Procurement in the State HIE Program

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Procurement in the State HIE Program
June 28, 2011
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Contents

• General Vendor Management Concepts
• Planning for Procurement
• Executing a Procurement
• Managing a Vendor Contract
• Closing a Vendor Contract
• Common Contracting Needs and Requirements by SO
  Plan Model

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GENERAL Vendor Management CONCEPTS

• Vendor Management Basics

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Services Available for Procurement

• This resource brings up issues relevant to HIE
  related services being procured that may be
  useful to you
• HIE products and services.
• Consulting services. These services may be
  beneficial if you would like additional advice or
  expertise during a particular task or piece of
  work (e.g., strategic planning, developing a
  community outreach program, or writing/developing
  an RFP)
• Service providers. Service providers (e.g.,
  HISPs) provide services around communication,
  storage, or processing. These can ensure that
  HIE, or one particular HIE element, runs smoothly
• Implementation entities. These entities would
  focus on implementing your HIE strategy. This
  might include running or maintaining HIE services
  in your state, selecting vendors for HIE work,
  become the governance entity, and more

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Why Release a Request?

• Federal and State regulations require competitive
  bids under most circumstances
• Developing all necessary HIE components and
  services in-house may not be feasible or
  realistic
• Contracting with a vendor may be the best option
  for states to achieve their HIE objectives.
  There are three main types of requests that will
  help you find a vendor
• Request for Information (RFI)contract isnt
  implied
• Request for Quote (RFQ)to get price quotes from
  prospective vendors
• Request for Proposal (RFP)specifies a scope of
  work that needs to be performed and asks for
  vendor proposals (including pricing)

Time constraints Technical resources
Budget constraints Legal or cultural constraints
Human resources constraints Development doesnt fit with states overall strategy
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RFP Reminders!

• Your RFP (and eventual contracts) should match
  with your approved Strategic and Operational Plan
  strategies and available funds
• The more you can clarify what you want, the more
  detail vendors can provide around how they would
  achieve your goals. At the very least, an RFP
  should clearly identify
• A statement and scope of work
• Specifications, schedules, and deliverable
  timelines
• Contract type
• Data requirements
• Vendor eligibility criteria
• Terms and conditions, description of services,
  and evaluation criteria
• Have a clear and defined scope. An RFP without
  an identified scope will lead to poor outcomes
  and a vendor that may not match your needs. In
  order to choose the best possible vendor, you
  must know exactly what you are looking for and
  have a strategy for getting there

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Comparing Request Types
Request Type Benefits Drawbacks
Request for Information (RFI) Least formal of the three, has the smallest amount of commitment Used to learn more about a market of products or services, usually used for information to develop an RFP Easiest to complete Yields the least comprehensive amount of information Will not usually end in a vendor selection
Request for Quote (RFQ) Simpler to complete than an RFP Helpful option for a defined piece of work for small dollar amount and limited time Used to complete simple tasks Only valid for a certain period of time Cannot be used to contract for robust work
Request for Proposal (RFP) Best option for robust needs Yields the most comprehensive and detailed information of the three - Requires the most time and resources to develop
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Choosing a Contract Type

• Depending on what you need from your vendor,
  there are several types of contracts for you to
  choose from
• Fixed Price Contracts.
• Cost Reimbursable Contracts
• No Cost Contracts
• This is not the full range of contract types
  each contract has several sub-types that can
  provide additional incentives or prioritize
  certain project metrics
• Given the complexity of your HIE needs, you may
  also want to consider two types of awards
• Single award
• Multiple award

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Fixed Price Contracts

• Fixed-Price Contracts Involve setting a fixed
  total price for a defined HIE product or service
• Firm Fixed Price Contracts (FFP) - Most commonly
  used contract type, favored because the price is
  set at the outset and wont change unless the
  scope of work changes
• Fixed Price Incentive Fee Contracts (FPIF) -
  Gives more flexibility to the state and vendor
  because it allows for performance deviation and
  ties financial incentives to achieving certain,
  defined metrics
• Fixed Price with Economic Price Adjustment
  Contracts (FP-EPA) Used whenever the vendors
  performance period spans a considerable period of
  years. It has provisions allowing for inflation
  changes or cost increases/decreases for specific
  commodities

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CostReimbursable Contracts

• Cost-Reimbursable Contracts Involve payments to
  the vendor for all legitimate actual costs
  incurred from completed HIE work
• Cost Plus Fixed Fee Contracts (CPFF) Vendor is
  reimbursed for all allowable costs for performing
  the contract work and receives a fixed fee
  payment calculated as a percentage of the initial
  estimated project costs
• Cost Plus Incentive Fee Contracts (CPIF) Vendor
  is reimbursed for all allowable costs for
  performing the contract work and receives a
  predetermined incentive fee based on achieving
  certain performance objectives identified in the
  contract
• Cost Plus Award Fee Contracts (CPAF) Vendor is
  reimbursed for all legitimate costs, but the
  majority of the fee is only earned based on the
  satisfaction of certain broad subjective
  performance criteria defined in the contract
• Revenue Sharing Contracts (RSC) Vendor is
  reimbursed through revenue sharing where revenue
  and financial payouts, after expenses, are
  distributed based on pre-determined proportions
  as defined in the contract.

