Disclaimer: The content of this Q&A is for general information purposes only and does not constitute advice. ALN tries to provide content that is true and accurate as of the date of writing; however, we give no assurance or warranty regarding the accuracy, timeliness, or applicability of any of the contents. The HITECH Act is in the early stages and information is being updated and clarified daily. ALN will continue to update information as it becomes available.

• Requiring the government to take a leadership role to develop standards by 2010 that allow for the nationwide electronic exchange and use of health information to improve quality and coordination of care.
• Investing $19.2 billion in health information technology infrastructure and Medicare and Medicaid incentives to encourage doctors and hospitals to use HIT to electronically exchange patients‘ health information.
• Saving the government $10 billion, and generating additional savings throughout the health sector, through improvements in quality of care and care coordination, and reductions in medical errors and duplicative care.
• Strengthening Federal privacy and security law to protect identifiable health information from misuse as the health care sector increases use of Health IT.

3. What portion of the $19.2 billion HITECH Act is specifically targeted to adopting Electronic Health Record, EHR?

The HITECH Act includes $17.2 billion in Medicare and Medicaid financial incentives for hospitals and doctors using qualifying electronic health records (EHR) systems. Group practices can apply for either Medicare funding or Medicaid funding, not both.

4. What is the main objective of the HITECH Act?

The main objective 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.

Clearly with $17.2 billion of the $19.2 billion going directly towards EHR adoption, the main objective is to stimulate the adoption of EHRs.

5. How is the $19.2 billion for the HITECH Act allocated?

There is approximately $2 billion that will be spent between 2009 and 2013 by the Secretary of Health & Human Services (HHS Secretary) through the Office of the National Coordinator for Health IT (ONC). This money, focused on creating an HIT infrastructure, will be used to support ONC policy and standards efforts, "immediate funding" through federal agencies, grants to states, a state loan program for provider EHR purchase, training, and technical support.

In addition, the federal government projects that it will spend a net amount of $17.2 billion for Medicare and Medicaid incentives that will be available to providers (physicians and hospitals) meeting specified criteria.

6. What is the potential financial benefit of the healthcare IT incentives to physicians?

Each office-based physician who meaningfully uses a certified EHR could receive up to $44,000 (Medicare) or $64,000 (Medicaid) in government funding. Office-based physicians practicing in rural or underserved areas would be eligible for up to $48,400 in Medicare incentives. It‘s important to note that these figures represent the maximum allowable incentives under the Medicare and Medicaid programs, and that physicians may only qualify for either the Medicare or the Medicaid funding, but cannot qualify for both.

Medicare reimbursement will start 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. The incentives are calculated up to 75% of your Medicaid Allowed in a the calendar year.

Medicaid reimbursement will be managed at the State level, which will institute the guidelines provided by HHS. Much of the basic qualifications are similar, e.g., meaningful use of certified EHR, but other aspects diverge significantly.

The high points:

• Significantly more complicated process to receive reimbursement.
• Total reimbursement amounts up to $65,000/physician over five years. First year costs applied to purchase, install and training. Follow-on years, reimbursement for operations and maintenance.
• Reimbursement is for a percentage of total expenditures by physician for certified EHR.
• Extended time horizon, payments through 2021.
• Physician must demonstrate that a certain percentage of patients (20-30%) are covered by Medicaid.

7. How do I know if I should participate with Medicare or Medicaid?

Deciding which incentives to receive will involve "running the numbers" once all the details of the programs have been released. For most practices, the choice will be very clear based on the program details and payer/patient mix of the individual practice.

8. What about Medicare Advantage?

The Act provides for comparable incentives and disincentives for professionals providing substantial services through Medicare Advantage plans.

9. What kinds of organizations will benefit from the HITECH Act?

The incentives primarily benefit hospitals and office-based physicians. They are designed to reduce healthcare costs by accelerating the use of IT to improve quality, safety andefficiency. Ultimately, patients and caregivers also will benefit from the automation and connectivity enabled by EHRs.

10. Who qualifies for the HITECH Act?

"Eligible professionals" under the Medicare HIT incentive program are limited to physiciansas defined in the Social Security Act (§1861(r)), which includes:

• Eligible physicians are defined as medical doctors, dentists, podiatrists, optometrists and chiropractors.
• Hospital-based physicians such as pathologists, anesthesiologists, emergency physicians or hospitalists are not eligible.
• Physical therapists are not eligible for EHR incentives and not subject to penalties.

