State Innovation Models Initiative

Recent Updates:

09/17 - Updated: Application Submission Guidance posted and FAQs updated.
09/10 - Updated: 08/28 webinar materials posted.
08/24 - Updated: Application deadline extended and 08/28 webinar materials posted.
08/22 - Updated: 08/14 webinar and 08/15 webinar materials posted.



The State Innovation Models initiative is a $275 million competitive funding opportunity for States to design and test multi-payer payment and delivery models that deliver high-quality health care and improve health system performance.

States are an important partner in health care, providing services through Medicaid, the Children’s Health Insurance Program (CHIP) and their public health departments. States are in a unique position to develop and test innovative models that can help support efforts that can deliver better health, better care and lower costs. 



The Innovation Center 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).


Initiative Details

The solicitation invites states interested in participating in the State Innovation Models initiative to propose innovative approaches to improving care and lowering costs for their residents.

States can apply for either Model Testing awards to assist in implementing their already developed models, or Model Design awards that will provide funding and technical assistance as they determine what type of system improvements would work best for them. Up to five states will be chosen for the initial round of Model Testing awards and up to 25 states will be chosen for Model Design awards.


Model Design Awards:

States that would like to develop transformative payment and delivery reforms may apply for Model Design funding. Model Design awards will provide financial and technical support to states for their planning and design efforts. The Innovation Center will award up to a total of $50 million to up to 25 states for Model Design efforts.

A state that receives model design funding must produce and submit a State Health Care Innovation Plan to CMS. 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 provides a broad vision of health system transformation and payment reform, including the 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. States’ Health Care Innovation Plans will form the basis for a potential second round of implementation funding, targeted for release in the spring of 2013.


Model Testing Awards:

States that are ready to implement a multi-payer model in the context of a State’s Health Care Innovation Plan may apply for Model Testing funding. The Innovation Center will award up to a total of $225 million over three to four years for up to five states to test and evaluate multi-payer health system transformation models including commercial, employer-sponsored and public health plans.

Each state that applies for Model Testing funding but does not receive an award may qualify for pre-testing assistance of up to $3 million (which will be counted toward the $50 million in funding for the Model Design Awards described above) to help them improve their model design proposals and/or State Health Care Innovation Plans.

Many State model testing proposals will be based on approaches already under way at CMS, such as Accountable Care Organizations or other Innovation Center initiatives. However, in other limited instances, it may be appropriate for a state as part of its proposal to request approval to pursue payment and service delivery models that differ from established CMS pathways that will require additional approvals. In light of this, CMS is offering two tracks for Model Testing. Track 1: Ready-to-go-states; and Track 2: New Models.

While awards for the two tracks will be announced simultaneously, Track 2 states will need to receive all necessary waivers and/or regulatory changes to proceed to implementation and Model Testing.

States may not apply for both a model design grant and a model testing grant.

CMS anticipates announcing a second round of model testing funding in 2013 for states that are not currently prepared to submit a Model Testing proposal, apply and receive pre-testing assistance in this round. Any future solicitation will not include a pre-testing award option.


Eligibility and How to Apply

Only governors from states and U.S. Territories and the mayor of the District of Columbia may submit applications for Model Design and Testing funding. 

Only one application per state is permitted for Model Design funding under the current FOA. And only one request per state is permitted for each round of Model Testing award applications under the current FOA. A state may apply in a subsequent round if it did not apply, or was not selected for funding in the first round of Model Testing awards. 

Each application must include a letter from the governor (or the mayor, if from the District of Columbia) officially endorsing the application for a Model Design award or for a Model Testing award. A state cannot receive multiple model design, pre-testing assistance or model testing awards.

All applications must be submitted electronically through Applicants are strongly encouraged to use the review criteria information provided in the “Design Requirements” and “Application Review Information” sections in the Funding Opportunity Announcement (FOA) (PDF), to help ensure that the proposal adequately addresses all the criteria that will be used in evaluating the proposals. As part of the application, states must complete a Financial Template (XLS). If you use assistive technology and are having trouble accessing or using this document, please contact us and we will assist you.

For additional information on how to apply, see our Application Submission Guidance and the Frequently Asked Questions (FAQ).


Important Deadlines

Model Design Applications
Applications are due: September 24, 2012, by 5:00pm Eastern Time
Anticipated Award Date: December, 2012
Period of Performance: From award date through June 3, 2013

Model Testing Applications (Round One)
Applications are due: September 24, 2012, by 5:00pm Eastern Time
Anticipated Award Date: December, 2012
Period of Performance: For Ready-to-go States (Track 1) – up to 6 months for implementation and 36 months for testing after date of award through June 3, 2016; for New Model States (Track 2) – post waiver/plan review anticipated 6 months for CMS review, followed by up to 6 months for implementation readiness and 36 months for testing after the date award through December 3, 2016.


Additional Information


For additional information, contact the State Innovation Models team at