In addition to well-publicized incentives to get doctors to start using electronic health records, the federal stimulus package also dangles financial carrots to encourage the establishment of what will amount to a new mini-industry involved with helping those doctors choose and use EHRs.

In one of the first steps in laying the foundation for that new enterprise — a web of regional extension centers — the government is formally seeking comments on how best to proceed.

The American Recovery and Reinvestment Act of 2009 (ARRA) provides for Medicare and Medicaid incentive payments to health care providers for the adoption and meaningful use of certified EHR technology, and for the establishment of health information technology regional extension centers to assist providers in selecting and successfully implementing EHRs. 

Last week, the Office of the National Coordinator for Health IT published a request for comments relating to the REC program.  Comments are due by 5 p.m. June 11.

How Centers Will Operate

The extension centers program, as envisioned in ARRA, will feature a local, hands-on approach in defined geographic regions. Some of the particulars:

Centers will be members of a consortium that will be coordinated and facilitated by the Health IT Research Center established under ARRA.  Lessons learned during the course of these activities will be shared among the regional centers and made publicly available.

Services provided by RECs will be direct and individualized.  On-site assistance is expected to be a key service offered at the centers and will represent a significant portion of their activities.  Support will include the provision of information on mechanisms to exchange health information and the effective integration of health information exchange activities into practice workflow.

Each regional center will provide technical assistance within a defined geographic area, and each defined geographic area will be served by only one center.  However, government officials expect the centers to be used by multistakeholder collaborations that leverage local resources. 

Regional centers will be evaluated to ensure they are meeting the needs of the health providers in their geographic area.

Criteria for Determining Qualified Applicants

In addition to the ARRA requirement that regional centers be affiliated with a not-for-profit organization, the government proposes the following requirements and preferences.

Required Criteria.  An applicant must:

• Define the geographic region and the provider population within that region it proposes to serve;
• Describe proposed levels and approaches of support for providers to be served;
• Address how the applicant would structure its organization and staffing to ensure providers served have ready access to reasonably local health IT “extension agents” and provide training and ongoing support for these critical workers;
• Demonstrate the capacity to facilitate and support cooperation among local providers, health systems, communities and health information exchanges (“HIEs”);
• Demonstrate that the applicant is able to meet the needs of providers prioritized for direct assistance; and 
• Propose an efficient and feasible strategy to furnish deep specialized expertise (in such areas as organizational development, legal issues, privacy and security, economic and financing issues, and evaluation) to all providers served, as well as intensive, individualized, “local” presence from an interdisciplinary extension agent to smaller groups of providers assigned to individual agents.

Preference Criteria.  ONC proposes to give preference to:

• Organizational plans and implementation strategies that include multi-stakeholder collaborations that make use of local resources, such as universities with health-related programs; medical or professional societies; state primary care associations; state or regional hospital organizations; large health centers and networks of rural and/or community health centers; state Area Health Education Centers; HIEs; and government entities such as public health agencies, libraries and information centers with health professional and community outreach programs, and consumer/ patient organizations.
• Applicants identifying viable sources of matching funds, including but not limited to grants from states and not-for-profit foundations, and payment for services from providers.

Payments, Earnings Support Detailed

The request for comment indicates that providers may use Medicare and Medicaid incentive payments they receive under ARRA to pay for the implementation and meaningful use support services they receive from a regional extension center.

The request also indicates that centers could seek to establish themselves as a first-choice source of assistance that would realize net retained earnings on service to providers and use those retained earnings as a source of matching funds for grant-funded activities.

Awards may be made as early as the first quarter of fiscal year 2010.  Awards made in FY 2010 would be for a two-year period, with an average award of $1 million to $2 million per REC and a maximum award per REC of $10 million.  Matching funds are not required for awards made in FY 2010. 

Procedures To Be Followed by the Applicants

Funding for the regional centers will be awarded through a “broadly announced” solicitation of proposals, which will take into account the comments obtained through the notice.  Further, there will be multiple submission dates so that areas with well-prepared applicants can begin work sooner, while allowing other areas more time to prepare viable proposals.

A call for proposals is expected later this summer.

Helen Pfister is a partner at Manatt, Phelps & Phillips. Manatt Health Solutions, a division of the law firm, has been hired by the California HealthCare Foundation to provide periodic updates for California Healthline readers on the federal economic stimulus funding authorized under the American Recovery and Reinvestment Act of 2009.

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