Kansas Health Institute | Information For Policy Makers. Health for Kansans.

TOPEKA — The board responsible for overseeing a health information exchange in Kansas today began grappling with the question of how to pay for its operations once federal funding runs out in the next year or so.

The Kansas Health Information Exchange board faces a June deadline for submitting a sustainability plan to the Office of the National Coordinator, or ONC, the federal agency that funds state-based HIE efforts.

"The time is now, the clock is ticking — we've got to have a plan in place," said KHIE board member Jerry Slaughter, who represents the Kansas Medical Society.

"The federal sources are drying up, the state has no money, there are not too many other places to turn," he said.

"There are only a couple options, and we all know what they are," Slaughter said, referring to health care providers and insurance companies. "If we don't address this pretty quickly and forthrightly, this could really hamper the development of health information exchange in our state."

Board member Michael Atwood expressed concern that too many big questions remained about the role of KHIE to create a tenable sustainability plan. For example, Atwood said, it is not known yet how KHIE might work with the state to share resources, such as Medicaid's coming Master Patient and Provider Indexes and Record Locator Service.

"Creating a sustainability plan without knowing what we're sustaining at this point in the process is very difficult," said Atwood, who represents Blue Cross Blue Shield of Kansas.

In February 2010, Kansas was awarded a $9 million federal grant to develop a health information exchange. The lion's share of the grant is earmarked for infrastructure — for example, about $5 million is slated for interstate connection.

Only about $900,000 of the grant is earmarked for the operations of KHIE. KHIE chief executive Bill Wallace told the board today that his budget draft for KHIE's first year of operations was about $740,000. That will pay for — among other things — three staff salaries, office space and utilities. It will also pay for core KHIE responsibilities such as operating a help desk and processing patient requests to opt-out of the exchange.

The board today decided to create a sustainability committee to hammer out options for sustaining KHIE functions beyond the first year. Members agreed that the committee should present options at the Feb. 8 board meeting. They also agreed that the committee would contain representatives from insurance companies, doctors, hospitals, the state Medicaid program and the two health information networks currently in the state — KHIN and LACIE.

"In some states, they have big fights over this," Slaughter told KHI News Service after the meeting. "In our state, the provider community will step up and pay our fair share — we believe that to be about half of the cost. We're proposing that it be divided equally between payers and providers. To the extent that you get some additional government support ... that would just reduce costs on the others. But in this environment, I don't think you can count on governmental support."

In other business today, the KHIE board:

• Accepted Missouri-based network LACIE's application to be a sanctioned Health Information Organization in the state. It was the second application submitted to KHIE, following the one from Kansas-based network KHIN, which was submitted last month.

The deadline for applying to be an approved HIO in Kansas is Jan. 31. Health care providers that exchange patient information via a KHIE-approved network will be granted some immunity from lawsuits should they inadvertently breach patient privacy while doing so.

• Voted to acknowledge and make recommendations to fill the board's four vacancies. Once appointed by the governor, those positions will represent consumers, large employers, the state's Medicaid program and hospitals.

• Approved signing a lease for office space at the Kansas Pharmacy Center, 1020 SW Fairlawn, Topeka. The lease is set to begin next month.

• Made plans to generate short- and long-term goals for KHIE at the board's next meeting, which is set to begin at 9:30 a.m. Feb. 8 at the Topeka Public Library.