work relating to public health programs including the state’s Healthy People 2020 plan, and meeting goals for the National Quality Strategy and/or National Prevention Strategy
• Model Design costs, including:
  • Model scope development
  • Theory of action development
  • Target population research
  • Setting performance targets
  • Financial analysis and analysis of health care trend impacts
  • Budget planning
  • Travel to State Innovation Models initiative workshop and conferences

Allowable costs associated with model testing awards could include:

• Technical resources necessary to implement new models
• Model performance data collection, analysis, reporting cost
• Data center costs, and system information processing associated with the model testing
• Provider costs for data collection
• Coordination with Innovation Center rapid cycle evaluation, and costs for collecting and preparing data for Innovation Center evaluator and/or state evaluator
• Staff resources associated with model management and project management
• Simulation and modeling cost
• Data management system cost
• Health information exchange cost associated with the model
• Infrastructure costs to build or expand telemedicine system
• Web and internet collaborative learning and communication cost
• Project management and reporting cost
• Business operation associated with the model
• Model contract management and administration
• Building a statewide all–payer database
• Impact model evaluation data collection, reporting, beneficiary and provider survey data, and other costs associated with final model evaluation
• On a limited, case-by-case basis, provider payments for performance-based shared savings.
• Other activities necessary to implement the overall State Health Care Innovation Plan that will further the testing of payment and service delivery models and improve outcomes for Medicare, Medicaid and CHIP beneficiaries.

State Innovation Models funds shall not be used to:

• To match any other Federal funds.
• To provide services, equipment, or support that are the legal responsibility of another party under Federal or state law (e.g., vocational rehabilitation, criminal justice, foster care, or civil rights law). Such legal responsibilities include, but are not limited to, modifications of a workplace or other reasonable accommodations that are a specific obligation of the employer or other party.
• To supplant existing Federal state, local, or private funding of infrastructure or services.
• To be used by local entities to satisfy state matching requirements.
• To pay for the use of specific components, devices, equipment, or personnel that are not integrated into the entire service delivery and payment model proposal.
• To lobby or advocate for changes in Federal and/or state law or regulations.

Yes, states may propose the use of State Innovation Models testing funds to support additional costs associated with or created by testing a State Innovation Models model.

Yes, states may not use funds to: match any other Federal funds, provide services, equipment, or support that are the legal responsibility of another party under Federal or state law, supplant existing Federal state, local, or private funding of infrastructure or services, be used by local entities to satisfy state matching requirements, pay for the use of specific components, devices, equipment, or personnel that are not integrated into the entire service delivery and payment model proposal, or lobby or advocate for changes in Federal and/or state law.

Yes, states may not use funds to: match any other Federal funds, provide services, equipment, or support that are the legal responsibility of another party under Federal or state law, supplant existing Federal state, local, or private funding of infrastructure or services, be used by local entities to satisfy state matching requirements, pay for the use of specific components, devices, equipment, or personnel that are not integrated into the entire service delivery and payment model proposal, or lobby or advocate for changes in Federal and/or state law.

Yes, the government entity can subcontract activities; however, the government entity will have to oversee the subcontract to ensure all activities are performed. CMS funding will go to government entities, who can then subcontract according to the requirements in the FOA. The applicant should identify all sub-grants in their project narrative, 424a and budget narrative.

Operational budgets should reflect budgets for the entire grant period, including, in the case of Track 1 Model Testing Awardees, the 6-month implementation period. Track 2 Model Testing Awardees should prepare a budget that includes both the 6-month period of CMS review and analysis and the 6-month implementation period.

Limited, initial funding will be provided to states to undertake and complete pre-implementation activities. Such activities might include testing systems, finalizing business operations, and/or preparing for model data collection and analysis.

No. CMS may award a total of up to $225 million in funding for up to five state-sponsored Model Testing cooperative agreements, awarded in this first round and the total for each Model Testing award will range from $20 to 60 million per state for the implementation and testing period.

The funding amounts of cooperative agreements for Model Design will be based on a variety of factors, including the proposed model plan and budget requirements submitted by the state. The proposed budget will be evaluated based on the following elements: the scope of the proposed plan and size of the target Medicaid, CHIP, and Medicare populations; the complexity of the Model Design proposed by the state; the activities necessary to complete the required plan; and the reasonableness of expenditures in the budget plan.

No.

Initial funding of Model Design, Model Testing, and pre-testing assistance awards is contingent upon the state’s acceptance of the award’s terms and conditions and, in the case of Model Testing awards, CMS approval of an operational plan submitted by the state. Please see pages 17-18 of the FOA for more detailed information.

