The American and Reinvestment Act of 2009 and the HITECH Act

Friday, May 12th, 2009

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Overview
The American Reinvestment and Recovery Act of 2009 allocates $2.1 billion for distribution by the Department of Health and Human Services through the Office of the National Coordinator for Health IT (ONCHIT). These funds are intended to assist healthcare providers adopt, implement, and effectively use certified EHR technology that allows for the electronic exchange of health information. Additionally, this funding will provide health information technology assistance in the areas of standards, technology, and health IT research, including regional centers designed to provide technical assistance and disseminate best practices to accelerate efforts to adopt, implement and effectively utilize healthcare information technology.

Incentive Payment Options
There are two incentive payment programs outlined under the HITECH Act - one through Medicare and another from Medicaid. Since providers can only submit for payment of an incentive bonus from one of the programs, each practice will need to analyze its public payer mix to determine where it stands to benefit most. Both require that a provider prove "meaningful use" of an EHR product to qualify for the incentives, as well.

"Meaningful Use"
"Meaningful Use" is defined in three ways in the Bill:

--Use of a certified product complete with ePrescribing capability as determined appropriate by the Secretary of HHS
--The EHR technology is connected for the electronic exchange of PHI
--Complies with submission of reports on clinical quality measures

The final criteria for standards will be determined by the Secretary of Health & Human Services before the utilization incentives begin. Note that the Secretary of HHS shall seek to improve the use of electronic health records and healthcare quality over time by requiring more stringent measures of meaningful use.

What are the bonus payments that will be available to physicians under Medicare?
Under Medicare, physicians will be eligible for up to the following as soon as they can demonstrate "meaningful use" (beginning in 2011):

Notes:

--Physicians operating in a "provider shortage area" will be eligible for an incremental increase of 10% in their bonus payments.

--Physicians operating entirely in a hospital environment, such as anesthesiologists, pathologists and ED physicians, are ineligible.

What will happen if the provider does not adequately demonstrate "meaningful use"?
Beginning in 2015, physicians not demonstrating meaningful use will have their Medicare fee schedule reduced as follows:

--For 2015, down to 99 percent of the regular fee schedule
--For 2016, down to 98 percent
--For 2017 and each subsequent year, down to 97 percent

If the Secretary finds that less than 75% of eligible healthcare professionals are utilizing EHR beginning in 2018, the Secretary can further reduce the fee schedule to 96% and then 95% in subsequent years but not further.