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NoCost Contracts

• No-Cost Contracts Where a vendor provides
  services to the state in exchange for fees
  collected from third parties. Examples may
  include
• Vendor provides HISP services in exchange for
  service fees from providers
• Vendor runs the HIE entity in exchange for data
  fees from payers
• For a short period, grantee pays fees to vendor
  for running the HIE entity, but data fees
  transition to users
• It is extremely important that you consider
  possible conflict of interest concerns or
  perceptions before signing a No-Cost Contract
• Even though a vendor will be running certain
  services, you must not lose sight of your
  objectives and your responsibilities

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Comparing Contract Types
Contract Type Possible Uses
Fixed Price Contract Good for ensuring contract will not exceed a budgeted amount Could be used for the majority of HIE needs and services
Cost Reimbursable Contract Should be used if state doesnt have a good estimate of the work and wants to ensure it isnt overpaying for the service If offering the vendor a portion of the profits as an option under this model, it could be a way to reimburse the vendor against future revenue
No Cost Contract Vendors are reimbursed through third-party fees Could be used when procuring for a HISP or HIE entity
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Single vs. Multiple Award Contracts

• Single-Award Contract (i.e., Single Source) A
  contract where several vendors can supply the
  technology or perform the services needed, but
  only one is selected. This vendor will then be
  the only one that can receive orders under the
  contract.
• Multiple-Award Contract A contract addressing
  various needs and factors, necessitating the
  award to more than one vendor. Multiple vendors
  will then receive orders under the contract.
• When choosing between single- and
  multiple-awards, consider
• Do you have time and resources to compete
  multiple RFPs if the awards are ultimately going
  to different vendors?
• How complicated are your vendor needs?
• Do your procurement needs require several, very
  specific skill sets or are they more general?
• Does your Agency have the resources to be able to
  manage several vendors at once?
• Are the products or services such that continuous
  competition between selected vendors will help
  keep state costs down?

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Contract Reminders!

• A great deal of your contract language
  (especially Terms and Conditions) may be mandated
  by state or agency regulations, it is important
  that you use this language to ensure that
• Your contract meets with state and federal
  guidelines and legislation
• Your contract meets with mandated timeframes for
  approval/renewal
• You are protected from liability issues
• You are protected from vendor protests
• Note This may not apply for SDEs releasing an
  RFP
• For many states, the RFP is considered a part of
  the contract and is legally binding for the
  vendor
• To provide more detail to vendors, utilize
  Special Terms and Conditions in your contract
  to clarify HIE project needs
• If you do not have the internal expertise or feel
  confident selecting a vendor, consider procuring
  additional assistance (e.g., consultants) during
  the RFP process

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State HIE Request and Contracts Examples (1)
State Request Type Contract Type Location Online Scope
CA RFP http//www.caleconnect.org/content/2011/03/Provider_Directory_RFP_Ex_B_Requirements_DRAFT_20110426.pdf Provider directory
CT RFP http//www.input.com/index.cfm?fractalrelatedattachments.act.documents.getfilefordownloaddocID1557889 Domain infrastructure, provider directory, and identity management
NH RFI http//www.input.com/index.cfm?fractalrelatedattachments.act.documents.getfilefordownloaddocID1490978 Statewide infrastructure (both development and maintenance)
MO RFI and RFP Firm-Fixed Price http//dss.mo.gov/hie/action/pdf2010/mo-hitech-rfi.pdf and http//dss.mo.gov/hie/action/pdf2010/rfp_11122010.pdf HIO technological platform
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State HIE Request and Contracts Examples (2)
State Request Type Contract Type Location Online Scope
NC RFP Deliverables-Based Fixed Price http//www.input.com/index.cfm?fractalrelatedattachments.act.documents.getfilefordownloaddocID1448350 RFP for technical services partner
ND RFP Fixed-Price w/Adjustment http//www.input.com/index.cfm?fractalrelatedattachments.act.documents.getfilefordownloaddocID1417681 Statewide HIE
TX RFI and RFQ Firm Fixed Price http//www.input.com/index.cfm?fractalrelatedattachments.act.documents.getfilefordownloaddocID1414646 and http//www.input.com/index.cfm?fractalrelatedattachments.act.documents.getfilefordownloaddocID350394 and http//www.input.com/index.cfm?fractalrelatedattachments.act.documents.getfilefordownloaddocID350395 Local HIE entity and E-Prescribing solution
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Consider Your State Environment

• Do contracts have to be reviewed by other,
  specific agencies/entities?
• Are vendors required to be registered/certified/li
  censed in state databases?
• What is your mandated Request/Contract language?
• Is there any variation among agencies?
• Do you have language around chain or trust,
  otherwise known as flow down language?
• Each state, its procurement rules, and its
  procurement language are different and your
  procurement strategy may depend on your states
  specific environment
• Are you running a transparent, stakeholder-involve
  d process?
• What are your regulations regarding sole source?
• Could you have possible community/stakeholder
  backlash from a sole source procurement?
• Remember that, unless state procurement
  regulations can justify a sole source
  procurement, federal regulations usually require
  competitive bids

