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CMS established the State Innovation Models (SIM) Initiative to provide support and funding for
state multi-payer efforts around payment reform and health care system transformation. The goal
of the SIM effort is to achieve statewide transformation for the preponderance of care delivered
within the state and to improve health, transform the delivery system, and lower costs. The
Initiative provides funding for states to either design or test health care innovation models.
In 2013, CMS awarded six states (OR, MN, AR, ME, VT and MA) a total of $250 million to test their
innovation models. An additional three states received pre-test assistance to continue design work,
and 16 states received grants to design models.
On May 22, 2014, CMS released Round Two of SIM grant opportunities, with applications due July 21,
CMS FAQs [PDF]
On July 19, Arizona submitted an application for the CMS State Innovation Model Funding. The Arizona
State Innovation Model (SIM) Initiative will accelerate the state’s delivery system transformation towards
a value-based integrated model that focuses on whole person health in all settings and regardless of coverage
source. Arizona will undertake transformation of the health care delivery system using three overarching
strategies: 1) Facilitating Integration and Decreasing System Fragmentation; 2) Improving Care Coordination;
3) Driving Payment Reform. Arizona will distribute almost 90% of the $85.7 million in SIM funding through
largely competitive processes to community partners engaged in delivery system transformation.
Tens of thousands of providers will benefit from the variety of strategies Arizona will employ, including expanding
the use of Health Information Technology and data sharing among various fragmented entities. The Arizona SIM
Initiative, in addition to providing support for enhanced access to data, will also provide funding to accelerate
organizations’ ability to enter into modernized payment structures. Arizona expects these efforts, in conjunction
with the state’s State Health Improvement Plan, will improve individual and population health and increase payer and
provider accountability for outcomes and costs. The SIM Initiative will begin by focusing on critical populations
including individuals with serious mental illness (SMI) or who have other significant medical and behavioral health needs
(super-utilizers), individuals dually eligible for Medicare and Medicaid, individuals transitioning from the justice system,
members moving between Qualified Health Plans (QHPs) and Medicaid health plans, and the American Indian population.
The initiative will improve care for all of Arizona’s 1.5 million AHCCCS enrollees (including 150,000 American Indians
enrolled in Medicaid), tens of thousands of Arizonans transitioning between AHCCCS and QHPs, the estimated 100,000
individuals who transition from incarceration to AHCCCS every year, and, ultimately, a significant number of Medicare
beneficiaries and commercially-insured individuals. As evidenced by over 55 letters of support from community partners,
the Arizona SIM strategy will be a statewide collaborative effort towards transforming the health care delivery system for
Grant Submittal 7/19/14 [PDF]
Arizona's Proposed Strategy
Accelerate the delivery system’s evolution towards a value-based integrated model that focuses on
whole person health throughout the continuum and in all settings.
Governor Brewer’s leadership to restore Medicaid coverage for adults addressed a major challenge facing
the health care system in Arizona. Due to the success of her efforts, Arizona is well positioned to
focus on driving continued innovation in the health care delivery system by expanding the public-private
partnership that has been so successful in the state. The SIM proposal would build on a number of
initiatives that are already underway to reduce fragmentation, integrate the delivery system and align
incentives to improve quality and lower costs. These efforts are critical to ensuring sustainability of
health care delivery within Arizona and improved health outcomes for Arizona citizens.
The SIM proposal will allow for an acceleration of these efforts and enable savings to accrue more quickly.
The major focus of the proposal is to integrate the delivery system, with a particular focus on ensuring
behavioral health services and needs are not siloed from the physical health delivery system.
Significant efforts are occurring across the state led by multiple organizations and payers.
However, the results of stakeholder engagement make it clear that there are substantial gaps within
initiatives related to behavioral health needs and the impact on population health and individual behavior
within the health care system (e.g., where an individual accesses care, the level and frequency of care
sought, etc.). This is magnified by the historical structure of the state-funded health care system in which
behavioral health and physical health are administered separately. Major payers, including AHCCCS, are also
driving value-based purchasing (which will be most successful in an integrated delivery system), but additional
provider education and incentives are needed to accelerate that process. Arizona has undertaken numerous
disparate efforts to align incentives and drive integration and value-based purchasing, and this proposal
will support their objectives and accelerate their implementation.
Stakeholder involvement and input is critical to Arizona’s success. AHCCCS is accepting public comments,
including letters of support from family members, providers, payers, advocacy groups and other interested
parties and will submit them with its proposal and post them on this website. Comments received to date can
be found on the links below:
Arizona Governor Janice K. Brewer
Advisory Council on Indian Health Care
Aetna Medicaid Administrators, LLC
Arizona Medical Association
Arizona Academy of Family Physicians
Arizona Alliance for Community Health Centers
Arizona Association of Health Plans
Arizona Board of Regents
Arizona Connected Care ACO
Arizona Department of Corrections
Arizona Department of Health Services
Arizona Health Care Association
Arizona Health-e Connection/Health Information Network of Arizona
Arizona Hospital and Healthcare Association
Arizona Osteopathic Medical Association (AOMA)
ASU College of Health Solutions, Center for Applied Behavioral Health Policy
Behavioral Health Information Network of Arizona, LLC
Blue Cross Blue Shield of Arizona
Bridgeway Health Solutions & Cenpatico BH of AZ
Care 1st Health Plan Arizona, Inc.
Chicanos Por La Causa, Inc.
College of Nursing and Health Innovation, ASU
Commonwealth Primary Care ACO
Community Partnership of Southern Arizona
Comprehensive Medical and Dental Program
Corporation for Supportive Housing
Council of Human Service Providers
County Supervisors Association of Arizona
El Rio Community Health Center
Jewish Family & Children's Service
Magellan Health Services of Arizona, Inc.
Maricopa Consumers Advocates and Providers
Maricopa Integrated Health System
Mercy Care Plan
Mercy Maricopa Integrated Care
Northern Arizona Healthcare
Northern Arizona Regional Behavioral Health Authority
People of Color Network
Area Indian Health Service
Phoenix Children's Hospital
Pima County Access Program
Scottsdale Lincoln Health Network
St. Luke’s Health Initiatives
Topaz Information Solutions, LLC
Touchstone Behavioral Health
Tucson Medical Center
University of Arizona Health Network
West Yavapai Guidance Clinic
Your Partners in Quality, LLC
Attn: Office of Intergovernmental Relations
801 E. Jefferson St., MD 4200
Phoenix, AZ 85034