The American Recovery and Reinvestment Act

What is the HITECH Act?

On February 17, 2009, the $787 billion American Recovery and Reinvestment Act of 2009 (AARA or better known as the Stimulus Bill")  was signed into law by the federal government. Included in this law is $19.2 billion for increasing the use of Electronic Health Records (EHR) by providers. This portion of the bill is called the Health Information Technology for Economic and Clinical Health (HITECH) Act.

Why is the government willing to invest federal resources in the HITECH Act?

The government is investing and taking a leadership role in developing standards for the electronic exchange and use of health information. Extensive research has shown that effective use of an EHR system improves quality of patient care and care coordination, minimizes errors, increases productivity and reduces costs.  The HITECH Act establishes a process for the development of standards that will allow for the nationwide electronic exchange of information among doctors, hospitals, patients, health plans, the government and others by the end of 2009.

What does the HITECH Act mean to me? 

Medicare—The Act includes provisions for incentives to be paid to providers who participate with Medicare, use a certified EHR system and use that system in a “meaningful” way. The Medicare payment to providers is $44,000, with incentive payments equaling 75% of the allowable Medicare fees billed each year, up to the full amount (see table).

Note: The first year payment is $18,000, so you must bill at least $24,000 in allowed charges that year. After 2015, non-use of EHR will lead to penalties. There will be a 1% reduction in Medicare reimbursements per year, up to 3% by 2017.

Medicaid – Providers whose caseloads include Medicaid recipients are eligible to receive nearly $64K. If Medicaid patients make up at least 30% of your patient volume, you can earn incentives equal to 85% of the allowable Medicaid charges, up to $21,000 in the first year.   Incentive payments in the following five years are capped at $8,500 per year, for a maximum total of $63,500 (see table).

How do I qualify for the incentives?

Make sure you use a “certified” EHR: Use of “certified EHR technology” is a core requirement of providers who seek to qualify to receive incentive payments under the HITECH Act. The Office of the National Coordinator (ONC) for Health Care Information Technology has issued the final rule to establish a certification program for EHR systems.  It’s expected that multiple organizations will apply to become ONC Authorized Testing and Certification Bodies (ONC-ATCB). The Certification Commission for Healthcare Information Technology (CCHIT) has announced it will seek ONC-ATCB status as soon as the application process opens.

Start now demonstrating “meaningful use” of an EHR:  The ONC has issued guidelines for “meaningful use” which specify elements which must be present in the EHR system and available for use by a provider.  The required elements include:

• Use e-Prescribing—the EHR must allow providers to prescribe over the Internet
• Electronically exchange information—with labs, hospitals, providers and payers, including Medicare and Medicaid and such additional organizations as the HITECH Act may require
• Submit clinical quality measures—such as Physician Quality Reporting Initiative (PQRI)

If you become a meaningful user by the end of 2010, your first EHR reporting period could be as early as 1/1/11 – 3/31/11 (the reporting period in 2011 is 90 consecutive days).  This means you would get paid your first $18,000 payment as early as April 2011!

Still have questions?  Check out some of the Common Myths about the HITECH Act , EHR and qualifying for the incentives.  Or contact us.