State HIE TA Vendor Managment Report - State Health Information by wuyunyi


									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 S&O Plan Model

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
• Developing all necessary HIE components and services “in-house” may not
  be feasible or realistic
    ‒ Time constraints                   ‒ Technical resources
    ‒ Budget constraints                 ‒ Legal or cultural constraints
    ‒ Human resources constraints        ‒ Development doesn’t fit with state’s overall
• 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 isn’t implied
    – 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)
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 timelines
    –   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            -Least formal of the three, has the    -Yields the least comprehensive
Information (RFI)      smallest amount of commitment          amount of information
                       -Used to learn more about a            -Will not usually end in a vendor
                       market of products or services,        selection
                       usually used for information to
                       develop an RFP
                       - Easiest to complete
Request for Quote      -Simpler to complete than an RFP       -Only valid for a certain period of
(RFQ)                  - Helpful option for a defined piece   time
                       of work for small dollar amount        - Cannot be used to contract for
                       and limited time                       robust work
                       -Used to complete simple tasks
Request for Proposal   - Best option for robust needs         - Requires the most time and
(RFP)                  - Yields the most comprehensive        resources to develop
                       and detailed information of the

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 won’t 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 vendor’s performance period spans a considerable period
      of years. It has provisions allowing for inflation changes or cost
      increases/decreases for specific commodities

Cost–Reimbursable 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 contract
    – 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.

No–Cost Contracts

• No-Cost Contracts: Where a vendor provides services to the state in
  exchange for fees collected from third parties. Examples may include:
    – 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
Cost – Reimbursable Contract   -Should be used if state doesn’t have a good
                               estimate of the work and wants to ensure it isn’t
                               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

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 contract.
•   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
     – 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 approval/renewal
    –   You are protected from liability issues
    –   You are protected from vendor protests
    –   Note: This may not apply for SDEs releasing an RFP
• For many states, the RFP is considered a part of the contract and is
  legally binding for the vendor
• 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   Contract                 Location Online                        Scope
         Type      Type
CA      RFP            Provider directory
CT      RFP           Domain
                             edattachments.act.documents.getfilefordow      infrastructure,
                             nload&docID=1557889                            provider directory,
                                                                            and identity
NH      RFI           Statewide
                             edattachments.act.documents.getfilefordow      infrastructure (both
                             nload&docID=1490978                            development and
MO      RFI and   Firm-       HIO technological
        RFP       Fixed      hitech-rfi.pdf and                             platform
     State HIE Request and
     Contracts Examples (2)

State   Request   Contract Type                Location Online                      Scope
NC      RFP       Deliverables- RFP for technical
                  Based Fixed     latedattachments.act.documents.getfilefor services partner
                  Price           download&docID=1448350
ND      RFP       Fixed-Price Statewide HIE
                  w/Adjustment    latedattachments.act.documents.getfilefor
TX      RFI and   Firm Fixed   Local HIE entity
        RFQ       Price           latedattachments.act.documents.getfilefor   and
                                  download&docID=1414646 and                  E-Prescribing
                                  download&docID=350394 and

Consider Your State Environment

•   Do contracts have to be reviewed by other, specific agencies/entities?
•   Are vendors required to be registered/certified/licensed 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”
•   Each state, its procurement rules, and its procurement language are different
    and your procurement strategy may depend on your state’s specific
•   Are you running a transparent, stakeholder-involved process?
•   What are your regulations regarding sole source?
     – Could you have possible community/stakeholder backlash from a sole source
     – 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 from:
    –   Liability for security or privacy breaches
    –   Poor quality or late work
    –   Key project elements that the vendor isn’t required to complete
    –   Contested contracts from non-selected vendors

