HITECH Act of 2009 FAQs

The American Recovery and Reinvestment Act of 2009, commonly known as the “Economic Stimulus Package”, is a comprehensive package for economic recovery in the United States. The final package of $787 billion was signed into law by President Barack Obama on February 17, 2009.

This document answers many of the frequently-asked questions you may have about the impact of the stimulus package on your organization. As additional information becomes available, these FAQs will be updated.

1. What are the Health IT provisions in the bill?
   While there are many details yet to be resolved, the broader stimulus bill includes a package of approximately $31.2 billion for healthcare infrastructure and EHR investment, and this legislation is expected to impact providers and vendors quickly. The $31.2 billion is the gross investment, with the Congressional Budget Office assumption that the program will save an estimated $12 billion over a ten year period, resulting in a net cost to the federal government of $19.2 billion. This portion of the bill is collectively known as the “HITECH Act”.The goals of the legislation are to create and expand the current U.S. healthcare IT infrastructure, promote electronic data exchange, and substantially and rapidly increase EHR adoption to 90 percent for physicians and 70 percent for hospitals by 2019. Initial spending will begin in 2009 and is projected to increase considerably in 2010 and 2011.The final text of the legislation signed by the President is available at:
   http://www.whitehouse.gov/the_press_office/arra_public_review

   HIMSS has published a summary of the bill from an HIT perspective – this document is recommended reading and is available at: http://www.himss.org/content/files/HIMSSSummaryOfARRA.pdf

2. What incentive options are available to assist in EHR adoption? The HITECH Act specifies incentive payments from two federal programs: Medicare and Medicaid. Physicians and other eligible healthcare professionals may apply for incentive payments from only one of the programs, while hospitals may receive incentive payments from both programs. Both the Medicare and Medicaid incentive programs require that the provider demonstrate “meaningful use” of a certified EHR product.
3. What incentive payments are available to physicians through the Medicare program?
   Starting in 2011, physicians are eligible to receive Medicare incentive payments for being a “meaningful user of a certified EHR”.These incentive payments are calculated on a per physician basis. The proposed payments are greatest in the first year, decreasing in amount for the following four years or until 2016, depending on starting year of eligibility.

   Physicians who do not meet the “meaningful user” criteria will face penalties, calculated as a percentage of allowed charges, beginning in 2015 with a one percent penalty. These penalties increase each year up to a maximum potential cap of three percent per year for 2017 and beyond, with an additional penalty up to 5 percent for years after 2017 where physician adoption is less than 75 percent.

   Medicare incentives will not be paid.

4. What is the definition of “meaningful use” or “meaningful user”? Language in the HITECH Act requires physicians to demonstrate “meaningful use” of a qualified, certified EHR.A qualified EHR is defined as an electronic record of health-related information for individuals, with:
   • Inclusion of patient demographic and clinical health information, such as medical history and problem lists
   • The capacity to provide clinical decision support
   • Support for physician order entry
   • The ability to capture and query information relevant to healthcare quality
   • Electronic health information exchange capabilities, including the ability to integrate such information from other sources into the EHR

   To be eligible for incentive payments, physicians must also demonstrate that they are using such an EHR in a “meaningful manner” through:

   1. Meaningful use, including use of electronic prescribing;
   2. Electronic exchange of health information, such as with a health information exchange (HIE); and
   3. Quality reporting
5. What is “Certified EHR technology,” as defined within the bill?“Certified EHR technology” means a qualified EHR that is certified as meeting standards pursuant to the HITECH Act. The Act created an HIT Standards Committee, which will develop or recognize standards and certification criteria for recommendation to the ONC for endorsement and adoption by the HHS Secretary via regulation.The future status of existing bodies that certify EHRs and “harmonize” standards, namely the Certification Commission for Healthcare Information Technology (CCHITSM) and the Healthcare Information Technology Standards Panel (HITSP), will be determined by HHS and ONC. Specifics of the operations and approach of these existing bodies will certainly change as a result of provisions in the stimulus bill. For example, the work of HITSP would flow through the newly-created HIT Standards Committee. As part of this process, the ONC may “keep or recognize” certification programs, such as CCHIT, however, the final certification criteria will be established by the HHS Secretary by regulation.The HHS Secretary will issue an initial set of standards, implementation specifications, and certification requirements by December 31, 2009. These standards, specifications, and requirements will play an important role in determining the certification requirements for certified EHRs.
6. What incentive payments are available to physicians through the Medicaid program? The Medicaid incentive program is targeted at physicians with a relatively large Medicaid volume. Eligible physicians will need to choose either the Medicare or the Medicaid incentives. Between 2011 and 2016, physicians can begin to receive six years of Medicaid incentive payments, up to a maximum of $63,750. Payment in the initial year can be up to $21,250 for demonstrated adoption, implementation, or upgrade of a certified EHR. The physician can then receive up to $8,500 per year over five years for demonstrating “meaningful use” of the EHR. These payments will be based on 85 percent of average allowable costs, as defined by the HHS Secretary. Any non-government financial support received for the applicable EHR purchase or operation will be deducted from this payment.Physicians will qualify for Medicaid incentives if they are:
   • Non-hospital based providers with 30 percent Medicaid volume
   • Pediatricians with 20-30percent Medicaid patients (eligible for up to $42,500 over six years)
   • Professionals in Federally Qualified Health Clinics (FQHCs) or rural clinics with 30 percent “needy patient” volume (See Question 14)
7. What is the impact of the HITECH Act for hospitals? Unlike physicians, hospitals are eligible for both Medicare and Medicaid incentives. As with physicians, hospitals will be eligible for incentives starting in 2011 for meaningful use of a qualified, certified EHR. The formula is a bit complicated: a base amount of $2 million per year, per hospital (not IDN), adjusted up based on volume of discharges and adjusted down based on the extent to which the hospital’s Medicare share of total volume (excluding charity care) is less than 100 percent. The adjusted base amount is then paid at a declining percentage (75, 50, and 25 percent) over three additional years. Full payment is available for those hospitals that become eligible in 2011-2013. The table below shows how Medicare incentives would work for a hospital with 10,000 annual discharges, 30 percent Medicare volume, and 10 percent charity care, depending on the starting year of incentive eligibility. Medicaid payments would be added to this amount, based on a formula similar to that used for Medicare, but focused on Medicaid volume share. At state discretion, the Medicaid hospital payout schedule can be different than that for Medicare.The maximum Medicare and Medicaid incentives that will be paid to hospitals are estimated at $11 million, with more typical total payments of $6-8 million. Critical Access Hospitals will be eligible for a cost-based bonus.
8. How will the Privacy and Security section of the HITECH Act impact hospitals and healthcare providers? The stimulus bill increases regulatory requirements by expanding the privacy and security provisions and penalties to business associates within the Health Insurance Portability and Accessibility Act (HIPAA). The new language requires covered entities to notify patients of a security breach, and requires vendors that have access to patient health information (PHI) to enter into a Business Associate Agreement.Below is a brief overview of the covered entity’s requirements:
   • Provide patients with a report of all disclosures made through the EHR, from three years of the request (compliance dates vary depending on date of EHR adoption);
   • Comply with a patient’s request to withhold PHI from a health plan if the patient is self-pay;
   • Limit the disclosure of PHI to a limited data set, or to the minimum necessary to fulfill an intended purpose (as defined under HIPAA);
   • Obtain patient authorization, before using PHI for marketing purposes and receiving payment;
   • Employees and other individuals who access, use, or disclose PHI without authorization shall be subject to criminal penalties; and
   • Civil penalties for violations under HIPAA vary (a tiered approach) depending on the specific conduct.
9. What are the details of the funding available for Community Health Centers? Within the stimulus bill, Federally-Qualified Health Center (FQHC) providers are specifically listed as eligible to receive Medicaid payments for the adoption and use of certified EHRs. In order to qualify for these payments, the law states that at least 30 percent of patients served by the FQHC provider must be defined as “needy individuals.”For details including the definition of “needy individuals”, see the FAQs published by the NationalAssociation of Community Health Centers:http://www.nachc.org/client/documents/NACHC%20ARRA%20FAQ.pdfCommunity Health Centers are also likely to be eligible for some of the funds which are “immediately available” from the Department of Health and Human Services’ Office of the National Coordinator for Health Information Technology through the Health Resources and Services Administration. The specific funds available are still to be determined. In addition, there will be HIT technical assistance focused on Community Health Centers. Finally, as mentioned in Question 11, there will be $1.5 billion dollars available to CHCs for renovation and repair of community health centers and for the acquisition of health IT systems.Sources:
   Electronic Health Records Association (EHRA)
   Healthcare Information Management Systems Society (HIMSS)