Understanding EHR Stimulus Bill Incentives for EMR Software

As a part of the Economic Stimulus Package, the ARRA — American Recovery and Reinvestment Act 2009 was enacted on February 17, 2009. The ARRA dedicates $19 billion to the cause of accelerating the adoption of progressive health information technologies like maintaining Electronic Health Records (EHRs). The ARRA is aimed at providing monetary (cash) incentives for catalyzing the adoption of EHR technologies. An extensive scheme has been put forth under Medicare and Medicaid programs for healthcare providers willing to make the transformation to the electronic format of maintaining PHI.

What does the Stimulus Bill have for Medical Practices/Practitioners?

Payment Incentives — the funds that will be distributed in the form of incentives have been categorized under Medicare and Medicaid. Each of them defines its own criteria like eligibility and the related amount of incentive. Healthcare professionals can receive payment under only one of these, i.e. they should specify which of these programs they prefer.

Medicare Program — Medicare incentives are provided to physicians found eligible in providing ambulatory medical facilities, using Electronic Health Records. The total amount of incentive is $44,000, per physician, paid out over a period of five years. This cash incentive is paid directly to the healthcare professional or his employer. The incentives are also called EHR Bonus Payments for which physicians should be able to establish that they are meaningful users of certified electronic health record system.

Medicaid Program — Start date for the Medicaid Incentive Program hasn’t been fixed by the Stimulus Bill but is tentatively believed to be October 1, 2010. Eligible physicians will receive cash incentives of up to $63,750 for purchasing and using qualified EHRs. Medicaid-listed incentives are a bit more elaborate. They also help the practices that have yet not incorporated EHR technologies. Under the Medicaid program, an amount of $21,250 is offered to every physician to assist in the procurement and implementation of a qualified EHR system.

The deadline for purchasing the EMR system is 2016 to be eligible for these incentives. After the adoption of EMR system, the Medicaid incentive program further provides $8,500 to every physician for persisting with a meaningful use of the EHR configuration. Payments covered under meaningful use extend up to 5 years with no payment being made after 2021. Medicaid-eligible professionals must pay at least 15% of the cost to purchase and maintain their EHR technology.

What is Meaningful Use?

There are still no exact definitions to this term and the realm of its definition is constantly evolving. The term is indicative of the fact that the government wants to stress upon the criticality of using EHRs in a constructive manner that is solely aimed at improving the quality of patient care and making it more affordable. However, some basic criteria constitute meaningful use of an adopted Electronic Health Record system.

The EHR system should be:
• Certified and used for documentation (record-keeping) of patient care and for e-prescribing
• Used in a format wherein it forms a part of electronic health information exchange system that can be used when PHI needs to be shared among providers
• Capable of submitting information regarding qualitative measures needed to maintain the integrity of EHR functions

Is purchasing and implementing EHR an urgent need?

In many ways, it is, since the incentive programs take into consideration the fact that selection, trial and implementation of a meaningful EHR system is time consuming. The incentives have been designed in such a manner that they reward professionals/practices that have been pro-active to make an early investment for gainfully employing a certified EHR system. Medical practitioners who choose to employ the wait & watch methodology stand to lose up to 45% of bonuses that will be distributed among the initial set of names that come forth with their eligibility and compatibility with EHR-based requirements.

Are there financial benefits before the incentives are distributed?

The Medicare Improvement for Patients and Providers Act offers healthcare providers an increase of 2% in their Medicare reimbursement for choosing the EHR-enabled, e-prescribing mode in 2009-10, 1% bonus in 2011-12 and a token 0.5% bonus for those who choose to wait until 2013. Practices that can use the tax benefit listed under Section 179 Tax write-off can make a huge saving when buying the equipment/software for adopting EHR technologies. Practices covered under this clause stand to avail a 35% discount on the total cost incurred for such purchases. The deduction made under Section 179 cannot be guaranteed in the future years as it is subject to annual evaluation by the policymakers — another reason why healthcare facilities should speed-up their efforts to get on the EHR bandwagon.