HITECH Federal Stimulus Funds:

Will You Qualify to Receive Yours?

By Thomas Rosol

What a difference a year makes. Last September, I remember sitting in association and society meetings hearing how it was a dull year for health care at both the state and federal level. We have certainly made up for that over the last 6 months with all of the debate and work on National Health Care Reform.

Before the Health Care Reform initiative gained steam, the President signed the American Recovery and Re-Investment Act (ARRA) in February 2009. One component of this bill is the HITECH Act which appropriates $36 billion in incentives to be paid to physicians and hospitals over a 6-year timeframe, from 2011-2016. The Federal goal for this initiative is to move physicians who have been slow to adopt Electronic Health Records (EHRs) into a computerized environment, and to create a truly transparent national records system where a patient’s chart can be viewed electronically and securely in any health care office or facility in the country.

To qualify for stimulus funds, the physician’s office must demonstrate three things:

1. Meaningful use of a certified EHR product with ePrescribing capability that meets current US Department of Health and Human Services (HHS) standards.

2. Connectivity to other providers so that all can view the entire patient history.

3. Ability to report on the use of the software/hardware to HHS.

Currently, HHS is still working on the definition of “meaningful use”, and which government or private organization(s) will be authorized to certify the multitude of systems out there. More details on this are expected in 2010.

Now that you know the requirements, you may be ask, “How much are the incentives?” This is where it gets interesting. Those that think they qualify based on the above criteria will have the choice to apply for incentives either through Medicare or Medicaid, but not both. Below are two tables that outline the available payments.

Medicaid Incentives

For providers seeing 30 percent or more Medicaid-paying patients:

Year of First Filing Maximum Potential Amount

2015 – $29,750
2016 – 8,500
2017 – 8,500
2018 – 8,500
2019 – 8,500
Total: $63,750

Note: Pediatricians seeing 20 percent or more Medicaid-paying patients qualify for incentive payments, but at 66 percent of the above amounts for a maximum amount of $42,075.

Medicare Incentives

For providers seeing Medicare-paying patients:

First File Yr	2011	2012	2013	2014	2015	2016	Total
2011	18,000	12,000	8,000	4,000	2,000	0	$44,000
2012	0	18,000	12,000	8,000	4,000	2,000	$44,000
2013	0	0	15,000	12,000	8,000	4,000	$39,000
2014	0	0	0	15,000	12,000	8,000	$35,000
2015 Or later...	0	0	0	0	0	0	$0

The calculation for the Medicare payment will be made by taking each provider’s Medicare revenue per year and multiplying by 75 percent. To obtain the maximum incentive payment for 2011 or 2012, the individual provider’s annual Medicare revenue would need to be $24,000 x 75 percent (0.75) = $18,000. The maximum incentive for either of those years is $18,000; however, if a physician’s Medicare revenue was only $20,000 for the year, they would receive $15,000.

Currently for both Medicare and Medicaid programs, the incentive is calculated by provider and their patient volume, not by office. As an example, if you have a 10-physician practice with 5 doctors who serve Medicare patients and 5 who only serve commercially insured patients, only those 5 who serve Medicare would qualify for individual incentives.

If you don’t want to wait until 2011 or 2015 to start earning your Federal Incentives, you have the ability today to start earning between $6000-$8000 per qualified physician for participating in the ePrescribing or Physician Quality Reporting Initiative (PQRI) incentive as laid out by the 2008 Medicare Improvements for Patients and Providers Act.

The above could be considered the “carrot” and you should also know that there is a “stick”. For those that don’t adopt EHR technology, Medicare will begin reducing their reimbursement by 1 percent starting in 2015 and then another 1 percent in 2016 and 2017 for a total of 3 percent Medicare reduction. A maximum reduction of 5 percent for those not complying can be implemented if the Secretary of HHS determines that there is less than 75 percent nationwide EHR adoption.

Based on the above information, where do you stand? If you already have EHR software installed and you’re fully using it, you are probably in good shape. Make sure, if you haven’t already, that you have purchased, installed and implemented your EHR vendor’s ePrescribing software as that is a key Federal element of “meaningful use.” Just sending prescriptions via fax from your computer is not ePrescribing and it won’t qualify you for the incentives. Also, it is advisable that your software should be Certification Commission for Healthcare Information Technology (CCHIT) certified because many in the industry believe that the current CCHIT standards will be used as the starting point to designate software as “approved.

If you have been diligently looking at systems or are about to start, remember that it can take some time to look at a number of products and narrow it down to one you like. Due to the time and expense involved, you don’t want to rush the decision and you want to make sure that you purchase the software that best fits the practice. Full implementation can take anywhere from 6-18 months depending on the size of the practice and the resources available. As an example, if you started looking in November 2009 and took until February 2010 to narrow your choice to 3 products, and then began implementation of your selected product in June of 2010, you could be ready to file for your incentive some time in early to mid-2011.

Over the past four years, as a vendor serving the physicians office market, I have visited numerous medical practices on a daily basis. I have seen a fairly dramatic increase in the installation and acceptance of numerous EHR products. I would estimate that 90 percent of established practices tell me that although the implementation process was somewhat painful, they are now very pleased with their system and would not go back to paper charts. Interestingly, every new practice I have encountered and helped to start up opened with EHR software in place and ready to go on the first day of business. This included doctors out of residency, some who moved from other states, and some locally who left established practices to start their own.

As a final note, one of the strongest endorsements I have heard for the use of EHR came from two of our past BCMS Presidents, Drs. (Del) Chumley and (Manuel) Quinones during a January 2008 address at the general meeting for the San Antonio Medical Group Managers Association. Both of their practices had implemented electronic software during 2007 and they both stated that this had increased their practices efficiency and revenue (the software helps physicians select the proper E and M codes based on what is done at the visit). More importantly, they felt that as medicine moves toward “pay for quality performance,” the software would give them the ability to produce the data needed to run their practice productively and profitably in the future.

Tom Rosol (thomas.rosol@henryschein.com) is an American Medical Systems (AMS)-certified Field Sales Consultant with Henry Schein Medical, a $6.5 billion world-wide distributor of medical supplies, equipment, vaccines and injectables to office-based providers in the medical, dental and veterinary markets. Henry Schein has an exclusive agreement to market AllscripsMisys EHR and Practice Management Software.