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 contacts
• 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 state’s providers, payers, pharmacists, and/or existing HIE entities needs?
• Analyze Vendor Environment
    – Identify any particularly active vendors in your state/region
    – 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 state’s 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
        • Addressing white space
        • Offering/enabling at least one option to participate
        • 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                                 22
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 Certifications
    –   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                          •   Ownership of Intellectual Property
•   Contract Acceptance and                •   Ownership, Proprietary Information,
    Cancellation Periods                       Duplication and Disclosure
•   Purchasing Preferences (e.g., 40%      •   Acknowledgement of Publication
    from Small Businesses)                 •   Business-to-Government Contracts
•   Contractor and Service                     and Orders
    Responsibilities                       •   Contract Administration
•   Contract Renewal                       •   Method of Payment
•   Subcontracts                           •   Pricing Schedules
•   Notifications of Positions Filled or   •   State government as a reference
    Vacated                                •   Leasing Fees
•   Data Confidentiality
•   Treatment of Property and

General RFP Evaluation
Criteria Examples

•   Understanding of project                  •   Management approach including how
    requirements                                  the vendor interacts with the
•   Vendor background including financial         organization as well as the project
    stability, past performance to projects       timeline and associated deliverables
    of similar size and scope, and            •   Vendor’s process regarding updates,
    references                                    enhancements, or regulatory changes
•   Compliance to functional, technical,      •   Acceptance with contractual terms
    and performance requirements,             •   Vendor presentations (if organization
    including Meaningful Use core and             has engaged in a Orals/Presentation
    menu requirements as applicable               process
•   Overall life cycle cost beyond the
    original purchasing price
•   Personnel qualifications

HIE Requirements and
Evaluation Criteria Examples

                   • Alignment with state S&O plan and Direct Project Best Practices for HISPs, as well as state
                     and national regulations, including state laws, CMS regulations, etc.
Direct / Secure    • Ability to offer core HISP services and additional value-added services beyond the core
                     specifications to providers
  Messaging        • Strength of their services, technology systems, and processes
                   • Does it include certification management?

                    • Ability to interface with other vendor Provider Directory/Index products or services. Also
                      specify the standards, technologies, protocols, and specific interactions with those vendors.
   Provider         • Ability to load provider information and enroll or update information in the directory.
  Directories       • Compliance with all current and future federal standards and requirements.
                    • Who will be responsible for obtaining, validating, and updating information?

                   •Adequate experience dealing with developing interfaces to common source services (such as lab information
                    systems, hospital EMR systems, LIS, and national labs) and interfaces with common physician office EHRs.
                   •Approach to and experience with utilizing different types of clinical messages and document formats, such as
 Lab Interfaces     HL7, CCD, CCR, DICOM and ability to handle different types of images and files.
                   •Approach to and adequacy of experience with LOINC mapping and use of LOINC codes.
                   •Who will be doing the nuts and bolts of interface work with labs?

                    • Demonstrate an understanding and acceptance of the technical architecture
Network Hosting     • Demonstrate an ability to integrate statewide/sub-state HIE into daily activities and
/ Administration      workflows of clinicians
                    • Demonstrate interoperability based on federal and state requirements
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 process
• 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

• 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
Solidifying Your Vendor Relationship


Executing Procurements Process

 Obtaining Vendor                  Selecting the                  Awarding a
    Responses                         Vendor                       Contract

• Addressing vendor            • Reviewing the              • Addressing any vendor
  questions, objections,         responses/proposals          protests
  and clarification requests   • Scoring and/or selecting   • Addressing any conflict of
                                 finalists                    interest concerns
                               • Requesting additional      • Any additional
                                 information from the         negotiations with
                                 vendor short-list (e.g.,     vendors
                                 demonstrations or oral     • This will include several
                                 presentations)               documents:
                               • There are a variety of       • Notice of Intent to
                                 ways that a vendor can         Award
                                 be selected, including:      • Press Releases
                                 • Lowest cost estimates      • Procurement Contract
                                 • Weighted evaluation          Award
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 process
• Independent Estimates: Preparing separate, objective cost
  estimates to compare to the proposals
   – 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    •   Limitation of liability
•   Schedule baseline                    •   Fees and retainage
•   Performance reporting                •   Penalties
•   Period of performance                •   Incentives
•   Roles and Responsibilities           •   Insurance and performance bonds
•   Vendor’s place of performance        •   Subordinate subcontractor approvals
•   Pricing                              •   Change request handling
•   Payment terms                        •   Termination and alternative dispute
•   Place of delivery                        resolution (ADR) mechanisms
•   Inspection and acceptance criteria        – This can be decided in advance as
                                                part of the procurement award
•   Warranty
•   Product/Service support
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
                      • 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 Services

