Health care leaders statewide submitted a plan this year to the Maryland Health Care Commission to form a statewide health information exchange system to allow hospitals to share electronic medical records. The group, called the Chesapeake Regional Information System for our Patients, includes representatives from Johns Hopkins, MedStar Health, the University of Maryland Medical System and Erickson Retirement Communities.

A new state law, set to take effect July 1 if Gov. Martin O'Malley (D) signs the bill, requires the Maryland Health Care Commission and the Health Services Cost Review Commission to designate the state health information exchange by Oct. 1. At least 13 states have adopted statewide health information exchange systems, according to a legislative report.

The law also requires the state to pass regulations that establish incentives for health care providers to adopt electronic medical records by Sept. 1, 2011.

The Maryland Health Care Commission is soliciting bids from companies to build the exchange system, with a June 12 deadline. The state Health Services Cost Review Commission will provide the initial funding of up to $10 million through hospital reimbursement rate adjustments, according to a recent commission report.

That funding mechanism is "unique" among states, officials with the American Health Information Management Association said in a recent report. Overall, hospitals and physician practices have "significant limitations" in paying for capital costs of statewide health information exchange systems, the report said.

"In addition, the recent economic downturn puts additional pressure on providers to reduce costs," the report said. "Even hospitals with positive cash flows have challenges amassing the capital internally to make large IT investments, and when they do invest in health IT, it is aligned to support the organizational needs. As a result, IT investments tend to focus on internal, tactical operational needs."