News Release

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

Sixteen states and Puerto Rico have just been awarded nearly $52 million to fund research and design in new ways to improve Medicaid efficiency, economy and quality of care, Secretary Mike Leavitt announced.

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 follows grants of $98 million that were distributed last January to 26 states.

“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 more economical way,” Secretary Leavitt said. 

Transformation grants went to states with proposals that included:

• Reducing patient error rates through the implementation of interoperable health information 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. No state matching funds are required for these special grants.  More information on the grants can be found at:  www.cms.hhs.gov/MedicaidTransGrants.

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Last revised: January 12, 2009