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Contract Management Risks

• A significant part of vendor management is
  mitigating risks during the contracting process
  and the period of performance. By defining
  responsibilities of the contractor via service
  level agreements (SLAs) and other contract
  documents, it will ensure that you are protected
  from
• Liability for security or privacy breaches
• Poor quality or late work
• Key project elements that the vendor isnt
  required to complete
• Contested contracts from non-selected vendors

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Planning for procurement

• Preparing for a Successful Procurement

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Planning Procurements Process
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Do Your Research

• Identify your state environment and HIE needs
• Use your approved Strategic and Operational Plan
• Identify your state/agency required language and
  contacts
• Perform a make or buy analysis
• Determines whether particular work can best be
  accomplished by the project team or must be
  purchased from outside vendors.
• Influenced by budget or time constraints
• Solicit stakeholder feedback
• What are your states providers, payers,
  pharmacists, and/or existing HIE entities needs?
• Analyze Vendor Environment
• Identify any particularly active vendors in your
  state/region
• Have you worked with any vendors on HIE before?
• Have you had contracts or agreements with these
  vendors before?
• Clearly define your scope
• Perform a needs assessment for your state
• Set priorities and lay out a phased, multi-year
  strategy to achieve them

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Plan to Write Your Request

• Specify your needs
• Important terms
• Available budget
• Performance objectives
• Identify your states key risks in relation to
  the product or service you are procuring
• For example, what will prevent you from
  supporting Stage 1 Meaningful Use (i.e., ensure
  that all eligible providers/hospitals can meet
  Stage 1 requirements)?
• Addressing white space
• Offering/enabling at least one option to
  participate
• Will this option be scalable and flexible for
  future stages of Meaningful Use?
• Select request and contract type
• Each request and contract fits a different type
  of environment, you should select the combination
  that will best fit your needs

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Write Your Request

• Important elements to include
• Detailed Summary of Need
• Detailed Scope of Work
• Evaluation Criteria and Methodology
• Performance Expectations
• Timelines
• Terms and Conditions
• Special Terms and Conditions
• Desired Vendor Qualifications, Registrations, or
  Certifications
• Administrative/Logistical Information
• Submission Requirements and Deadlines
• Preferred Request Format
• Additional Procurement Guidelines
• Make sure that your final request is in line with
  your approved Strategic and Operational Plan!

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Special Terms and Conditions Examples

• Audit Options
• Contract Acceptance and Cancellation Periods
• Purchasing Preferences (e.g., 40 from Small
  Businesses)
• Contractor and Service Responsibilities
• Contract Renewal
• Subcontracts
• Notifications of Positions Filled or Vacated
• Data Confidentiality
• Treatment of Property and Equipment

• Ownership of Intellectual Property
• Ownership, Proprietary Information, Duplication
  and Disclosure
• Acknowledgement of Publication
• Business-to-Government Contracts and Orders
• Contract Administration
• Method of Payment
• Pricing Schedules
• State government as a reference
• Leasing Fees

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General RFP Evaluation Criteria Examples

• Understanding of project requirements
• Vendor background including financial stability,
  past performance to projects of similar size and
  scope, and references
• Compliance to functional, technical, and
  performance requirements, including Meaningful
  Use core and menu requirements as applicable
• Overall life cycle cost beyond the original
  purchasing price
• Personnel qualifications

• Management approach including how the vendor
  interacts with the organization as well as the
  project timeline and associated deliverables
• Vendors process regarding updates, enhancements,
  or regulatory changes
• Acceptance with contractual terms
• Vendor presentations (if organization has engaged
  in a Orals/Presentation process

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HIE Requirements and Evaluation Criteria Examples
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Review and Issue Request

• Gather stakeholder feedback on final request
  including input from your ONC Project Officer
• Utilize expert judgment to assess procurement
  criteria and other elements of the request
  process
• Identify your Response Solicitation Schedule.
• Due to government regulations, you must issue
  your request publicly
• Remember to be clear on timeframes

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ONC Review of State/SDE Procurements

• ONC requests that RFPs, RFIs and other similar
  procurement documents for HIE products or HIE
  services and also for any sub-recipients of any
  kind be reviewed by the ONC project officer
• To ensure that the procurement aligns with what
  was agreed to in the approved state HIE plans and
  with federal direction/expectations
• Project officers should also be briefed about the
  proposed winning bid before an award is made
• ONC Project Officers do not approve/disapprove
  procurements but provide guidance to ensure state
  is in alignment with federal expectations

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Executing a procurement

• Solidifying Your Vendor Relationship

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Executing Procurements Process
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Obtaining Vendor Responses

• Bidder Conferences are a way to ensure that all
  potential vendors get equal information
• These meetings between the state and all
  prospective vendors prior to submittal of a bid
  or proposal detail the process, expectations, and
  address any vendor questions
• If possible, these meetings should be recorded
• To avoid the possibility of vendor protests, make
  the Request process as transparent as possible

