Stimulus Package Provides Incentives for the Use of Health Information Technology, Electronic Health Records
2/14/2009
The American Recovery and Reinvestment Act of 2009, passed by Congress on Friday, Feb. 13, 2009, includes the Health Information Technology for Economic and Clinical Health Act (the HITECH Act). The purpose of the HITECH Act is to promote the use of health information technology with a goal of utilization of an electronic health record for each person in the United States by 2014.
Incentives for Hospitals and Physicians
The Act provides incentives to physicians and hospitals to adopt and use certified electronic health records (or EHR) technology.
Calculation for Hospital Incentive Payments
Hospitals that are meaningful EHR users (as defined below) during a payment year will be paid an amount based on an equation that takes into account a base amount of $2,000,000 plus an additional amount based on the number of discharges for such hospital, on a graduated basis. The equation also considers additional adjustments based on other factors.
There will be a phase down for eligible hospitals first adopting EHR after 2013. If the first payment year for an eligible hospital is after 2015, the hospital will not receive an incentive payment for that year or any subsequent year.
Calculation for Physician Incentive Payments
Physicians who are meaningful EHR users (as defined below) will be paid amounts not to exceed $15,000 for a physician for the first payment year (or $18,000 for the first payment year if the first payment year is 2011 or 2012) with decreasing amounts during the second through fifth payment years. No incentive payment will be made during the sixth and succeeding years. An additional incentive is provided for doctors who predominantly furnish services in rural areas designated as “health professional shortage areas.”
There will be a phase down for physicians first adopting EHR after 2013. For example, if the first payment year for a physician is after 2013, then the incentive amount for the first year would be $12,000, instead of $15,000 or $18,000. If the first payment year for a physician is after 2014, then he or she would receive no incentive payment, and no incentive payments will be paid after 2016.
The incentive payments for physicians DO NOT apply to hospital-based physicians who furnish substantially all of their services in a hospital setting through the use of the facilities and equipment of the hospital. Hospital-based physicians include pathologists, anesthesiologists and emergency physicians.
The Act also provides implementation and operational funding for Medicaid providers who adopt EHR.
Requirements for “Meaningful EHR User”
In order to be considered a meaningful EHR user, the eligible physician or eligible hospital will need to meet the following requirements:
Demonstrate that the physician or hospital is using certified EHR technology (qualified electronic health record technology that is certified as meeting standards adopted under the Act) in a meaningful manner, which shall include the use of electronic prescribing
Demonstrate that the certified EHR technology is connected in a manner that provides for the electronic exchange of health information to improve the quality of heath care in accordance with the standards and criteria adopted under the Act
Submit information on clinical quality measures and other measures in a form and manner that will later be specified by the HHS Secretary
A physician or hospital can demonstrate that it is a “meaningful EHR user” the following ways:
An attestation
The submission of claims with appropriate coding (such as a code indicating that a patient encounter was documented using certified EHR technology)
A survey response
Reporting as specified above
Other means specified by the Secretary
A list of the names of the physicians who are meaningful EHR users, group practices receiving incentive payments under the HITECH Act, and the names of eligible hospitals that are meaningful EHR users will be posted on the Internet website of the Centers for Medicare & Medicaid Services.
Applicability to Federal Agencies and Private Entities
All federal agencies will be required to abide by the standards and criteria established under the Act. In contracts between federal agencies and health entities (i.e. healthcare providers, health plans, or health insurance issuers), the contracts will require the entity to use health information technology that meets the standards and implementation specifications adopted under the Act. Other than as required by such contracts, any standard or implementation specification adopted under the Act is voluntary with respect to private entities.
Penalties
Even though participation in the incentives is voluntary, the Act contains penalties for physicians and hospitals who do not adopt use of EHR by 2015. The penalties reduce Medicare payments physicians and hospitals would otherwise receive by percentages on an increasing scale for each year the physician or hospital does not adopt use of EHR. The penalties for both physicians and hospitals contain “significant hardship” exceptions. The physician penalty does not apply to hospital-based physicians.
National Coordinator, Policies, Standards and Studies
The Act creates an Office of the National Coordinator for Health Information Technology (HIT), a HIT Policy Committee and a HIT Standards Committee. The Act calls for the initial set of standards, implementation specifications and certification criteria to be adopted by the Secretary of Health and Human Services though a rulemaking process by Dec. 31, 2009 and the first incentive payment year will not be until 2011.
The Act requires various studies and reports to be conducted. The Act authorizes various grants to States and institutions of higher education to facilitate the widespread adoption of certified EHR technology. The Act provides for more stringent privacy and security provisions. Information on this aspect of the legislation is available at this link.
The opinions expressed in this bulletin are intended for general guidance only. They are not intended as recommendations for specific situations. As always, readers should consult a qualified attorney for specific legal guidance.
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