Health Information Technology for Economics and Clinical Health (HITECH) Act of ARRA

The HITECH act includes two major components - Medicare and Medicaid incentives for all eligible providers and hospitals and discretionary funds by the Office of National Coordinator (ONC) for technical assistance, training and standards development for electronic health record (EHR) adoption, research and development and India health services.

• $17.2 billion has been allocated towards Medicare and Medicaid incentives for eligible providers and hospitals.
• $2 billion has been allocated for discretionary funding.
  

Medicare Incentives:

To become eligible for Medicare payments provided by the HITECH act (a maximum benefit of $44,000 per physician), physicians must adopt a certified EHR in a meaningful way. The meaningful criteria was defined by ONC' health care information policy and standard committees, and later adopted by ONC. The interim ruling of this effect was issued on December 30th, 2009. All physicians including employed providers are eligible to receive these incentives. However, hospitalists are not eligible.

Practices need to adopt an EHR by the end of 2011 to gain the maximum benefit of $44,000. If not, these benefits will reduce over time and end by 2015. The following table describes the maximum eligible amount by each physician per year based on the year of EHR adoption.

	Incentives (for eligible physicians that adopt an EHR in a meaningful way)
Year Adopted an EHR	2011	2012	2013	2014	2015	2016	2017	Total
2011	$18,000	$12,000	$8,000	$4,000	$2,000	$0	$0	$44,000
2012	$0	$18,000	$12,000	$8,000	$4,000	$2,000	$0	$44,000
2013	$0	$0	$15,000	$12,000	$8,000	$4,000	$0	$39,000
2014	$0	$0	$0	$12,000	$8,000	$4,000	$0	$24,000
2015 and After (penalty up to a maximum of 3%)	$0	$0	$0	$0	(1%)	(2%)	(3%)	N/A

Penalties:
The penalties for not adopting an EHR are as follows:

• If physicians do not adopt an EHR by 2015, their medicare reimbursements will reduce by 1 percent each year up to a maximum of 3 percent.
  
• If the EHR adoption does not exceed 75 percent then the Secretary of HHS can further reduce medicare reimbursements up to 5 percent with increments of 1 percent each year after 2015.

Medicaid Incentives:

States may make payments to Medicaid providers to encourage a meaningful EHR adoption up to a maximum of $65,000 per physician. These providers must meet the following criteria.

• Must demonstrate a meaningful use of EHR. States can develop their own meaningful use criteria or follow the criteria adopted by ONC.
• All non-pediatric physicians must contain at least 30 percent of their patients covered by Medicaid.
  
• Pediatricians are eligible with 20 percent of their patients covered under Medicaid.

Medicaid payments will be paid as displayed in the following table. Unlike Medicare penalties, Medicaid will not penalize providers for not adopting EHRs.

Year Physicians First File	First Year	Second Year	Third Year	Fourth Year	Fifth Year	Total Payments
2011 till 2016	$25,000	$10,000	$10,000	$10,000	$10,000	$65,000

Physicians can file for Medicaid payments till 2016 to receive maximum benefits. First year costs must occur by 2016 and no payments will be made after 2021. Additionally, physicians are not eligible for duplicate Medicare and Medicaid payments.

To be eligible for both of these incentives, physicians must demonstrate a meaningful use. Now, is that financially viable for all physicians even with above incentives?

American Recovery and Reinvestment Act - the health care prospective....

On February 17 2009, President Obama signed the American Recovery and Reinvestment Act (ARRA) into law with a staggering total spending of $787 billion. The goals of this act are two folds:

• Save existing jobs and create new jobs.
• Stimulate the economy and invest in the long term needs of the country.

To achieve these goals, ARRA funds are allocated as follows:

• $288 billion for tax cuts and benefits. A few include:

o Extended unemployment benefits.

o COBRA benefits - Covers 65 percent of the premium for unemployed Americans.

• $224 billion in federal funds for education, health care and other entitlement programs.
• $275 billion for federal contracts, grants and loans.

Approximately, $30 billion of $224 billion, allocated for education, health care and entitlement programs, has been set aside for health care initiatives. These initiatives will promote:

• Information technology (IT) adoption.
• Health information exchange (HIE).
• Research and development.
• Standards development and
• Education and outreach.

These health care funds are further allocated to different programs as displayed in the following table. Some of these initiatives are managed by the states and others are managed directly by the federal government (health and human services).

Program Name	Available Fund
Medicare payment incentives and penalties (Managed by: Office of the National Coordinator (ONC))	$17.2 Billion
National Telecom & Information Administration’s broadband technology opportunities program (Managed by: National Telecommunications and Information Administration)	$4.7 Billion
U.S. Department of Agriculture’s distance learning, telemedicine, and broadband Program (Managed by: U.S. Department of Agriculture)	$2.5 Billion
Discretionary funding through ONC (Managed by: ONC)	$2 Billion
Grants toward construction of, renovation of, and equipment for health centers. (Managed by: HHS)	$1.5 Billion
Comparative Effectiveness Research & Healthcare Research and Quality. (Managed by: National Institutes of Health and HHS)	$1.1 Billion
Social Security Administration: health technology research and activities related to the adoption of technologies for disability claims.	$500 Million
Indian Health Services: HIT, telehealth services and related infrastructure. (Managed by: Indian Health Services [Part of HHS])	$85 Million
Healthcare IT adoption for Veterans Affairs hospitals. (Managed by: Veterans Benefits Administration)	$50 Million

Of these programs, the Health Information Technology for Economics and Clinical Health (HITECH) act consists $19.2 billion of total spending and includes the following programs - Medicare payment incentives and penalties and discretionary funding through ONC.

Due to HITECH act, some suggests that approximately 90 percent of the physicians adopt a comprehensive electronic health records (EHR) though it is questionable.

Await for more information on HITECH act and if it make sense operationally and financially for practices to adopt a EHR in a meaningful way.

P:S: The information provided here is collected to best of my knowledge. Programs and funding amounts may vary.