June 9th, 2008

In 2005, Highmark, Pittsburgh’s dominant health insurer, announced plans to establish a $26.5 million fund, called the Highmark eHealth Collaborative, which would have distributed grants of up to $7,000. Physicians were to use the money to invest in electronic equipment that would allow them to deal with prescriptions and patients’ health files electronically, reports the Pittsburgh Post-Gazette:

“But because the money was funneled through the eHealth Collaborative — itself to be maintained by The Pittsburgh Foundation — before reaching the doctors, the collaborative needed to obtain tax-exempt, 501(c)(3) charitable status from the IRS. The IRS has been “conducting a lengthy review of this and other initiatives that support the adoption of health information technology by physicians and has not yet rendered an opinion as to the tax exemption,” according to Highmark.

Yesterday, Highmark said it would disburse the money itself, instead of through an intermediary. The ground rules for the $29 million fund are the same — Highmark will pay up to 75 percent of the physician’s equipment costs, up to a maximum of $7,000 per physician’s office. The physician is to pay for the balance of the investment.”