HHS Offers Grants For Health IT InfrastructureHHS Offers Grants For Health IT Infrastructure

Healthcare Innovators

The Department of Health and Human Services (HHS) will offer competitive funding opportunities for states to design and implement IT infrastructure needed to operate health insurance exchanges (HIEs).

Dubbed Early Innovators grants, the competitive initiative will reward states that demonstrate leadership in developing cutting edge and cost effective consumer-based technologies and models for insurance eligibility and enrollment for exchanges.

HHS announced the program late last week and said the effort is intended to help create a simpler, consumer-oriented system for individuals, families, and businesses to sign up for the health insurance plan that they choose.

The state-based exchanges, which are scheduled to be operational in 2014, will require the development of a robust health IT infrastructure that will support secure websites where eligible consumers and small businesses can compare health plans as well as purchase health insurance coverage.

All states, including recipients of the award, will be eligible to apply for a future funding opportunity, to be announced in February, that will support ongoing exchange implementation.

"States are focused on implementing the health insurance exchanges because they know the exchanges will empower their citizens by forcing health insurers to compete," HHS secretary Kathleen Sebelius said in a statement. "Consumer-friendly information technology is the backbone of that effort, which is why we are creating an incentive for states that are willing and able to lead the way to do so."

Slideshow: Who's Who In Healthcare IT

Two-year grants will be awarded by February 15 to up to five states or coalitions of states that have ambitious yet achievable proposals that can yield IT models and best practices. These states will lead the way in developing consumer friendly, cost-effective IT systems that can be adopted by other states and can help all states and the federal government save money as they develop these competitive marketplaces.

Funding, which will vary based on states' proposals, will provide necessary resources to develop and establish the most innovative systems that meet consumer and employer needs in a cost effective manner, HHS officials said.

"States are developing cutting-edge innovative systems to deliver cost-effective and consumer friendly care to families and small businesses," said Joel Ario, director of the Office of Consumer Information and Insurance Oversight (OCIIO) office of health insurance exchanges, in a statement. "By encouraging and rewarding states for their innovation, we can build and leverage models that can be adopted and tailored by other states and generate taxpayer savings across the board."

According to HHS, a strong IT infrastructure will be critical to the success of state exchanges and work is already underway to design and implement them across the country. As states prepare, they have requested early funding assistance to develop the right IT, particularly with respect to eligibility and enrollment systems. Funding will be directed to states that are willing and able to lead the race to develop IT systems.

The Early Innovators grants program builds upon other funding measures that HHS has recently announced. In July, $51 million was made available to help states build new competitive HIEs. That was followed at the end of September with a further $49 million that HHS said would go toward helping 48 states and the District of Columbia plan for the establishment of HIEs.