Economic Recovery Act Should Spur Adoption, Use of Health IT, Say Experts

The health information technology, or HIT, provisions in the recently enacted economic recovery legislation should accelerate the adoption and use of HIT in physician practices during the next few years, according to Steve Waldren, M.D., director of the AAFP's Center for Health IT.

The stimulus package, which is known as the American Recovery and Reinvestment Act, or ARRA, of 2009, provides $19 billion for HIT -- $17 billion in incentives to encourage the adoption of HIT by Medicare and Medicaid providers during the next five years and $2 billion in direct funding for the nation's HIT infrastructure. According to Waldren, this unprecedented investment in HIT reinforces the value of the technology and its pivotal role in upcoming efforts to reform the nation's health care system.

"Before this stimulus package was put together, there really wasn't a significant amount of support for HIT," said Waldren. "A practice really had to be a champion of HIT and work really, really hard to implement these strategies."

Physician practices may still find it challenging to use the HIT systems effectively, but the enactment of the ARRA will make the process more financially rewarding, according to Waldren. "We are talking about some real money for practices here compared to previous incentives," he said.

The ARRA employs a combination of incentives and penalties to encourage the adoption and use of HIT among Medicare and Medicaid providers. Although any physician is eligible through the Medicare Part B program to receive incentive payments, to qualify for the Medicaid incentives, physicians' caseloads must include at least 30 percent Medicaid patients. Hospital-based physicians are not eligible to participate in the either incentive program. Payments go to the individual physician, not to the practice.

According to the Medicare HIT provisions in the economic recovery legislation, physicians who "meaningfully use" an approved HIT system beginning in 2011 are eligible to receive as much as 75 percent of their Medicare allowed charges as an HIT incentive, up to the maximum incentive payment for that year.

The bill provides an even higher payment ceiling for "early adopters," defined as physicians who first begin "meaningful use" of HIT systems in 2011 -- the first year payment incentives will be available -- or 2012. These physicians could receive as much as $18,000 the first year they adopt the technology. For example, if such a physician's allowed charges in 2011 or 2012 total $24,000 or more, he or she would receive the full $18,000 bonus that year.

The basic incentive schedule likely will be the same for physicians who already have HIT systems and wish to upgrade them. Regulations yet to be written will address more specifically how these funds will flow to physicians. Physicians with existing HIT systems can qualify if their systems are certified according to standards that HHS is expected to release at the end of 2009.

Finally, to encourage physicians practicing in federally designated health professional shortage areas, or HPSAs, to begin using HIT, the law provides them with an additional bonus payment of 10 percent of the incentive amount. For example, a physician serving in a HPSA who began using HIT in 2011 or 2012 and who received an $18,000 incentive payment (as an early adopter) also would receive a bonus of $1,800, for a total of $19,800.

For physicians who fail to adopt HIT, the law cuts Medicare payment rates to 99 percent in 2015, 98 percent in 2016 and 97 percent in 2017. After 2018, the payment rates continue to fall but can go no lower than 95 percent.

Medicaid HIT incentives in the recovery bill are structured differently. Medicaid will contribute 85 percent of a defined allowable costs cap for HIT adoption and implementation. Thus, in the first year, physicians who purchase and implement HIT systems can receive no more than $21,250 (85 percent of a $25,000 maximum) as a Medicaid incentive. During each of the following four years, Medicaid providers cannot receive more than $8,500 (85 percent of a $10,000 maximum) for operation and maintenance. The payment period for purchase, implementation, operation and maintenance of the HIT system cannot exceed five years.

Waldren said the ARRA should influence, not dictate, physician decisions about HIT. More than 40 percent of AAFP members already have HIT systems in place, and another 13 percent are in the process of implementing such systems, according to the latest AAFP survey.

If a physician practice has vetted an HIT system and is in the process of buying one, Waldren said he would encourage that practice to proceed with the purchase but also would advise the practice to ensure that the HIT vendor would support future requirements from CMS for the ARRA incentives. However, he added, if a physician's practice is not far along in choosing and buying an HIT system, the practice should probably wait a couple of months to determine how to best implement the HIT provisions in the ARRA.

Waldren noted that there is a chance that existing HIT users will have to upgrade their systems and buy additional products and services to meet the ARRA requirements.

Much of the HIT language in the stimulus package has not been adequately defined yet, according to Waldren. The ARRA requires Medicare and Medicaid physicians to use "qualified" HIT systems and to employ them in "meaningful ways" to qualify for the incentives. But the legislation leaves it up to the HHS secretary to define these terms.

The measure itself gives HHS and the Office of the National Coordinator for Health Information Technology, or ONC, a certain degree of latitude in implementing the HIT provisions. That could be beneficial, Waldren said, because it would allow those individuals some leeway to adapt to rapid changes in the HIT field.

"They have the potential to do some great things or to not do great things -- it all depends on who fills those positions," said Waldren.

According the legislation, for example, the ONC is in charge of developing national HIT standards and deciding how to spend some of the $2 billion allocated for HIT infrastructure. Some of that $2 billion will go to states in the form of grants, giving states the opportunity to use the money to encourage HIT adoption on the state and local levels.

"The legislation talks in broad terms about promoting health information exchange, promoting standardization, supporting certification, and it talks about supporting the states through grants," said Waldren.

But the HIT language does not talk about linking HIT to measurements, goals or outcomes to improve quality and reduce costs, raising questions about how to judge the long-term success of the HIT investment, according to Waldren.

"I would hate to look back 10 years from now and say, 'We just wasted $19 billion,'" said Waldren. "The government could say, 'We gave physicians money, support and certified products, but they didn't use them to do what we wanted them to do.'"

Waldren said HHS and the ONC should look at the "real world implementation" of HIT products and services when developing HIT standards. And perhaps most importantly, they should rely, in large part, on existing standards instead of creating new standards that are based on theory and not actual practice.

"The federal government needs to get on the ball so we (FPs) know where we stand and what we need to do," said Waldren. "We don't have much time between now and 2010."