Posted by Soraya Hareez on Fri, Apr 10, 2009
On February 17th, President Obama signed into law the American Recovery and Reinvestment Act of 2009, which aims to stimulate the economy through investments in many different fields - one being healthcare information technology. Under what is referred to as the HITECH Act, the government will grant $20.8 billion in Medicaid and Medicare incentives for physicians and hospitals to adopt EHRs (electronic health records).
The terms EHR (electronic health record) and EMR (electronic medical record) are often used interchangeably.
Incentives (increased payments/reimbursements) will begin in fiscal year 2011, with the largest reimbursements within the first year and decreasing amounts for each subsequent year. Penalties (reduction in fee schedules) for lack of adoption will begin in fiscal year 2015.
Who qualifies?
The HITECH act states that eligible professionals who demonstrate meaningful use of a certified EHR will qualify for these incentives. Here is a breakdown of these terms:
Eligible professional: An eligible professional is an office-based physician. Eligible professionals can have employment relationships with hospitals, but the bulk of services must be provided outside of a hospital setting.
Meaningful use: Meaningful use will include use of ePrescribing and quality measures reporting as designated by the Health and Human Services Secretary.
Certified EHR: HIT Standards Committee is currently establishing standards for certification of EHRs - the deadline for having standards set is December 31, 2009. (Vālant is closely tracking certification developments and is fully committed to complying with standards and achieving certification.)
What are the incentive payments and penalties?
Providers may receive reimbursement incentives from either Medicare or Medicaid (not both).
MEDICARE INCENTIVE
Providers may receive up to $44,000 over five years for proving meaningful use of a certified EHR.
First payment year: $18,000 if first payment year is 2011 or 2012
$15,000 if first payment year is 2013
$12,000 if first payment year is 2014
Second payment year: $12,000
Third payment year: $8,000
Fourth payment year: $4,000
Fifth payment year: $2,000
Eligible professionals working in health professional shortage areas (HPSAs) will receive a 10% increase in incentive payment amounts.
MEDICARE PENALTY
Providers who have not begun to demonstrate meaningful use of an EHR by 2015 will experience a reduction in Medicare fee schedules as follows:
2015: 99%
2016: 98%
2017 and on: 97%
MEDICAID INCENTIVE
In order to qualify for the Medicaid incentive, providers must rely on Medicaid assistance for at least 30% of their patient volume. For eligible Medicaid providers, the State is authorized to provide reimbursement for 85% of net average allowable costs of EHR adoption and startup - up to $63,750 over 6 years. Medicaid incentives for EHR adoption will begin in 2011. There are no set Medicaid penalties for lack of EHR adoption.
Vālant's blog will be updated as further incentive and certification details are released by the Secretary. Subscribe to our blog to receive an update as soon as more information becomes available.
Additional Information
Summary of Key Health Information Technology Provisions from the Stimulus Package
From the Healthcare Information and Management Systems Society (HIMSS
The American Recovery and Reinvestment Act of 2009
The full legal document (HITECH Act is Title XIII, pages 112 - 165)