TOPEKA — Kansas officials by now had expected to be making incentive payments to doctors and hospitals who had linked to a new digital health information exchange created for the state's Medicaid program.

But a new timeline for launching the exchange and the bonus payments was announced Friday by state Medicaid officials to a small group of interested parties that included representatives of the state's main hospital and doctor groups.

The system and first payments won't be launched until at least the end of this year but more likely early in 2012, officials said, due to the state's delays in preparing its exchange plan for needed federal approval.

Another hurdle has been the technical difficulties in modifying the state's Medicaid claims processing system, which is managed under contract by HP Enterprise Services, a subsidiary of the tech giant once known as Hewlett-Packard.

Incentive payments waiting

Officials said the digital information exchange was being built as a software "module" atop the existing claims processing system. Kansas' module is among those being prepared for Medicaid programs in 13 other states that contract with HP for similar services.

The waiting incentive payments available to hospitals, doctors and some other health care providers were made available by the federal economic stimulus law passed in 2009. This year was the first for which the payments were available to providers who work with the Medicare or Medicaid systems. Generally, providers who want the payments are expected to certify with one of those programs or the other, but are not allowed to collect incentives from both.

Doctors who want to claim the Medicaid bonuses, except pediatricians, must certify that 30 percent or more of their "encounters" over a continuous 90-day period in the previous year were with Medicaid patients. Pediatricians can qualify if their patient load is 20 percent Medicaid. Hospitals can qualify with 10 percent.

State officials have estimated that somewhere between 750 and 1,250 Kansas providers will be eligible for the extra Medicaid payments, which are intended to encourage providers to adopt health information technology.

Federal health officials have said that by 2014, they want every American to have a digital health record that can easily be exchanged among providers within and beyond state lines. The federal incentive payments started this year and where certified can be available to providers over a period of six years. The maximum incentives available in the first year are $21,250 and $8,500 in subsequent years for a total of $63,750.

Uncertainty of retroactive payment

Dane Pelfrey, a consultant hired by the Health Care Finance Division of the Kansas Department of Health and Environment, said it remains unclear if Kansas Medicaid providers will be able to retroactively claim incentives for 2011, if the state doesn't have an approved plan or system in place before 2012.

He said the state has been seeking clarification of that point from officials at the federal Centers for Medicare and Medicaid Services.

State officials said their new "tentative" timeline includes presenting the state plan to federal officials by next month.

Between September and November, they plan to received federal approval and begin preparing to make the incentive payments.

If that timeline is met, they said, the first payments could go out in December.

The Medicaid officials at the meeting included Andy Allison, director of KDHE's Health Care Finance Division; Medicaid Director Barb Langer, and project manager Diane Davidson.

In response to questions, Allison and Davidson made it clear that the timeline for launching the system most likely would extend into early 2012.

"We're targeting our first payments for December, but there's certainly a chance that won't happen," Allison said.

Melissa Hungerford of the Kansas Hospital Association said from her organization's perspective it would be good to have a system in place as soon as possible.

"In general," she said, "I think these folks are trying very hard to put together a program that gets as many providers as possible involved. But it's very complicated. We need a lot more education. As far as the timeline, the sooner the better. It keeps getting pushed out."