Editor’s Note: For decades, states have struggled to establish infrastructure that supports the efficient and secure sharing of health information, despite its benefits of improved quality, reduced duplicative services and associated costs. Although there has been some progress, significant gaps remain. As a result, many patients will receive care in settings that do not have their complete health records, which can lead to care that is inefficient at best and dangerous at worst.
In a new issue brief prepared with the California Health Care Foundation, summarized below, Manatt Health outlines seven policy levers available to states working to advance interoperability—the ability of healthcare entities to exchange patient data seamlessly—including their pros and cons. The report also reviews the efforts of five states—Minnesota, Florida, Michigan, Maryland and North Carolina—that have used some of these levers to extract lessons from their successes and failures. Click here to download a free copy of the full report.
Health information exchange (HIE) is vital to enabling the quadruple aim of better care, better health, improved clinician experience and lower costs. Yet states have wrestled for decades with the challenge of building infrastructure that allows for the seamless, safe and secure sharing of health information. The lack of supportive state policy and leadership, no clear and compelling value proposition, misaligned incentives, and concerns over privacy and high costs represent many of the barriers that states, providers and payers must overcome on the journey toward interoperability.
Although states have made progress, significant holes remain. In California, for example, health information organizations (HIOs)—private or nonprofit community-based entities that facilitate the exchange of patient health information among the enterprises composing a healthcare delivery system—have been challenged in realizing their aspirational role as universal conduits of HIE. Today, only half of California’s hospitals participate in HIOs, and 23 counties lack any significant HIO presence.
The federal government recently issued proposed rules with the goal of achieving a vision of seamless HIE across the continuum of care and providing robust patient access. Federal policy alone, however, has shown time and again to be insufficient in significantly advancing HIE. Without the right mix of state public policy, financial support and aligned market incentives, providers and payers won’t be motivated to adopt HIE services.
Policy, Contracting and Financing Levers
A variety of policy, contracting and financing levers may be used to advance interoperability. The levers are not mutually exclusive, and states have deployed them in tandem. The levers are listed below according to the intensity of the state’s role in advancing HIE activity:
- Public-private advisory councils. Public-private advisory councils can guide HIE programs and recommend policies and standards. These stakeholder bodies typically convene to develop policy recommendations related to HIE. They have broad representation across the healthcare industry, including from state agencies, health plans, providers, consumers and HIOs. The pro is that they can garner broad stakeholder input and support. On the con side, with no power or enforcement authority, they cannot compel industry participants to act.
- Quality and value-based collaboratives. Quality and value-based collaboratives have been used to design and develop programs that may require HIE and pay providers who have met specified milestones. Participation may be voluntary or required under a state’s contract with a Medicaid managed care plan or through a plan’s contract with its providers. The pro is that the collaboratives can build trust and a cooperative process, allowing stakeholders to develop programs jointly that align care delivery with payment incentives. The con is that they are typically voluntary and can’t compel participation.
- Financing for HIE infrastructure, service development and onboarding. Efforts to advance interoperability have largely failed when not coupled with funding, meaningful financial incentives and/or monetary penalties. States are in the position to pursue federal funding to support HIE objectives, including HITECH administrative funding available through the Medicaid Electronic Health Record (EHR) Incentive through 2021 and funding through Section 1115 demonstrations in partnership with the Centers for Medicare & Medicaid Services (CMS). On the pro side, making funding available helps providers overcome the significant cost barrier to interoperability and enhances the HIE value proposition. The con is that, while funding helps mitigate the initial costs associated with connecting to an HIO, it doesn’t address sustainability.
- Contracting. State agencies may use their purchasing power to promote and require interoperability. The most straightforward example is through state contracting that may be paired with payments. Under the CMS guidance, states may pay incentives to managed care plans that meet performance targets. At the federal level, demonstrating HIE capabilities is an important part of the Medicare Access and CHIP (Children’s Health Insurance Program) Reauthorization Act of 2015 (MACRA) Merit-Based Incentive Payment System (MIPS). The pro for contracting is that it leverages existing purchasers’ contracting mechanisms, procurement processes and payment models, enabling them to integrate changes that advance interoperability alongside other requirements. The con is that purchasers must enforce contractual requirements to be effective, which can be difficult and can carry some risks (such as losing providers).
