EHR subsidies: The program you like may not qualify for a hospital hand-out

March 14, 2008

Hospitals have a federal green light to help you pay for an EHR, but one little restriction could limit the number of programs eligible for a discount.

Hospitals have a federal green light to help you pay for an EHR, but one little restriction could limit the number of programs eligible for a discount.

In 2006, the federal government carved out exceptions in the Medicare anti-kickback and Stark self-referral laws to let hospitals subsidize 85 percent of the cost of interoperable EHR software for doctors on their staff. To qualify for a subsidy, an EHR must be certified by the Certification Commission for Healthcare Information Technology, which vets programs under a contract with the federal Department of Health and Human Services. CCHIT certification applies to individual products-not the vendor itself-and lasts three years.

The number of certification criteria, incidentally, increases from year to year. Some 90 products have been certified based on criteria that took effect in May 2006. Another 22 products have been blessed so far based on expanded criteria that CCHIT set forth in 2007.

However, the so-called Stark relaxation regulations specify that a program must have been certified in the last 12 months to be subsidy-worthy. For a hospital intending to offer an EHR subsidy, say, in May 2008, this fine print disqualifies dozens of products certified before May 2007, even though they are still within their three-year certification period.

This restriction could force EHR vendors to seek certification for their products every year so hospitals can offer them at a discount. Granted, that’s a moot point for vendors who release a new version of their product each year. After all, each version needs to be certified in its own right.

The trouble lies for vendors who release new product versions at longer intervals. To keep a current program eligible for a subsidy, they’ll need to seek recertification under the latest set of criteria. For example, a product certified in March 2007 under the 2006 criteria could be certified in March 2008 under the 2007 criteria.

Winning this approval isn’t cheap. On top of forking over a $28,000 application fee, vendors seeking certification must tweak their products to comply with changing CCHIT criteria. Emergency medicine specialist Sami Aita, the CEO of EHR vendor MedcomSoft, predicts that companies like his could spend up to $500,000 in programming costs to comply with new CCHIT criteria which will take effect in July.

“This is very taxing because the software criteria get heavier each year,” says Aita. He recommends that the feds loosen up and require certification within the last two years for subsidized EHRs. Says Aita: “Vendors need more breathing room.”

But remember, the feds want hospitals to subsidize EHRs that are interoperable-meaning they can “talk” to other computer systems-for the sake of a national health information network. CCHIT is raising the interoperability bar on a yearly basis. In 2007, it began requiring the ability to electronically transmit prescriptions to a pharmacy and import test results from a lab. The new criteria that debuts later this year will require EHRs to exchange patient medical summaries with each other. So the feds will naturally want subsidized EHRs to keep up with the latest technology standards.

CCHIT publishes a list of EHRS that it has certified within the last 12 months.