Under the Centers for Medicare and Medicaid Services (CMS), the Center for Medicare & Medicaid Innovation (the Innovation Center) is authorized to test innovative payment and service delivery models to reduce program expenditures under Medicare, Medicaid and the Children?s Health Insurance Program (CHIP)

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while preserving or enhancing the quality of care furnished to individuals under such programs.

The Federal Coordinated Health Care Office (Medicare-5Medicaid Coordination Office) is charged with more effectively integrating benefits under the Medicare and Medicaid programs and improving the coordination between the Federal government and states.

In July 2011, CMS released a letter to State Medicaid Directors which discussed two models for integrating care and aligning financial incentives for Medicare and Medicaid as part of CMS? Financial Alignment Initiative, a joint initiative of the Innovation Center and the Medicare-Medicaid Coordination Office, under which States and CMS will collaborate to integrate care and financing for Medicare-Medicaid individuals.