If you sell health IT products, be sure you know about Regional Extension Centers

One of the interesting things funded by the HITECH Act was the creation of the Health Information Technology Program. That program invests in Regional Extension Centers to offer consulting and technical support to help accelerate meaningful use of Electronic Health Records (EHRs). All told there are likely going to be 70 (or more) regional centers across the country.

One of the major tasks of a Regional Extension Center is to provide guidance on which products to buy. Unfortunately, most small and medium sized vendors don’t know about this and may be left out of guidance programs so I wanted to make sure that all of you who sell or market healthcare IT products and services know about this HHS program and are devising an appropriate strategy for how you will become known to these centers.

Here is some information from slide 8 of the recent overview given by ONC about what the regional centers are supposed to be doing:

Vendor Selection & Group Purchasing:  Help providers select the highest-value option — the option that offers the greatest opportunity to achieve and maintain meaningful use of EHRs and improved quality of care at the most favorable cost of ownership and operation, including both the initial acquisition of the technology, cost of implementation, and ongoing maintenance and predictable needed upgrades over time.
  • Each Regional Center will offer unbiased advice on the systems and services best suited to enable the priority primary-care providers to become meaningful users of EHRs.  Regional Centers will avoid entering into business arrangements creating an actual or apparent conflict of interest.
  • Applicants are required to submit a Conflict of Interest Certification with the vendors that that they’ve identified.  If vendors have not yet been identified, applicant can leave the vendor portion of the certification blank for the moment.

The big EMR and EHR players will have good lobbying and communications programs to reach the Regional Extension Centers with ease; the smaller guys need to be worried about being squeezed out. If you’re a local player, work with HIMSS and other organizations to figure out where your regional extension center is or who is applying for the grants. It could mean success or failure for your company.

If you know more about these Regional Extension Centers and can help out the community, please share some advice here.

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15 thoughts on “If you sell health IT products, be sure you know about Regional Extension Centers

  1. Living in California and specializing in helping clincis and practices in this State, I have been closely involved with the California Regional Extension Centers. In CA, it is expected to have three RECs. First one, which covers most of the state except for two counties, have been selected. I agree with this artice but the vendors and service providers must have patience. In CA, RECs are just getting their act together and for several months, confusion will be dominant. I am hoping that the RECs get their act together quickly so that the vendors can start working with the RECs to help providers. One more fact about CA RECs. CA will also have LECs (Local Extension Centers) which are working under RECs to distribute services and work with providers. Due to large geographic coverage area of CA, LECs have been established to better serve regions within the RECs. Again, details are sketchy so far. My hope is that RECs and LECs will work with other healthcare service providers to achieve their set goals.

    1. Thanks, David, for the summary of RECs in California. I would like to echo your advice about vendors having patience — there's just not enough information out there to give anyone specific answers. I'm hoping that with guidance like yours vendors at least put it on their strategic communications plans and make sure they reach out to RECs and LECs that are advising people to purchase specific tools so that their solutions are known.

      One other piece of advice for vendors is to not try to sell their products to RECs and LECs — you should be creating “just the facts, ma'am” kinds of materials that would fit well into a government RFI or RFQ response. It shouldn't be traditional brochure-ware but specifics that the RECs and LECs can use to independently judge your products.

      1. Shahid, I will definitely share what I know in this forum. There is one approved REC (CALHIPSO) and they cover most of California except for 2 counties (Los Angeles and Orange). It is unclear if other states will follow how California is rolling this program out but CALHIPSO has been pretty good with information sharing via weekly calls. I am very hopeful that all RECs across the state will learn from each other so that RECs provide consistent and accurate information and services at a national level. General roles and repsonsibilities are outlined but how the key players (State, RECs, Service Providers and Providers) will actually interact to provide the best service is still being worked out. Good advice about how the vendors should interact with the RECs. Knowledge is power as the saying goes.

  2. Very timely article with a very good point. As a small technical support business that represents a EMR vendor in California, I was alarmed when I read the Loan Fund Workgroup recommendation that CalHIPSO contract with one EMR vendor at the state level for software, hardware and technical services as a requirement for access to the state's loan fund. This would seem to be contrary to the stated role of a REC by the ONC – to avoid entering into business arrangements creating an actual or apparent conflict of interest. It is estimated that this loan fund could be needed by as many as 6000 of the 24,000 small practices needing to acquire EMRs to achieve meaningful use.

    Here are the actual “proposed mechanics”:

    1. The REC Coalition solicits a $13 million demonstration pool of funds from stakeholders at a 2% interest rate.
    2. The REC Coalition sets aside 10% to cover “no!fault defaults” from grants or other sources.
    3. The REC Coalition selects a hardware and software vendor for the program.
    4. The REC Coalition sets Local Entity consulting fees and milestone payments at a standard rate.
    5. Standardized criteria for participation in the program are created by the coalition.
    6. Local Entities submit a list of eligible providers who are ready to install EHR’s and achieve meaningful use (0ngoing).
    7. Eligible providers sign contracts that commit them to the process and pay $5,000.
    8. The RECC review the applications for final approval.
    9. The REC pays the hardware, software and local entities directly for approved providers according to negotiated terms.
    10. Providers pay the REC directly over three years out of their meaningful use payments.
    11. Providers who do not achieve meaningful use but follow the well!documented REC procedures and processes do not have to repay their loan. Their equipment is removed and resold and they are soon going to be penalized by Medicare, Medi!Cal and other insurers. Providers that do not act in good faith will have to pay back their loans less recovered costs. If the program is successful, we will continue to solicit funds and enroll as many providers as possible.


