Regional Health Information Organizations: Business, Organizational and Legal Issues

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Regional Health Information Organizations
Business, Organizational and Legal Issues
AHRQ Annual Meeting June 9, 2005
manatt manatt phelps phillips
William S. Bernstein, Esq. wbernstein_at_manatt.com (
212) 830-7282
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Table of Contents

• Realities
• RHIOs Emerging Policy Issues
• RHIOs Emerging Business Plans
• Emerging Models for Advancing HIT/HIE
• RHIOs Financing, Formation and Governance
• RHIOs Lessons From The Field

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Realities

• Framework for Strategic Action Issued but Federal
  Agenda Still Emerging
• NHIN Waiting to hear federal response to
  submissions
• RHIOs Still nascent concept with great variation
  as to mission, goals and technology plans
• If you have seen one RHIO, you have seen one
  RHIO
• Funding Sources are Scarce, Especially for Early
  Development Stage, But Some Notable Exceptions
• Big Question Whether Potential Benefits of
  HIT/HIE Can Overcome Competing Agendas and
  Priorities

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RHIOs Emerging Policy Issues

• No Federal guidelines at this point, but likely
  to emerge in the next several months field will
  evolve over time
• Federal definition of RHIOs like to focus on four
  areas
• Public Trust
• Harmonization of State/Local Privacy Issues
• Security
• Aligned Financial Incentives

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RHIOs Emerging Policy Issues

• Key issues to be defined with respect to RHIOs
• Geographic coverage
• Requirements regarding numbers of
• stakeholders/definition of community
  project
• Relationship to National Health Information
• Network (NHIN)
• Tax status of an entity
• Availability of Federal funding
• Certification/Accreditation
• Requirements in Federal Contracts
• State role in defining RHIOs

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RHIOs Emerging Policy Issues

• Federal role likely to be permissive encouraging
  innovation in marketplace, while seeking to
  promote federal goal of interoperability through
  National Health Information Network

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RHIOs Emerging Business Plans
Regional Health Information Organization
RHIOs are regional entities which support the
development, implementation and application of
secure health information exchange
Information Technology
Clinical Process Improvement
Financing
Regulatory Decisions
Public Relations
Incentives
Consumer Participation

• Privacy and security standards
• Operating standards
• Core data set
• Clinical protocols
• Data use rules

• Capital

• Performance goals
• Incentive structure
• Coordination of payers and employers

• Marketing Strategy
• Communication Plan
• Website management
• Media management
• Performance publication

• Development
• Operations
• Security
• Training
• Support
• NHIN Compliance

• Clinical Guidelines
• Operations
• Implement
• Training
• Support

• Patient advocacy
• Patient involvement strategies

Potential Outsource Partners exist
Source HealthAlliant
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RHIOs Emerging Business Plans

• CareSpark (Tennessee)
• Indiana
• Massachusetts

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What Is CareSpark?

• CareSpark is a not for profit organization commit
  committed to better health in the central
  Appalachian region through collaboration,
  innovation, and wise use of health information
• 10 year history of health improvement projects
• Regional leaders concluded major improvements
  require regional health information exchange
  (HIE)
• 2 ½ years on current project 600,000 raised in
  9 months
• Filed for 501c3 not for profit status

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CareSpark Tactical Plan

• To address health issues, we propose to provide
  technical capability and encourage clinical
  process improvement in the following areas
• Prescription Medication
• Diagnostic (lab, imaging) Services
• Preventive Medicine (immunizations / screenings)
• Chronic disease management

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Regional Economic ImpactAverage of First Three
Project Years
Conservative Projections
CareSpark will help reduce unnecessary spending
through coordinated regional programs and
equitably share savings among participants and to
fund operations.
260 M
48 M
Source CareSpark
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Indiana Health Information Exchange
Data access and use
Data management

• Results delivery
• Secure document transfer
• Shared EMR
• Credentialing
• Eligibility checking

Hospitals
Payers
Hospital

• Results delivery
• Secure document transfer
• Shared EMR
• CPOE
• Credentialing
• Eligibility checking

Physicians
Health Information Exchange
Labs

• Results delivery

Labs
Data repository
Network applications

• Surveillance
• Reportable conditions
• Results delivery

Public health
Outpatient RX
Payer

• Secure document transfer

Payer
Physician office

• De-identified, longitudinal clinical data

Ambulatory centers
Public health
Researchers
Source IHIE
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Massachusetts Pilot Project in
3 Communities
Management coordination

• Joint oversight and decision-making bodies
• Structure, composition, process

Evaluation/ transformation

• Quality measurement
• Pilot evaluation
• Transformation models

• Quality
• Cost
• Productivity
• Etc.

