|Budget Issue:||Health Information Technology Act—Medi-Cal Electronic Health Record Incentive Program.|
|Program:||Department of Health Care Services- Medi-Cal|
|Finding or Recommendation:||Approve request for 11 staff and contract funds given the complexity of implementing this program and the sizeable amount of funding that it has the potential to distribute to Medi-Cal providers. However, instead of using money from a foundation, we recommend the Legislature fund the state’s share of the cost of $180,000 using General Fund dollars.|
The DHCS is requesting 11 positions and $575,000 in contract funds to implement the Medi-Cal Electronic Health Record (EHR) Incentive Program in accordance with an implementation plan developed by a consultant for DHCS. The EHR program is intended to incentivize Medi-Cal providers to adopt and use electronic health records in a meaningful way and by doing so advance patient safety and quality of care. This program has the potential to provide incentive payments of approximately $1.4 billion to 435 hospitals and 10,000 Medi-Cal providers. The administration is proposing to have the California Health Care Foundation (CHCF), an independent philanthropy, pay the state share, or 10 percent of the total cost for these staff and contractors. The federal government is providing a 90 percent match.
Analyst’s Recommendation. We believe that the request for 11 additional staff and contract funds is reasonable given the complexity of implementing this program and the sizeable amount of funding that it has the potential to distribute to Medi-Cal providers. However, we have concerns about using foundation money to fund core state staff.
We recommend that, instead of using money from a foundation, the Legislature fund the state’s share of the cost of $180,000 using General Fund dollars. While we acknowledge that a new expenditure from the General Fund represents a difficult budget choice at this time, we consider this to be a particularly important investment of state funds that will leverage as much as $1.4 billion in information technology (IT) incentive payments. This relatively small cost to the state would likely result in significant administrative efficiencies in the Medi-Cal Program as well as significant sales tax revenues related to the purchase of IT systems and equipment.