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Vendor Selection Techniques

• Proposal Evaluation Methods For complex
  procurements, these techniques might include
  weighted criteria or a formal evaluation review
  process
• Independent Estimates Preparing separate,
  objective cost estimates to compare to the
  proposals
• Relevant estimates can be found through other
  states contracts, websites such as INPUT, and
  previous service contracts with your vendor
• Expert Judgment Proposal evaluations by
  multi-discipline review teams or experts
• States can locate experts through their fellow
  states, professional organizations, local
  universities or hospitals, and team members
• Procurement Contract Award Document that details
  the contract with the vendor

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The Procurement Contract Award

• The Procurement Contract Award will contain many
  elements, including

• Statement of work or deliverables
• Schedule baseline
• Performance reporting
• Period of performance
• Roles and Responsibilities
• Vendors place of performance
• Pricing
• Payment terms
• Place of delivery
• Inspection and acceptance criteria
• Warranty
• Product/Service support

• Limitation of liability
• Fees and retainage
• Penalties
• Incentives
• Insurance and performance bonds
• Subordinate subcontractor approvals
• Change request handling
• Termination and alternative dispute resolution
  (ADR) mechanisms
• This can be decided in advance as part of the
  procurement award

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Managing a Vendor Contract

• Maintaining the Relationship

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Suggested Roles and Responsibilities
Role Responsibilities
Contracting Officer Provide oversight for all procurement actions Manage vendor selection process, including developing BAAs (Business Associate Agreements) and/or SLAs (Service Level Agreements) Assist in measuring vendor performance Address and negotiate vendor disputes
Project Manager Develop vendor contract, including setting key milestones Monitor and control execution of vendor contracts Measure vendor performance, including maintaining a quality assurance plan (QASP) Evaluate and formally accept contract deliverables
Project Team Assist in evaluating vendors
Legal Representatives Assist in development of formal acceptance letter
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Vendor Compliance Responsibilities for HIE
Services

• The vendor shall comply with all State and
  Federal laws and regulations with regards to
  handling, processing, or using Health Care Data,
  and ensure compliance by any and all
  subcontractors
• The contractor must keep abreast of changing
  regulations
• This includes the Health Insurance Portability
  and Accountability Act (HIPAA) of 1996 and the
  Health Information Technology for Economic and
  Clinical Health Act (HITECH) of 2009 as it
  pertains to the agreement
• As federal laws applicable to all health care
  information, the vendor shall comply with the
  regulations at no additional cost to the state
• The vendor may also be required to enter into a
  HIPAA Business Associate Agreement in order to
  comply with the regulations protecting Protected
  Health Information (PHI).

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Business Associate Agreements

• A HIPAA Business Associate is any uncovered
  person or entity that performs or helps perform a
  function or activity involving the use or
  disclosure of any PHI
• Business Associate Agreements (BAA) define the
  authorized uses of the PHI, the safeguards
  required to protect the information, and the
  steps to be taken in the event of a breach of the
  PHI
• Organizations that act only as passive conduits
  or switches for PHI in transit are not considered
  business associates under HIPAA
• Examples of these organizations include the post
  office and overnight parcel services (for
  physical movement of electronic media) and
  internet service providers
• Even a specialized switch that moves electronic
  protected health information in the form of
  encrypted messages might not be a business
  associate if it does not need access to protected
  health information in order to perform its work

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NonDisclosure Agreements

• A Non-Disclosure Agreement (NDA) is key to
  protecting your state and citizens private
  information
• Elements or provisions of an NDA may include, but
  not be limited to
• Definition of Confidential information
• Explanation of Purpose for Disclosure
• Disclosure
• No Disclosure
• No Use
• Limits on Information Deemed Confidential
• Term
• Protection of Secrecy
• NDA language may already be covered by
  confidentiality or employment contracts, but it
  is vital that you address confidentiality with
  your vendor

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Service Level Agreements

• Service Level Agreements (SLA) are contractual
  agreements negotiated between a service provider
  and its customer that define performance
  expectations and the associated penalties should
  the service not be performed as contracted.
• SLAs set expectations for the delivery of
  services as related to the statement of work and
  should be included in the RFP process. SLAs
  ensure a common understanding of
• The term of the contract
• Scope of services
• Goals
• Performance measures
• Review processes
• Penalties for non-compliance
• Responsibilities for levels 1, 2, and 3 of user
  support

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Strategies to Develop Effective Service Level
Agreements

• Identify service levels that your infrastructure
  needs so the SLA is comprehensive.
• Design the SLA so that it clearly defines the
  service provider's responsibilities.
• Negotiate the SLA with the service provider,
  paying particular attention to what services are
  being guaranteed, how they will be measured, the
  process for realizing agreed-upon remedies, and
  the amount of time the service provider has to
  correct problems.
• Implement SLA measurement and enforcement tools
  and processes to ensure that every SLA can be
  measured and enforced as soon as the service
  under consideration is installed.
• Enforce SLA compliance, and identify and resolve
  problems that arise.

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Service Level Agreement Example Terms

• Statement of Intent
• The aim of this agreement is to provide a basis
  for close co-operation between Agency Name and
  Company Name, for support services to be provided
  by Company Name to Agency Name, thereby ensuring
  a timely and efficient support service is
  available to Agency Name end users. This
  agreement is contingent upon each party knowing
  and fulfilling their responsibilities and
  generating an environment conducive to the
  achievement and maintenance of targeted service
  levels.
• Period of Agreement
• This agreement will commence on the date
  specified in the Official Order following the
  acceptance by both parties and will continue
  until terminated.