• 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 subcontractors
    – The contractor must keep abreast of changing regulations
• 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 PHI
• 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

Non–Disclosure Agreements

• A Non-Disclosure Agreement (NDA) is key to protecting your state and
  citizens’ private information
• 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 it’s 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 support
 Strategies to Develop Effective
 Service Level Agreements

• Identify service levels that your infrastructure needs so the SLA is
• Design the SLA so that it clearly defines the service provider's
• 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

1. 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 levels.
2. 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

Service Level Agreements
Example Terms (2)

3. 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 signatories.
4. Representatives
  •   Agency Name and Company Name nominate the following
      representatives responsible for the monitoring and maintenance of the
      service agreement:

      Agency Name               Company Name
      Agency Representative     Company Representative

Service Level Agreements
Example Terms (3)

5. 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.
6. 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 parties
• Consider additional documents for administration of the
  procurement as it relates to your states environment and
  procurement policies and procedures
   – An example would be regular progress reports

Vendor Management

                                          Draft, Review,
                  Define the Chain
                                         Revise, Execute
                   of Command

            Establish Change
                                               Deliverables, Key
                                               Milestones, and

                               and Processes

            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
                           – Transparency in roles and responsibilities for contract management

                   Draft, Review,
     Define the
      Chain of
              Establish         es
                s and
             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
            • Once a change has been negotiated and agreed upon,
              the contract should be amended and formally accepted
              by both parties

                   Draft, Review,
     Define the
      Chain of
              Establish         es
                s and
             Define Deliverables, Key Milestones,
             and Responsibilities

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

                   Draft, Review,
     Define the
      Chain of
              Establish         es
                s and
             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

                   Draft, Review,
     Define the
      Chain of
              Establish         es
                s and
            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
                   Draft, Review,
                                           Handling performance problems
     Define the
      Chain of
              Establish         es
                s and
            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
                   Draft, Review,
     Define the
      Chain of
              Establish         es
                s and
            Establish Change Control Processes

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

                   Draft, Review,
     Define the
      Chain of
              Establish         es
                s and
Contracting Due Diligence

Stage 4 – Closing a Vendor Contract

   Administrative             Procurement
                                                      Closed Contract
     Activities                  Audits

• This can include:       • Conduct a structured    • The buyer provides
  • Negotiating all         review of the entire      the seller with formal
    outstanding issues,     procurement process       written notice that
    claims and disputes     to identify successes     the contract has been
  • Updating records        and failures in           completed
                            preparation or          • Requirements for
  • Information and
                            administration of         formal closure should
    document archiving
                            other procurement         be defined in the
  • Formal acceptance       contracts                 terms and conditions
    of all outstanding
                                                      of the contract

Preparing for Closure

• Beyond the fulfillment of the contracts terms and
  conditions, a contract can be closed for a variety of
   –   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 circumstances

State S&O 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:

                                Capacity –

        Orchestrator           Public Utility
      State HIE Strategic/Operational
      Plan Emerging Models

          Elevator                         Capacity-builder                    Orchestrator                      Public Utility

                                                $         $

Aggressive facilitation of          Development and bolstering of      A thin-layer state-level network   A single statewide network and
directed exchange capabilities to   sub-state exchanges through        that connects existing sub-state   HIO organization that provides
support Stage 1 MU and on-the-      financial and technical support,   exchanges that provide direct      “retail” exchange services
ground support for                  tied to performance goals          HIE services to end-users          directly to end-users
providers/data suppliers
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 state’s 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 requirements.

