WASHINGTON – In the face of what it characterizes as a "programmatic and financial review," the Foundation for eHealth Initiative says it has filed all outstanding documents demanded by the federal agency overseeing millions of dollars in healthcare IT grants.

The Health Resources and Services Administration had given the foundation a final deadline to document grant expenditures over the past two years.Dena Puskin, director of HRSA's Office for the Advancement of Telehealth, notified the foundation's chief executive, Janet Marchibroda, that an audit would be conducted because the eHealth Initiative Foundation had failed to provide key documents regarding federal grants.

Among the documents requested by HRSA are a carryover request for unexpended funds from the first year of the grant, a financial status report for Year 1 funds and a detailed work plan, budget and budget narrative for Year 2 funds.

The memo also included a list of new documents the agency requested for delivery within 15 business days "to assist in preparation for the audit."

"In order to facilitate the audit," Puskin's Aug. 3 memo says, "we strongly urge you to provide the above requested information withn the next three business days.

Marchibroda said now that the FeHI had met the federal requirements, "they are not conducting an audit."

Puskin and other executives at the Office for the Advancement of Telehealth, which is part of the Health Resources and Services Administration under the Department of Health and Human Services, could not be reached for comment today. Lawrence L. Bryant, deputy director of the office, said last week he was not authorized to comment on the matter.

At issue is the Foundation for eHealth Initiatives' program called "Connecting Communities for Better Health." In July 2004, the foundation awarded $2 million in funding collectively to nine communities to pursue local projects in electronic health information exchange.

The program is funded through an agreement with the Health Resources and Services Administration Office for the Advancement of Telehealth. The idea behind the project is to provide a foundation for an interoperable healthcare information infrastructure. Participating communities are Denver; Indianapolis; Waltham, Mass.; Baltimore/Washington metro area; Santa Barbara, Calif.; Fishkill, N.Y.; Kingsport, Tenn.; Bellingham, Wash.; and Milwaukee.

The Office for the Advancement of Telehealth is administering two congressional mandated grant awards to the Foundation for eHealth Initiative that total more than $6.8 million.

In the Aug. 3 e-mailed memo obtained by Healthcare IT News, Puskin wrote: "We continue to have serious concerns regarding FeHI's ability to manage the program in a satisfactory manner that is in compliance with Federal government policies. There have not only been substantial delays in FeHI's deliverables, but there are continued concerns about the program's financial management through the draw down process, significant staff turnover, and FeHI's ability to produce satisfactory deliverables and conduct an adequate evaluation of the program."

In a statement released today, Marchibroda said: "eHealth Initiative's Foundation denied that there is an audit currently being performed by HRSA in conjunction with its cooperative agreement with the agency. In keeping with standard procedure related to federal grants, it is anticipated that HRSA will conduct a review of eHealth Initiative Foundation's activities conducted in conjunction with the cooperative agreement.

"…All reports due to HRSA in the normal course of business have been filed and are up to date."

The foundation has a positive working relationship with HRSA, Marchiborda added, and welcomes the review.

Francois deBrantes, president of the Foundation for eHealth Initiative, took exception to the word "audit."

"The terminology used was incorrect," he said, and in subsequent memos and conversations HRSA retracted the terminology, he claimed.

"The memo says one thing," he said. "The reality is another."

John Glaser, CIO of Partners HealthCare System, president of eHealth Initiative, and a member of the foundation's board said last week the foundation responded to the federal agency's concerns by providing the information required.

"It was largely related to whether reports have been filed," Glaser said. "I think we're in good shape."

Glaser said he and deBrantes met with Marchibroda and Robert Marotta, a lawyer, who serves as the foundation's treasurer, about a week ago to review the status of reports due.

Glaser characterized the situation as a "procedural and process matter."

"We ought to get them in on time," he said, of the federal reports. "The staff is running a thousand miles an hour."

Responding to a question about staff turnover, Glaser acknowledged there had been "some" turnover due, he said, to the "high pressure" of the jobs.