Obama's EMR stimulus package - Incentives for Medical Practices

As you may know, President Barack Obama on February 17, 2009 signed into law the economic stimulus package, the "American Recovery and Reinvestment Act of 2009" (ARRA). This new law contains several investments in health care, including $1 billion in funding for prevention and wellness programs, $10 billion in funding for National Institutes of Health research and $1.1 billion for comparative effectiveness research.

Solinmed wants to bring to your attention the stimulus plan funds available to assist physicians in adopting health information technology (IT). The law authorizes $20 billion to assist in the development of a robust health IT infrastructure, including $17.2 billion in incentives through Medicare and Medicaid, as well as new grant programs, to assist providers in adopting health IT

From 2011-2015, physicians who demonstrate "meaningful use" of electronic health record (EHR) technology and performance during the reporting period of each payment year will be eligible for positive payment updates. Beginning in 2015, physicians who are not considered meaningful users will receive negative Medicare payment updates. Physicians are able to receive incentives equal to 75 percent of their allowable Medicare Part B charges, subject to the following caps:

• First payment year: $18,000 in 2011 or 2012; $15,000 in 2013; $12,000 in 2014
• Second payment year: $12,000
• Third payment year: $8,000
• Fourth payment year: $4,000
• Fifth payment year: $2,000

Penalties for physicians who do not adopt a certified EHR system by 2015 start at -1 percent update in payment. The penalty will grow to -2 percent in 2016 and -3 percent in 2017.
Physicians who quality for the health IT incentive will not be eligible for the incentives offered under the CMS e-prescribing program. The e-prescribing incentives run from 2009 to 2013.
The law also determines that an initial set of standards will need to be adopted by Dec. 31, 2009, that includes implementation specifications and certification criteria. We recommend that physicians and medical groups who do not currently use an EHR begin the process of adoption in 2009 and implement a system no later than 2010, in order to receive the maximum bonuses available under the program.

Given the many benefits of using health IT, including reduced administrative cost and medical errors, we encourage physicians and medical groups to take advantage of the federal funding available from 2011-2015. The funding can significantly offset the cost of adopting this technology.