EMR Stimulus Program

The American Recovery and Reinvestment Act of 2009 will invest $19.2 Billion into the healthcare industry between now and 2015.  The goal of the Act is to further the adoption of Electronic Health Records (EHR) by physicians with the aim of improving the quality, safety and cost-effectiveness of healthcare across America.  Many details of the program have already been determined while others are still being developed.  LeTigre Healthcare Solutions has summarized the key details to help you better understand what this means to you.

The Program

The 2009 Stimulus Bill includes a Health Information Technology component, entitled the HITECH Act, which encourages healthcare organizations to adopt electronic health records (EHRs) and health information exchange (HIE) networks at a regional level.  The HITECH Act appropriates $19.2 billion for health information technology, of which $17.2 billion goes to those practices that demonstrate use of EHR’s in an effective and secure manner.

In order to qualify for the incentive payments, physicians and hospitals must display proof of “meaningful” use of technology while implementing a “qualified” EHR system.  “Meaningful” use of technology, while still not fully defined, is currently demonstrated by the following:

Certified EHR Technology -Use of a certified product as determined by the Department of Health & Human Services (HHS), which must include the use of electronic prescribing.

A “qualified” EHR system is currently defined as one with the following criteria:

What It Means for You

Hospitals and physicians that adopt EHR systems first will benefit the most.  Physicians can earn up to $44,000 or $64,000 over five years by leveraging a Medicare or Medicaid incentive program, respectively. To receive the full amount, the EHR must be implemented by 2012.  Providers may receive incentives under only one of the two programs (either Medicaid or Medicare), and must implement an EHR by 2014 in order to receive any incentive payments. No payments are made after 2016.

By 2015 eligible non-EHR users will see reductions in Medicare/Medicaid fee schedules.  Eligible hospitals without EHR use by 2015 will see fee schedule reductions of 1% in 2015, 2% in 2016 and 3% in 2017 and beyond.  This reduction applies to an individual fiscal year – if the hospital begins demonstrating use of an EHR the following year, their fee schedule increase will be modified accordingly.

Medicare

Any physicianthat accepts Medicare patients is eligible for the Medicare incentive program.  In addition to a flat payment, physicians operating in a "provider shortage area" will be eligible for a 10% increase in their bonus payments. The projected payment schedule for an early adopter of EHR is:

Year 1 - $18,000 (2011 or 2012)
Year 2 - $12,000
Year 3 - $8,000
Year 4 - $4,000
Year 5 - $2,000

Hospitals may receive up to $11 million from Medicare incentive payments through a calculation that considers a base payment ranging from $2-4.6 million (based on number of discharges) multiplied by a Medicare share and a declining in “transition factor” for each of four years (1, .75, .5, .25).  Note that Critical Care Hospitals are not eligible for the incentives described above; instead, they will be allowed to expense the acquisition cost of health IT in a single year up to $1.5 million.

Medicaid
Physicians whose Medicaid patients comprise at least 30% of their total patients (20% for pediatricians) are eligible for incentive payments of up to $64,000 over five years if they are early to adopt an EHR.  Hospitals whose Medicaid patients comprise at least 10% of their total patients are eligible for incentive payments.  The payment amount is determined by an algorithm similar to the Medicare incentive program; although payments do not depreciate over the first four years.

Now is the time to implement an EHR system in order to receive maximum reimbursement for the conversion. In order to encourage rapid adoption, all of the incentives include payments for up to five years but provide the largest payments early in the program.  The earliest payment year is 2011 in order.