Maine will receive up to $33 million from the federal government over the next three and a half years to test a plan to improve residents’ health care while cutting costs.

Maine and five other states are the first recipients of more than $250 million in funding awards made under the federal Affordable Care Act, the U.S. Department of Health and Human Services announced Thursday. The money is designed to help states find new ways of paying for and delivering health care that could ultimately lower costs for Medicare, Medicaid and the Children’s Health Insurance Program while making those programs’ beneficiaries healthier.

HHS hopes to foster state-level innovations that could eventually stem the tide of rising costs in Medicaid, the state-federal health insurance program for the poor, and the Medicare program for the elderly and disabled. Maine’s Medicaid program, known as MaineCare, accounts for about a third of the total state budget. Like Medicaid programs in other states, it faces critical funding shortages.

In a conference call on Thursday with reporters, HHS Secretary Kathleen Sebelius acknowledged the burden of mounting health care costs on the economy, states, businesses and consumers.

“Too many Americans receive care that’s fragmented, unreliable and generates poor health outcomes,” she said. “The good news is that we have numerous examples from across the country of how improvements in care delivery can both lower costs and improve health.”

The grant was awarded to Maine Gov. Paul LePage’s office in partnership with the Department of Health and Human Services and MaineCare.

Maine’s plan is a broad effort that includes expanding the creation of “accountable care organizations,” or groups of health providers that are promised incentives for better coordinating each patient’s care while also trimming costs. The model, which ties payments to health care quality metrics, stresses patient safety, better management of chronic diseases, and preventive health services.

The accountable care organization model was formalized under President Barack Obama’s health reform law, upheld in late June by the U.S. Supreme Court. It’s being tested in regions across the country.

HHS was impressed with work done by Maine health providers in recent years to collaborate with other stakeholders to improve health care, and then broaden those efforts statewide, Richard Gilfillan, director of the Center for Medicare and Medicaid Innovation at HHS, said in the conference call.

“Many providers in Maine had come together with private entities and with payers and the state government and have been thinking about planning specific initiatives to address transforming care in their local communities,” he said.

The grant will support Gov. Paul LePage’s vision for a more transparent health system that uses data to guide decisions, reforms payment, and assists patients in managing their health, Maine DHHS Commissioner Mary Mayhew said Friday.

“This grant will empower patients by producing data that will help them compare health care providers in terms of quality and value for their health care dollar,” she said. “Patients will be equipped to find the practices that best fit their needs regardless of how the bill is being paid.”

LePage has opposed the Affordable Care Act, under which the grant was issued, and refused the legislation’s call to expand the state’s Medicaid program. Mayhew said the grant, unlike the federal health reform law, gives states the latitude to innovate in health care.

“This is what the governor has criticized, the lack of flexibility in the federal Medicaid program,” she said.

The effort, called the Maine Innovation Model, could result in more than $1 billion in savings over the three-year period, according to DHHS.

The state will partner with the Maine Health Management Coalition, a Portland nonprofit made up of employers, hospitals, and others working to improve the quality and value of health care, to make better use of health data for more transparent and detailed reporting of costs and quality.

Additional partners include HealthInfoNet, the state’s health information exchange, and Maine Quality Counts, an independent alliance working to transform health care in Maine.

All other work for the project will be contracted through a competitive bidding process, according to DHHS.

Maine’s plan also calls for strengthening coordination among primary care providers and public health, behavioral health and long-term care organizations. The federal funding will allow the state to continue work to facilitate better partnerships between patients and their families and their primary care physicians.

Adults and children with developmental disabilities and autism disorders will be able to see doctors who are better trained to meet their needs, Mayhew said. Health providers also will benefit from greater consistency in how they’re paid, she said.

Through electronic health records, practitioners will get real-time notification when some of their sickest patients wind up in the emergency room or are admitted to a hospital, which will lead to better follow up care, Mayhew said.

Maine’s efforts to improve the value of health care will hopefully free up resources to improve residents’ access to care, which has suffered in recent years amid cuts to the MaineCare program, said Mitchell Stein, policy director for the advocacy group Consumers for Affordable Health Care.

“This is a great step forward for Maine and we are very excited that the work being done in Maine is being recognized,” he said.

The other five states that received the “State Innovation Model” awards were Arkansas, Massachusetts, Minnesota, Oregon and Vermont. Another 19 states will receive awards totaling $35 million to further develop proposals to transform health care, HHS said.

Continued funding will be contingent upon each state’s performance and demonstrated progress, according to HHS.

Jackie Farwell

I'm the health editor for the Bangor Daily News, a Bangor native, a UMaine grad, and a weekend crossword warrior. I never get sick of writing about Maine people, geeking out over health care data, and...