A prescription for success?...

The current recession has, to a large degree, escalated the imperative to reduce costs within the health care industry. In response, the Federal government views this as an opportunity to make a significant impact on health care cost reduction by focusing its efforts on reforming the Medicare and Medicaid programs - over which it has the most control - by accelerating the adoption and use of EHR systems by hospitals and medical practitioners.

On February 17th of 2009, the Federal government signed into law the American Recovery and Reinvestment Act ARRA which provides some $780 billion dollars to help with national economic recovery from the current recession. Part of that legislation includes the Health Information Technology for Economic and Clinical Health HITECH act. HITECH seeks to allocate some $20 billion dollars of the ARRA appropriation for adoption and "meaningful use" MU of EHR systems by hospitals and physicians. The money will be reimbursed (via the Medicare and Medicaid programs) to those entities that qualify, have adopted a certified EHR system, and have met the MU requirements starting at the beginning of 2011.

An important obstacle that has now been overcome is the somewhat vague definition of MU. The details were finally solidified by the Centers for Medicare and Medicaid Services CMS on December 30, 2009 (although there is a sixty day public comment period that ends in early March of 2010).

The government's plan to make EHR technology adoption happen as quickly as possible includes both a carrot and a stick...

The carrot - "Implement a certified EHR system, use it in a way that shows MU, and we will begin to "reimburse" you in 2011 via Medicare or Medicaid for a portion of your costs".

The stick - "If you fail to implement a system by the year 2015, we will begin knocking off annual reimbursements to you via Medicare - 1% in 2015, 2% in 2016, 3% in 2017, and then escalate the punishment up to a maximum of 5% every year after that going forward". Medicaid is not subject to these disciplinary measures.

For many providers, the clock starts ticking as of January 1st 2010. To get the reward and avoid the punishment... providers will need to select, implement, and eventually show MU of their EHR system to the Fed by 2012. This will be a challenging deadline to meet given the complexity of EHR selection, implementation, and MU requirements. Most EHR experts agree that the timeline to adopt EHR and meet meaningful use will average about 12 months.

Next » ARRA, HITECH, and EHR - A brief history