HITECH Act

Health Information Technology for Economic and Clinical Health Act

What is the HITECH Act?
Why did the government pass this law? Why is it important?
What does the HITECH Act mean to physicians and hospitals?
What incentives are available to me?
What is a "certified" EMR?
What happens if I don’t adopt an EMR system?
Where do I begin?  What analysis will be required?
Where can I read the HITECH Act?

 

What is the HITECH Act?

On February 17, 2009 the American Recovery and Reinvestment Act of 2009 aka “the Stimulus Bill,” was signed into law by the federal government.  The Stimulus Act allocates $787 Billion to economic recovery.  Included in this law is $19.2 Billion intended for healthcare.  The healthcare portion of the bill is called, the Health Information Technology for Economic and Clinical Health Act, or HITECH Act. 

The HITECH Act makes permanent the Office of the National Coordinator for Health Information Technology within the Department of Health and Human Services and expands the authority of the office.

Title XIII in Division A, pages 112 through 165 and Title IV in Division B, pages 353 through 398, cover the HITECH portion of this economic recovery act.

Why did the government pass this law? Why is it important?

There has been extensive research done to show that utilizing an EHR would serve to improve patient care, increase patient safety and simplify compliance in the US healthcare system. Additionally, it would help cut costs in the long term, as it would minimize errors, increase productivity and administrative efficiency.

For additional information on the potential benefits and savings associated with investing in an EMR system, the following link provides a good reference: HealthAffairs.org.

What does the HITECH Act mean to physicians and hospitals? What incentives are available to me?

As described in the most recent published news, the intended use of the $19.2 Billion will be for incentive payments, grants and loans.

$2.2 Billion will be dispersed as grants and loans to promote advancements in healthcare information technology (HIT) and improve accessibility to HIT in underprivileged areas. The grants will be available to researchers, Community Health Centers, Rural Health Centers and Indian Health Centers.

$17 Billion will be used for incentive payments to physicians and hospitals that participate in Medicare and Medicaid programs. These incentives will be issued to current users and new adopters of certified EMR systems, who use the system in a meaningful way.  The certification process and standardization criteria have NOT yet been determined, and will be decided upon by the end of 2009.  The government has NOT yet made any reference to partnerships with any existing EMR certification organizations.

Medicare - Physicians seeing Medicare patients can receive a maximum of $44K over the course of 5 years.  An additional 10% is available to physicians operating in a designated Health Professional Shortage Area (HPSA), for more information go to www.hpsafind.hrsa.gov.  To qualify for Medicare incentives:

>The practice must demonstrate "meaningful" use of an EMR:

• Usage of e-prescribing

• Demonstrates information exchange

• Reports clinical quality measures

• Prove usage of a certified EHR

>Providers must bill 125% of the total incentive received over the five-year period of incentive distribution.

  Medicare Incentives Schedule

Payout	Current User	Adopt in 2011	Adopt in 2012	Adopt in 2013	Adopt in 2014
2011	$18K	$18K	―	―	――
2012	$12K	$12K	$18K	―	―
2013	$8K	$8K	$12K	$15K	―
2014	$4K	$4K	$8K	$12K	$15K
2015	$2K	$2K	$4K	$8K	$12K
2016	―	―	$2K	$4K	$8K
Total	$44K	$44K	$44K	$39K	$35K

How to read this table: if you are a current user, your payout for 2011 will be $18K, $12K in 2012, $8K in 2013, $4K in 2014 and $2K in 2015.  If you adopt an EMR system in 2013, your payout will be $15K in 2013, $12k in 2014, and $8K in 2015.

Medicaid - Physicians whose caseloads include at least 30% Medicaid patients are eligible to receive up to $65K over the course of 5 years. 

• Available only to non-hospital based clinicians, including dentists, certified nurse midwives, and physician assistants practicing in rural health clinics or FQHCs.
• Minimum for Medicaid participation: 30% of a clinicians' patients must use Medicaid, with the exception of pediatricians, who only need 20% of their patients using Medicaid.
• Startup incentive up to $25,000 in state loan funds will be available in year one toward the purchase of a certified EMR.
• After receiving startup funds, providers who can prove "meaningful use" can receive up to $10K annually for an additional four years.
• No penalties have been defined by Medicaid for lack of adoption.

Medicaid Incentives Schedule
2011	2012	2013	2014	2015	2016	2017	2018	Total
$25K	$10K	$10K	$10K	$10K				$65K
	$25K	$10K	$10K	$10K	$10K			$65K
		$25K	$10K	$10K	$10K	$10K		$65K
			$25K	$10K	$10K	$10K	$10K	$65K
				$25K	$10K	$10K	$10K	$55K
					$25K	$10K	$10K	$45K

 

Physicians cannot obtain incentives from both Medicaid and Medicare, but hospitals can.

Hospitals - Hospitals can receive a base payment of up to $2M initially.  Additional incentives are available according to a formula based on discharges, year of adoption etc... with a cap at $6M. The exact payment schedule is not yet determined.

What is a "certified" EMR?

The HITECH Act states that a "certified" EMR product must be adopted for the Healthcare Professional to quality for any incentives.  The specifies are still being determined, but most likely The Certification Commission for Healthcare Information Technology - CCHIT will be deemed the certifying body.

The CCHIT Certification has 500 plus different requirements for functionality, interoperability and security. 

What happens if I don’t adopt an EMR system?

After 2015, further financial incentives will not be available and penalties will kick in.  There will be a 1% reduction in Medicare fees per year, up to 3% by 2017.

Where do I begin? What analysis will be necessary?

It is obvious from the explanation of the incentive plan that the sooner you adopt an EMR system, the more incentive funds that will be available to you.  It is not an easy undertaking and will require quite a bit of analysis, preparation and research to begin the process.

Physicians will need to know the volumes of their patients that have Medicare and Medicaid.  The higher Medicaid incentives will be paid to Healthcare Professionals who have at a 30% Medicaid patient volume.    Heckman Consulting can assist you with by creating reporting and analysis output of these patient volumes.  Please call us at 317-862-2126 or contact us via email.

Where can I read the HITECH Act?

A PDF document of the entire ARRA can be found here.  The sections related to HITECH are Title XIII in Division A, pages 112 through 165 and Title IV in Division B, pages 353 through 398, cover the HITECH portion of this economic recovery act.