States urged to start now on health exchanges

State governments should start planning now to foster health information exchanges and adoption of electronic health records in their states, according to new guidance released by the State Alliance for eHealth, which the National Governors Association sponsors.

The Health Information Technology for Economic and Clinical Health (HITECH) Act contained in the economic stimulus law provides at least $2 billion for health information exchanges and up to $45 billion in incentive payments to doctors and hospitals for digitizing their patient records. The law sets a goal of 2014 to dramatically increase the number of providers who are using electronic patient records and participating in health exchanges.

“States must immediately begin planning how they will support this new direction and lead the way for broad deployment and use of Health Information Exchange,” the guidance states. “The role of states in modernizing the health care system was already substantial, but it will dramatically expand as the HITECH Act is implemented.”

The law authorizes grants to states to support health information exchange planning and implementation. It also provides Medicare and Medicaid incentive payments to providers who meaningfully use certified electronic records systems and requires that all federal health agencies use such systems.

To receive an implementation grant, a state must have a state plan approved by the Health and Human Services Department. The goal is to increase participation in the exchanges, but specific HHS guidelines for the state plans have not been released yet. HHS also will be allowed to make loans for electronic record system purchases and implementation costs.

According to the guidance, states are advised to:

• Determine the basic architecture of health information exchanges, including where the data will be housed and who will participate.
• Identify a governance and business model for health information exchange in the state, including how it will operate, how rates will be set, who will pay and who will manage the exchange.
• Determine the state government leadership and oversight structure with stakeholder input.
• Identify a framework or options for ensuring privacy and security of electronic health records.

State planners also should consider how broadband availability would affect health information exchange, and what type of broadband projects might increase health information exchange coverage, the report said. The economic stimulus law makes available $7 billion in grants and loans for broadband development in underserved areas.