Health IT Activities at the State Level

August 2006

States have demonstrated a range of preferences and approaches when integrating health IT (HIT) activities in their policy agendas. During 2006, at least twenty-nine state legislatures introduced or passed legislation related to the use of HIT. The next few years promise to be particularly important in the development of state-level elements in HIT. States are looking to HIT to improve quality and safety in the health system and the efficiency and effectiveness of their own health-related operations. They also are an important part of nationwide HIT strategies. NCSL activities in support of state legislative decision-making about HIT will now be served by NCSL’s Project HITCh – Health Information Technology Champions.

This report is a preview of future HITCh products, which will respond to state legislators’ interests and concerns related to HIT and speed the flow of ideas to and among states. This report identifies key HIT issues and current state-level policy activities.

HIT Planning/ Start-up

State legislatures have directed agencies to conduct studies and funded new projects to explore how the state can lead in this area. In addition to HIT planning, legislators in some states have considered measures that set and enforce HIT standards, use HIT to enable markets, and include HIT as a central feature of comprehensive health reform. In some states, the Governor’s office has led HIT activities. In at least ten states, the Governor has issued an executive order related to HIT.

Many national decisions that will affect the shape of HIT are still being determined. States have been engaged in a parallel process of planning and experimentation. State roles in HIT planning include the following:

Start-up Funding. At least seventeen state governments are funding programs to examine how HIT may be used or implemented. Examples include AZ, DE, FL, HI, IA, KA, KY, LA, ME, MI, MN, NH, NM, NY, OH (Medicaid only), WV.
Building infrastructure. At least ten states are facilitating a statewide regional health information organization (RHIO) through a committee or agency. Examples include AK, CA, DE, FL, IA, KY, ME, MI, RI, and WV.
Studies. Some states have initiated planning projects such as an examination of the cost / benefit of electronic medical records (EMRs) or a HIT and infrastructure advisory committee, but have not taken legislative action. Examples include AZ, MD, MN, VA, WI, and WY.

The federal government has stimulated and supported this activity. In 2004, groups in thirty-eight states received grants from the Agency for Healthcare Research and Quality (AHRQ) for planning and implementing projects that demonstrate the value of HIT in terms of patient safety and quality of care. More information is available at: http://www.ahrq.gov/research/hitfact.htm.

Security and Privacy Issues

In response to concern that personal information should be provided reasonable security when owned or licensed by a health care organization, state legislatures have passed legislation related to an individual’s right of privacy, protection against identity theft and security breach, destruction of documents containing personal information, the use of encryption and redaction processes, social security number (or other identifier) protection, and prescription fraud. State laws often go beyond the privacy protection offered by federal law under HIPAA.

At least six states (AZ, MA, MI, RI, VA, VT) require disclosure of security breaches related to HIT. In these states, notification of affected individuals as well as law enforcement is required when unauthorized acquisition or access to personal information occurs in HIT systems.

Thirty-four states and U.S. territories are participating in a federally funded partnership effort to address privacy and security issues concerning health information exchange (HIE), the Health Information Security and Privacy Collaboration (HISPC.) More information on HISPC is available at: www.rti.org/hispc.

HIT Financing

In addition to start-up funding, states are considering how HIT efforts will be sustained. States are looking at strategic ways to leverage their spending on health care programs--including medical assistance, employee health benefits, and public health--to finance HIT. With the aims of addressing rising health care costs and improving quality of care, states have provided funds to HIT programs through appropriations, grants and contracts, and have developed tax incentives for users of HIT.

In addition to initial investments in HIT described above, state roles in HIT financing include the following:

Developing tax incentives. Many states are considering changes in the payment system because providers now bear most of the cost for HIT, whereas benefit is shared with many other groups. At least three states are addressing this misalignment of incentives by investigating the feasibility of tax incentives to encourage providers to invest in HIT. Examples include KY, CA, ME.
Funding local HIT programs through state grants. Seventeen states are providing funds for HIT and HIE through a state grant or contract program (eHI, 2006)

HIT in State Medicaid Programs

Encouraged by the Centers for Medicare and Medicaid Services (CMS) to explore creative uses of HIT in their Medicaid and SCHIP Programs, states are introducing and passing legislation related to HIT in state Medicaid programs. More information on CMS’ Quality Practices is available at: http://www.cms.hhs.gov/MedicaidSCHIPQualPrac/. Many states are including HIT among Medicaid reform initiatives and state Medicaid agencies are increasingly playing lead roles in advancing HIE in their states.

The following approaches are being used to promote HIT in state Medicaid programs:

Updating Medicaid technology. States often have large legacy systems that manage administrative data in their Medicaid programs. While these systems may have the potential to be platforms for data exchange, their sunk costs and structures are just as likely to be obstacles. Some states are updating their Medicaid HIT systems so as to integrate financial and program management with patient care. OH is an example.
Engaging Medicaid in HIE. In many states, the organization, committee, or agency facilitating HIE includes a representative from the state Medicaid agency among other stakeholders. Examples of states that have proposed or enacted this include AK, CA, FL, IA, KY, SC.

HIT and Transparency

Many legislatures see HIT as a tool for making information on price and quality more transparent. States can assist in collecting, analyzing and disseminating data that is collected through connected systems.

State roles in advancing transparency through HIT include:

Establishing health data centers. Health data centers collect, compile, analyze, disseminate, and otherwise use health-related data. Such centers make the results of special health surveys, health care research, and health care evaluations available for the public. In FL and MA, for example, a state agency is given the responsibility of setting up this center.
Creating health data websites. States are providing consumers with the means to compare health care services, such as pharmaceuticals, physicians, health care facilities, and health plans, by making health care quality measures and financial data publicly available online. Examples include CA, FL and MA.
Reporting on quality. A growing number of states are publishing data on hospital acquired infection (HAI) rates and adverse events on the websites of state agencies, in order to make this information available to providers, purchasers and the public.

For more information about NCSL HITCh, Contact Kala Ladenheim, Program Director at Kala.ladenheim@ncsl.org

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