Health Information Technology (HIT) in the American Recovery and Reinvestment Act (ARRA) of 2009
Last Update: 18 March 2010
Medicare and Medicaid Electronic Health Record (EHR) Incentive Payment Programs
Overview
The American Recovery and Reinvestment Act (ARRA) of 2009, signed into law in February 2009, included new funding for Health Information Technology (HIT). A significant portion ($17 billion) of the funding for HIT will support incentives for physicians who have adopted Electronic Health Records (EHRs). All Physicians (par and nonpar) who treat outpatient Medicare patients and demonstrate that they are using a “certified” EHR in a “meaningful” way will be eligible for incentive payments totaling up to $44,000 (per physician) over 5 years, starting as early as 2011. Starting in 2015, Medicare reimbursement rates will be reduced for physicians who do not meet this requirement. Physicians who treat Medicaid patients and demonstrate that they are using an EHR will be eligible for incentive payments totaling up to $63,750 (per physician) over 6 years, starting as early as 2010. Funding is also available to encourage hospitals to adopt EHRs, but this is not discussed here.
Timing
On December 30, 2009, the Centers for Medicare and Medicaid Services (CMS) released proposed rules on the EHR Incentive Program, open for public comment until March 15, 2010. Many organizations submitted comments on the proposed rules, including APA and AMA. The information presented here is based on the proposed rules. The final rule, anticipated in spring 2010, will likely reflect modifications based on the comments that are received. APA will continue to monitor developments in this area and will provide updated information as it becomes available.
To obtain the full incentive, physicians must begin participation in the Medicare incentive program in 2011 or 2012. The proposed rule allows for participating physicians to demonstrate meaningful use of electronic health records for 90 consecutive days in the first year of the Medicare incentive, as opposed to the entire calendar year in subsequent years. Therefore, to receive the full incentive, physicians must be able to attest to meaningful use of EHRs by October 1, 2012. The Medicaid incentive program will start when the States activate them, as early as 2010. Physicians do not need to demonstrate meaningful use in the first year of the Medicaid program, but rather demonstrate efforts to adopt, implement, or upgrade to a certified EHR.
Certification
Use of a certified EHR system is a requirement for the incentive. Details of the EHR certification process were not included in the December 30 proposed rules and will be described in subsequent rulemaking. Currently, the Certification Commission for HIT (CCHIT) is the only group that certifies EHR products at the national level. While CCHIT is currently positioning itself to certify EHR software products capable of supporting “meaningful use” criteria, additional sources of certification are possible. CCHIT is in the process of developing certification criteria specific to behavioral health software.
Meaningful Use
The proposed rule outlines 25 technical requirements for physicians to demonstrate meaningful use, e.g., that the EHR supports electronic prescribing and that physicians are electronically transmitting at least 75% of the total prescriptions written in the year. In addition, physicians are required to report on several clinical performance measures. The proposed rule lists 3 core measures that all physicians must report (tobacco use screening; blood pressure measurement; and drugs to be avoided in the elderly), as well as subsets of specialty measures. The proposed rule lists 6 psychiatric measures: antidepressant medication during the acute phase of major depressive disorder; diagnostic evaluation of MDD; suicide risk assessment in MDD; optimal practitioner contacts for MDD; initiation and engagement of alcohol/other drug dependence treatment; and appraisal for alcohol and chemical substance use in MDD and bipolar disorder.
The 25 technical requirements in the proposed rule include the following areas:
- Maintaining patient demographics
- Maintaining problem and medication lists electronically
- Support for integrated clinical decision support
- Medication reconciliation
- Electronic prescribing
- Use of Computerized Physician Order Entry (CPOE)
- Tracking and reporting specified clinical quality measures
- Supporting basic exchange of clinical information with external entities
- Providing the patient an electronic copy of their health information
- Specific privacy and security requirements
Financial Incentive and Penalty
Incentives for physicians who demonstrate meaningful use of certified EHR systems will be awarded annually from 2011-2016. To be eligible for any incentive, the first year of adoption can be no later than 2014. The incentive is calculated based on a percentage of charges billed to Medicare and/or Medicaid. Physicians who bill a small amount to Medicare or Medicaid will be eligible for smaller incentives than physicians who see more patients covered by either of the programs. Physicians can only participate in one incentive program (Medicare or Medicaid) per year and can only switch once.
