Health and Human Services Secretary Kathleen Sebelius announced that her department will provide up to $1 billion over three years to create jobs in local programs that improve health care through innovation. The Center for Medicare and Medicaid Innovation, established by the Affordable Care Act, is sponsoring the Health Care Innovation Challenge, which will provide Grants of $1 million to $30 million to organizations such as hospitals, nonprofits, and local government agencies. 

This initiative will fund applicants who propose compelling new models of service delivery/payment improvements that hold the promise of providing better health, better health care, and lower costs through improved quality for Medicare, Medicaid, and Children’s Health Insurance Program (CHIP) enrollees. Successful models will include plans to rapidly develop and/or deploy the requisite workforce to support the proposed model. Awards will recognize interventions that show capability to improve care within the first six months of the award, while creating a sustainable pathway to net Medicare/Medicaid/CHIP savings within two to three years.

While the money comes from the health care law, the program is part of the president's "We Can't Wait" initiative, a political effort by the White House to show the administration is acting to create jobs and boost the economy while Congress considers and debates legislation.

Examples of the types of organizations expected to apply are: provider groups, health systems, payers and other private sector organizations, faith-based organizations, local governments, and public-private partnerships and for-profit organizations. State governments are not eligible for participation. 

To be eligible, an organization must be recognized as a single legal entity by the state where it is incorporated, and must have a unique Tax Identification Number (TIN) designated to receive payment. The organization must have a governing body capable of entering into a cooperative agreement with Centers for Medicare & Medicaid Services (CMS). Because partnerships and other groups may not be organized into a single legal entity, health systems and other private sector organizations may have an advantage in this process. These entities may also have an advantage because they generally already have in place procedures to comply with CMS requirements, which are expected to be required in the new CMS Agreements.

What should health care employers interested in applying for a jobs grant be thinking about?

Hiring Policies and Practices – Are hiring policies and practices in place and up to date for all legally required background checks? The grant program is looking to establish jobs immediately. Employers will need to be able to quickly engage in covered hiring. 

Compliance with Wage and Hour Laws – Are job classifications appropriately identified for purposes of state and federal minimum wage and overtime requirements, and do pay policies and practices comply with the federal Fair Labor Standards Act and state wage laws? Wage and hour litigation is a significant issue for all employers, and healthcare employers have become particular targets for wage and hour class actions. The risk of these types of claims can be reduced or avoided by proper initial employee classification and an audit of payroll policies and practices.  

Disability Accommodations – Have the essential functions of current jobs and any new positions that will be created been clearly established so that individual disability accommodation requests can be evaluated in the interactive process when they arise? In an active hiring process disability accommodation requests may likely arise and preparation for addressing them will enable appropriate determinations.