CMS, state cost-sharing gives HIEs a shot in the arm

Federal-state funding can aid expansion that helps health information exchanges achieve critical mass and meet the needs of more healthcare organizations.

A federal source of funding for health information exchanges is getting high marks for providing the financial backing to help assist statewide HIEs in building the infrastructure needed to support Meaningful Use.

Under the Medicaid Electronic Health Records Incentive Program, and authorized by the HITECH Act, many HIEs are eligible for 90 percent federal matching funds through 2021. States may request 90/10 HITECH administrative funding for a wide range of HIE activities that support Meaningful Use—states provides 10 percent of the investment in order to receive a 90 percent federal contribution.

The Centers for Medicare and Medicaid Services provides funding for state administrative activities related to the development of core HIE services as well as public health and electronic Clinical Quality Measurement infrastructure. In addition, CMS pays for provider “on-boarding”—the technical and administrative process by which a provider joins an HIE or interoperable system, and secure communications are established and all appropriate business associate agreements, contracts and consents are put in place.

Micky Tripathi, president and CEO of the Massachusetts eHealth Collaborative, calls the 90/10 funding stream a hidden treasure for HIE activities across the country.

“The program is very beneficial to the federal government and taxpayers because it allows Medicaid to partner with the private sector to invest in infrastructure to improve the efficiency and quality of its programs,” says Tripathi. “And the model is flexible to accommodate the variable levels of HIE maturity that exists across the country. Many states have received this funding already.”

Launched in 2012, the Massachusetts Health Information Highway has the distinction of being the first CMS-funded, statewide electronic HIE.

“In Massachusetts, we were the first state to receive 90/10 funding to support statewide HIE activities, and it is an essential source of funds for the Massachusetts Health Information Highway, the statewide HIE which has hundreds of providers connected and conducts well over 50 million transactions per year,” adds Tripathi.

In February, CMS sent a letter to state Medicaid directors updating its guidance about the availability of federal funding at the 90 percent matching rate for state expenditures on activities to promote HIE.

“We are expanding our interpretation of the scope of state expenditures eligible for the 90 percent HITECH match, given the greater importance of coordination of care across providers and transitions of care in Meaningful Use modified Stage 2 and Stage 3,” states the CMS letter.

As a result, George Beckett, chief business development officer for consultancy CedarBridge Group, said during a November 30 eHealth Initiative webinar that HIEs “need to start thinking bigger” about 90/10 funding as they continue to struggle financially. And, he warned, the clock is ticking given the fact that these funds will expire at the end of September 2021.

Also See: Number of public HIEs drop, bringing viability into question

According to Beckett, most HIEs across the country have two to six employees and annual budgets of $2 million to $6 million. “They’re really small businesses,” he says. “They need to go big or go home.”

Beckett believes that the relatively small footprint of HIEs is hurting them. “You have very big health systems out there with large IT departments that are looking at state HIEs and wondering if they are worth investing in.”

He says that HIEs have to make themselves mission critical for the health systems they serve and bring value to their end users. A statewide HIE that Beckett points to as a success story is the North Dakota Health Information Network (NDHIN), which leveraged funding to boost growth, expand regional interoperability and upgrade to higher performing technology. To date, North Dakota has spent slightly less than $9 million to get its initial infrastructure established and will spend about $10 million more annually over the next five years, he notes.

“With an additional investment of approximately $47 million dollars over the next five years—approximately $7 million of which will come from the state and stakeholders—nearly every healthcare provider across all sectors in North Dakota will be fully participating in data and image exchange, and will benefit from statewide analytics, care coordination, centralized credentialing, notifications and alerts, and an advance directives registry,” states NDHIN’s five-year business plan.

The goal of NDHIN is to provide one of the most comprehensive data stores of patient health information in the country. “With the majority of funding available from CMS, there is a unique opportunity for the NDHIN to rapidly grow its participant base as well as expand its service offerings,” according to the HIE’s business plan. “Most importantly, the execution of this plan will position healthcare organizations in the state to successfully participate in value-based payment models and transform healthcare delivery to benefit all North Dakota residents with better care at lower costs, ultimately improving population health across North Dakota.”

For those HIEs looking to take advantage of 90/10 funding, Beckett advises that they work closely and have good partnerships with their respective state Medicaid agencies.

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