Network execs squabble over issue of exchange connectivity

Dispute over fees settled for now



Laura McCrary, chief executive of KHIN, one of two networks constituting Kansas' new statewide exchange for digital transfer of patient records. KHIN officials recently notified officials from LACIE — the other network — that they would not agree to connect the two networks unless LACIE paid a fee for doing so. LACIE has refused to pay the fee. In order to operate as licensed networks in Kansas, the two networks must be connected. Providers exchanging patient records on an unlicensed network risk legal liability if network security is breached.

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— Following a heated exchange between two network chief executives, the board regulating digital health record exchange in Kansas voted Wednesday to prohibit the networks from charging each other connectivity fees until at least 2015.

In Kansas, the exchange of digital patient information began last summer via two private networks licensed by the quasi-governmental Kansas Health Information Exchange, Inc. (KHIE). The two networks are LACIE, which connects doctors primarily in metro Kansas City, and the Kansas Health Information Network (KHIN), which connects doctors all over the state but not on the Missouri side of Kansas City.

The KHIE licenses granted to the networks initially required them to be interconnected by July so that doctors on one network could access patient records of doctors on the other network. But that deadline was changed at the Wednesday meeting to Dec. 31. Once they are interconnected each network could receive $500,000 in federal incentive payments through the Office of the National Coordinator for Health Information Technology.

On May 9, KHIN officials notified LACIE officials that they would not agree to an interconnection unless LACIE paid KHIN a fee.

LACIE chief executive Mike Dittemore said his network had no intention of paying a fee to KHIN.

"We will not pay another (network) to connect. That's never been the intent or spirit of this group. We certainly want KHIN to be successful, but we will not subsidize them," Dittemore told the board.

But KHIN chief executive Laura McCrary predicted interconnection fees for networks would soon become the norm across the United States.

"We're asking for exactly where the market is going in terms of 'we built the infrastructure, we incurred the cost, we have something of value and that is the data in the exchange," McCrary said. "If we give that data to another (network) they will have a competitive advantage, if we give it to them for free. We know that LACIE knows this — they've been out talking to providers all across the state of Kansas saying 'If you join LACIE you can join at a lower fee, and you'll get all of KHIN's data for free,'" McCrary said before being interrupted by Dittemore:


Mike Dittemore, chief executive of LACIE.

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"That's untrue, Laura. That's absolutely untrue and we've told you it's untrue. I'm sorry, Mr. Chair but that is an absolute lie," Dittemore said.

After meeting 90 minutes in executive session, the KHIE board members agreed to prohibit any network operating in Kansas from charging other networks a connection fee.

The decision might be the board's last as the state's regulator of patient information exchange. The Kansas Department of Health and Environment proposed taking over KHIE as a way to save money, and last month the Legislature and governor put the plan into law, effective July 1.


Aaron Dunkel, the KDHE official who will head regulation of health information exchange in Kansas after the July transition of the duties from KHIE.

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No network fees yet elsewhere

Aaron Dunkel — the KDHE official who will head regulation of the exchange after the July transition, said federal officials were not encouraging networks to charge one another connection fees.

"We've had conversations with our (Office of the National Coordinator) contacts that basically said 'No, interstate connectivity isn't something that should be charged for.' That's the reason they gave money to states to build their infrastructures."

ONC officials told KHI News Service that there have been discussions around the country about networks charging each other fees, but that none were doing so to their knowledge.

"This is the first time, at least the first of which we are aware, that a (network) receiving our funding actually tried to charge another (network)," said ONC spokesman Peter Ashkenaz. "ONC is discouraging grantees from taking up this practice. So far, there hasn’t been much discussion about (networks) charging others across state lines."

Remaining federal dollars

The ONC was created in 2004 by executive order, and legislatively mandated in 2009 by the HITECH Act, which also authorized $26 billion in incentives for doctors and hospitals to adopt electronic health records. The American Recovery and Reinvestment Act of 2009 authorized millions more for states to implement health information exchanges.

Kansas was awarded $9.1 million in ARRA funds for the effort here, 84 percent of which have now been distributed. The lion's share of the funds have gone to KHIN and LACIE to defray their costs of setting up exchange infrastructures.

On April 30, $4.5 million was paid to KHIN and $1.3 million to LACIE based on how many providers had begun connecting to each network.

The grant was set to expire in September but was recently extended by ONC to Feb. 10. If LACIE and KHIN connect to each other by Dec. 31, they will each receive another $500,000 in ARRA funds.

Coverage of electronic health records in Kansas

Kansas breaks ground on statewide digital health network (5/28/12)
The pros and cons of health information exchange: An interview with Dr. Joe Davison (5/28/12)

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KDHE begins day-to-day duties of HIE regulation (7/19/13)
Network execs squabble over issue of exchange connectivity (5/23/13)
KU Hospital, Shawnee Mission going live on statewide health record exchange (5/9/13)
Governor signs HIE bill transferring regulatory authority from KHIE to KDHE (4/18/13)
This is why health IT systems aren't keeping up (3/19/13)
Senate panel hears bill to move HIE regulatory authority to KDHE (3/13/13)
Bill introduced to transfer regulatory authority from KHIE to KDHE (2/12/13)
Legislators request 'lengthy discussion' on HIE developments (1/16/13)
KHIE board members get cold feet on legal changes (12/13/12)
KHIE defers details of transition to KDHE (10/10/12)
KHIE board turns over regulatory duties to state (9/12/12)
HIE board delays decision on turning authority, costs over to state (8/8/12)
Regulators of health information exchange to consider ceding authority to state (8/6/12)
The cost of independent regulation of health information exchange (8/6/12)
KHIE board presented with proposal to dissolve the organization by August (7/11/12)
Far fewer than projected patients opting out of health information exchange (6/14/12)
Public awareness campaign begins for health information network (5/23/12)
Networks granted temporary licenses to exchange patient data (4/11/12)
KHIE committee changes course on funding scheme (3/26/12)
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State Medicaid officials announce new schedule for digital health records exchange (7/25/11)
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Full coverage of health information technology in Kansas

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