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
•   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/transformation 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
    – Targeted development of services to support directed exchange including directory
      services, translation/transformation services and authentication/certificate
    – 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 specifications
    – 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 (RLS)
    – Higher level analytics or repositories initially populated/enabled through push messages
    – Nationwide Health Information Network (NWHIN) Gateway
    Elevator Contracted Services

                   • Additional HISP services (e.g., statewide provider directory, certificate
                     authority, or SMTP/XDD adaptors)
     Phase 1       • Services to support directed exchange, including directory services,
Implementation:      translation services, and authentication/certificate management
 Direct Exchange   • Technical support of providers/data trading partners to enable them to
     Services        share care summaries and send lab results using directed specifications
                   • Marketing and outreach of REC/provider registration activities

                   • Master patient index (MPI) or record locator service (RLS)
                   • Higher level analytics or repositories initially populated/enabled
    Phase 2          through push messages
                   • Nationwide Health Information Network (NWHIN) Gateway

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 Inpriva’s 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 Workgroup
• RI has distributed a simple Application-to-Participate. HISPs who
  meet evaluation criteria will become members of a new HISP
    – RI also assists in planning Marketplace Health IT Expos to allow vendors to
      meet providers directly

Capacity–Builder Model

 Model Summary: Bolstering of sub-state exchanges through financial and technical
                      support, tied to performance goals

• 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
    – 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

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

Capacity–Builder 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 end-users
    – State-level shared services to connect sub-state nodes, which may indicate a
      transition to the Orchestrator Model

Capacity–Builder 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 services.
•   Texas Health Services Authority (THSA) evaluated proposals and ensured the
    delivery of core HIE services and adherence to state standards. Evaluation metrics
     –   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

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

• Provides a light, statewide “network-of-networks” architecture to connect
  sub-state nodes and facilitate HIE transactions across existing exchanges
    – Qualified organizations could include regional/community HIOs, IDNs, IPAs,
      HISPs, EHR hubs, etc., which may provide HIE services to end-users.
• Unlike Capacity–Builders, 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 end-users

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

                   • Services that enable basic directed exchange (push) across sub-
                     state networks in alignment with Stage 1 MU requirements
     Phase 1       • Messaging hubs or gateways to route messages across nodes
 Direct Exchange   • Security services
     Services      • Provider/entity directories to facilitate addressing of messages

                   • Expanding core infrastructure to support query/retrieve (pull) of
                     patient data
    Phase 2        • Federated MPI and RLS to match patient identities and locate
                     patient data across sub-state networks
    Services       • Patient routing services
                   • Event notification services
                   • Lab or CCD translation.
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

 Model Summary: Statewide HIE activities providing a wide spectrum of HIE services
         directly to end-users and to sub-state exchanges where they exist

• 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 models.
    – 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 networks
• Effort is a proactive state-led approach and requires:
    –   Broad participation and support among stakeholders across the state
    –   Highly defined project management and technology deployment approach
    –   The provision of retail services directly to end-users
    –   Strong policy and/or funding support from the state government or other stakeholders

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 summaries
     – 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

                   • Goal is to support Stage 1 Meaningful Use. Phase may also include:
     Phase 1         • User-facing applications such as portals, EHRs, PHRs, etc.
Implementation:      • Ancillary services such as hosting, training, and help desk support
   Connecting        • Multi-layered model of directed exchange and query-response exchange
 Stakeholders to     • Connect providers to current infrastructure, with focus on “white space”
     Existing          providers
  Infrastructure     • Enhance existing network to provide services to support MU, including
                       clinical messaging or routing of lab results and exchange of care summaries

                   • Expand core infrastructure to support query/retrieve (pull) access to
                     longitudinal care record
    Phase 2        • Connection to NWHIN
Implementation:    • Consumer access (PHRs)

Public Utility Case Study: KY

•   The Kentucky Health Information Exchange (KHIE) was                               initially
    funded through a Medicaid Transformation Grant and
    operational since April 2010.
•   Core components already in place in the statewide exchange include:
     –   Master patient/person index and record locator services
     –   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
     – This will support statewide HIE that is open to all healthcare providers and
     – Has contracts in place with ACS Healthcare.
Vendor Management Resources

• Project Management Toolkit Module
• Change Management Toolkit Module
• INPUT Website
   – Free accounts allow you to monitor state procurements for HIE and other HIT
• HHS Generally Accepted Accounting Principles
• 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
•   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
•   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 contract’s 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 contract
• In an RFI, the state will request various pieces of information from
  potential vendors related to the state’s 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
• Because a contract isn’t 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 products/services
    – 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)
  aren’t significant
• 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 project
    – The lowest price quote does not necessarily win the contract, many other criteria are
• 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)


To top