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The Hitech Act of 2009

The Hitech Act - appropriates $19 billion to encourage health care organizations to adopt what are referred to as electronic health records (EHR) and establish regional health-information exchange networks (HIE), all while ensuring that the systems safeguard critical patient data.

The act represents an enormous opportunity for health care providers. After decades of slow but steady progress toward converting our paper-based record system into an electronic one, we are taking a monumental leap forward. The Congressional Budget Office predicts 90 percent of physicians and 70 percent of hospitals will be using a comprehensive, robust EHR in a few years. As a result, the country will save billions of dollars on the provision of health care, and our citizens will receive better-informed care from a coordinated network of providers. 

DETAILS OF THE $19 BILLION

The Hitech Act can be broken into two sections - one providing $2 billion immediately to the Department of Health and Human Services (HHS) and its sub agency, the Office of the National Coordinator for Health IT (ONCHIT); and a second that sets aside $17 billion for health care providers who can demonstrate their use of a certified EHR.

In the act's first section, the secretary of HHS is directed to spend $300 million of the $2 billion fund to establish more health-information exchange initiatives across the country, as well as helping existing HIEs to progress in connecting providers electronically. The act also allocates $20 million to ensure that health-information standards are consistent in all settings.

The second part of the act calls for $17 billion in incentive payments to physicians and hospitals. The government is focused on two primary goals in this legislation: first, moving physicians who have been slow to adopt EHRs to a computerized environment; and second, ensuring that patient data no longer sits in silos but instead is actively exchanged between providers to ensure that patients receive informed care. 

The majority of the funds within the Hitech Act are for payments that will reward physicians and hospitals for effectively using a robust, connected EHR system. There is a program designed for those that see a large volume of Medicaid patients and another for those that accept Medicare. In order to qualify for the incentive payments, both physicians and hospitals have to demonstrate "meaningful use" of an EHR by proving three things:

1. Use of an EHR with ePrescribing capability that meets current HHS standards

2. Connectivity to other providers to improve access to the full view of a patient's health history

3. Ability to report on their use of the technology to HHS

Importantly, because the government wants to spur quick action, all of the incentives include payments for up to five years but provide the largest payments early in the program. The incentive payments begin in 2011 to ensure that providers have time to adopt and learn to use the EHR. Physicians who fail to adopt an EHR will eventually be penalized through lower Medicare and Medicaid payments. The penalties begin in 2015.

PHYSICIAN OPPORTUNITIES

There are two separate incentive programs for physicians: one provided by Medicare and another by Medicaid. 
  • Medicaid: If more than 30 percent of a physician's patients pay with Medicaid (20 percent for pediatricians), then they are eligible for payments of up to $64,000 over five years. The incentives will be calculated through a formula that factors in the exact Medicaid mix of their patients, as well as amounts ranging from $25,000 in the first year to $10,000 in subsequent years. Additionally, nurse practitioners and nurse midwives are eligible for the same incentives.

  • Medicare: Physicians who do not have a large Medicaid volume but do accept Medicare can earn up to $44,000 over the five years. Additionally, physicians operating in a "provider shortage area" will be eligible for an incremental increase of 10 percent, though those delivering care entirely in a hospital environment, such as anesthesiologists, pathologists and ED physicians, are not eligible for any incentives.

  • Fee reductions: Providers who do not demonstrate meaningful use of an EHR by the end of 2014 will see a decrease of 1 percent in their 2015 fee schedules from Medicare. An additional decrease will be affected in 2016 and 2017, down to a total of 97 percent of the regular fee schedule. The secretary of HHS can reduce the fee schedule even further, by a maximum of 5 percent beginning in 2018, if the nationwide EHR adoption rate remains below 75 percent.
 Standards, certification and privacy expansion

The secretary of HHS is required by the act to review all existing standards and determine the initial set of standards that will apply to the "meaningful use" criteria. All of this must be completed before the end of 2009.

Finally, the act places a strong emphasis on further protecting patient health information under federal privacy and security laws (HIPAA). Primary changes included defining which actions constitute a breach (including some inadvertent disclosures); imposing restrictions on certain disclosures, sales and marketing of protected health information; requiring an accounting of disclosures to a patient upon request; authorizing increased civil monetary penalties for HIPAA violations and granting authority to state attorneys general to enforce HIPAA violations.