Changes in Stark laws allow hospitals to offer EMR-implementation subsidies to physicians. Physicians can also tap into federal stimulus money for EMRs. How will the two funding options converge?

By Pamela Lewis Dolan, amednews staff.

Availability of government stimulus money, combined with hospitals being allowed to finance portions of physicians’ electronic medical record systems, could make EMR adoption a veritable bargain. Or the stimulus money could make hospital systems less eager to help pay for your EMR, figuring that government funds will instead.

Either way, the possibility of combining two avenues of EMR funding has added a twist to the economic picture for physicians deciding what, when and whether to buy.

Doctors can get a maximum of $44,000 in funds from the federal economic stimulus package for adopting a certified EMR system that meets the government’s “meaningful use” standards. How much physicians get in stimulus funds will be based on the percentage of their practice that is made up of Medicare or Medicaid patients. Hospitals can get their own share of stimulus funds, but the amount depends on how they’re connected with physicians.

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Below are some commonly asked questions regarding the economic stimulus funding and what physicians need to do to qualify for the funding:

Who or what kinds of organizations will benefit from the healthcare IT incentives?

The incentives primarily benefit hospitals and office-based physicians. They are designed to reduce healthcare costs by accelerating the use of IT to improve quality, safety and efficiency. Ultimately, patients and caregivers also will benefit from the automation and connectivity enabled by EHRs.

What is the potential financial benefit of the healthcare IT incentives to physicians?

Each office-based physician who meaningfully uses a certified EHR could receive up to $44,000 (Medicare) or $64,000 (Medicaid) in government funding. Office-based physicians practicing in rural or underserved areas would be eligible for up to $48,400 in Medicare incentives. It’s important to note that these figures represent the maximum allowable incentives under the Medicare and Medicaid programs, and that physicians may only qualify for either the Medicare or the Medicaid funding, but cannot qualify for both.

When will the payments be made?

Funds become available for office-based physicians on January 1, 2011 (and are eligible to apply through January 1, 2012 and still receive full benefits). Providers should begin planning as soon as possible to allow time to achieve meaningful use of certified solutions during this time period.

Are there additional incentives for office-based physicians to adopt in the early years of the program?

Office-based physicians’ maximum allowable Medicare incentive for the first year of meaningful use is increased by $3,000, from $15,000 to $18,000, for meaningful EHR use in 2011 or 2012. This “early adopter” incentive raises the total amount physicians can qualify for from $41,000 to $44,000. A benefit for office-based physician early adoption does not exist under the Medicaid incentive program.

What is meant by “meaningful use” of healthcare IT?

Funding and incentives are tied to “meaningful” use. While no one yet knows the full definition of meaningful use, preliminary descriptions include the following:

An eligible professional shall be treated as a meaningful EHR user for a reporting period for a payment year if the following requirements are met:

• Meaningful use of certified EHR technology. The eligible professional demonstrates to the satisfaction of the HHS Secretary, that during such period the physician is using certified EHR technology in a meaningful manner. The certified EHR shall include the use of electronic prescribing as determined to be appropriate by the HHS Secretary.
• Information exchange. The eligible professional demonstrates to the satisfaction of the HHS Secretary that during such period such certified EHR technology is connected in a manner that provides, in accordance with law and standards applicable to the exchange of information, for the electronic exchange of health information to improve the quality of health care, such as promoting care coordination.
• Reporting of measures using EHR. Using such certified EHR technology, the eligible professional submits information for such period, in a form and manner specified by the HHS Secretary, on such clinical quality measures and such other measures as selected by the HHS Secretary. The HHS Secretary shall seek to improve the use of EHRs and healthcare quality over time by requiring more stringent measures of meaningful use selected under this paragraph.

Will the incentives be applied to systems already in use, or will they be applied to the purchase of new systems only?

The incentives are available to meaningful users of certified IT systems described in the legislation regardless of when they were implemented. The qualifier is the date at which the eligible provider can demonstrate meaningful use of the certified technology

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Written by Patricia King

Editor’s note: Health care attorney Pat King outlines and explains provisions of the pending economic stimulus package that deal with electronic health records (EHR/EMR 1) use by physicians.

The American Recovery and Reinvestment Act of 2009 finally passed both houses of Congress this week. As this article is written, a final vote is expected on Saturday, February 14. While there are significant differences between the House² and Senate³ version in some areas, incentives for health information technology adoption by physicians and hospitals are substantially similar in both bills. The cost of incentives is estimated to be $17 billion in increased Medicare and Medicaid payments.

