HHS Announces New ‘Early Innovators Grants’ To Help States Develop Technology For The Exchanges

The Department of Health and Human Services (HHS) announced a new round of grants this afternoon to help states expedite and simplify the process of developing IT systems for the new exchanges (the Travelocity-like market places that will help Americans find comprehensive insurance coverage). By the time the exchanges become operational in 2014, states should be able to use information technology to determine eligibly, enrollment, premium tax credits, cost-sharing assistance administration, and integrate the system with Medicaid and CHIP. Officials believe that sophisticated, yet “consumer friendly” IT systems are “critical to the success of the exchanges” and hope that the final product will look similar to the new website, where beneficiaries can compare different plans, identify if they’re eligible for government aid, and enroll in insurance.

But as Politico’s Jennifer Haberkorn points out this morning, “states view the project as an enormous undertaking, requiring them to design a system, develop the information technology and put it into action in just three years amid tight budgets. In response, the Department of Health and Human Services is planning to ask five states to develop systems that can hopefully serve as prototypes for other states to replicate.” “The states have told us that they don’t all want to all have re-invent the wheel on each aspect of the exchange; they want to be able to re-use and leverage the work of their fellow states so that the resources are used more efficiently and effectively,” Joel Ario the Director of the Office of Insurance Exchanges at HHS said on a conference call attended by the Wonk Room.

The so-called “Early Innovators Grants” will be offered to five states or coalition of states “that demonstrate leadership in developing cutting-edge and cost-effective consumer-based technologies and models for insurance eligibility and enrollment for Exchanges” that “can be adopted and tailored by other States.”

“The benefits to the states are three-fold,” Ario said. “First, there are lower costs through the uses of shared models, second there is an improved implementation schedule, increased quality and reduced risk through the re-use, the peer-collaboration and the leveraging of lessons learned across the state boundaries. And finally, there is improved capacity for program evaluation because of the more uniform implementation theory,” he explained.


Last month, the federal government awarded exchange planning grants to 48 states and the District of Columbia and has announced that it will award “Establishment Grants” in February of 2011. “We’re looking for a lot of collaboration, we’re looking for states to lead….to really kind of provide the direction and progress that needs to be made early rather than later,” Henry Chao — the Chief Technology Officer at the Office of Consumer Information and Insurance Oversight — explained on the call, noting that states struggled to implement the IT requirements in Medicare Part D because they were given “very very short timeframes” “in terms of systems development.” “I think the lessons learned have really told us that we need to collaborate much more so upfront, not just with the states, but across the federal government, with other agencies.”