Stimulus
Law Aims To Jump-Start EHR Usage
Generally speaking, medical practices have been slow to adopt electronic
health record (EHR) systems. However, the situation may soon change.
A preliminary report from the National Center for Health Statistics* says
that 17% of office-based physicians surveyed in 2008 have basic EHR systems,
up from 10.5% in 2006. But the vast majority of practices have not embraced
EHR. There are many possible reasons, including high up-front costs, a steep
learning curve, limited savings, liability concerns, the lack of a software
certification process and the inconvenience and disruption of switching to
an electronic system.
To encourage the implementation of EHR systems, the American Recovery and
Reinvestment Act of 2009 provides direct incentives to physicians who adopt
health IT systems. On the other hand, the law includes Medicare payment
penalties for physicians and hospitals that are not using electronic health
records by 2015.
The Carrot Phase: Incentives
Under the stimulus law, physicians who have purchased or leased a certified
EHR system and are using it in a “meaningful” way by January 1, 2011, may be
eligible for an initial lump-sum incentive of up to $18,000 (or 75% of
Medicare charges, whichever is less) for 2010. Additional incentives of up
to $12,000, $8,000, $4,000 and $2,000 are possible (also subject to the 75%
Medicare limit) for years 2011 through 2014, respectively, for a total of
$44,000. Physicians who have Medicare caseloads of at least 30% and meet the
health IT adoption standards are eligible for nearly $64,000.
The Stick Phase: Medicare Reductions
Beginning in 2015, practices that have not adopted EHR systems will be
penalized with a 1% reduction in Medicare payments for that year, followed
by a 2% reduction in 2016 and a 3% cut in 2017 and beyond (unless certain
factors exist beyond the physicians’ control).
Definition of Meaningful Use
On June 16,
2009, the Health IT Policy Committee published a draft description of the
definition of meaningful use of EHRs by provider organizations. The
published materials included a presentation, a preamble document and a
matrix summarizing the priorities, goals, objectives and measures for
meaningful use. The deadline for public comments on the definition to the
Health IT Policy Committee is June 26, 2009. The publications on meaningful
use can be found on the
Health IT Policy Committee's website.
Clearly, there will be much more news
to come. Please
contact us if you would
like to discuss this topic further.
*Preliminary Estimates of Electronic Medical Record Use by Office-based
Physicians: United States, 2008
Health Care Commentaries is
provided by Somerset’s
Health Care Team
for our clients and other interested persons upon request. Since
technical information is presented in generalized fashion, no final
conclusion on these topics should be made without further review. For
additional information on the issues discussed, please contact a member
of our Health Care Team. This
document is not intended or written to be used, and cannot be used, for
the purpose of avoiding tax penalties that may be imposed on the
taxpayer.
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