The Act uses the same “carrot and stick” approach adopted last year to encourage electronic prescribing. The incentive portion starts in 2011: a physician who is a “meaningful user” of electronic health records (EHR) is eligible to receive additional payments under the Medicare program that can extend over five years. The penalty portion starts in 2015, when physicians who are not meaningful EHR users will begin to see declines in their Medicare payments. Neither the incentive nor the penalty applies to hospital-based physicians.

Incentives for EHR use

For the first year that a physician qualifies as a meaningful EHR user, the physician is eligible for an incentive payment of 75% of his/her Medicare charges for the year, up to a maximum of $15,000 (the Senate bill provides that the ceiling is $18,000, if the first payment year is 2011 or 2012). The ceiling declines each year: $12,000 for the second year; $8,000 in the third year; $4,000 in the fourth year; $2,000 in the fifth year; and zero for subsequent years. Late adopters are penalized through phase down of the incentives: if the physician does not qualify as a meaningful user until 2014, then the payment ceiling for that physician’s first year is $12,000, the ceiling for the second year is $8,000, and so on. Under the House bill, there are no extra payments for physicians who do not qualify before 2015.

The Secretary of the Department of Health and Human Services (HHS) has discretion to determine whether the incentive payment will be paid in a single lump sum, or in installments. If the physician provides services to Medicare beneficiaries through more than one practice, HHS will determine how to allocate the incentive payment among the practices.

Penalties for not using EHR

Under the penalty provisions, physicians who are not meaningful EHR users in 2015 will see a 1% reduction in their fee schedule amount. The reduction increases to 2% in 2016, and 3% in 2017 and each subsequent year. If HHS finds that by 2017, the proportion of physicians who are meaningful EHR users is less than 75%, HHS may continue to ratchet down payments by 1% a year (but may not reduce payments below 95%). Hardship exceptions may be issued on a case-by-case basis, such as exceptions for physicians who practice in rural areas without adequate Internet access.

How to be considered an EHR user

To be a “meaningful EHR user”, the physician must satisfy three criteria:

• The physician must use “certified EHR technology” in a meaningful manner, including electronic prescribing. The law calls for creation of a health information technology (HIT) Policy Committee, and an HIT Standards Committee. The HIT Policy Committee will focus on development of a nationwide health information infrastructure, while the HIT Standards Committee will recommend standards, implementation specifications and certification criteria. The Office of the National Coordinator for Health Information Technology (ONCHIT) is to adopt an initial set of standards, implementation specifications and certification criteria before December 31, 2009.
• The physician must demonstrate that the certified EHR technology is connected in a manner that provides for the electronic exchange of health information to improve the quality of health care, such as promoting care coordination.
• The physician must submit information on clinical quality measures specified by HHS.

HHS will designate the way in which a physician is recognized as a meaningful user (through attestation, submission of claims with codes indicating that a patient encounter was documented using certified EHR technology, survey responses, submission of quality reports, or other means).

The Act also authorizes state Medicaid programs to provide additional payments to physicians, at least 30% of whose patient volume is services to Medicaid beneficiaries.

In addition to the incentive program, $2 billion is available to ONCHIT for implementation of the program, including grants to states to establish loan programs for physicians seeking to acquire certified EHR systems.

Above article published on http://www.netdoc.com/Physician-Practice-Articles/General-Medical
-Practice/Stimulus-package-and-EMR-use-by-physicians/

The law offers bonuses for health IT adoption but will penalize physicians who don’t have adequate systems by 2015.

By Doug Trapp, AMNews staff.

Washington – President Obama on Feb. 17 signed a $787 billion stimulus bill that directs about $150 billion toward speeding adoption of health information technology and maintaining health care coverage, among other provisions.

The sweeping measure — the American Recovery and Reinvestment Act of 2009 — provides nearly $90 billion in temporary increased federal Medicaid funding, delays four cost-cutting Medicaid regulations and spends a net of about $19 billion to encourage physicians and others to adopt health IT.

Obama said the enactment of the stimulus package and the Feb. 4 enactment of the Children’s Health Insurance Program reauthorization are big steps in health care. “We have done more in 30 days to advance the cause of health care reform than this country has in a decade.”

The American Medical Association applauds the investments in health IT and coverage for the poor and newly unemployed, wrote AMA Executive Vice President and Chief Executive Officer Michael D. Maves, MD, MBA, in a Feb. 11 letter to Sen. Max Baucus (D, Mont.), chair of the Senate Finance Committee.

The stimulus also provides $500 million to help train physicians through the National Health Service Corps, a provision widely supported by physician organizations. “This program is integral to rebuilding the primary care physician pipeline,” said Ted Epperly, MD, president of the American Academy of Family Physicians.

$19 billion of the stimulus bill is for incentives to encourage health IT adoption.

But few Republicans backed the stimulus measure. The House adopted the bill Feb. 13 with no Republican support. The Senate approved it the same day with votes from only three moderate Republicans: Sens. Olympia Snowe and Susan Collins of Maine and Arlen Specter of Pennsylvania. The final bill is a compromise between earlier versions adopted by the House and Senate.

Many Republicans, including Senate Minority Leader Mitch McConnell (R, Ky.), lambasted spending in the measure that they said would not stimulate the economy quickly. McConnell also criticized Democrats for not accepting more GOP input on such a massive spending bill.

Some Republican lawmakers, such as Phil Gingrey, MD (R, Ga.), also worried that the stimulus is not offset by new revenues and therefore will increase the national debt. “I don’t know how our children and grandchildren are going to pay for this,” Dr. Gingrey said.

“Significant” health IT support

Under the stimulus law, physicians and other health professionals are eligible for tens of thousands in health IT incentive payments via Medicare or Medicaid through 2016. But in 2015, penalties for non-adopters begin.

Medicare-participating physicians who adopt a certified electronic health record system by 2011 or 2012 and use it in a way that the government deems “meaningful” — a term to be defined later — could receive up to $44,000 over a period of up to five years. The incentives will be limited to 75% of the physician’s Medicare charges in any one year.

Health IT grants and loans from the federal government won’t become available until 2010.

Physicians who have caseloads of at least 30% Medicaid patients and who also meet the health IT adoption standards are eligible for nearly $64,000 in support during the same time frame. Medicaid incentive payments are limited to 85% of physicians’ Medicaid charges. Pediatricians can qualify if their patient mix is 20% Medicaid, but they would be eligible for only two-thirds of the incentive payments available to physicians meeting the 30% standard.

This health IT funding is “very significant,” said Robert Doherty, the American College of Physicians’ senior vice president for governmental affairs and public policy. “Our sense is for a lot of physician practices, that may be the tipping point where it begins to make business sense to consider plunging into that pool and buying a certified EHR.”

Physicians cannot apply for incentives in both Medicare and Medicaid, but hospitals can, said Erica Drazen, ScD, managing partner for emerging practices at health IT consultant CSC’s Global Healthcare Sector.

Also, while physicians must use an EHR system to qualify for the stimulus incentive payments, they need not own one. The measure provides $2 billion to the Office of the National Coordinator for Health Information Technology for health IT grants and loans, but those won’t become available until 2010, Drazen said. She expected private firms to offer new financing options for the EHR systems or to offer them through leases.

But the stimulus measure will penalize physicians, beginning in 2015, if they have not become meaningful EHR users. These doctors face a 1% reduction in Medicare fees that year. The yearly cut would phase up to 3% in 2017 and beyond.

The ACP would prefer that the penalties not apply if, for example, a shortage prevents EHRs from being available to physicians or if another factor not in physicians’ control prevents them from meeting the health IT standards, Doherty said.

Drazen said existing EHR vendors and consultants will be strained by the demand created by the health IT stimulus. “We’re going to have a real short supply of people who know how to do this well.”

Sustaining Medicaid

The $87 billion in stimulus going to state Medicaid programs should help avoid health coverage cuts to low-income people. But states still may need to trim other parts of their Medicaid programs, because many have budget shortfalls exceeding their stimulus funding, said Ann Kohler, director of the National Assn. of State Medicaid Directors.

The enactment could be significant for physicians in California. State lawmakers and Gov. Arnold Schwarzenegger have been struggling to close a roughly $42 billion budget deficit.

California’s Medicaid program would receive more than $11 billion in stimulus funding over 27 months, according to the California Medical Assn. But to qualify for the additional funds, states first must maintain or restore Medicaid eligibility and renewal procedures to their status on July 1, 2008. California lawmakers would need to reverse legislation enacted late in 2008 requiring people on Medicaid to re-enroll twice a year instead of once.

“This is another great opportunity for state lawmakers to maximize federal assistance,” said CMA President Dev A. GnanaDev, MD.

The stimulus offers another boost to states by extending moratoriums on three Medicaid rules through July 1, 2009. Those regulations, issued by the Centers for Medicare & Medicaid Services, would have reduced federal Medicaid spending by billions. The new law also delays until July a CMS rule that reduces some states’ Medicaid rates by aligning the program’s hospital outpatient services definition with that of Medicare.

This content was published online only.

Above article published on http://www.ama-assn.org/amednews/2009/02/23/gvl20223.htm