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Service Level AgreementsExample Terms (2)

• Review Procedure
• This agreement will be reviewed on Date X, or at
  a mutually agreed date, by Agency Name and
  Company Name. The review will cover services
  provided, service levels and procedures. Changes
  to this agreement must be approved by both
  signatories.
• Representatives
• Agency Name and Company Name nominate the
  following representatives responsible for the
  monitoring and maintenance of the service
  agreement

Agency Name Company Name
Agency Representative Company Representative
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Service Level AgreementsExample Terms (3)

• Service Level Monitoring
• The success of service level agreements depends
  fundamentally on the ability to measure
  performance comprehensively and accurately so
  that credible and reliable information can be
  provided to customers and support areas on the
  service provided.
• Service factors must be meaningful, measurable
  and monitored constantly. Actual levels of
  service are to be compared with agreed target
  levels on a regular basis by both Agency Name and
  Company Name.
• Complaints
• All complaints relating to the operation of the
  help service, including expected level of
  support, actual support offered and delivered,
  personnel responsible for providing or
  administering support, and any other issue
  relating to this document or the relationship
  between Agency Name and Company Name, received by
  either party will be forwarded in writing and
  distributed concurrently to the signatories of
  this document. The intent is to ensure thorough,
  timely and open resolution of all such problems.

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Other Supporting Documents to Manage a Contract

• Payment Schedules
• Establishes a timeline for payment, whether based
  on the delivery of work products or services or
  the calendar
• Statement of Work
• Sets the expectations for the type or amount of
  services or work products expected in order to
  fulfill the contract
• Mutually agreed upon schedules and statements of
  work help establish accountability for both
  parties
• Consider additional documents for administration
  of the procurement as it relates to your states
  environment and procurement policies and
  procedures
• An example would be regular progress reports

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Vendor Management
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Define the Chain of Command

• Especially valuable in performance monitoring and
  dispute resolutions, a clear line of authority
  can ensure fair oversight and help mitigate risks
  
• Best practices include
• Identify key points of contact for both parties
  to establish channels of communication
• Transparency in roles and responsibilities for
  contract management

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Draft, Review, Revise, and Execute the Contract

• Either party can request potential constructive
  changes to the contract
• A claims administration helps to document,
  process, monitor and manage changes throughout
  the life of the contract
• Once a change has been negotiated and agreed
  upon, the contract should be amended and formally
  accepted by both parties

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Define Deliverables, Key Milestones,and
Responsibilities

• A kick-off meeting with the selected vendor can
  help to address these important issues, as well
  as
• Surface and potentially address any outstanding
  concerns
• Clarify and reiterate terms and expectations of
  the contract
• Review project management plan
• Gain invaluable face time

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Establish Reporting Requirements and Processes

• Inspections and audits should be conducted during
  the execution of a contract to verify compliance
  in work processes or deliverables
• Routine performance reports provide information
  on how effectively the vendor is achieving the
  contractual objectives
• Include inspection and/or audit requirements in
  the RFP or contract to communicate expectations
  and ensure compliance

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Protecting the Contract

• The Project Manager overseeing contract
  activities has responsibilities to protect and
  safeguard the contract and related business
  relationships, including
• Communication with the contracting officer
• Being involved in contract planning
• Understanding the contract
• Ratification and/or modification of the contract
• Issuing task orders
• Exercising contract options
• Evaluation of contractor performance
• Handling performance problems

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Protecting the Contract (2)

• States should be aware of possible indicators of
  fraud, these might include
• Lack of competition
• Agency official(s) cozy with contractor
• Split/overlapping requirements
• Evasion of oversight
• Ineffective internal controls
• Lack of, or falsified, records
• Unexplained odd contracting practices
• Agency official lives above means

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Establish Change Control Processes

• Create a framework through which expectations and
  guidelines are set for managing changes to the
  contract
• Establish a contract check-in schedule to
  routinely assess progress to key milestones and
  raise relevant issues or potential risks
• Assign change management responsibilities to
  ensure concerns are addressed timely and
  appropriately
• Outline dispute resolution steps to achieve
  equitable settlement of outstanding issues and
  maintain a healthy working relationship

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Closing a Vendor Contract

• Contracting Due Diligence

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Stage 4 Closing a Vendor Contract
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Preparing for Closure

• Beyond the fulfillment of the contracts terms and
  conditions, a contract can be closed for a
  variety of reasons
• Breach of Contract
• Breach of Data
• Mutual decision for early termination of contract
• Change in scope
• As such, it is important to define requirements
  for formal closure under a number of
  circumstances

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Common contracting requirements

• State SO Plan Models

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The Four Plan Models

• Multiple approaches are being used to achieve
  program goals. There are four broad models
  emerging from the approved state HIE strategic
  and operational plans

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State HIE Strategic/Operational Plan Emerging
Models


