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Introduced by   Committee on Health Care


Subject:  Health; health care information technology; health e-fund

Statement of purpose:  This bill proposes to establish a health e-fund board to oversee and manage a health e-fund for the purpose of financing health vare information technology programs and initiatives.


It is hereby enacted by the General Assembly of the State of Vermont:


(a)  Improving the capability to access and exchange electronic health information is a key component of Vermont’s health care reform initiatives as originally expressed in the Health Care Affordability for Vermonters Act of 2006 and updated in No. 70 of the Acts of 2007.

(b)  The Health Information Plan produced by the Vermont Information Technology Leaders (VITL) and accepted by the general assembly documents the value of creating a statewide health information exchange network and the importance of providing financial and technical support to primary care practitioners to enable them to select, install, and use electronic medical records effectively.

(c)  The creation, installation, and use of electronic information tools through the chronic care information system is a key element of the Blueprint for Health initiative to improve the prevention and care of chronic conditions.

(d)  The financing model of the existing health care system results in most of the financial benefits of the use of health information technology not being realized by the primary care practitioners who have to invest in and use the electronic medical record.  Those financial benefits accrue primarily to those who pay for health care services.

(e)  No. 70 of the Acts of 2007 authorized an interim health information technology fund and pilot electronic medical record program, which is being successfully implemented by VITL and is demonstrating the effectiveness of this approach to assisting primary care practitioners.

(f)  The return on investment from electronic medical record implementation as reported by medical practices using this technology shows:

(1)  substantial administrative savings based on staff duties for chart pulls, new chart creation, searches, and transcriptions;

(2)  savings on ordering and communicating tests, managing results, referral dictations, and transcription; and

(3)  a practice that sees 100 patients per day can save approximately $24,000.00 per year in charting supplies alone.

(g)  The December 2007 report of the commonwealth fund commission on a high performance health system entitled “Bending the Curve” found that electronic medical records, when implemented along with process redesign efforts, can help providers improve quality and reduce medical errors, while health information exchange can improve care coordination and reduce unnecessary tests.

(h)  The commonwealth fund commission report also estimated a cumulative savings of $88 billion nationally over a 10-year period due to the implementation of regional health information exchanges and electronic medical records.

(i)  The gap between available funding and projected expenses for health information technology identified by VITL in the studies and plans it has submitted to the general assembly pursuant to Nos. 70 and 71 of the Acts of 2007 totals between $35 million and $40 million over five years.

Sec. 2.  2  V.S.A. chapter 27 is added to read:



There is created a health e-fund board.  Members of the board shall include three members appointed jointly by the speaker of the house and the president pro tempore of the senate and three members appointed by the governor.  Board members shall not be potential recipients of the health e-fund grants, subcontracts, or contracts.  The board shall meet as required to carry out its responsibilities under section 962 of this title.  Legislative members shall be entitled to compensation and expenses as provided in section 406 of this title.  All other members shall be entitled to compensation and expenses as provided in section 1010 of Title 32.


(a)  The Vermont health e-fund is established in the department of the treasury as a special fund to be a source of financing for medical health care information technology programs and initiatives such as those outlined in the Vermont health information technology plan administered by the Vermont Information Technology Leaders (VITL).  One hundred percent of the fund shall be disbursed for the advancement of health information technology adoption and utilization in Vermont as appropriated by the general assembly, less any disbursements relating to the administration of the fund.  The fund shall be used for the development of programs and initiatives sponsored by VITL and state entities designed to promote and improve health care information technology, including:

(1)  a program to provide electronic health information systems and practice management systems for primary care practitioners in Vermont;

(2)  financial support for VITL to build and operate the health information exchange network;

(3)  implementation of the Blueprint for Health information technology initiatives and the advanced medical home project; and

(4)  consulting services for installation, integration, and clinical process re-engineering relating to the utilization of healthcare information technology such as electronic medical records.

(b)  The health e-fund shall be administered by the secretary of administration or his or her designee as directed by the e-fund board established in section 961 of this title.

(c)  Into the fund shall be deposited:

(1)  revenue from the reinvestment fee imposed on health insurers pursuant to section 4089k of Title 8;

(2)  contributions from the office of Vermont health access, as appropriated by the general assembly; and

(3)  the proceeds from grants, donations, contributions, taxes, and any other sources of revenue as may be provided by statute, rule, or act of the general assembly.

(d)  The fund shall be administered pursuant to subchapter 5 of chapter 7 of Title 32, except that interest earned on the fund and any remaining balance shall be retained in the fund.  All monies received by or generated to the fund shall be disbursed solely as allowed by appropriation of the general assembly.

(e)  VITL and any other entity requesting disbursements from the healthy

e-fund shall develop an annual detailed plan for proposed expenditures from the health e-fund for the upcoming fiscal year.  The expenditure plan shall be included within the context of the entity’s overall budget, including all revenue and expenditures. 

(f)  The plan developed under subsection (e) of this section shall be submitted to the health e-fund board for approval.  The health e-fund board shall submit its recommendations to the general assembly.

(g)  The secretary of administration or his or her designee shall submit an annual report on the receipts, expenditures, and balances in the health e-fund to the joint fiscal committee at its September meeting and to the commission on health care reform by October 1.  The health e-fund board shall commission an annual study of the effectiveness of programs and initiatives funded through the health e-fund with reference to a baseline, benchmarks, and other measures for monitoring progress and any return on investments made.

(h)  VITL and any other beneficiary receiving funding shall submit quarterly expenditure reports to the secretary of administration, the e-fund board, and the health care reform commission, including a year-end report by August 1.

Sec. 3.  8 V.S.A. § 4089k is added to read:



(a)  Quarterly, beginning October 1, 2008, each health insurer shall pay a fee into the health e-fund established in section 962 of Title 2.  The fee shall be 0.5 of one percent of all medical claims paid by the health insurer in the previous fiscal quarter.

(b)  As used in this section:

(1)  “Health insurance” means any group or individual health care benefit policy, contract, or plan offered, issued, or renewed to a Vermont resident, including any health care benefit plan offered, issued, or renewed by any health insurance company, any nonprofit hospital and medical service corporation, or any managed care organization as defined in section 9402 of Title 18.  It does not include any state health care assistance program financed in whole or in part through a federal program, unless authorized by federal law and approved by the general assembly.

(2)  “Health insurer” means any person who offers, issues, or renews a health insurance policy, contract, or plan, and includes third party administrators.


(a)  No later than June 30, 2011, the health e-fund board shall assess the adequacy of funding and the appropriateness of the duration of the health care information technology reinvestment fee.

(b)  Sec. 3 of this act, requiring payment of a health care information technology reinvestment fee, shall sunset June 30, 2013.

Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont