Stimulus Overview

October 19, 2009

1) What is the ARRA / Hitech Act and what is it suppose to do?

On February 17, 2009, President Barack Obama signed into law the American Recovery & Reinvestment Act. The health IT component of the Bill is the HITECH Act, which appropriates billions of dollars to encourage healthcare organizations to adopt and effectively utilize Electronic Health Records (EHR) and establish health information exchange networks at a regional level, all while ensuring that the systems deployed protect and safeguard the critical patient data at the core of the system.

The Congressional Budget Office predicts 90% of physicians and 70% of hospitals will be using a comprehensive, robust Electronic Health Record over the next few years as a result.

As a result, the government expects that the country will save billions of dollars on the provision of healthcare, and our citizens will receive coordinated, informed care from their entire network of providers.
$36 Billion in Incentive Payments to Physicians and Hospitals

$36 billion will be paid to healthcare providers who demonstrate use of Electronic Health Records use by certain deadlines in 2010 and 2011. The program requires physicians to first adopt a EHR and meaningfully implement EHR software from a certified provider like EdgeEHR™

The government is focused on two primary goals in this legislation: 

  • moving physicians who have been slow to adopt Electronic Health Records to a computerized environment
  • and ensuring that patient data no longer sits in silos within individual provider organizations but instead is actively and securely exchanged between healthcare professionals.

The vast majority of the funds within the HITECH Act are assigned to payments that will reward physicians and hospitals for effectively using a robust, connected EHR system.

2) What are the requirements for physicians?

In order to qualify for the incentive payments, both physicians and hospitals have to demonstrate three things:

1. Use of a certified EHR product with ePrescribing capability that meets current HHS standards.
2. Connectivity to other providers to improve access to the full view of a patient’s health history
3. Ability to report on their use of the technology to HHS
Additionally, because the government wants to spur quick movement in this area, all of the incentives include payments for up to five years but provide the largest payments early in the program.

3) Specifics of the Physician Opportunity

There are two incentive programs for physicians: Medicare and Medicaid. Physicians will choose program participation.

Medicaid grants

Physician who see more than 30% of patients paying with Medicaid (20% for pediatricians) are eligible for payments of up to $64,000 over five years. The incentives will be calculated through a formula that multiplies 85% by amounts ranging from $35,000 in the first year to $10,000 in subsequent years.

Medicare grants

Physicians who do not have a large Medicaid volume but do accept Medicare can receive up to $44,000 over the five years. Additionally, physicians operating in a "health provider shortage area" will be eligible for an incremental increase of 10%, and those delivering care entirely in a hospital environment, such as anesthesiologists, pathologists and ED physicians, are ineligible.

4) Annual Grants amounts decline for late adopters after 2012

 2011  $18,000  $12,000 $8,000
 2012  $0 $18,000
$8,000 $4,000 $2,000  $44,000
 2013  $0 $0 $15,000
$8,000 $4,000
 2014  $0 $0  $0 $15,000 $12,000
 2015 +
 0   0

NOTE: Grants eligibility is dependant on “meaningful use” implementation by certain deadlines, just owning the software is not sufficient. Physicians must demonstrate the EHR software is being used consistently for all key areas of practice management and patient care. Early adoption is therefore mandatory to maximize stimulus grants.

5) Are there penalties for not adopting an EHR?

Those that don’t demonstrate meaningful use of an EHR under the Medicare component of the program will eventually be penalized through lower payments. The incentive payments begin in 2011 to ensure the providers have time to adopt and learn to use the EHR; penalties begin in 2015.

Medicare billing reimbursements to physicians reduced by up to 25%

Providers who do not demonstrate meaningful use in 2014 will see, in their 2015 fee schedules from Medicare, a decrease of 1%. An additional decrease will be affected in 2016 and 2017 down to a total of 97% of the regular fee schedule; it can further be reduced to 95% if the Secretary determines that total adoption is below 75% in 2018.

Fee Reductions

Eligible hospitals not demonstrating meaningful EHR use by 2015 will see that their fee schedules are not increased as planned but instead will be adjusted increasingly to the disadvantage of the hospital. This reduction only applies to the individual fiscal year; if the hospital begins demonstrating use of an EHR the following year, their fee schedule increase will normalize.

6) Additional Incentives for Physicians for early adoption

Even before the incentive payments or grants become available to qualifying healthcare organizations through the HITECH Act, there are already programs in place that will reward physicians who adopt technology now.

By maximizing the ePrescribing incentives currently available through the Medicare Improvements for Patients and Providers Acts of 2008 and PQRI incentives, a qualified provider can earn an additional $6,000 and $8,000 prior to beginning participation in the Stimulus incentives programs.

7) What are the Standards and Certifications to qualify?

Qualified EHR technology means that the EHR is certified to meet standards and includes patient demographic and clinical health information, such as medical history and problem lists, and has the capacity to provide decision support for physician order entry, to capture and query healthcare quality information, and to exchange electronic health information with other sources.

Certification Commission for Health Information Technology  “CCHIT”

Widespread adoption of health information technology (health IT) can foster improvements in quality, safety, efficiency and access – key goals in today’s national dialog on health reform.

These goals also drive the Certification Commission for Health Information Technology (CCHIT®), a nonprofit, 501(c)3 organization with the public mission of accelerating the adoption of health IT.

Founded in 2004, and certifying electronic health records (EHRs) since 2006, the Commission established the first comprehensive, practical definition of what capabilities were needed in these systems. The certification criteria were developed through a voluntary, consensus-based process engaging diverse stakeholders, and the Certification Commission was officially recognized by the Federal government as a certifying body.

Certification information for EdgeEHR™ is available at the following link:

8) Privacy Expansion

As part of the HITECH Act, Federal privacy and security laws (HIPAA) were expanded to protect patient health information, including:

• Defining which actions constitute a breach (including some inadvertent disclosures)
• Imposing restrictions on certain disclosures, sales, and marketing of protected health information
• Requiring an accounting of disclosures to a patient upon request
• Authorizing increased civil monetary penalties for HIPAA violations
• Granting authority to state attorneys general to enforce HIPAA