- Regulatory rulemaking and directives by state purchasers and regulators. State purchasers and regulators may promulgate rules that require health plans to engage in HIE or promote interoperability among providers. The pro is that regulatory rulemaking and directives allow agencies to consider aspects of interoperability most critical to their goals and priorities and tailor requirements accordingly. This also is a transparent process with an opportunity for public participation. The con is that regulatory rulemaking on its own would be piecemeal. It is unlikely that requirements would be consistent across agencies, placing a burden on plans and providers to implement and track varying requirements.
- Executive order. Governors have the authority to direct state regulatory agencies and purchasers to advance interoperability through contracting and rulemaking within each regulator’s or purchaser’s purview. Generally, state agencies can promulgate regulations and establish policies within the scope of their authority on relevant matters, and an executive order can help enable consistent rulemaking across agencies. The pro of this approach is that an enforced, statewide directive via executive order with accompanying incentives would likely have a broad impact—and it can be done quickly, requiring only the governor’s signature. On the con side, a directive can have a negative impact on the trust between government and HIE stakeholders, especially if it is developed without broad stakeholder input.
- Legislation. State legislatures have the authority to require payers and providers to meet interoperability requirements by enacting legislation. The pro is that legislation gives implementing state agencies clear authority to take action and applies to all regulators and purchasers. The con is that any legislation imposing requirements on health plans or providers would encounter significant debate in the legislature and subsequent reviews by legislative committees before becoming law—and also requires the governor’s signature. In addition, legislation would need to be accompanied by enforceable, meaningful incentives or penalties in order to have a significant impact on the market.
Regardless of the levers deployed, it is critical that states establish an accompanying measurement and reporting process and infrastructure to set a baseline, track progress against targets and inform how policymakers can adjust or craft levers to ensure progress. Measurement and reporting are important to evaluating the progress of HIE adoption, increasing transparency and identifying strategies that are working and may be scaled up, as well as strategies that aren’t effective and can be modified or eliminated.
Lessons Learned From States
States that have been most successful in advancing HIE have played an active role in convening stakeholders and using public policy to articulate expectations for payers, providers and HIOs. Examining the efforts, policy and market levers, and results of five states—Florida, Maryland, Michigan, Minnesota and North Carolina—yields many important lessons.
States that have been most effective in advancing HIE have coupled state policy with financial incentives and stakeholder collaboration. In the states studied, none of the policy levers guaranteed widespread HIE adoption when employed in isolation.
Minnesota enacted EHR and HIE legislation that furthered EHR adoption but failed to facilitate cross-network HIE likely due to its failure to include compliance incentives or penalties. Maryland’s regulation has resulted in universal HIE participation among hospitals, but participation rates are lower among ambulatory providers who fall outside the regulation. Florida has used contracting requirements to boost participation in its encounter notification system (ENS) and direct messaging use cases, but it has struggled to galvanize stakeholders for broader utilization.
North Carolina and Michigan have supplemented state policy with additional supports to garner broad HIE participation among a balanced group of stakeholders. In both states, the largest commercial Blue Cross Blue Shield plans have provided private sector support for advancing HIE. North Carolina’s legislation has been furthered by state efforts to provide funding for providers who may struggle with the cost of complying with its requirements. Michigan’s success in advancing HIE has been facilitated by its collaborative and transparent approach, as well as effective use of managed care organization (MCO) contracting to require and incentivize HIE adoption.
There are many public policy and market levers available to advance HIE. A consistent theme in more successful states is the use of a multitude of levers that align the business interests of payers and providers. By coupling strong state leadership with sound public policy, leveraging state and private purchasing power, and aligning private payer programs with interoperability goals, some states are finding they can move the market toward more systemic information exchange. These states also have sustained their efforts for a decade or more and recognize that one-off policy directives are not sufficient to get the job done.