Federal debt reduction could affect EHR incentives

September 7, 2011

The incentives driving electronic health record adoption could be affected if health information technology falls victim to cuts by the Congressional Joint Select Committee on Deficit Reduction. Here?s what the experts have to say.

The incentives driving more than 77,000 healthcare providers to register for electronic health record (EHR) incentive payments and 40% of physician offices to use EHRs could be affected if health information technology (HIT) falls victim to cuts by the Congressional Joint Select Committee on Deficit Reduction, also known as the “supercommittee.”

The supercommittee could “look to changes in the HIT incentive program as a means to achieve overall budget savings” or “enact specific provider cuts that reduce the ability of providers to acquire and implement HIT, despite the HIT incentive program,” according to the Healthcare Information and Management Systems Society (HIMSS).

More likely, consultant Christopher Jennings said in the New England Journal of Medicine, the committee will fail to reach agreement on specific reductions and the automatic cuts outlined in the fallback “sequester” provision will take effect. Jennings, a health policy adviser in the Clinton administration, suggested that could be the best outcome for healthcare as “any plan agreed on by the supercommittee would result in larger aggregate cuts,” including extensive reductions to Medicaid and Medicare. 

“The incentive program could be slowed by any cuts to Medicare and Medicaid that could be put in place by the debt ceiling compromise,” according to HIMSS. If the automatic cuts occur, Medicare would face a maximum 2% reduction in 2013, which could translate into a 2% reduction in incentive funds, if applied across the board. Medicaid is exempt from the automatic cuts.

A third option is possible. The committee could recommend some specific cuts, to HIT or other programs, but not enough to reach the $1.5 trillion target and the sequestering provision would automatically generate the additional cuts needed.

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