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Clearer Picture Emerges on Stimulus’ IT Funding

Over the past few weeks, the Office of the National Coordinator for Health Information Technology has released key updates about available funding to advance health IT adoption, including changes to an existing funding program and the announcement of a new initiative.

First, the Health IT Regional Extension Center Program cycles have been consolidated and available funding has been increased. Second, ONC unveiled the health IT “Beacon Communities” program, which aims to strengthen community-based health IT infrastructures and health information exchange capabilities. Both programs were established under the American Recovery and Reinvestment Act of 2009.

Through these and other initiatives, ONC seeks to ensure wide-scale adoption and effective implementation of health IT applications nationwide to ultimately improve the quality and efficiency of health care delivery.

Regional Health IT Extension Centers

ARRA established an incentive program to promote the meaningful use of electronic health records by health care providers that participate in Medicaid and Medicare. To enable adoption and effective implementation of EHRs, ARRA set aside funds for regional extension centers, which are envisioned as local support organizations that provide customized technical assistance to health care practitioners.

ONC issued a competitive funding opportunity announcement (FOA) in the summer to establish approximately 70 RECs nationwide, with each serving a defined region. Collectively, RECs will support at least 100,000 primary care providers in achieving meaningful use of EHRs and enabling nationwide health information exchange.

RECs will deliver individualized technical assistance and project management support for health care providers implementing EHRs and participate in best practices exchange with other RECs in coordination with federal entities.

Federal support for these RECs will end after four years, after which the entities are expected to be fully self-sustaining. The Extension Program also established the Health IT Research Center (HITRC), a national body that will collect and distribute to RECs best practices in health IT adoption and convene RECs to facilitate learning collaboratives.

Originally, the REC application and award process was segmented into three cycles with discrete funding per cycle totaling nearly $598 million. Through an updated funding announcement, ONC said that the second and third cycle of funding will be consolidated into one round and that the total amount of available funding has increased to $640 million. Available funding in the first round has risen from $189 million to $350 million. For the second round, it has increased from $225 million to $290 million.

According to the revised funding announcement, the original average award amount estimates remain at $8.5 million, with an award floor of $1 million and ceiling of $30 million.

An estimated 70 awardees is still expected. Awards will result in four-year cooperative agreements, with biennial evaluations for each REC assessing progress toward provider-specific milestones.

Application deadlines also have been revised.  The award deadlines for the first round have passed, but the announcement of those awards has been delayed from the original date of Dec. 11, 2009, to Jan. 21, 2010.  

Although Cycle 1 awards will not be announced until next month, ONC will be reaching out to organizations that submitted full applications as early as this month.

To accelerate the deployment of RECs and initiate their work with health care practitioners, the deadline for full applications in the second round from applicants that receive preliminary approval by ONC has been moved up from March 2, 2010, to Jan. 29, 2010, with award announcements expected by the end of March.

In summary, the revised funding cycles are as follows:

Cycle 1

  • Available funding: $350 million;
  • Preliminary application deadline: Sept. 8, 2009;
  • Preliminary approval: Sept. 29, 2009;
  • Full application deadline: Nov. 3, 2009;
  • Anticipated award date: Jan. 21, 2010.

Cycle 2

  • Available funding: $290 million;
  • Preliminary application deadline: Dec. 22, 2009;
  • Preliminary approval (expected): Jan. 5, 2010;
  • Full application deadline: Jan. 29, 2010;
  • Anticipated award date: March 31, 2010.

Health IT Beacon Communities

This month, ONC announced the availability of $235 million in ARRA funds to support health IT “Beacon Communities” as part of an effort to help strengthen community-based health IT infrastructures and health information exchange capabilities. Nationwide, ONC will fund approximately 15 beacon communities, which must have higher-than-average EHR and HIE service adoption rates and are expected to achieve measurable improvements in health care quality, safety, efficiency, and population health.

Beacon communities are expected not only to improve health IT infrastructures and HIE services, but also serve as a model for communities across the country to “demonstrate the promise of health IT” in improving health care delivery and outcomes.

The program consists of two distinct efforts:

  • $220 million for three-year cooperative agreements for 15 beacon communities; and
  • $15 million for technical assistance services for and evaluation of the beacon communities.

The funding opportunity announcement for the latter funding component has not yet been released.

To be eligible for funding, applicants first must meet two benchmarks:

  • First, applicant communities must have EHR-adoption rates of at least 30% among health care providers in urban areas and 25% among providers in rural areas. In addition, communities must document that at least 40% of physicians and 20% of hospitals have implemented EHRs.
  • Second, communities must demonstrate previous success and/or “advanced core-competencies” with regard to performance measurement and cost-efficiency improvement, e.g. reduction of preventable hospitalizations.

Individual and population health improvements within beacon communities are a key focus of this program. Communities must design and measure performance metrics on an individual level that reduces cost and improves quality of health care.

In addition, they must advance population-specific goals in one or more of the following areas:

  • Tobacco control;
  • Preventive health services;
  • Health disparities; and
  • Public health surveillance.

Further, community plans must be sustainable beyond the course of this initial federal support.

Funding may be applied toward provider-specific activities such as:

  • The purchase of EHRs for providers ineligible for the Medicaid and Medicare incentive programs;
  • Provision of technical assistance beyond those services provided by RECs;
  • Implementation of clinical decision support;
  • Development of telemedicine tools; and
  • Improvement of medication management.

In addition, community-based activities are eligible for funding, including the expansion of broadband access, the development of quality reporting registries, and engagement of patients and families in using IT to improve their health.

Beacons Likely To Be Group Efforts

Beacon communities are likely to comprise consortia of stakeholders representing a diverse set of organizations, with coordination led by the lead applicant. Lead applicants must be not-for-profit organizations or government entities that fall into one of the following five categories:

  • State, local, tribal or territorial government entity with a public health focus;
  • Integrated delivery network or health system with broad community partnerships;
  • Independent physician association or consortium of medical groups;
  • Public/private partnership aimed at health system improvement and/or community health improvement; and
  • ONC-funded regional extension center with the capacity to expand its services.

Award amounts are expected to range from $10 million to $20 million for three-year cooperative agreements. Letters of intent are due Jan. 8, 2010, and full applications are due Feb. 1. Award announcements are expected March 2010, with programs intended to begin in April.

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