There is a very significant funding opportunity for State Medicaid Programs, which can support use of health information technology by health care providers that provide care to Medicaid recipients and those who may exchange information with Medicaid providers eligible for Meaningful Use incentives. It may also benefit technology developers that are engaged in health information exchange efforts.

On February 29, CMS released a letter to State Medicaid Directors expanding the scope of available federal funding at the 90 percent matching rate under the Health Information Technology for Economic and Clinical Health (HITECH) Act of 2009 for state expenditures on activities to promote health information exchange (HIE) and encourage the adoption of certified Electronic Health Record (EHR) technology by certain Medicaid providers. This can provide significant financial resources for providers who are not eligible for the CMS EHR Incentive Program (the “Meaningful Use Program”).  CMS states that they will look favorably on collaborative efforts that support interoperability.

Subject to CMS prior approval, States may be able to claim 90 percent HITECH match for expenditures related to connecting eligible providers to other Medicaid providers, if this will help the eligible providers demonstrate Meaningful Use. The types of providers include: behavioral health providers, substance abuse treatment providers, long-term and post-acute care providers, pharmacies, laboratories, correctional health providers, emergency medical service providers, public health providers, etc. These funds are not available for the costs of actually providing EHR technology to providers or supplementing the functionality of provider EHR systems, but can enable be used to provide some services and connectivity for these providers.

Some examples of use of these funds include:

  • On-boarding Medicaid providers to HIEs or interoperable systems,
  • Costs related to the design, development, and implementation of infrastructure for several HIE components and interoperable systems, including provider directories, secure electronic messaging, query-based HIE, and encounter alerting.

CMS explicitly encourages and welcomes multistate collaboratives that partner on shared solutions for HIE and interoperability. CMS states it will aggressively support such collaboratives as potentially cost-saving opportunities to increase adoption of interoperability standards and help eligible providers demonstrate Meaningful Use. Clearly, these efforts will need to involve health care providers and health information exchange organizations or other entities that facilitate the exchange of health information.