State to lose $2 million in stimulus money after health information exchange money shuts down

The state's health and human services department, which received a $6 million stimulus grant more than three years ago, is leaving a third of that money on the table after an information exchange shut down Friday.

The Nevada Health Information Exchange, which had spent a portion of that money ($1.3 million) on a vendor and other costs, voted to close because of an inability to raise significant matching funds. Another $3 million was spent by the DHHS on other programs, Director Mike Willden said Monday, but the grant expires next week, so about $2 million will not reach a state that consistently has been underfunded health and human services needs.

Although the NV HIE is distinct from the Silver State Exchange, erected in response to the Affordable Care Act, it was supposed to integrate with the Obamacare site in providing information to customers.

"The impact is going to be a void in the health care marketplace," NV HIE CEO David LaBarge told me this morning in confirming the 4-2 vote on Friday. Although there is another information site run by a nonprofit with ties to health care goliath United Health, that one cannot claim to be an independent aribiter as NV HIE (the site is down) would have been.

But Willden said that is not so, that he has to decide whether to contract with the other site, Healthy Nevada, or take the information site in-house. "They (NV HIE) need operating cash," Willden said. "We offered them subgrants (for relatively small amounts of money), but they turned us down."

(I sensed some tension/fingerpointing between the state-sponsored nonprofit and DHHS.)

Nevada lawmakers embraced the idea for the electronic records exchange in 2011 with legislation and the Department of Health and Human Services has been the repository of the American Recovery and Reinvestment Act money. 

NV HIE was supposed to provide a portal whereby providers at all levels from emergency room to primary care to specialist to hospitals could enter records, and any provider that needs to know medical history, with permission, can pull it up. HealthInsight, helped by United Health, got its site up first but it is not as multifarious as the state's was supposed to be -- and not quite independent, either, albeit a nonprofit.

The NV HIE folks were charged with raising $1.3 million in matching funds by next week, but only had $300,000 so far. "The board pulled the plug because of concern about the match," LaBarge told me.

Jane Holman of NV HIE informed me via email that the feds "denied several requests from us/NV DHHS to extend the timeframe in which we could raise our $1.3 million in match," which Willden confirmed.

Holman is sensitive to the confusion with the ACA, so when I raised it, she responded: "This is not a failure of Obamacare in the state. In fact, we would have provided a conduit whereby that site could have used our system to ensure that health data was immediately available and maintained in a secure way."

Indeed, the ARRA grant was approved in 2009, and the ACA wasn't passed until 2010. But by the time the Legislature passed the enabling legislation, both were on the books.

This is a big blow to the state and to health care consumers, and that money is down the drain.