Stimulus package to provide Medicare/Medicaid incentives to promote EHR adoption

The $787 billion American Recovery and Reinvestment Act (ARRA) of 2009 passed last month injects more than $100 million into specific areas of health care. One specific provision that impacts practices is additional funding through financial incentives for physicians who adopt and use Electronic Health Record (EHR) systems. (For a summary of the major health care provisions in ARRA prepared by the American Medical Association, click here.)

The ARRA authorizes the Department of Health and Human Services (HHS) to use Medicare reimbursement through defined incentives to reward physicians that qualify as “meaningful users.” Meaningful users are defined as those that meet the following requirements:

• Use an EHR that is certified as defined by HHS standards and allows for information exchange
• Using certified EHR technology, reports clinical quality data and other measures as defined by HHS
• Includes the use of e-prescribing as appropriate

To be “qualified” for incentive payments, EHR technology must have the capability to include patient demographic and clinical health information, and the capacity to support order entry, provide decision support, capture and query information relevant to health care quality, and exchange electronic health information with and integrate electronic health information from other sources

Beginning in 2011, Medicare will pay eligible physicians an annual incentive if they meet the definition of a “meaningful user.” Physicians that qualify as meaningful users beginning in 2011 or 2012 may qualify for up to $18,000 in the first year and up to $44,000 in a five-year period. The payments phase down following your first year as a meaningful user. No incentives will be paid if EHR adoption occurs after 2014. An additional 10 percent will be added for services provided within a designated health professional shortage area (HPSA). Total Medicare incentive payments made to one physician may not exceed 75 percent of their total Medicare payments for a given year.

Eligible professionals include any physicians who participate in Medicare with the exception of hospital-based physicians that provide substantially all of their services in the inpatient or outpatient hospital setting. As a result, emergency department physicians, radiologists, anesthesiologists and other hospital-based physicians will not be eligible for incentive payments. Payments may be made either as a single consolidated payment or periodic installments as the HHS Secretary will specify.

The ARRA also allocates monies to state Medicaid programs to promote use and adoption of EHR technology, as well as to off-set the state Medicaid agencies cost to administer such an incentive program. Eligible professionals that can receive Medicaid incentives include physicians, dentists, nurse-midwives, nurse practitioners and non-hospital based physician assistants. To be eligible for the Medicaid incentive, a physician must devote a specified percentage of his or her practice to serving Medicaid patients. State Medicaid agencies may provide up to $21,250 in federal dollars for the purchase of EHR technology, and up to $8,500 annually up to five years for maintenance related costs. State Medicaid agencies may not provide more than 85 percent of the cost to purchase and maintain an EHR system. Medicaid incentive payments will not be available for purchase of EHR technology after 2016 or for maintenance after 2021. Physicians receiving Medicaid incentive payment are not eligible to receive Medicare incentive payments.

To help your practice prepare to take advantage of these reimbursements, the Society is offering a series of teleconferences to you help navigate options for electronic health systems in April. For more information, click here. For your convenience, the series will be repeated in May as well.