Electronic Health Records

This information is intended to try and facilitate your education on The American Recovery and Reinvestment Act of 2009 (ARRA) which was signed on February 17, 2009. We believe this act will provide the stimulus needed to accelerate the adoption of Electronic Health Records (EHRs) in the U.S.

How does the stimulus plan apply to medical practices?

The Federal stimulus package contains $19 billion to accelerate the adoption and meaningful use of electronic health records (EHR). This money is provided to physician’s nationwide to assist in the deployment of health information technology to reduce medical expenses and improve patient care.

What payment incentives are available to physicians?

Incentive funds are available through Medicare and Medicaid programs. Each has its own set of eligibility criteria, requirements, and incentive amounts. Eligible physicians must choose to accept payments under either the Medicare or Medicaid programs and are not entitled to receive payments from both.

How does the Medicare incentive program work?

The stimulus plan calls for eligible physicians in ambulatory medical practices to possibly receive $44,000 or more over a 5 year period for utilizing a qualified electronic health records system. Fundamentally, the program is straightforward. CMS will provide EHR incentive payments to physicians who can demonstrate they are “meaningful users” of a certified electronic health record. The bonuses will be offered through 2015 via the following schedule:

How does the Medicaid incentive program work?

The stimulus plan calls for eligible physicians to potentially receive up to $63,750 for utilizing a qualified electronic health records system. For practices that have not implemented an EHR, the Medicaid program offers up to $21, 250 per physician to aid the purchase and implementation of a system (the physician must purchase before 2016 to be eligible). Thereafter, the Medicaid incentives offer up to $8,500 per physician for “meaningful use” of the EHR. The “meaningful use” payments will be available for up to 5 years (with no payments being made after 2021). Medicaid-eligible professionals must pay at least 15% of the cost to purchase and maintain their EHR technology. The start date of this program has yet to be determined, but it is expected to begin on or before October 1, 2010.

An eligible physician in the Medicaid incentive program is:

• A non-hospital based physician who has at least 30% patient volume identified as Medicaid insured.
• A non-hospital based pediatrician who has at least 20% patient volume in Medicaid insured.
• A physician who practices primarily in a Federally Qualified Health Center with at least 30% patient volume identified as “needy individuals.”

How is “meaningful use” defined?

A meaningful user is an eligible professional (physician) that:

• Demonstrates to the satisfaction of the Secretary that during such period the professional is using certified EHR technology in a meaningful manner, which shall include the use of electronic prescribing as determined to be appropriate by the Secretary.
• Demonstrates to the satisfaction of the Secretary that during such period such certified EHR technology is aiding in electronic exchange of health information to improve the quality of health care, such as promoting care coordination.
• Submits information on clinical quality measures and such other measures as selected by the Secretary.

Is edgeMED’s EHR offering certified and does it have the features and functionality to meet the government’s criteria?

edgeMED’s solution not only meets, but exceeds the criteria specified in the American Recovery and Reinvestment Act of 2009. As per the Act, certified EHR technology means an EHR that is certified to meeting standards pursuant to this Act. To be qualified as a certified EHR technology, the certified technology must include patient demographic and clinical health information, such as medical history and problem lists, and has the capacity to provide clinical decision support to support physician order entry, to capture and query information relevant to healthcare quality, and to exchange electronic health information with, and integrate such information from other sources.

The payment incentives do not begin until October 1st, 2010. Should I wait until then before getting an EHR?

The stimulus program recognizes and accounts for the fact that selecting, purchasing, implementing and engaging in meaningful use of an EHR do not happen all at once. The process takes time and the incentives are designed to reward practices that have made an investment in a certified EHR and have made the effort to become meaningful users. Given the amount of time it takes to select, implement and optimize an EHR in a physician practice, practices that delay could forgo up to 45% of the initial bonus pool available.

Stephen Lieber, CAE, President and CEO of HIMSS (Health Information and Management Systems Society) stated “The time for Physicians to purchase is now. The idea behind the package is to strongly encourage physicians to buy, then to reward them for doing so. Now is the time for providers and organizations to align themselves with vendors and products that meet the current standards of service and functionality, verify that they are committed to maintaining any future standards as well.”

Are there financial benefits available now, even before incentive money becomes available?

Section 179 tax advantage is better than ever in 2009. That’s because the new, higher limits (and bonus 50% depreciation) that were first introduced in 2008 have been extended for 2009. This means the limits are almost double from previous (pre 2008) years. Practices are able to write off up to $250,000 of software and related equipment purchased. For practices that can use this tax benefit, this clause functions as a 35% discount off of your purchase price. For instance, if you purchased and installed $50,000 of EMR software and hardware in 2009, you would be able to depreciate, or write off the full $50,000 this year which translates to total cash savings on your purchase of $17,500. It is important to note that the section 179 deduction is re-evaluated annually and may or may not be in effect in future years. Regardless, acting now can signify a substantial tax savings for your practice.

What will happen if I decide not to implement an EHR?

Beginning in 2015, practices that are not “meaningful users” of EHRs will incur the following penalties:

• 1% reduction in Medicare fee schedule for 2015
• 2% reduction in Medicare fee schedule for 2016
• 3% reduction in Medicare fee schedule for 2017

If by 2018 less than 75% of physicians are meaningful EHR users, then the financial penalties may be reduced 1% up to a maximum 5% reduction.

What if I have already purchased an EHR and am a “meaningful user”?

If you are currently using EHR software in a method considered “meaningful” by the Department of Health and Human Services (HHS), you will be eligible to receive the incentive payments. edgeMED will continue to update its customers on the latest developments of the stimulus plan as they become available. Should you have any questions please do not hesitate to contact us at 800-832-3274.

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