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Federal Financial Participation for HIT and HIE

HITECH Administrative Funding

Funding for some state Health Information Exchange (HIE) activities is already available to states through the Medicaid Electronic Health Records (EHR) Incentive Program as authorized by the American Recovery and Reinvestment Act of 2009 (ARRA) at the 90% match rate through 2021. Within the parameters set by State Medicaid Director (SMD) Letter #11-004 and SMD Letter #10-016, states may request 90/10 Health Information Technology (HITECH) administrative funding for a wide range of HIE activities that support providers' adoption and meaningful use of EHRs. For additional information, refer to the Frequently Asked Questions related to this topic. The map below represents states that have HIE Implementation Advanced Planning Documents (HIE IAPDs) approved or are in first time review process.

50 States and Territories with HIE IAPDs Approved or in the First Time Review Process

Territories with HIE IAPDs Approved or in the First Time Review Process  Alabama: Approved, Alaska: Approved, Arizona: Approved, Arkansas: Approved, California: Approved, Colorado: Approved, Connecticut: Approved, DC: Approved, Delaware: Approved, Florida: Approved, Georgia: Approved, Hawaii: Approved, Idaho: Approved, Illinois: Cancelled Indiana: Approved, Iowa: Approved, Kansas: Approved, Kentucky: Approved, Louisiana: Approved, Maine: Approved, Maryland: Approved, Massachusetts: Approv

CMS is able to provide funding for state administrative activities related to the development of core HIE services (e.g., designing and developing a provider directory, privacy and security applications, and/or data warehouses), public health infrastructure, electronic Clinical Quality Measurement (eCQM) infrastructure, and provider on-boarding. CMS cannot provide enhanced funding for operations and maintenance costs under this authority, nor can CMS provide funding for any activities that do not directly support the Medicaid EHR Incentive Program. Below is a summary describing which HIE benefits and functions states have elected with approved IAPDs. Some states have elected multiple activities. 

Approved HIE/IAPD Activities Number of Participating States*
Onboarding Providers 49
Public Health 49
HIE Infrastructure 49
HIE Services 48
Planning 48

*Updated data as of March 2021

Please note that states requesting for funding under this authority must adhere to the fair share and cost allocation principles, as outlined in SMD Letter #11-004. HIE infrastructure often benefits entities both inside and outside of the Medicaid enterprise, and CMS' share of the cost as funded under this authority must be limited to the benefit derived by the Medicaid eligible providers and the state's Medicaid EHR Incentive Program.

States must submit to CMS how they will sustain the activities initially funded by Medicaid HITECH. Below is a list of strategies states have reported to CMS.

Approved Sustainability Approaches Number of Participating States*
Provider Subscriptions 35
Payor Subscriptions 31
State Funding 31
Grants/Donations 19
Other/NA 31

*Updated data as of March 2021

For more information on opportunities to receive HIE funding through the Medicaid EHR Incentive Program, please review these FAQs or reach out to your regional CMS HITECH contact.

Medicaid Management Information System or Eligibility and Enrollment System Funding

Some of the HIE IT functionality described above as potentially eligible for HITECH administrative FFP may in some cases be more appropriately funded by MMIS or E&E Federal financial participation, also at a 90 percent match for design and development costs. As long as the HIE work using MMIS or E&E funding meets the Standards and Conditions, on-going maintenance and operations funding is available at a 75 percent match rate, unlike HITECH. States can leverage these existing CMS funding authorities to build out master person indexes, provider directories, identity proofing and management, etc. within their Medicaid/CHIP systems enterprise, or to allow patients to download their claims and/or clinical data that are housed in the states’ MMIS. This latter function is sometimes referred to as a Blue Button service, in reference to the service provided by the U.S. Department of Veterans Affairs that gives veterans access to their electronically-stored personal health information.

Under 42 CFR 433 Subpart C and the State Medicaid Manual Part 11, MMIS funding is available for clinical decision support functionality that ties directly to the state’s MMIS to reduce cost and improve outcomes. As such, states may request funding to build or enhance functionality that will provide patients with their data housed in the MMIS. However, please note that MMIS funds are not allowable for infrastructure outside the MMIS environment and for either MMIS or E&E funding, cost allocation with other entities accruing benefit is still required.

Opportunities to Integrate HIE into State Insurance Marketplaces

For states building or operating a state-based health insurance marketplace, there is an excellent opportunity to integrate HIE functionality and utilization into the new eligibility systems and consumer-facing portals. Several states are leveraging their health information exchange entities’ provider directories to support the plan, compare and selection functionality on the consumer portal. To further enhance the plan comparison and provider directory utility to consumers, an indicator of whether or not a provider has demonstrated meaningful use of EHRs and participates in HIE for coordinated care could be included to help with consumer decision-making. 

An additional bridge between the insurance marketplace and HIE worlds would be to provide the link to consumers gaining insurance coverage to existing HIE entities, perhaps those that support a personal health record or that could encourage their consent to share their information within their provider network. Or as referenced above, to inform the newly eligible Medicaid beneficiary about the state’s blue button options to download their claims history. In sum, the goal of the new marketplaces and enhanced Medicaid and CHIP E&E systems is not just to enroll more individuals in health coverage but to use health insurance coverage as a tool to provide access to high quality and well-coordinated health care for overall improved personal and population health outcomes. Considering the role of HIE in states’ efforts to provide health insurance coverage to more eligible individuals ensures that the new demand for care will be met by a technology-supported supply of care providers.

Other CMS Opportunities

While the above mentioned approaches are specific to existing Medicaid authorities, states are highly encouraged to engage with CMS on other opportunities to further build infrastructure and polices that drive health information exchange utilization. States can leverage opportunities like State Innovation Model (SIM) grants and Demonstration Grant for Testing Experience and Functional Assessment Tools (TEFT) to further expand health information exchange capabilities where our current policies are limited. CMS will continue to work with states as these opportunities become available.