Health IT: feds hold sway

Modern Healthcare - - Special Report -

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.

—Joseph Conn

Lieber: Stim­u­lus law “will very much be the story for 2010.”

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