$44K in incentives available for EHR usage; penalties by 2015

February 27, 2009

Starting in 2011, there could be a total of $44,000 coming your way over the following five years if you choose to adopt an electronic health record system.

Starting in 2011, there could be a total of $44,000 coming your way over the following five years if you choose to adopt an electronic health record system, according to details released on the American Recovery and Reinvestment Act of 2009, better known as the $787 billion economic stimulus bill.

But, of course, there are conditions, according to the legislation that was signed by President Barack Obama on Feb. 17. First, the system has to be certified. The bill’s language says regulators will recognize “a program or programs for the voluntary certification of health information technology,” but it does not specifically name the EHR industry’s largest certification program, which is being conducted by the Certification Commission for Health Information Technology.

You must purchase or lease the system, integrate it into your practice and be “meaningfully” using it before you’ll receive any money. Meaningful use, according to the law, means: The system must exchange information electronically and the physician must report certain quality of care measures, which are to be determined by the Office of the National Coordinator for Health Information Technology within U.S. Department of Health and Human Services, by December 31, 2009, according to the legislation.

If physicians meet those obligations by Jan. 1, 2011, they will receive the first year’s lump-sum incentive, which will be $18,000. The following year’s incentive will be $12,000, then $8,000, $4,000, and $2,000. After 2014, Medicare payments will be reduced by 1 percent for those practices which haven’t adopted an EHR system, then 2 percent in 2016 and 3 percent in 2017 and thereafter, barring hardship or changes to the regulation.

There is no Medicare incentive for those who are meaningfully using an EHR after 2014.

Physician groups welcomed the stimulus package’s EHR incentives, despite its penalties for non-adoption down the road.

“…[The legislation] helps overcome an often insurmountable challenge that physicians have faced,” says Ted Epperly, MD, president of the American Academy of Family Physicians. “A national health information technology infrastructure and universal implementation of this technology are integral to reining in spiraling healthcare costs and improving quality of care.”

The leadership of the American Medical Association, wrote in a letter to their membership that the final EHR provisions of the legislation is not what the organization would have drafted, but “do represent real progress and a major improvement upon the status quo.”

“This is the first substantial federal funding provided to help physicians implement HIT systems – systems that will generate benefits across the health care spectrum,” the letter states. “While the bill does include Medicare payment reductions (starting at 1 percent) for physicians who do not implement HIT systems, these do not take effect until 2015 and there are exceptions for significant hardship cases.”