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Procurement in the State HIE Program


Procurement in the State HIE Program June 28, 2011 * * * * * * * * * * * * * * * * Sources: PMBOK NAIAID Glossary of Funding and Policy Terms and Acronyms http://www ... – PowerPoint PPT presentation

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Title: Procurement in the State HIE Program

Procurement in the State HIE Program
June 28, 2011
  • 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

GENERAL Vendor Management CONCEPTS
  • Vendor Management Basics

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

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
  • 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
  • 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
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
  • 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

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
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

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

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
  • 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.

NoCost Contracts
  • No-Cost Contracts Where a vendor provides
    services to the state in exchange for fees
    collected from third parties. Examples may
  • 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

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
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
  • 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?

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
  • You are protected from liability issues
  • You are protected from vendor protests
  • Note This may not apply for SDEs releasing an
  • For many states, the RFP is considered a part of
    the contract and is legally binding for the
  • 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

State HIE Request and Contracts Examples (1)
State Request Type Contract Type Location Online Scope
CA RFP http// Provider directory
CT RFP http// Domain infrastructure, provider directory, and identity management
NH RFI http// Statewide infrastructure (both development and maintenance)
MO RFI and RFP Firm-Fixed Price http// and http// HIO technological platform
State HIE Request and Contracts Examples (2)
State Request Type Contract Type Location Online Scope
NC RFP Deliverables-Based Fixed Price http// RFP for technical services partner
ND RFP Fixed-Price w/Adjustment http// Statewide HIE
TX RFI and RFQ Firm Fixed Price http// and http// and http// Local HIE entity and E-Prescribing solution
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

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
  • 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

Planning for procurement
  • Preparing for a Successful Procurement

Planning Procurements Process
Do Your Research
  • Identify your state environment and HIE needs
  • Use your approved Strategic and Operational Plan
  • Identify your state/agency required language and
  • 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
  • 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

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
  • 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

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
  • 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!

Special Terms and Conditions Examples
  • Audit Options
  • Contract Acceptance and Cancellation Periods
  • Purchasing Preferences (e.g., 40 from Small
  • 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

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

HIE Requirements and Evaluation Criteria Examples
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
  • Identify your Response Solicitation Schedule.
  • Due to government regulations, you must issue
    your request publicly
  • Remember to be clear on timeframes

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

Executing a procurement
  • Solidifying Your Vendor Relationship

Executing Procurements Process
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

Vendor Selection Techniques
  • Proposal Evaluation Methods For complex
    procurements, these techniques might include
    weighted criteria or a formal evaluation review
  • Independent Estimates Preparing separate,
    objective cost estimates to compare to the
  • 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

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

Managing a Vendor Contract
  • Maintaining the Relationship

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
Vendor Compliance Responsibilities for HIE
  • 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
  • The contractor must keep abreast of changing
  • 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).

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
  • 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

NonDisclosure Agreements
  • A Non-Disclosure Agreement (NDA) is key to
    protecting your state and citizens private
  • 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

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

Strategies to Develop Effective Service Level
  • 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.

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
  • 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.

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
  • Representatives
  • Agency Name and Company Name nominate the
    following representatives responsible for the
    monitoring and maintenance of the service

Agency Name Company Name
Agency Representative Company Representative
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.

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
  • Consider additional documents for administration
    of the procurement as it relates to your states
    environment and procurement policies and
  • An example would be regular progress reports

Vendor Management
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

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

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

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

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

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

Establish Change Control Processes
  • Create a framework through which expectations and
    guidelines are set for managing changes to the
  • 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
  • Outline dispute resolution steps to achieve
    equitable settlement of outstanding issues and
    maintain a healthy working relationship

Closing a Vendor Contract
  • Contracting Due Diligence

Stage 4 Closing a Vendor Contract
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

Common contracting requirements
  • State SO Plan Models

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

State HIE Strategic/Operational Plan Emerging

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
Development and bolstering of sub-state
exchanges through financial and technical
support, tied to performance goals
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

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.

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
  • 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
  • Higher level analytics or repositories initially
    populated/enabled through push messages
  • Nationwide Health Information Network (NWHIN)

Elevator Contracted Services
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
  • 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

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
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,
  • Capacity-Builders may also issue an RFP to
    provide services to cover un-tethered
    providers/white space.

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
  • State-level shared services to connect sub-state
    nodes, which may indicate a transition to the
    Orchestrator Model

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
  • 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

Orchestrator Model
  • Provides a light, statewide network-of-networks
    architecture to connect sub-state nodes and
    facilitate HIE transactions across existing
  • Qualified organizations could include
    regional/community HIOs, IDNs, IPAs, HISPs, EHR
    hubs, etc., which may provide HIE services to
  • 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

Model Summary Thin-layer state-level network to
connect existing sub-state exchanges
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.

Orchestrator Contracted Services
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

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
  • 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
  • Effort is a proactive state-led approach and
  • Broad participation and support among
    stakeholders across the state
  • Highly defined project management and technology
    deployment approach
  • The provision of retail services directly to
  • 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
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
  • 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.

Public Utility Contracted Services
Public Utility Case Study KY
  • The Kentucky Health Information Exchange (KHIE)
    was initially
    funded through a Medicaid Transformation Grant
    operational since April 2010.
  • Core components already in place in the statewide
    exchange include
  • Master patient/person index and record locator
  • 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.

Vendor Management Resources
  • Project Management Toolkit Module
  • http//
  • Change Management Toolkit Module
  • http//
  • INPUT Website
  • Free accounts allow you to monitor state
    procurements for HIE and other HIT initiatives
  • HHS Generally Accepted Accounting Principles
  • http//
  • HITRC Vendor Management Page
  • Will serve as the state grantees home for vendor
    management guidance, discussion and resources

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

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

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

Request for Information (RFI)
  • The least formal of the three requests, it also
    makes the smallest commitment in terms of a final
  • 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

Request for Quote (RFQ)
  • An RFQ is used to request price quotations from
    prospective vendors for common or standard HIE
  • 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
  • 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

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
  • 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)
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