TOPEKA — In the first two weeks that it was possible to do so, only four patients have filed the paperwork necessary to exclude their health records from the Kansas Health Information Exchange.

KHIE officials had projected as many as 55,000 opt-out requests during the first month of operations of the new statewide network for sharing electronic health records.

KHIE chief executive Bill Wallace said he had been "really surprised" that more requests haven't been received.

"Who's to say what's behind it," Wallace told KHI News Service following the monthly board meeting of KHIE on Wednesday. KHIE is the semi-public entity responsible for overseeing the exchange of digital health information in Kansas.

Wallace said the lower-than-expected number could be because most providers haven't begun distributing new privacy notices alerting patients that they have the right to opt out.

Starting June 1, Kansas patients could elect to have their health records excluded from the statewide network that is set to go live July 1.

To do so, patients must mail in an "opt-out" form — otherwise, a patient's information will be automatically included on the exchange as their health care providers connect to the network.

Health information exchange, or HIE, takes the place of paper records, which are typically transferred via fax, discs, mail or by patients themselves. As it is more widely adopted, HIE is expected to improve patient care and help cut medical costs by avoiding redundant and ineffective treatments. It’s also expected to reduce errors.

A third of Kansas patients — about a million people — are expected to receive care from a provider who is or will be connected to the exchange in the near future, KHIE officials said. At least one month before connecting to the exchange, providers must notify their patients.

Only a handful of providers will begin exchanging patient data over the network in July, KHIE officials said. Those are: Pratt Regional Medical Center, Hays Medical Center, Hutchinson Clinic, Via Christi Health Systems and Wesley Medical Center in Wichita.

Wallace said that until more providers are connected, public awareness of the exchange may be limited.

"I think it's going to increase slowly as more and more patients come in and word of mouth spreads," Wallace said.

When that might happen is anybody's guess, he said.

"We're just going by the experience other states have had, which is roughly 3 percent when they have the opt-out process," he said.

When Nebraska began its statewide exchange in 2009, nearly 2 percent of residents — about 37,000 patients — opted out in the first month.

Deb Bass, chief executive of the Nebraska Health Information Initiative, said that Nebraska health care providers were trained to communicate to patients the pros and cons of being included in the exchange, which could have lead to more opt outs.

"If we hear any kind of hesitancy from the consumer, we encourage them to opt out. We don't want anyone participating that is not comfortable with this concept," Bass said.

In Kansas, KHIE officials decided not to task doctors and hospitals with educating patients about the exchange, instead relying on a public awareness campaign and the media.

Funding KHIE operations

In other business, the board charted a course for funding KHIE operations, approving a plan to assess fees on the private networks it licenses.

The fees would be proportionate to the market share of each network. Currently there are two networks that comprise the statewide exchange: the Kansas Health Information Network (KHIN) and Missouri-based LACIE.

KHIE has an annual budget of about $650,000, which pays for administrative operations including three staff salaries, a service desk, office space and utilities. KHIE is currently funded by a grant that expires next year from the Office of the National Coordinator, or ONC, the federal agency that funds state-based health information exchange efforts.

In Nebraska, fees are assessed directly to physicians, hospitals and other providers who use the network. Bass estimated that once ONC funding for states expires, the fees would constitute nearly all of the operating funds for Nebraska's health information exchange, or HIE.

"I would say probably 90 percent of our operations will have to be supported by license fees," Bass said. "We hope to grow the 10 percent through revenue we're getting from consulting fees to other HIEs."

A plan to spend remaining federal dollars

The board also approved a plan for distributing most of the remaining funds from the ONC grant, totaling about $7 million. The $9.1 million grant — awarded as part of the American Recovery and Reinvestment Act of 2009 to implement health information exchange in the state — expires after September 2013.

The plan is to award about 70 percent of the funds to KHIN and LACIE based on how many providers they sign up to participate in the exchange, with a premium paid for providers in rural areas. According to the plan, those would be providers outside of the state's four most populous counties: Johnson, Sedgwick, Shawnee and Wyandotte.

The other 30 percent of the funds would be awarded to KHIN and LACIE based on how many providers had begun connecting to the exchange.

Originally the ONC funds were earmarked to pay directly for the technical infrastructure of the exchange, such as hardware and software needed to connect the Kansas exchange to other state-based and regional exchanges. However, with the deadline to spend the funds looming, board members determined that much of the money would be forfeited if officials had to wait until the infrastructure was built.

Board member Michael Atwood expressed concern that the bar was being set too low for the networks to qualify for the funds.

"What assurance do we have that once the money goes out that (it will pay for) the priorities of KHIE?" said Atwood, who represents Blue Cross Blue Shield. "How do we know it won't just be used to keep the lights on?"

Board member Jerry Slaughter said that KHIN and LACIE were already committed to building needed infrastructure when they applied for KHIE licenses to operate in the state.

"Because of that rigorous process and all that we're requiring of them, the priorities for technology infrastructure would be met...Otherwise, they wouldn't have got a license in the first place," Slaughter said.