Right now is a once-in-a-career opportunity for states to upgrade IT infrastructure – with federal funding – to bolster the healthcare services they provide, namely with health insurance exchanges (HIX). But they must act wisely, or risk being devastated during the procurement process. And time is everyone’s enemy.

That’s the assertion put forth by Bobbie Wilbur, co-director of Social Interest Solutions. Government Health IT Editor Tom Sullivan spoke with Wilbur about this quandary, why the early innovators did not work out as planned, the downsides to states letting the federal government run their HIX and the risk of hedging bets that a new administration might alter the HIX rules altogether.

Q: In previous discussions, you mentioned a certain quandary states are in: they have to begin establishing health insurance exchanges now – but the guidelines and standards are not fully-baked at this point.
A: The law gets passed and then the feds issue standards and regulations and the regulations really kind of put the operational considerations around the ‘how’ you implement the law. The feds have made great progress, this is a complex law. They’ve made great progress, but it is 2,200 pages of law, so they still have a ways to go. But the timeline, which is 2014 and actually to have an exchange stood up by 2014, which backs them into the timeline that the exchanges have to be operational by June 1, 2013. The reason for that is so you can load the plans in and provide open enrollment to consumers by October 1, 2013. You’re really looking at June of 2013. So time is the enemy of everyone in this thing because of what’s facing them. The feds are moving as quickly as they can to get the regulations and the standards out, the states are consuming that as quickly as it comes out from the feds and trying to do everything they can to simultaneously get ready. So everybody’s marching against the time. The states, in order to get something stood up in time, have to move. They have to start buying, they have to start developing, they have to start moving or just they won’t make it.

Q: So does this apply to every state? Are any advanced enough that they are not in this situation, or somehow otherwise immune to it?
A: The feds issued some early financing to a group they called Early Innovators. And they awarded that to seven different states. Those actually started sooner, with funding from the feds, but at the time they got the grant, the only standards the feds had issued were on section 1561. The other regulations and the other information coming from the feds had not yet been published or was not available to the states. So the states agreed to go early, try to get some things stood up, and the idea was that those seven states would provide systems, capabilities, ideas or functionality that would be available to all other states.

[See also: An inside look at Maine's MMIS implementation.]

The problem is, all the other states are at least six months behind them. Nobody’s fast enough, so all the states had to get into this. The group of states that may be somewhat immune to this are the ones that have chosen not to build their own exchanges – and those states are then reliant on the feds to build their exchange. They’re a little bit immune but the difference might be that they all have their eyes pointing toward what the feds will be providing for them. The feds are in almost the same situation as the states are, the only difference being the feds awarded their exchange work, the group that is actually going to build their exchanges about a two months ago.

Q: What’s the downside for states leaving it to the feds?
A: What I hear from state colleagues is that they’re nervous about leaving it to the feds because of the significant interaction with state systems to make this work. So if you leave it to the feds, you still have to build a lot of capabilities, it’s not like you’re really scot-free.