A thin-layer state-level network that connects
existing sub-state exchanges that provide direct
HIE services to end-users
A single statewide network and HIO organization
that provides retail exchange services
directly to end-users
Aggressive facilitation of directed exchange
capabilities to support Stage 1 MU and
on-the-ground support for providers/data
suppliers
Development and bolstering of sub-state
exchanges through financial and technical
support, tied to performance goals
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Plan Model Assumptions

• No model completely describes any particular
  state. These were designed to highlight common
  practices and approaches among approved plans.
• Models are tools for plan illustration purposes
  and help direct states to contracting approaches
  and guidance that are best suited to their needs
  based on other states experiences.
• Model contracted services identify potential
  vendor HIE services and solutions, as well as
  non-IT areas such as regional surveys and
  assessment, REC outreach / HIE services, and
  assistance in meeting Meaningful Use
  requirements.

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Elevator Model
Model Summary Rapid facilitation of directed
exchange capabilities, including Direct, to
support Stage 1 Meaningful Use

• Uses directed exchange (e.g., Direct or
  vendor-provided directed exchange solutions) to
  quickly enable HIE requirements by initiating
  HISP services in the state.
• Focuses on enabling connectivity for those
  organizations currently without broadband access
  
• Small providers
• Independent labs
• Approaches target development of modular, openly
  available services, such as translation/transforma
  tion services or provider/entity directories
• More robust exchange services may be required to
  meet stages 2 and 3 of Meaningful Use
• Additional contracts with REC and EHR vendors may
  be required to integrate Direct to address gaps
  in functionality and meet MU specifications.

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Elevator Contracted Services

• Phase 1 implementation would require contracted
  direct exchange services, such as
• Establishing HISP or HISP-supplementation
  services to complement commercial HISP services,
  such as statewide provider directory, certificate
  authority, or SMTP/XDD adaptors
• Targeted development of services to support
  directed exchange including directory services,
  translation/transformation services and
  authentication/certificate management
• Technical support of providers/data trading
  partners such as rural hospitals, clinics and
  independent labs to enable them to share care
  summaries and send lab results using directed
  specifications
• Marketing and education activities of directed
  exchange, including provider registration
  services and provision of REC services to engage
  data trading partners including labs, critical
  access hospitals and community pharmacies
• Phase 2 implementation may require additional
  services, such as
• Master patient index (MPI)/record locator service
  (RLS)
• Higher level analytics or repositories initially
  populated/enabled through push messages
• Nationwide Health Information Network (NWHIN)
  Gateway

62
Elevator Contracted Services
63
Elevator Case Study RI

• Rhode Island Quality Institute (RIQI), serving
  as both the SDE and REC,
  connected providers to the HISP that
  best suited their needs
• RIQI contracted with Inprivas HISP to provide a
  solution supporting the security, trust, and
  Rhode Island-specific consent laws as a part of
  their Direct Pilot project
• RIQI also solicited interested HISPs via the
  Direct Project Implementation Geographies
  Workgroup
• RI has distributed a simple Application-to-Partici
  pate. HISPs who meet evaluation criteria will
  become members of a new HISP Vendor.
• RI also assists in planning Marketplace Health IT
  Expos to allow vendors to meet providers directly

64
CapacityBuilder Model

• This model uses state-sponsored grants programs
  to help sub-state nodes
• Fill capability gaps
• Address the needs of stakeholders with limited
  HIT capabilities, including unaffiliated
  providers through technical and non-IT support,
  such as state-wide assessments, REC outreach and
  interface/interoperability support.
• Focuses on providing financial or technical
  support to encourage existing or developing
  exchanges rather than connect them through
  state-level services
• Initial focus is on building the capacity of
  these sub-state nodes through temporary financial
  and technical support so that end-users have
  access to core HIE services

Model Summary Bolstering of sub-state exchanges
through financial and technical support, tied to
performance goals
65
CapacityBuilder Contracted Services

• Capacity-Builders typically issue competitive
  RFPs to procure technical and Meaningful Use
  compliance support to enhance exchange through
  sub-state regional, local IDNs, and HIOs.
• Ensures compliance with required state-level and
  national policies and standards
• Provides a commitment of matching funds to
  support implementation
• Requires State-level monitoring and evaluation of
  grantees to ensure that criteria are met and
  maintained (i.e. delivery of core services,
  enabling meaningful use, etc)
• Wide range of possible respondents including
  sub-state nodes, RECs, vendors, etc.
• Similar to grants program approach, however award
  determinations include includes criteria such as
  quality, cost, readiness, coverage, and service
  offerings such as directed exchange or Direct.
• Includes contracted services to ensure HIE
  eligibility, survey/assessments, program
  monitoring, HIE evaluation and certification,
  etc
• Capacity-Builders may also issue an RFP to
  provide services to cover un-tethered
  providers/white space.

66
CapacityBuilder Contracted Services

• In upcoming HIE phases, may provide a thin
  backbone of state-level shared services to
  facilitate node-to-node exchange
• Messaging or Routing Services
• Provider Directory Services
• Security Services
• NwHIN Gateways
• MPI/RLS for Query/Retrieve
• There are two categories of state level services
• State-level shared services, which include
  provider directories and authentication services
  are deployed centrally or among sub-state nodes
  to decrease cost of service provisions to
  end-users
• State-level shared services to connect sub-state
  nodes, which may indicate a transition to the
  Orchestrator Model

67
CapacityBuilder Case Study TX

• The Texas Health and Human Services Commission
  (HHSC) issued
  a competitively state-sponsored RFP to
  enable HIE services to
  
  white spaces,
  identified through the local HIE grant program.
• RFP respondents would propose coverage for some
  or all of the underserved areas. Eligible
  respondents included
• Vendors
• Local HIEs
• RECs
• Others with the technical ability to deliver HIE
  services.
• Texas Health Services Authority (THSA) evaluated
  proposals and ensured the delivery of core HIE
  services and adherence to state standards.
  Evaluation metrics included
• Quality and Cost
• Readiness
• Coverage
• Stated willingness to deliver core services,
  implement required policies and standards for
  local HIEs, and participate in program evaluation

68
Orchestrator Model

• Provides a light, statewide network-of-networks
  architecture to connect sub-state nodes and
  facilitate HIE transactions across existing
  exchanges
• Qualified organizations could include
  regional/community HIOs, IDNs, IPAs, HISPs, EHR
  hubs, etc., which may provide HIE services to
  end-users.
• Unlike CapacityBuilders, Orchestrators focus on
  the creation of a statewide network
• Unlike Public Utilities, Orchestrators focus
  primarily on connecting existing nodes rather
  than providing retail HIE services directly to
  end-users or deploying a full-spectrum of
  centralized HIE services.
• In general, Orchestrators have no state-level
  responsibility for providing direct services to
  end-users

Model Summary Thin-layer state-level network to
connect existing sub-state exchanges
69
Orchestrator Contracted Services

• Phase 1 implementation focuses on directed
  exchange (push) and services that enable basic
  directed exchange across sub-state networks in
  alignment with Stage 1 MU requirements. This
  would include messaging hubs or gateways to route
  messages across nodes, security services, and
  provider/entity directories to facilitate
  addressing of messages
• Phase 2 implementation may expand core
  infrastructure to support query/retrieve (pull)
  of patient data and other value-added services,
  including federated MPI and RLS to match patient
  identities and locate patient data across
  sub-state networks and value-added services such
  as patient routing, event notification services,
  and lab or CCD translation.
• State-level contracts or accreditation/attestation
  would be required for existing or newly formed
  exchanges to comply with state-level policies,
  including legal, business, and technical rules.

70
Orchestrator Contracted Services
71
Orchestrator Case Study NH

• New Hampshire has issued
• An RFI to solicit information on viable
  technologies and
  solution options in the marketplace
• An RFP for mature HIE vendors, HIE technology
  companies, and existing solutions such as local
  or regional HIOs to provide the requisite
  functionality and services
• Potential vendor will develop a statewide network
  to provide a core backbone of services essential
  to tie together and provide secure exchange of
  clinical data among existing provider networks
• Vendor plans must be in compliance with current
  New Hampshire statutes regulating health
  information exchange
• Target date for contract award/project effort
  commencement is June 2011

72
Public Utility Model

• Provides for a state-level entity implementation
  with a responsibility to connect stakeholders
  (end-users and existing sub-state networks) to
  state-level infrastructure, with a high level of
  centralized policies and services of the four
  models.
• This model focuses on the state-level entity as
  the central focus of HIE activities in the state
  rather than being the coordinator of multiple
  networks
• Effort is a proactive state-led approach and
  requires
• Broad participation and support among
  stakeholders across the state
• Highly defined project management and technology
  deployment approach
• The provision of retail services directly to
  end-users
• Strong policy and/or funding support from the
  state government or other stakeholders

Model Summary Statewide HIE activities providing
a wide spectrum of HIE services directly to
end-users and to sub-state exchanges where they
exist
73
Public Utility Contracted Services

• Phase 1 implementation would include connecting
  stakeholders to existing infrastructure and
  enhancements to support Stage 1 Meaningful Use.
  This phase may also include
• User-facing applications such as portals
• Ancillary services such as hosting, training, and
  help desk support
• Multi-layered model of directed exchange and
  query-response exchange
• Connect providers to current infrastructure, with
  focus on white space providers
• Enhance existing network to provide services to
  support MU, including clinical messaging or
  routing of lab results and exchange of care
  summaries
• Coordinated efforts with the REC to implement
  interfaces or applications, including preferred
  EHR vendors and health systems developing
  interfaces to state-level network
• Phase 2 implementation includes expansion of core
  infrastructure to support query/retrieve access
  to longitudinal care record, connection to NWHIN,
  consumer access (PHRs), etc.

74
Public Utility Contracted Services
75
Public Utility Case Study KY

• The Kentucky Health Information Exchange (KHIE)
  was initially
  funded through a Medicaid Transformation Grant
  and
  operational since April 2010.
• Core components already in place in the statewide
  exchange include
• Master patient/person index and record locator
  services
• Provider/user authentication
• Security services
• Electronic prescribing, laboratory and patient
  clinical summaries
• Statewide immunization registry
• Provider portal.
• KY is now focused on filling gaps in HIE access
  and supporting Meaningful Use. Secured Medicaid
  funding to support the development of their
  technical infrastructure
• This will support statewide HIE that is open to
  all healthcare providers and organizations
• Has contracts in place with ACS Healthcare.

