The state awarded $2.6 million in health care innovation grants to eight provider groups Wednesday.

"Our challenge is to put a stop to skyrocketing health care costs that are hammering Vermont businesses and families. Through this grant program, we are supporting leaders who are working to do just that," Gov. Peter Shumlin said in a statement.

The money comes from the $45 million State Innovation Model grant Vermont received from the federal government last year.

The purpose of the larger grant is to help Vermont reform payment and delivery methods for health care services to bring down costs and improve quality.

Its focus is three alternative payment models designed to help Vermont move away from fee-for-service, or compensating providers for the volume of services they deliver, and toward value-based payments through which providers are compensated for better patient outcomes.

Those models include shared-savings programs for Accountable Care Organizations; episode-based care, or payments based on treating a specific condition over a defined period where the provider shares in savings based on the cost and quality of that care; and pay-for-performance where providers are compensated for meeting or exceeding quality thresholds.

Provider groups submitted applications this year.

Another round of applications will be solicited over the summer to hand out roughly $800,000 more in provider grants.

    The provider grants include:

  • $112,063 to a coalition of health care and long-term care providers in the Rutland area to develop a model of care for seriously ill patients with complex health care needs;
  • $176,400 to a coalition of health care and social service providers in the Northeast Kingdom to develop an integrated team approach to caring for "at risk" individuals who have high health care needs;
  • $363,070 to a primary care practice in White River Junction to develop a new approach to patient and provider management of chronic conditions;
  • $250,000 to Burlington Community Health Center, Northern Counties Health Care and the state's employee assistance program to develop a model for reducing stress and preventing chronic disease among workers;
  • $548,829 to the Vermont Medical Society Education and Research Foundation and the Fletcher Allen Health Care Department of Pathology and Laboratory Medicine to implement a statewide program that reduces unnecessary and potentially harmful medical testing;
  • $400,000 each to Bi-State Primary Care and HealthFirst to further develop their "accountable care organizations," networks of providers who take responsibility for managing health care costs and quality for their patients; and
  • $350,000 to the Vermont Program for Quality in Health Care to support a statewide surgical services collaborative. This is a physician-led partnership to improve the quality of surgical care in Vermont and reduce complications from surgery.