Economic Stimulus Package Incentives for Electronic Health Records

On February 17, 2009 a $787 Billion, the American Recovery and Reinvestment Act of 2009 aka “the Stimulus Bill,” was signed into law by the federal government. Included in this law is $19.2 Billion which is intended to be used to increase the use of Electronic Health Records (EHR) by physicians and hospitals; this portion of the bill is called, the Health Information Technology for Economic and Clinical Health Act, or HITECH Act. You can view the text of the signed bill here.

$17 Billion will be used for incentive payments to physicians and hospitals that participate in Medicare and Medicaid programs. These incentives will be issued to current users and new adopters of certified EMR systems, who use the system in a meaningful way. The certification process and standardization criteria have NOT yet been determined, and will be decided upon by the end of 2009.

· Hospitals - Hospital incentives start at $2 Million annually, with an additional reimbursement amount tied to annual Medicare discharge volume, and decrease for each subsequent year during the 5-year incentive period.

· Physicians - Non-hospital-based physicians and physician groups can expect to receive up to $60,000 during the 5-year incentive period for Physicians whose caseloads include at least 30% Medicaid patients. The reimbursement plan includes $18,000 the first year.

Physician Reimbursement Plan
	Adopt 2011	Adopt 2012	Adopt 2013	Adopt 2014	Adopt 2015
2011	$18K	$0	$0	$0	$0
2012	$12K	$18K	$0	$0	$0
2013	$8K	$12K	$15K	$0	$0
2014	$4K	$8K	$12K	$15K	$0
2015	$2K	$4K	$8K	$12K	$0
2016	$0	$2K	$4K	$8K	$0
Total	$44K	$44K	$39K	$35K	$0

EHR Systems That Qualify for the Incentives - Qualifying EHR systems (tied to “meaningful EHR users”) must meet the following criteria.

· Clinical Decision Support - As yet undefined, but presumably includes, for example, drug allergy and drug interaction tracking capability

· Physician Order Entry - As yet undefined, but presumably includes support for entry and storage of diagnoses, course of treatment, etc.

· Ability to Capture Health Care Quality Data - “To capture and query information relevant
to health care quality.” As yet undefined, but the legislative history suggests concerns over those “underserved” within the U.S. healthcare system.

· Ability to Support the Exchange of Clinical Data with Other Organizations - As yet undefined, but will presumably include elements of system interoperability.

Reasons to Wait

· State of Flux - Just like you, EHR system vendors are anxiously awaiting the new EHR system qualification criteria, including any new certification standards. They cannot develop to compliance until the new compliance requirements are known. So, you might decide to wait for the regulatory dust to settle before you buy your first EHR system or upgrade to a new system.

· Buy Now, Get Reimbursed Later - With the after-the-fact reimbursement structure of the EHR incentive program, you may find that you do not have sufficient money of your own right now to invest in an EHR system. And even if you do, you certainly don’t want to waste money on a system that might not qualify for incentive reimbursements down the road (as the government has NOT yet made any reference to partnerships with any existing EMR certification organizations.).

Reasons NOT to Wait

· Planning and Sourcing Take Time- Think of it this way. There are over 300 HER system vendors out there, and your attempt to understand the functional and technology-environmental variations among the current vendor offerings could make your head spin. My point is this. If you want to take advantage of the EHR incentives, you better get started NOW. You don’t necessarily have to commit to a buying decision now, but you should start your planning process now. Get informed, stay informed. Don’t procrastinate.

· Reimbursement Penalties - Remember that the stimulus bill includes not just incentives for EHR system adoption. It also includes penalties. After 2015, further financial incentives will NOT be available and penalties will kick in. There will be a 1% reduction in Medicare fees per year, up to 3% by 2017.