Incentives will be calculated based on 75% of the physician’s allowed Medicare charges for the year, with the following caps:
First year: $18,000 (2011 or 2012)/ $15,000 (2013)/ $12,000 (2014)
Second year: $12,000
Third year: $8,000
Fourth year: $4,000
Fifth year: $2,000
There is an additional 10% incentive for physicians who work in a Geographic Health Professional Shortage Area (HPSA). Starting in 2015, a penalty of 1% will be imposed on Medicare reimbursement (subject to certain exemptions) for physicians who do not demonstrate meaningful use of an EHR. This penalty is to be increased annually to a maximum possible penalty of 5% in 2019 and thereafter.
The Medicaid incentive program offers up to $63,750 for physicians over 6 years with a similar distribution. To be eligible for the Medicaid incentive, at least 30% of the physician’s patient population must be Medicaid patients.
According to the proposed rules, participation in the EHR Incentive program would not preclude participation in the Physician Quality Reporting Initiative (PQRI), which in 2010 allows for an additional 2% incentive for physicians who successfully report performance on clinical performance measures. Many of the clinical measures overlap in the two programs. The proposed rules note that reporting for the PQRI via EHRs, as opposed to more cumbersome claims-based reporting, would provide an added incentive for physicians to adopt EHRs.
Analysis
The details of the EHR incentive programs have yet to be finalized. Many organizations have expressed concerns about the potential administrative burden of participating in this program and it is possible that the final rules will change. Eligibility for the full incentive will require adoption of an EHR by 2012, and penalties in the form of reduced Medicare payments for physicians not using an EHR will begin in 2015. Psychiatrists not currently using an EHR should consider exploring their options. Some of the resources below may be helpful in initiating this process. While an EHR has great potential to improve healthcare quality and efficiency, the selection and usage of EHR technology can be time-consuming, complex, costly and disruptive. A strategic, well-considered commitment to EHR adoption, rather than the financial incentive, should be viewed as the main impetus to use EHRs. The EHR incentive serves as a “rebate” that follows this decision and the resulting actions taken. While the current incentive (and penalty) are limited to physicians treating Medicare or Medicaid patients, it is possible that private payers will develop similar incentive programs or requirements over the coming years. APA will continue to monitor this issue and will post new information and resources as they become available.
Other HIT Initiatives
Office of the National Coordinator for HIT (ONC)
ARRA formally codified the Office of the National Coordinator for HIT (ONC), currently led by David Blumenthal, MD, MPP. This office is overseeing many national EHR activities, including and extending beyond the provisions in ARRA.
HIT Regional Extension Centers
Funding was also included in ARRA for the establishment of regional resource centers intended to provide technical assistance, guidance and information on best practices to support and accelerate health care providers’ efforts to become meaningful users of EHRs. Approximately 70 centers will serve clinicians in designated geographic areas. Applications for potential centers were invited in August 2009, and these centers are expected to become operational throughout 2010.
State Health Information Exchanges
Funding has also been made available to advance health information exchange (HIE) across the health care system. Cooperative agreements will be awarded to states to evolve and advance the necessary governance, policies, technical services, business operations and financing mechanisms for health information sharing across the healthcare system. This program will build off of existing efforts to advance regional and state level HIEs while moving towards nationwide interoperability.
Resources
Meaningful Use
Department of Health and Human Services
Health Information Technology
Centers for Medicare and Medicaid Services (CMS) page on Incentive Programs
APA EHR Page
APA DGR Fact Sheet on HIT and Privacy
Questions?
Email qips@psych.org