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Leigh Burchell: How your practice can benefit from the $19B health IT giveaway

When President Barack Obama signed the American Recovery
& Reinvestment Act on Feb. 17, he not only helped to stimulate the lagging U.S.

When President Barack Obama signed the American Recovery
& Reinvestment Act on Feb. 17, he not only helped to stimulate the lagging U.S.
economy. He also paved the way to providing every physician in America an
affordable means to enter the digital era of medicine.

The health IT component of the legislation – the Hitech Act
– appropriates $19 billion to encourage health care organizations to adopt what
are referred to as electronic health records (EHR) and establish regional
health-information exchange networks (HIE), all while ensuring that the systems
safeguard critical patient data.

The act represents an enormous opportunity for health care
providers. After decades of slow but steady progress toward converting our
paper-based record system into an electronic one, we are taking a monumental
leap forward. The Congressional Budget Office predicts 90 percent of physicians
and 70 percent of hospitals will be using a comprehensive, robust EHR in a few
years. As a result, the country will save billions of dollars on the provision
of health care, and our citizens will receive better-informed care from a
coordinated network of providers. 

But just what does the new law mean for physician groups?
How can you take advantage of the billions in new funding that will be
available as early as 2011? And what will happen if you fail to seize the
opportunity presented by the new law?

Details of the $19 billion

The Hitech Act can be broken into two sections – one
providing $2 billion immediately to the Department of Health and Human Services
(HHS) and its subagency, the Office of the National Coordinator for Health IT
(ONCHIT); and a second that sets aside $17 billion for health care providers
who can demonstrate their use of a certified EHR.

In the act’s first section, the secretary of HHS is directed
to spend $300 million of the $2 billion fund to establish more
health-information exchange initiatives across the country, as well as helping
existing HIEs to progress in connecting providers electronically. The act also
allocates $20 million to ensure that health-information standards are
consistent in all settings.

The second part of the act calls for $17 billion in
incentive payments to physicians and hospitals. The government is focused on
two primary goals in this legislation: first, moving physicians who have been
slow to adopt EHRs to a computerized environment; and second, ensuring that
patient data no longer sits in silos but instead is actively exchanged between
providers to ensure that patients receive informed care. 

The majority of the funds within the Hitech Act are for
payments that will reward physicians and hospitals for effectively using a
robust, connected EHR system. There is a program designed for those that see a
large volume of Medicaid patients and another for those that accept Medicare.
In order to qualify for the incentive payments, both physicians and hospitals
have to demonstrate “meaningful use” of an EHR by proving three things:

1. Use of an EHR with ePrescribing capability that meets
current HHS standards

2. Connectivity to other providers to improve access to the
full view of a patient’s health history

3. Ability to report on their use of the technology to HHS

Importantly, because the government wants to spur quick
action, all of the incentives include payments for up to five years but provide
the largest payments early in the program. The incentive payments begin in 2011
to ensure that providers have time to adopt and learn to use the EHR. Physicians
who fail to adopt an EHR will eventually be penalized through lower Medicare
and Medicaid payments. The penalties begin in 2015.

Physician opportunities

There are two separate incentive programs for physicians:
one provided by Medicare and another by Medicaid. 

• Medicaid: If more than 30 percent of a physician’s
patients pay with Medicaid (20 percent for pediatricians), then they are
eligible for payments of up to $64,000 over five years. The incentives will be
calculated through a formula that factors in the exact Medicaid mix of their
patients, as well as amounts ranging from $25,000 in the first year to $10,000
in subsequent years. Additionally, nurse practitioners and nurse midwives are
eligible for the same incentives.

• Medicare: Physicians who do not have a large Medicaid
volume but do accept Medicare can earn up to $44,000 over the five years.
Additionally, physicians operating in a “provider shortage area” will be
eligible for an incremental increase of 10 percent, though those delivering
care entirely in a hospital environment, such as anesthesiologists,
pathologists and ED physicians, are not eligible for any incentives.

• Fee reductions: Providers who do not demonstrate
meaningful use of an EHR by the end of 2014 will see a decrease of 1 percent in
their 2015 fee schedules from Medicare. An additional decrease will be affected
in 2016 and 2017, down to a total of 97 percent of the regular fee schedule.
The secretary of HHS can reduce the fee schedule even further, by a maximum of
5 percent beginning in 2018, if the nationwide EHR adoption rate remains below
75 percent.

Standards, certification and privacy expansion

The secretary of HHS is required by the act to review all
existing standards and determine the initial set of standards that will apply
to the “meaningful use” criteria. All of this must be completed before the end
of 2009.

Finally, the act places a strong emphasis on further
protecting patient health information under federal privacy and security laws
(HIPAA). Primary changes included defining which actions constitute a breach
(including some inadvertent disclosures); imposing restrictions on certain
disclosures, sales and marketing of protected health information; requiring an
accounting of disclosures to a patient upon request; authorizing increased
civil monetary penalties for HIPAA violations and granting authority to state
attorneys general to enforce HIPAA violations. 

Industry experts agree that, to gain maximum financial
incentives, groups need to begin planning the rollout of EHR systems as soon as
possible. While many of the details of the act remain be worked out – including
the complete definition of “meaningful electronic health records” – providers
can’t afford to wait for all the details to be ironed out before moving forward.
To gain the maximum amount of Medicare and Medicaid incentives, physician
groups must have a qualifying records system in place by 2011. Bottom line: If
you want to be at the front of the line to collect those incentive payments and
move your practice onto the electronic health care highway, the time to start
driving is now.

Leigh Burchell is director of government affairs and
industry relations for Allscripts-Misys Healthcare Solutions Inc., a provider
of health care IT services based in Chicago.
She also directs the Center for Community Health Leadership, an organization
that disseminates leadership materials on health care IT adoption and
health-information exchange.

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