Since our series of posts on the Stimulus Bill (ARRA) and in particular the HITECH Act, Chilmark Research has been receiving a lot of questions from the market as to how we see this funding affecting EMR sales. Following is an example of our response to these inquiries.
Mike, thanks for the kind words regarding analysis of the Stimulus Bill and in particular the HITECH Act. Now as to your ques:
As we wrote earlier this week on the reimbursement schedules, the timelines are pretty tight, esp under Medicare reimbursement. There is a $3K bonus for those who demonstrate meaningful use in 2011 or 2012, so some upside to adopt earlier than later. Also, zero funding, under Medicare for those who show meaningful use after 2015, and in fact penalties start kicking in. Medicaid, which has a more complex funding schedule provides funding/reimbursement payments until 2021.
Thus, two key points:
1) If a physician is looking to Medicare for reimbursement, we do expect a more rapid run-up in EMR sales if the value to adopt exceeds the pain to adopt. Still a lot of fugly EMR solutions in the market. Just because they have CCHIT certification, doesn’t mean they are easy to use and the pain to adopt may not be worth the payback.
2) If Medicaid is the funding source, a more measured and slower adoption of EMR is anticipated. The challenge under Medicaid is that reimbursement schedules are set upon what the HHS Sec. determines as fair market price for software and services. Still unsure where that will fall and physicians may hold back till there is some clear precedent set.
Let’s not forget the big caveat:
We still do not have firm definitions for “meaningful” and “certified” leaving a lot of uncertainty in the market. We are cautioning physicians to go ahead and entertain conversations with EMR vendors, but do not make any firm purchase decisions, if we wish to receive reimbursement through one of these mechanisms until it is absolutely clear how HHS/ONC plans to define those two critical terms.