Health IT: feds hold sway
The federal government will dominate discussions about, plans for and implementations of health information technology this year. Of the estimated $34 billion in federal subsidies under the American Recovery and Reinvestment Act of 2009 that will be made available for the purchase of electronic health-record systems, only an estimated $2.8 billion will go to a limited number of providers under the Medicaid program, according to a George Washington University study released in July.
While they’re getting less than Medicare providers, the Medicaid money for EHR purchases under the stimulus law will begin to flow in 2010, giving Medicaid providers a head start in the IT race. Their more numerous Medicare provider counterparts who qualify for IT subsidies will have to wait longer.
As many as 45,000 physicians see a large enough percentage of Medicaid patients to qualify to receive enhanced payments for EHR systems, the GWU study concluded. At $63,750 each over the six years of the program, the subsidy for Medicaid physicians will be bigger than that of their Medicare counterparts. Most physicians receiving EHR subsidies under Medicare will max out at $44,000 over five years, with the first payments not coming until 2011.
Applications by states for up to 90% federal matching funds to pay for planning their Medicaid EHR subsidy programs were already being accepted back in September.
Qualified Medicaid providers will be able to receive EHR subsidy payments before they purchase their systems. In contrast, money under the Medicare program only will reimburse providers for EHR expenditures already made.
Still, expect a lot of EHR purchases to be made this year, even by Medicare providers.
“I think the stimulus legislation, the components on technology and technology adoption, will very much be the story for 2010,” says Stephen Lieber, president and CEO of the Healthcare Information and Management Systems Society.
Some vendors of more traditional EHR systems, where the software resides and is maintained on the provider’s own computer systems, are offering buy-now, pay-later financing of their EHR systems in advance of the federal spigot being turned on. Other IT vendors, offering remote-hosted systems, have pay-as-you-go models as part of their regular business plans.
There is another key reason many providers eligible for the Medicare subsidies will buy early.
Under the Medicare incentive program, providers not only must purchase and install their systems in advance of that program’s 2011 “payment year,” but also they must demonstrate they can “meaningfully use” their systems.
An interim final rule on just what hoops providers will have to jump through to meet federal meaningful-use criteria was, at this writing, still being prepared by the CMS, which will run both Medicare and Medicaid EHR subsidy programs for the federal government.
Vendors of IT systems also await federal rules—on what will be required of their systems to meet federal guidelines for “certification.” Under the stimulus law, providers must use certified EHR systems to obtain subsidies.
Lieber: Stimulus law “will very much be the story for 2010.”