Intra-community connectivity
Connectivity

• Clinical access to data
• Data gathering and aggregation
• Communication

• Hardware/software
• Implementation/tech support
• Systems integration
• Workflow redesign
• Decision support

Clinical IT implementation/ support
Source MAeHC
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Emerging Models for Advancing HIT/HIE

• Grassroots
• Convener
• Catalyst
• Operator

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Emerging Models for Advancing HIT/HIE

• Grassroots
• No Statewide, Coordinated Effort
• Driven entirely at local level truly allow a
  thousand flowers bloom
• Examples
• Connecting for Health
• AHRQ Patient Safety and HIT Grantees

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Emerging Models for Advancing HIT/HIE

• Convener
• Essential Tasks Educator, Convener, Information
  Clearinghouse, Researcher
• Examples
• North Carolina Health Information and
  Communications Alliance
• MAShare
• Maryland
• Florida

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Emerging Models for Advancing HIT/HIE

• Catalyst
• Essential Tasks Facilitate financing, provide
  technical assistance and project development
  support to spawn regional initiatives
• Examples
• Under consideration in New York
• Kentucky
• Health Tech/Manatt Report Spending Our Money
  Wisely Recommendations

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Emerging Models for Advancing HIT/HIE

• Operator
• Essential Tasks Create financing vehicle and
  build infrastructure for information exchange
• Examples
• Indianapolis Regenstrief Institute
• Massachusetts eHealth Collaborative

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RHIOs Financing, Formation and Governance

• Reviewing legal options necessitates a
  multi-faceted process involving an analysis of
• The key business decisions that first need to be
  made in order to define the organizations
  mission and scope
• The range of options facing the organization
  relative to
• Governance Structure
• Tax Status of Legal Entity
• Terms and Conditions of Participant Agreements

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RHIOs Financing, Formation and Governance
Medical Knowledge
100
Treatment
50 of Cost 20 of Return
Diagnostic
Redundancy
Patient Data
Errors
EMR
HIE
CDS
Source SBCCDE, CITL, Gordian Project analysis
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RHIOs Financing, Formation and Governance
Private Payers Medicare Medicaid Self-insured Self
-pay
Physicians
Ambulatory Computer-based Physician Order Entry
Source Center for Information Technology
Leadership, 2003
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RHIOs Financing, Formation and Governance
Source HealthAlliant
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RHIOs Financing, Formation and Governance

• Classes of Membership -- Categories of
  interested participants (e.g., institutional
  providers, physicians and medical groups, other
  clinicians, managed care companies and insurers,
  local employers, public health agencies, public
  representatives) could be divided into classes
  and represented on the governing body by one or
  more representative members.
• Restrictive Membership -- The governing body
  could consist of a limited number of members of
  diverse backgrounds chosen because of their
  leadership skills and standing in the community,
  their ability to articulate the views of various
  constituencies yet rise above those interests in
  determining the future of the project, etc.

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RHIOs Financing, Formation and Governance

• Virtual Model -- No new legal entity is formed
  rather, the project is operated under a
  contractual arrangement via (a) a hub-and-spoke
  format (see e.g., original Santa Barbara design),
  or (b) a single agreement among the participating
  parties (see e.g., original Indianapolis design).
• Non-Profit Corporation Model -- A non-profit
  corporation is formed to be the development
  and/or operating company for the project. It
  could be organized to qualify as a 501(c)(3)
  tax-exempt organization or it could be a taxable
  non-profit. It could have only a governing
  board, or it could have "members" (comparable to
  stockholders) who elect the governing board
  and/or have the right to vote on certain (but not
  all) matters affecting the corporation/project.

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RHIOs Financing, Formation and Governance

• For-Profit Corporation Model -- A for-profit
  corporation is formed to be the development
  and/or operating company for the project. The
  corporation would have stockholders (who could
  consist of one or more classes - representing
  different levels of "investment", with different
  voting rights), who would in turn elect the
  members of the board of directors.
• Limited Liability Company Model -- A limited
  liability company is formed to be the development
  and/or operating company for the project. The
  operating agreement for the company would provide
  who holds what economic interests in the entity
  and their respective rights, as well as the role
  of a governing body (if any) distinct from the
  equity owners.

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RHIOs Lessons from the Field

• Importance of Leadership and Creating Shared
  Vision Among Key Stakeholders
• Organization of Project - Needs to be
  interdisciplinary and inclusive
• Clinical
• Legal/Organization
• Financial
• Technology
• Communications
• First step is creating strategic business plan
  this will drive all future steps
• Structure of organizational vehicle may minimize
  legal complexity - multi-stakeholder
  not-for-profit structure, with independent
  decision making body, will significantly reduce
  concerns regarding fraud and abuse and antitrust

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RHIOs Lessons from the Field

• State law privacy issues may present larger
  hurdles to project than HIPAA
• Largest and most complex issues involve
• Defining role of RHIO as compared to and in
  relation to role of stakeholders contracting with
  the RHIO
• Creating financing plan for the project Think
  of financing as occurring in three stages
• Planning
• Development
• Operations
• Note RHIO may enable financing of certain
  information technology investment by outside
  entities this capital/operating cost will be
  borne by the outside entities, not the RHIO
  itself.

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Conclusion

• We are almost out of tricks here. The only
  thing left is to reduce the illness burden on
  society. Eliminating errors in the healthcare
  system through HIT is the best way to do that.
• -Anonymous Commentator