• Financial Incentives for Physicians Converting to Electronic Health Records
  • June 24, 2009 | Author: William H. Fischer
  • Law Firm: Holland & Hart LLP - Denver Office
  • The American Recovery and Reinvestment Act of 2009 makes up to $44,000 of Medicare incentive payments available to each eligible physician who becomes a meaningful electronic health record user.  To be eligible to receive the full amount of these incentive payments, a physician must become a meaningful user in 2011 or 2012.  No incentive payments will be made if a physician first becomes a meaningful EHR user by 2016.  The payments are made by Medicare over a period of 5 years and are heavily weighted to the earlier years.  A physician who predominately furnishes services in a health professional shortage area can receive incentive payments that are increased by 10%.  No incentive payments are available to hospital-based physicians.

    To receive incentive payments, the physician must demonstrate to the satisfaction of the Secretary of Health and Human Services that the physician is a meaningful user of certified EHR technology.  While regulations about meaningful use and certified EHR technology have yet to be developed, it is clear from the legislation that using certified EHR technology in a meaningful manner must include electronic prescribing; interconnection that provides for the electronic exchange of health information to improve quality such as promotion of care coordination; and submission of information on clinical quality measures in a manner specified by the Secretary of Health and Human Services.

    A certified health record must include patient demographic and clinical health information such as history and a problem list; provide clinical decision support; support physician order entry; capture and query information relevant to healthcare quality; and exchange health information with and integrate information from other sources.

    If a physician is not a meaningful EHR user by 2015, Medicare payments to the physician will be reduced by 1% from the Medicare fee schedule amount in 2015, by an additional 1% in 2016 and another 1% in 2017 for a total of 3% reduction in Medicare fee schedule payments.

    While these incentive payments likely will not cover the entire cost of a physician’s conversion to meaningful use of certified EHR technology, they can make a significant contribution to that cost, particularly if the physician has the ability to couple the incentives with a donation of EHR technology from a hospital as permitted under exceptions to the federal Stark law and safe harbors under the federal anti-kickback law.  Certainly the reductions in Medicare payments associated with failure to be a meaningful EHR user may outweigh the cost of converting to EHR technology.