Repeal of EMR Stimulus Money/HITECH Act for Meaningful Use Incentive Programs

The progression of EHR adoption across US healthcare settings has witnessed a major development with a proposal being set forth in the US House of Representatives recently. The proposal aims to withdraw all unobligated balances that were earlier allowed as a part of Division 'A' of ARRA (American Recovery and Reinvestment Act of 2009-Public Law 111-5). This essentially means that all unspent funds from the total allocation of $2 billion that was marked for discretionary spending as a part of HITECH Act's approval to the Office of National Coordinator for Health Information Technology should be categorized as 'unobligated balances' and withdrawn!

Understanding the Issue

It is important to understand the H.R. 408 Spending Reduction Act of 2011 that was Introduced in House-IH. Here, SEC. 301. refers to the withdrawal of unspent stimulus funds. If this Act is enacted, all unobligated balances that were made available under division A of American Recovery and Reinvestment Act of 2009 (Public Law 111-5) will be immediately withdrawn. Further, SEC. 302 of this Act indicates something even more serious, i.e. the repeal of many provisions that were earlier presented as a part of the stimulus. If this Act is enacted, stimulus benefits extended through subtitles B & C that are part of Title II & III respectively (through VII of Division B of ARRA 2009) will be repealed.

What does this mean? The consequences of this Act can be devastating for healthcare providers and associated businesses that have yet not adopted EMR software. Firstly, the healthcare providers who provide health services as a part of Medicare and Medicaid can be greatly affected. This is because the 'meaningful use' of EMR incentive programs is covered as a part of Title IV of subtitle B mentioned above. Thus, more than $27 billion of stimulus incentives authorized for incentive payments can get repealed.

Will this happen? Many industry-watchers in the healthcare niche indicate it is most likely that the Obama administration and the Democratic-controlled US Senate might not approve the appeal for enactment of this Act but there are no guarantees for the same. There are many reasons for this. For instance, the HITECH Act is located in a different section when compared to the other stipulations that define 'meaningful use' of EMR incentive programs. The HITECH Act is a part of Title XIII under Division A of the EMR Stimulus Law. If this is taken into consideration, Section 302 of the GOP Bill (the GOP Healthcare Reform Bill) should not affect the HITECH Act in any way, outside the realm of incentive funding. In comparison, Section 302 that proposes the repeal under the Stimulus Law and seeks to limit further EMR incentive payments doesn’t clearly distinguish between 'unobligated' and 'obligated' balances.

Equally importantly, there is no clarification regarding the authorization of HITECH Act for the purpose of establishing more stringent adoption of Privacy Rule and Security Rule recommendations. There is no mention of how the HITECH Act should handle the issue of establishing more Regional Extension Centers to ensure easier and faster adoption of EMR practices. Similarly, the authority of HITECH Act to handle state-level exchange of health information or how college-level Information Technology courses/curriculum will be updated to ensure easier-to-adopt formats for HIPAA-compliant handling of patient health information hasn’t been dealt with.