TOPEKA — For seven years, members of the Kansas Health Information Exchange board have worked to form the public-private entity KHIE Inc., which now regulates the exchange of digital health records in the state.

Today, board members were presented with a proposal to dissolve KHIE Inc. by August and hand over the board's regulatory authority to the Kansas Department of Health and Environment.

The proposal comes on the cusp of digital health information exchange going live in Kansas, which officials have said would begin next week.

'A shock'

Many board members saw the nine-page proposal for the first time about 90 minutes before today's monthly meeting.

"This is kind of a shock," said board member Helen Connors, who represents the University of Kansas Medical Center. "The timeline set forth is this document is very aggressive and leaves no time for consideration."

The proposal — which was drafted by KDHE staff at the request of a KHIE budget subcommittee — is aimed at eliminating the projected $390,600 annual cost of operating KHIE Inc.

Among the costs that would be eliminated:

• $134,900 in salaries and benefits;

• $49,300 for insurance, office space and other overhead; and

• $44,800 or more in legal and other consulting services.

The plan calls for eliminating the chief executive position, which was created in October with the hiring of Bill Wallace. The other two KHIE Inc. staff members would be offered the two new positions at KDHE proposed under the plan — project analyst and administrative assistant.

No licensing fees

KDHE's liaison to the board, Aaron Dunkel, said the operation's remaining costs could be paid for by reallocating existing KDHE resources.

"We're not going to go out and get additional dollars — this is a redirection of dollars internally," Dunkel said.

Dunkel said that under the proposal, there would be no licensing fees assessed to the networks that transfer patient data, often called health information organizations, or HIOs.

Doctors and hospitals are concerned that the fees would be passed on to them by the HIOs, said board member Jerry Slaughter, who chaired the subcommittee charged with determining how to finance KHIE's operations.

"So we thought it made sense to approach KDHE and see if there was a way — either through a hybrid model or folding this board and (KHIE Inc.) into KDHE — that we could reduce the costs that are going to the HIOs and ultimately providers," said Slaughter, executive director of the Kansas Medical Society. "If we can lower the costs of sustainability through a closer relationship with KDHE, it's hard to argue that that doesn't make sense, particularly if we can still retain a policymaking board."

Under the proposal, the 17-member KHIE board currently appointed by the governor would become an advisory committee appointed by the KDHE secretary.

Concerns with the plan

Most of the board members present expressed concerns or raised questions about the plan, including whether it was legally permissible.

KHIE Inc. was created two years ago by executive order, which holds the power of law, said the board's legal counsel, Jeff Ellis.

Further, KHIE Inc. was written into law last year as the regulatory body that would ensure the security and privacy of patient health information.

"What I'm hearing is that we can't do this legally until January," said board member Dr. Jennifer Brull, referring to when the legislature reconvenes and could first consider altering the law to allow the proposed changes.

"There's a lot of emotionality around this discussion and a lot of it stems from this aggressive timeline," Brull said. "I would suggest we take dates out of this ... and have a transparent discussion about what we can do."

Board member Dr. Michael Atwood said he was not comfortable voting on the proposal before he could seek input from Blue Cross Blue Shield of Kansas, which he represents.

"One of the purposes of the public-private partnership was to enhance transparency, and I don't know that we've treated this process in the most transparent fashion," Atwood said. "I'm disappointed that KDHE — which clearly has been working on this proposal for some time — did not elect to share any of this information in advance either with the board or the executive committee so that we might have the chance to speak with our constituencies."

"I was also very surprised to see this plan an hour and 20 minutes before the start of this meeting," said board member Karen Braman, who represents Express Scripts. "So it's kind of tough for me to think about the timeline that's contemplated in here — by the end of July transitioning the board, and suspending activities of staff by the end of August — when I'm not sure all the board members have had a chance to fully read the plan."

Connors said KHIE's public-private structure was created to ensure the security and privacy of patient health information via a transparent organization.

"My major concern is that for seven years we saw the value in a public-private partnership and now all of a sudden we don't," she said. "Where did that go by the wayside?"

The board agreed to defer action on the proposal until next month's meeting, which is set for 10 a.m. Aug. 8 at the Kansas Medical Society (map). In the meantime, board members agreed to circulate feedback on the proposal via email.