  3. Thank you for correcting that url. That is the correct source document I was attempting to reference.

    One additional note. The first paragraph you cited from the ONC goes on to say (after “apparent conflict of interest.”):

    “Regional Centers that choose to offer group purchasing of EHR software, IT support services, and/or hardware must provide a choice of offerings. The selection process for these vendors must be open and competitive; the selection committee must include representatives of the priority primary-care providers actively practicing within the Regional Center’s geographic service area.”

    The continuation of this paragraph seems to directly contradict ONC's initial statement relative to avoiding business arrangements the would create an actual or apparent conflict of interest. If the cash flow of the REC is tied to the sale, installation and support of one or more EMRs (In California the current plan is to offer 2-5 software applications) it would clearly create an environment where an “apparent conflict of interest” could thrive.

    From the small technical support firm's perspective, the effect of having to compete for sales, project management, installation and ongoing support services with a federally and state funded “vendor” – one with access to the state's borrowing authority dependent upon the selection of the RECs designated application(s) as a prerequisite – seems to be inherently unfair.

    1. Thanks for the clarification and the update. I think your point is valid — have you tried speaking with your local congressman's office about the issue? Perhaps they can help. I live in the DC area and I know that when there are issues like this your elected officials like to help their local constituents.

      1. I sent an email to our Congressman – my thinking was that since this is a federal program it would need to be modified at the federal level. I also sent a letter to several key individuals who are focused on the rural workforce development portions of the CA Strategic Plan.

        Just to be clear, I think the success of the 70 REC's as entities that assists primary care physicians, especially rural practices, achieve meaningful use is crucial to healthcare reform. But I believe if they act as the state-sponsored, subsidized vendor and contractor they will be detrimental to small rural technical support companies and technical worker availability.

        1. I totally agree. I hope the RECs succeed spectacularly. they are a great idea but a poor implementation of RECs can do far more damage than good.


          Shahid N. Shah

          1. californiataxpayer

            The focus should be on the patients and providers. The amount of money that will be skimmed off by the RECS, EHR vendors, and EHR consultants will be appalling. Of course the RECs will enter into “agreements” – the “CalHIPSO Kisckback” so that they can be “sustainable” for the long-term. If they really wanted to get PPCPs on EHRs they would allow local community healthcare organizations to assist their providers in implementing an easy and cost-effective EHR. This can be done with little to no impact on provider offices and without the need to purchase any hardware and a minimal cost for software. The stimulus money should be a “thank you” payment for these providers who see patients that offer them little reimbursement because of the low Medi-Cal rates.

          2. The RHITC proposal made this past friday at the Cal eConnect board meeting is a classic example of what you've stated. RHITC proposed that they be a LEC covering 80% of the California landmass, and do it as a wholly-owned subsidiary of Cal eConnect (the State Governance Entity). RHITC would 'contract' with the REC, allowing an improper if not illegal flow of REC funds to the SGE. (States were not allowed to apply for REC funding). CalHIPSO, the REC, would in effect act as a shell company to funnel funds to the SGE via their contract with the RHITC. The proposal was presented by Lynn Barr, consultant to Jonah Frohlich, Deputy Director of HIT at CHHS. Mr. Frohlich, an otherwise amazing fellow, just happens to be the gatekeeper for the $38 million the state received to set up the SGE, Cal eConnect. Board members were told that the proposal needed to be acted on quickly, within the next two weeks, and a special session is being scheduled to make a decision. They will be hard pressed to say no to their funders' desires.

            There's a lot more to the story, suffice it to say this is a marvelous case study if one wishes to pursue it. A tangled web is being spun that should someday make its way into a college textbook.

  4. Hi,
    I might not agree with the statement that “The big EMR and EHR players will have good lobbying and communications programs to reach the Regional Extension Centers with ease; the smaller guys need to be worried about being squeezed out” beacuse i think its not about which EMR is big and who is small its all about which EMR can enable the providers and practices for meaning ful use criteria set by the ONC.
    I work for an REC and a month ago we issued an RFP for all the EMR vendors and we received tremendous response.But we carefully shortlisted the EMR's who can and have the capability of enabling the meaningful use criteria and also better serve the providers.

    1. I agree – monitoring the 70 REC's for RFP announcements is a chore, but not an insurmountable chore, even for the smaller EMR vendors. And I agree with you that in order to make the “REC approved list” the EMR product needs to at least meet Stage 1 MU requirements.

      My concerns, however, are with REC staffing strategies, and how that will affect rural tech support companies over the near and long term. I think some staffing at the REC/LEC level will help tremendously if its somewhat limited – if REC's become statewide technical employers or contractors for implementation services with the likes of HP or other national vendors one of two things will happen – small locals will lose their talent to the REC/HP consortium, or will be pushed out of the market by out-of-region personnel driving in to do the implementation, and then abandoning the region to centralized help desk support in major metropolitan areas.

      If all aspects of ARRA, including local workforce development, are included in the REC plan, this could be a wonderful boost to tech support hiring and stability in rural areas. If a centralized plan is implemented, I fear it will have the exact opposite effect. It is my hope that your REC will develop these local, public-private partnerships that will be beneficial over the long haul to small rural communities.

  5. Pingback: Will RECs accidentally wreck innovation in the EMR market on their way to helping small practices?

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