The review of applications will be comprised of three activities: (1) an evaluation and scoring by an independent review panel; (2) a review regarding the reasonableness of the State’s financial assumptions and estimates by the CMS Office of the Actuary; and (3) an assessment of the State’s proposals for Medicaid waivers and state plan amendments, or Medicare payment alignment. The outcomes of these three reviews will be submitted to the CMS approving official for a final decision on awards.

Yes. The states submit applications for Model Testing and CMS will evaluate the proposals and determine if they belong in Track 1 or Track 2.

Because it takes time to review the requests for a Medicaid waiver and/or new payment model, funding for Model Testing awards will flow faster to Track 1 applicants. Other than that, both Track 1 and Track 2 applicants will be selected using the criteria in regards to the likelihood that their proposed state health care plan will produce better health, better health care, and lower cost.

The state evaluations should focus on the impact on all populations, not just those enrolled in CMS programs. Performance assessment, monitoring, and evaluation for Model Testing awards will focus on: Impact on quality of care, patient experience, and health status; Impact on health care costs; and Implementation and testing performance. The Innovation Center evaluation contractor will conduct additional impact evaluations on the effectiveness of each state model on key outcomes for target Medicare, Medicaid, and CHIP beneficiaries. The Innovation Center evaluation contractor will determine evaluation metrics once plans are awarded, which could include examining the impact of the plan on health disparities if relevant to what has been proposed.

Each state must develop its own procedures for performance monitoring, data collection, and model progress tracking and reporting, but must also agree to cooperate with and facilitate the role of the Innovation Center and its evaluation contractor. The state evaluations should focus on the impact on all populations, not just those enrolled in CMS programs.

The precise analytic methods will depend on the state model being tested and will be determined in collaboration with the Innovation Center evaluation contractor and CMS. The Innovation Center has established metrics for ACOs and has developed core metrics, which will form the foundation of metrics used for State Innovation Models. CMS will identify the best methodology available for the state model being implemented. An external contractor will support the Innovation Center during the Implementation and Testing process. This Innovation Center evaluator will work with each state to develop standards for data collection and use and for data reporting, as well as requirements for those data elements that will be collected by the states and reported to CMS. The Innovation Center evaluator will also define the measures to be used and evaluation methods to be employed. For more information, please see pages 53-57 of the FOA.

The precise analytic methods are not yet available but will depend on the state model being tested and will be determined in collaboration with the Innovation Center evaluation contractor and CMS. CMS will identify the best methodology available for the state model being implemented.

State may consider using state level public health data available in their own evaluation work related to continuous improvement. Additionally, this data may be used by the Innovation Center evaluation contractor if relevant to the proposed model and metrics.

Only the Model Testing states are required to do an evaluation, but Model Design states are expected to participate in CMS’ qualitative evaluation of the Model Design processes that ensued in states awarded cooperative agreements.

Some states may find that new payment and service delivery models that are currently available through CMS, such as the Medicare Shared Savings Program or Innovation Center initiatives (including the Independence at Home Demonstration), are appropriate to achieve their goals. Examples of such initiatives can be found on the Innovation Center web site at http://innovation.cms.gov.

The Innovation Center is planning an extensive learning and diffusion process to enable Model Design and Testing States to collaborate and learn from each other and to disseminate best practices, and replicate successful models.

The Innovation Center evaluator will conduct rapid-cycle evaluations for all CMS beneficiaries affected by the State Innovation Models initiative. These results will inform learning and diffusion collaborations. Also, Appendix 1 includes a list of new innovative health care delivery and payment models that the Innovation Center is charged with testing, evaluating and spreading that support providers in transforming the care system.

Model Design awards will support states that need financial and technical support to engage stakeholders and create a State Health Care Innovation Plan. Some examples of the types of payment and service delivery models states could propose, in the context of their State Health Care Innovation Plan include accountable care models, medical or health homes, and bundled payments/payments for episodes of care. CMS, through the Medicare Shared Savings Program and through a variety of Innovation Center initiatives, including the Independence at Home Demonstration, has already established many new payment approaches that could support State Health Care Innovation Plans. In addition, CMS, through State Medicaid Director letters and other mechanisms, has similarly provided latitude for states to utilize new payment and service delivery models for Medicaid beneficiaries. Please see pages 8-13 and/or Appendix 1 in the FOA for more information.

The Innovation Center is prepared to offer technical assistance to awardees of Model Design and Model Testing cooperative agreements. This technical assistance is in addition to funds provided under the award. The Innovation Center anticipates contracting with an entity or entities to provide limited technical assistance to state awardees.