Parks Associates Blog

Thursday, January 15, 2009

CMS kicked off PHR Pilot in Arizona and Utah

The Center for Medicare and Medicaid Services (CMS) officially launched a PHR pilot on Tuesday in the states of Arizona and Utah. According to the design of the pilot, it will run for about a year before CMS considers the next stage. Four PHR service providers, including Google Health, HealthTrio, NoMoreClipboard, and PassportMD, contracted with CMS on this pilot. These providers will compete with one another in these two states trying to sign up users. To incentivize providers as well as potential users, CMS promises to transfer up to two-year claim data from Medicare to one of the four player’s ePHR system. As a side note, the pilot targets the traditional Medicare fee-for-service population.

The CMS pilot is an investment in brand building for these PHR providers in the first place. If they are successful, CMS could continue to hire them in the future. Even if the pilot ends with no renewal, they can still use the experience to promote their services to other clients. The challenges for these vendors are significant too. To start with, managing the Medicare fee-for-service population is an arduous task. The user satisfaction score will be one of the most important evaluation criteria for CMS. Engaging these seniors so that they will continue using the PHR tools throughout the pilot period is critical to high user satisfaction. Finally the multi-vendor approach by CMS could also test the interoperability of these services. Will a user be able to transfer his medical data from one provider to another if he is not satisfied? How smooth will that experience be? These questions can be headaches for these providers and CMS clearly do not want to meddle with them.

This pilot is equally important for the PHR technology industry. Successful completion of the pilot could lead to future funding efforts from CMS to extend the program to other states. CMS’ endorsement would have a ripple effect on the private sector as CMS usually wields high influence on the policies of the private insurance sector.

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