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Vendor Management Resources

• Project Management Toolkit Module
• http//statehieresources.org/wp-content/uploads/20
  10/12/Project-Management-Strategies-and-Resources.
  pdf
• Change Management Toolkit Module
• http//statehieresources.org/wp-content/uploads/20
  10/12/Change_Management.pdf
• INPUT Website
• Free accounts allow you to monitor state
  procurements for HIE and other HIT initiatives
• HHS Generally Accepted Accounting Principles
• http//www.fasab.gov/accepted.html
• HITRC Vendor Management Page
• Will serve as the state grantees home for vendor
  management guidance, discussion and resources

77
Appendix
78
Definitions (1)

• Acceptance Criteria Those criteria, including
  performance requirements and essential
  conditions, which must be met before project
  deliverables are accepted
• Alternative Dispute Resolution A type of dispute
  resolution that seeks to limit the costs of
  litigation by using alternative, often out of
  court means such as arbitration or conciliation
• Change request handling How to address requests
  to expand or reduce the project scope, modify
  policies, processes, plans, or procedures, modify
  costs or budgets, or revise schedules
• Fees Agreed to amounts beyond an initial cost
  estimate in cost-reimbursement arrangements. May
  be fixed or vary based on performance.
• Inspection criteria Criteria to define
  examinations or measurements to verify whether a
  activity, component, product, result or service
  conforms to specified requirements
• Limitation of Liability Written statement that
  serves as a disclaimer to limit conditions or
  instances under which the disclaiming party may
  be held liable for loss or damages

79
Definitions (2)

• Insurance/Performance Bond A written guarantee
  from a third-party submitted to the
  client/customer by a vendor upon winning a bid.
  These ensure payment of a sum of money in case
  the contractor fails in the full performance of
  the contract
• Payment Terms. The conditions under which a
  state will complete a sale, typically includes
  period of payment and any particular payment
  requests (e.g., advance payment)
• Performance Reporting Document and presentations
  that provide organized and summarized work
  performance information, earned value management
  parameters and calculation, and analyses of
  project work progress and status
• Period of Performance. Time interval required to
  complete work defined in Statement of Work. Can
  only be revised through contract modification.
• Place of Delivery Place where the product or
  service will be delivered
• Place of Performance. Place where a contract is
  to be performed
• Pricing. Method adopted by a state or vendor to
  set its selling price

80
Definitions (3)

• Product/Service Support The tasks, guarantees,
  and services that a vendor agrees to provide to
  support the use and maintenance of its products
  or services
• Retainage Portion of a contracts final payment
  withheld by the client until the project is
  complete in all respects and in accordance with
  contract terms.
• Roles and Responsibilities A defined function to
  be performed by a project team member, such as
  testing, filing, inspecting, or coding
• Schedule baseline A specific version of the
  schedule model used to compare actual results to
  the plan to determine if preventive or corrective
  action is needed to meet the project objectives
• Statement of work or deliverables A narrative
  description of products, services, or results to
  be supplies
• Subordinate Subcontract Approvals Defines any
  additional approvals or requirements necessary
  for vendor subcontracting
• Warranty Expressed or implied undertaking that a
  certain fact regarding the subject matter of a
  contract is, or will be, true

81
Request for Information (RFI)

• The least formal of the three requests, it also
  makes the smallest commitment in terms of a final
  contract
• In an RFI, the state will request various pieces
  of information from potential vendors related to
  the states HIE needs
• Products/Services
• Vendor Capabilities/Experience
• Only valid for a set period of time (e.g., 30
  60 days)
• This may be a good request if you are unsure
  which HIE services are available
• Because a contract isnt implied by this request,
  vendors may not put as much effort into their
  responses. An RFI is not recommended if your
  ideal outcome is vendor selection

82
Request for Quote (RFQ)

• An RFQ is used to request price quotations from
  prospective vendors for common or standard HIE
  products/services
• The vendor with the lowest price quote is almost
  always selected
• These are less common in project work, as the
  only evaluation metrics are financial, and the
  other elements (e.g., performance) arent
  significant
• RFQs are only valid for a certain period of time,
  after which the price quotations may change
• May be useful for contracting for a specific HIE
  product or software, but not for any complicated
  or robust needs

83
Request for Proposal (RFP)

• The most robust of the three requests, an RFP
  specifies a scope of work that needs to be
  performed and asks for vendor proposals
  (including pricing) that describe their solution
  and/or approach that would best execute the
  project
• The lowest price quote does not necessarily win
  the contract, many other criteria are considered
• Given that most states HIE needs are fairly
  robust and are highly dependent on performance
  quality, an RFP is your most likely selection
• Given that the majority of these RFPs will be
  released by state governments (others may be
  released by SDEs), they must be publicly
  advertised to ensure fairness in the competitive
  bidding process
• Additional negotiations may be possible after
  proposals are reviewed (procurement regulations
  differ between state governments)