The federal Office of the National Coordinator for Health Information Technology has released “requests for proposals” to all 50 states to apply for federal grants worth $1.2 billion.

With the grants, individual states are expected to take a more active role in healthcare reform, said Robert Wah, chief medical officer of Falls Church, Va.-based CSC, an information technology company. The government wants states and the private sector to be more involved with the reform process to help reduce health IT implementation time and healthcare costs.

“We have been talking with David Blumenthal about the HITECH provision. Blumenthal has had a challenge to stimulate the economy by spending money,” said Greg DeBor, client partner of CSC healthcare delivery. “Another concern was paying to put EHRs in physician offices and increasing data access between providers.”

As part of the stimulus package, the federal government has set aside $2 billion for the implementation of health IT, said Wah. The federal grants are to be spent in three ways to help providers make that transition from paper to digital records:

1. The deployment of statewide health information exchanges – resulting in better access to patient data between providers.
2. Creating incentives that motivate physician practice and hospitals to implement electronic health records.
3. Begin collecting analytics and informatics in order to provide physicians and other clinical staff optimal health data, personalizing healthcare.

“Individual states can get things going instead of relying exclusively on the federal government,” said DeBor. “However, many states aren’t prepared. New York has a good start, but others are totally unprepared, and that is the mass majority. Some are further along than others. There is a very wide spectrum, from states dealing with this for years to others trying to play catch up.”

CSC officials said that $598 million will be put towards health IT regional extensions. These support centers will be designated to help healthcare providers implement and use EHRs, including training, technical support, and deployment.

Another $564 million is set aside for statewide HIEs. “Only states or non-profit groups representing them can apply for these grants,” said DeBor.

“It can’t be all state directed. There is a provision to get the private sector involved with this initiative,” continued DeBor. “States want to have a big role but they want the private sector’s assistance when it comes time to implement. Others are trying a hybrid by relying on the federal government for direction and also involving the private sector.”

Both Wah and DeBor indicate that time is of the essence, saying the federal government plans to start penalizing after a five year initiation period.

“The main point is that many states aren’t ready and the federal government has a 'use it or lose it’ mentality,” said DeBor.