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The Federal Stimulus Package and the HITECH Act: Taking Stock of What We Know To Date
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The passage of the American Recovery and Reinvestment Act of 2009 (ARRA) has left many of us seeking details on the federal plan to accelerate adoption of electronic health records (EHRs) in medical practices, as set forth in that portion of the ARRA known as the Health Information Technology for Economic and Clinical Health Act (HITECH Act).

undefinedSince the Act’s passage on Feb. 17, 2009, there has been a steady escalation of communication to physicians, most of it focused on the incentive payments tied to adoption and use of EHRs over the next several years. In fact, a Google search in preparation for this article resulted in 2,700,000 hits for “HITECH Act.”

With this much commentary, one would expect ready access to guidelines on how physicians are expected to go from paper to electronic data in one fell swoop, with generous incentive payments at the end of the EHR rainbow. However, it is exactly because the HITECH Act is written in broad-brush strokes, with details left to the secretary of the U.S. Department of Health and Human Services (HHS), that so much uncertainty exists. At the risk of redundancy, this article attempts to outline what we do, in fact, know about the HITECH Act thus far, and what we will likely learn in the months to come. It also discusses some of the practical first steps for ophthalmologists to consider.

The HITECH Act’s Vision
The HITECH Act seeks nothing less than overhaul and transformation of the delivery of health care as most of us know it today, taking us — however reluctantly — from paper-based systems to electronic utopia.

Studies cited by the Congressional Research Service suggest that only about 5 percent of physicians have a fully functional EHR system that incorporates all or most of the recommended capabilities, including electronic documentation of chart notes, electronic viewing of lab results and radiological images, electronic prescribing, clinical decision support and interoperability (the ability to share data) with other systems. That leaves the remaining 95 percent of us with much catching up to do. (According to an Academy survey, 23 percent of members are using a databased EHR system.)

The HITECH Act intends to aid this effort by permanently establishing the Office of the National Coordinator (ONC), formerly referred to as the Office of the National Coordinator for Health Information Technology (ONCHIT), within HHS to address macro-level health information technology (HIT) infrastructure issues. The act also provides significant financial incentives to encourage ground-level EHR adoption by providers.

Finally, the act mandates greater privacy and security protections for health information, particularly given the broad mandates for interoperability and electronic data exchange. (Various proposed regulations are already in their public notice and comment period. Of particular interest is the new inclusion of “business associates” in the definition of “covered entities,” and the new breach-notification requirements when disclosure of protected health information occurs.) Ultimately, the goal of the HITECH Act is to increase consumer confidence in the safety of their protected health information in the new electronic age.

Office of the National Coordinator
ONC was originally established by executive order in 2004 to develop a strategic plan for national expansion of HIT. Since then, it has worked to develop interoperability standards, certification criteria, privacy and security standards and prototypes for a national health information network in conjunction with organizations such as the American National Standards Institute (ANSI) and the Certification Commission for Healthcare Information Technology (CCHIT).

Under the HITECH Act, ONC’s mission has gained both urgency and $2 billion in discretionary funds. Most relevant to health care providers, ONC is the governmental body responsible for developing the HIT standards, implementation specifications and certification criteria that will together help define “meaningful use” of EHR, which must be met to be eligible for incentive payment. Although the Secretary of HHS has 90 days to review the recommendations from ONCHIT, the act mandates that, at a minimum, HHS had to adopt an initial set of standards by Dec. 31, 2009. Editor’s note: On Dec. 30, 2009, CMS released a fact sheet providing more details on the EHR incentive program and a fact sheet on the definition of “meaningful use.”

Even as we wait for details to emerge, however, the HITECH Act itself articulates four basic requirements for “meaningful use.”

  1. The EHR system must be certified.
  2. It must include e-prescribing.
  3. It must allow for electronic exchange of data to improve clinical care.
  4. It must be able to report clinical quality measures.

At a minimum, we expect the forthcoming standards will include and elaborate upon these EHR requirements. Pursuant to the HITECH Act, ONC is to work with separate HIT policy and HIT standards committees with balanced representation from various health care sectors, as well as the National Institute of Standards and Technology (NIST).

Financial Incentives and Assistance to Providers
The Congressional Research Service cites cost and limited financial incentives as two of the most significant barriers to widespread HIT adoption. By now, most of us have heard of the EHR incentive payments that will be available to providers under Medicare and Medicaid. However, the HITECH Act also authorizes funding for numerous grant and loan programs at both the state and federal level.

Medicare Incentive Payments and Penalties
Participating Medicare providers who demonstrate meaningful use of a certified EHR system will be eligible for incentive payments over a five-year period, beginning in 2011. The incentive payments are to equal 75 percent of the physician’s allowed Medicare Part B charges during the reporting year, up to designated maximums for each year as follows: 

  • $15,000 in the first payment year,
  • $12,000 in the second year,
  • $8,000 in the third year,
  • $4,000 in the fourth year, and
  • $2,000 in the fifth and final year.

Early EHR adopters whose first payment year is 2011 or 2012 may receive up to $18,000 (instead of $15,000) for that payment year. Taken together, either 75 percent of a physician’s allowed Medicare charges or the designated maximum amount, whichever is lower, will function as a cap on incentive payments in any given year.

Depending upon when a physician begins participating and the volume of that physician’s Medicare allowed charges, total maximum incentive payments will range from $44,000 to $24,000 per physician. However, those physicians practicing in health professional shortage areas will see a 10 percent increase in incentive payments.

