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?