Mike Smith, CIO, LMHS

The HITECH Act provides very powerful financial incentives to implement and utilize Electronic Health Records (EHRs) in hospitals and physician office settings. Due to the information-intensive nature of healthcare delivery, and the error-prone and fragmented nature of paper medical records, it is widely accepted that well designed and properly implemented interoperable EHRs are a key ingredient in taming and ultimately reducing healthcare costs. At the same time an EHR can enable improved quality of care for the patient. Further, in view of the payment reforms that are being contemplated by Medicare, an EHR may be one of the only ways for a physician to sustain their financial standing and improve their lifestyle under these new, evolving rules. When properly developed and implemented, EHRs are a tremendous tool for the healthcare provider. But, if an EHR is not designed well, or if it is not implemented well or supported properly, the results are wasteful and can be harmful. Selecting an EHR can be a complicated, unclear decision process. The cost of the EHR software will likely be a small portion of the total cost of the EHR project, once hardware, implementation and support costs are added in. This is especially true if one considers the financial impact of a reduction in physician and staff productivity. While the stimulus incentives may create a desire to move swiftly in the selection of an EHR, decisions need to be made thoughtfully and carefully. The selection and implementation of an EHR is a long term, very expensive proposition.

ECONOMIC STIMULUS PACKAGE - February 17, 2009 – assessment of Health IT Act (HITECH Act) Purpose of Act – to Accelerate the Implementation/Adoption of Health IT for improved safety, cost savings Background: In 2004, the President of the US established the goal that by 2014, all Americans would have their healthcare records stored in electronic medical records, and those records would be shareable through interoperable Electronic Medical Record/Electronic Health Record systems. The HITECH act makes available significant funding to hospitals and physicians to incentivize the installation and use of EHRs.

$19 Billion appropriated for Health IT - $ 2 Billion for Grants, Loans, Infrastructure (through Office of National Coordinator of Health IT).

$ 17 Billion paid through CMS for EMR usage Incentives for “meaningful” use of “qualified” EMR.

To be eligible for the incentive payments: . The provider must demonstrate use of certified EHR in a meaningful manner, including use of electronic prescribing. (Certified EHR is EHR technology that meets standards set out elsewhere in American Recovery and Reinvestment Act (ARRA) . The provider must demonstrate that the certified EHR is connected in a manner that allows for the electronic exchange of health information. The provider must use the certified EHR to report on quality measures selected by HHS. These measures must include clinical quality measures, and HHS must give preference to measures endorsed by a consensus-based entity (e.g., the National Quality Forum).

Medicaid EHR use incentive payments are also an option for physicians, and in some cases may be greater than the Medicare use incentives Physicians must waive the Medicare incentive in order to receive the Medicaid incentive (they are exclusive, not additive) Incentives will be paid over several years, starting in 2011. If the physician is not fully operational on the HER by 2013, the total available incentives will be discounted for that physician. The Act also includes provisions for fee schedule reductions after 2016 for physicians who are not using certified EHRs.

The Medicaid incentives begin on page 490 of this link: http://appropriations.house.gov/pdf/Recovery_Bill_Div_B.pdf

If you are:

1. An eligible physician who is not hospital based and has at least 30% Medicaid patient volume

2. A pediatrician (not hosp based) with at least 20% of Medicaid patient volume (in this case the dollar amount is 2/3 the amount otherwise specified)

3. An eligible physician in a Federally qualified health center or rural health clinic and has at least 30% of patient volume attributable to needy individuals

Incentive is not more than 85% of the net average allowable costs, generally estimated at up to $44,000 total incentive payment per physician.

1. First payment year, average costs for the purchase and initial implementation or upgrade of EHR technology = not greater than $25,000 or other limits set by the Secretary based on their study of average costs

2. (Up to 4) Subsequent payment years, average costs for maintenance and use of EHR = not greater than $10,000 or other limits set by the Secretary based on their study of average costs