Finally, physicians who practice entirely in a hospital environment, such as pathologists and emergency room doctors, are not eligible for EHR incentives under Part B because separate EHR incentives will be available to hospitals under Part A.

Beginning in 2015, the HITECH Act switches from carrot to stick by reducing Medicare payments for those physicians who are not meaningful users of certified EHR systems as follows:

  • 1 percent reduction in 2015,
  • 2 percent in 2016, and
  • 3 percent in 2017.

For 2018 and subsequent years, the reductions can eventually go as high as 5 percent if the secretary of HHS determines that the target 75 percent adoption rate has yet to be achieved across all eligible providers. Although the secretary may grant hardship waivers on a case-by-case basis, such exemption from the EHR penalties may not exceed five years.

E-Prescribing Bonus
Physicians who report using an EHR system that is also capable of e-prescribing will no longer be eligible for e-prescribing bonuses through other incentive programs. Instead, they will receive HIT incentives only to avoid “double-dipping.”

Medicaid Funding for EHR Adoption
The HITECH Act authorizes federal matching funds for state Medicaid programs to promote initial installation or upgrade of certified EHR technology by Medicaid physicians. Based on studies to be conducted by the states, HHS will determine the average acquisition or upgrade costs for certified EHR technology. Once this “average net allowable EHR technology cost” is determined, non-hospital based physicians with at least 30 percent Medicaid patient volume may qualify for payments equal to 85 percent of this EHR cost, up to a maximum of $25,000 for the first year.

In subsequent years, Medicaid physicians may receive up to $10,000, for up to five years, to cover the ongoing cost of maintaining the certified EHR system, so long as there is meaningful use of the technology. Non-hospital based pediatricians with at least 20 percent Medicaid patient volume are eligible to receive up to two-thirds of the above amounts.

Given the differences in how the EHR incentives are structured under Medicare and Medicaid, providers who qualify under both may elect to participate in one program over the other. However, physicians are specifically prohibited from participation in both incentive programs.

Other Financial Assistance
The HITECH Act authorizes funding for numerous grant programs to support HIT infrastructure, EHR adoption, training, best practices, telemedicine and inclusion of HIT in clinical education, with priority given to underserved areas and underserved populations. Of particular interest, however, are funds available for states to establish low-interest loan programs for purchase or upgrade of certified EHR systems by providers. The loans, which are similarly tied to meaningful use, allow for payment terms that can be spread out over up to 10 years. Like the Medicaid EHR incentives, the loan program will be administered at the state level, within guidelines set by HHS.

Next Steps
On March 20, 2009, HHS named David Blumenthal, MD, MPP, as the National Coordinator for ONC to guide its many activities and fulfill the ambitions of the HITECH Act. As national coordinator, Dr. Blumenthal, who has used EHRs in his primary care practice for 10 years, offered some early comments in a perspective piece published on April 9, 2009, in the New England Journal of Medicine.

He described the HITECH Act’s “clarity of purpose,” which sees HIT not as an end in itself, but a means of improving the quality of health care and the efficiency of the health care system. At the same time, he recognized two major challenges: the very tight timeline both HHS and ONC face, and the need to define “certified EHR” and “meaningful use” in a way that does not set the bar so high it dooms physicians and hospitals to failure.

Developments under the HITECH Act will be fast and furious, so we too must maintain “clarity of purpose” — take what we know thus far to guide our next steps.

If your practice is already on EHRs, evaluate your present system and talk to your vendor about the new HIT requirements. Despite the limited CCHIT certification currently available (and none for ophthalmology), is your EHR vendor familiar with existing certification requirements? Are they CCHIT certified? Do they have the resources to obtain certification as HHS and ONC will soon define it? Are you able to e-prescribe through your present system? Do you have a mature EHR system that allows for structured data input?

According to Jeffery Daigrepont, a senior vice president with Coker Group, a national health care consulting firm, document-imaging based systems have been popular among ophthalmologists. He states, “Unfortunately, these systems do not capture structured data. Instead, doctors still use pen and paper or dictation, then convert documents to images that are indexed electronically for easy access on the computer. This type of system does store health records electronically, but there is virtually no way to extract and report on the data contained therein, a key requirement of the HITECH Act.”

If you find that you need to shop for an EHR system, many of the considerations above still apply.

  • Will your existing patient management (PM) system be compatible with the EHR system that you want? If not, conversion of the PM system may have to come first, which will take additional time and resources.
  • Are your computers properly networked and do you have access to reliable IT support? 
  • Can your diagnostic equipment interface with the EHR system? 
  • Is the EHR vendor willing to guarantee compliance with the HITECH Act’s forthcoming mandates such that you will be able to seek incentive payments? Several vendors have already come out with such guarantees — just be sure to read the fine print. 
  • Do you have the personnel and resources to dedicate to EHR implementation? 
  • Are you ready to commit to completely new workflow and processes?

EHR adoption is not for the faint of heart. Fundamentally, physicians have to believe that EHR is, in fact, the better way. Our practice made the prior commitment to go electronic independent of the HITECH Act, but our implementation schedule coincides neatly with everything currently happening. We began the process of implementation this past summer and I, for one, am glad that the government wants so badly for us to succeed in our endeavor that they are even willing to pay us for it.

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About the author: This article was adapted from AAOE’s May 2009 Executive Update. It was written by Julia Lee, JD, executive director for Ophthalmic Partners of Pennsylvania, P.C. She is a member of the AAOE Board of Directors and serves as the current chair of the EHR Subcommittee. She can be reached at

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