The Department of Health and Human Services (HHS) will be handing out individual grants for up to $3 million to states and health systems to implement and evaluate models and methods to improve patient safety and reduce medical liability.

The action by HHS comes on the heels of President Obama’s speech to Congress last week on healthcare reform, which included plans to start investing in new ways to manage medical liability claims.

HHS has allocated $25 million for the inititiative. The demonstration grants can be for up to three years and $3 million, and will be given on a competitive basis for implementation and evaluation of patient safety and medical liability demonstrations. States and health systems that are in a planning stage are eligible for competitive one-year grants for up to $300,000 and are eligible for technical assistance.

According to the White House, the new demonstration initiative by HHS is geared to help states and health systems test models to meet several goals, including:

• Putting patient safety first and working to reduce preventable injuries;
• Fostering better communication between doctors and their patients;
• Ensuring that patients are compensated in a fair and timely manner for medical injuries, while also reducing the incidence of frivolous lawsuits; and
• Reducing liability premiums.

HHS said it also plans to complete a comprehensive review of initiatives that improve healthcare quality and patient safety and decrease medical liability by December 2009. The review is to supposed provide guidance for the new grant initiative, provide information to applicants and help evaluate grant submissions.

The grant application process is scheduled to begin within the next 30 days and applicants will have two months to complete and submit applications. The Agency for Healthcare Research and Qualilty will review applications and make award decisions early in 2010.