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HITECH Act: Reimbursement Schedule a Challenge

by John Moore | February 16, 2009

money-doctorThe reimbursement schedule for EHR adoption is aggressive.  Over the weekend, we spent more time pouring over the Stimulus Bill, (formerly known as the American Recovery and Reinvestment Act, ARRA), which Obama is scheduled to sign on Tuesday, Feb. 17th.

Within the ARRA, (Division B, page 489) is a very aggressive schedule to meet the oft-stated deadline of all US citizens having an electronic record of their health by end of 2014.  Those physicians that move quickly (demonstrate being a “meaningful EHR user”) will reap the greatest rewards, up to $48,400, through Medicare reimbursements.  Those that drag their feet (adopting in year 2015 or later) will end up with zero reimbursement, and worse, in the form of future penalties from CMS.

The following table provides our interpretation of the Medicare physician reimbursement schedule for that $19.2B (we have yet to look closely at reimbursement schedule for hospitals).  The Bill also allows for an additional reimbursement of 10% for those physicians providing services in an area designated by the Secretary of HHS as a “health professional shortage area.”  At this point, we are assuming that those practices that have already adopted a “certified EHR” and can demonstrate “meaningful use” will be grandfathered-in under ARRA and receive reimbursement.


The aggressive schedule outlined in ARRA raises some real thorny issues that we don’t have the foggiest notion as to how they will be overcome.  Those issues are:

With adoption of EMR at the practice/physician level somewhere below 10%, (NEJM puts it at a paltry 4%), do we even have enough IT professionals trained for deploying IT in the healthcare sector?  Will demand for HIT professionals far out-strip supply making it nearly impossible to adopt, install, train and demonstrate “meaningful use” in the time frame of ARRA to receive meaningful reimbursement?

How will “meaningful use” be defined and when? Currently, ARRA states (Division B, pg 435) a “meaningful EHR user” as one who demonstrates “meaningful use of Certified EHR technology.  We still do not know what a certified EHR is.

As for meaningful use, this includes; eRx, information exchange and reporting on quality measures.  eRx is easy to define as CMS has already put this in action. Information exchange is far trickier, but ARRA gives some direction by stating information exchange may be demonstrated by “electronic exchange to improve quality of health care such as promoting care coordination.” As for quality metrics, the preference is for “clinical quality measures that have been endorsed by an entity with a contract with the Secretary.”

To demonstrate meaningful use, the Bill outlines a few approaches including:

  • Attestation,
  • Submission of claims, electronically of course, with appropriate coding,
  • Survey response (whatever that is),
  • And a catchall of basically whatever the Secretary may decide appropriate.

Final Analysis

The roll-out of the HITECH Act and the policies requiring far greater elaboration and definition to successfully implement the Act in a timely fashion is going to be extremely challenging. It will require extrodinary leadership and strategic vision at numerous levels within HHS to be successful.  With Daschle out, we do not have a Secretary designate to help guide this process.  Nor are we completely sure who will ultimately lead ONC, the department within HHS that will be held responsible for actually implementing the HITECH Act.  Without that leadership, the HITECH Act is currently a rudderless sailboat, being carried which ever way the wind blows

While we are extremely strong advocates of the need for HIT to become more wide-spread throughout the healthcare sector, we are concerned that the timeline for reimburement that is outlined in ARRA is far too aggressive.  Aggressive schedules such as this, while well-meaning, have the very real danger of causing more harm than good.  The harm will come in the form of far too many poorly executed HIT deployments by physicians racing to capitalize on the reimburement.  While these deployments may meet the “letter of the law” and receive reimburement, over time we predict that the “hassle-factor” as a result of rushed, poorly thought-thru deployments will become ever larger and longer-term meaningful use of EHR will fade.

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-Alicia Vergaras