Mass. RHIO spins off for-profit subsidiary

The new arm will provide consulting services to raise money to help the nonprofit parent expand its information technology network.

By Pamela Lewis Dolan — Posted March 11, 2009

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After launching a three-community pilot program focused on expanding electronic health record implementation, the Massachusetts eHealth Collaborative has spun off a for-profit subsidiary to help expand health IT adoption even further.

The MAeHC Professional Services Corp. says it will provide consulting services across the country as a way of raising capital to expand its pilot program across Massachusetts.

The group will be consulting individual organizations and practices as well as health information exchanges, said Micky Tripathi, president and CEO of the Massachusetts regional health information network. He also is president of the PSC subsidiary.

Tripathi said the group was receiving requests for consulting work when it decided to create a wholly owned, for-profit subsidiary. That way, he said, it could do contract work for other organizations without worrying about its nonprofit status. As a wholly owned subsidiary, the organization's profits will be put directly back to the e-health collaborative.

One of the group's first clients is Boston's Beth Israel Deaconess Medical Center, which is in the throes of a large electronic health record deployment project to more than 1,300 affiliated physicians.

The project is one of the first and largest projects made possible via new exceptions to the Stark laws and safe harbors to anti-kickback rules, which allow hospitals to subsidize health IT adoption for nonemployed physicians. The PSC group is providing strategic guidance for the project as well as providing one-on-one consultations with each physician practice implementing an EHR.

The group also is working with the New York eHealth Collaborative, which is funding nine RHIOs in the state, and the Capital District Physicians' Health Plan in Albany, N.Y., which is creating incentive plans for EHR adoption and creating a quality reporting mechanism.

Tripathi said the group's work and profits are separate from the RHIOs it helped create in Massachusetts under the three-community pilot program, which it plans to eventually extend statewide.

The parent RHIO acts as the arm that secures funds to get those projects up and running. It provides consultation services on how to create a sustainable business model, but each runs as a separate business. Although the projects have been widely referred to as successful, all three have struggled to develop a sustainable business model.

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