In the Deficit Reduction Act (DRA), Congress authorized the new $150 million Medicaid Transformation Grant Program to help states design and implement reforms to increase quality and efficiency of Medicaid. This is a unique opportunity to help states restructure and modernize Medicaid, save taxpayer dollars, and improve services. But states must act fast to take advantage.

State Medicaid agencies may submit grant proposals to CMS by September 15, 2006. For grants, CMS has a total budget of $75 million in FFY 2007 and another $75 million in FFY 2008. The amount of each grant will vary and will depend on the number of applications received. State matching funds are not required.

While states have wide discretion in proposing projects and may propose multiple projects in a single grant application, CMS is encouraging states to look at ways to improve Medicaid program operations and efficiency.

In the area of improving Medicaid program efficiency, CMS is particularly interested in grant projects to:

CMS is also interested in projects to improve the effectiveness of Medicaid. Examples include projects on:

  • Reducing medical error rates and improving patient safety.
  • Advancing the use of electronic health records, clinical decision support tools, e-prescribing programs, and other system improvements.
  • Improving coordination of care through care management programs and other efforts to prevent complications and avoid duplicative or unnecessary services.
  • Pay for performance (P4P) programs or other performance-based incentives to reward and support high quality, evidenced-based care.

In the arena of improved care delivery, CMS is particularly interested in grant proposals to:

  • Promote personal control over services, with greater emphasis on prevention steps.
  • Improving access to primary and specialty physician care for the uninsured using integrated university-based hospital and clinic systems.

This is a unique, one-time opportunity for states but, with grant applications due in six weeks, the timeline is tight. States needing help or advice in writing an application may contact me or my friends at Sellers Feinberg for assistance.