If physicians are using a qualified EHR in 2011 or 2012, they can receive up to

• Calculated at 75% of allowable charges up to a maximum $44,000 over 5 years
• HHS secretary may consider additional providers for incentives.

The Medicaid HIT Incentive program expands the definition of "eligible professionals" to include:

• Certified nurse mid-wife
• Nurse practitioner
• Physician assistant (under certain circumstances)

To receive Medicaid incentive payments, eligible professionals must:

• Not be hospital-based;
• Demonstrate meaningful use of a certified EHR; and
• Treat a patient population, of which at least 30% receive medical assistance (or 20% if the physician is a pediatrician).

11. Do hospital-based physicians qualify?

The legislation specifically states that hospital-based physicians do not qualify for theMedicare or Medicaid EHR incentives.

Those professionals who are hospital-based would not be eligible for the incentive payments. Hospital-based professionals would include, e.g., pathologists, anesthesiologists, or emergency physicians who furnish substantially all of her/his services in a hospital setting (either inpatient or outpatient). The rationale for this exclusion is that those professionals would be expected to use the hospital‘s EHR. (Hospitals are entitled to a separate set of incentive payments under the law). The determination of whether an eligible professional is hospital-based or not will focus on the setting in which the provider furnishes services rather than any billing or employment arrangements between the provider and the hospital or other provider entity.

12. Do physician assistants, nurse practitioners, etc. qualify for the incentive?

Certified nurse mid-wives, nurse practitioners and physician assistants will not qualify under the Medicare provisions. These providers can receive Medicaid incentives provided that at least 30% of their patients receive medical assistance.

13. Who qualifies for the additional 10% rural health incentive for office-based physicians?

An "eligible professional" who predominantly furnishes services in a geographic area that is designated by the HHS Secretary as a health professional shortage area may receive a10% increase in their annual payment. To determine if you are operating in a designated Health Professional Shortage Area (HPSA) go to http://hpsafind.hrsa.gov/HPSASearch.aspx.

HPSA may also be exempt from late adoption penalties. The Secretary of HHS has the authority to make exceptions to penalties on a case-by-case basis for physicians who demonstrate significant hardship (e.g., a physician who practices in rural areas without sufficient Internet access).

14. When will the final regulations come out and how do I qualify?

The Secretary will develop a form of attestation to be completed by eligible physicians to demonstrate whether they are meaningful users of certified EHR technology. "Certified EHR technology" will be technology that is certified by an independent body recognized by the Secretary as meeting standards for such technology established by the Secretary by rulemaking before Dec. 31, 2009. "Meaningful use" will be demonstrated if an eligible professional can show that the EHR technology is connected in a way that improves the quality of health care through reported results on clinical quality and other measures selected by the Secretary.

There are several open items to determine the actual process to qualify.

15. When will the payments be made?

Funds become available for office-based physicians on January 1, 2011 (and are eligible to apply through January 1, 2012 and still receive full benefits). Providers should begin planning as soon as possible to allow time to achieve meaningful use of certified solutions during this time period.

16. Do we know the payment method?

We do not know the payment method. Medicare provides funds to hospitals and practices in different ways. We don‘t know whether this will be a supplemental payment, whether it will be an add-on to their existing payments. The payment methodology still needs to be explained.

17. What are the penalties if healthcare providers do not implement an appropriate amount of technology and report quality data by 2015?

For office-based physicians who do not adopt such technology by 2015, Medicare payments will be reduced by the following factors in the years specified:

• 2015: One percent
• 2016: Two percent
• 2017 and 2018: Three percent
• 2019 and beyond: HHS Secretary may decrease one additional percent up to 5%

Medicaid program will not make such payment cuts.

18. When do you need to be ready?

To maximize your stimulus and bonus money you should begin the process several months prior to the start of 2011. The sooner you start the better your chances to meet the timelines required in the HITECH Act. For many organizations this will be a very tight window; there is a lot you need to accomplish to qualify. System selection, change management, contracting, etc are just a few of the critical path items. You don‘t just drop in an EHR system; it is complicated and will affect your entire practice. There are interfaces, there is data migration, and there are a lot of challenges to overcome to qualify for "meaningful use".

19. Are there additional incentives for office-based physicians to adopt in the early years of the program?

Office-based physicians‘ maximum allowable Medicare incentive for the first year of meaningful use is increased by $3,000, from $15,000 to $18,000, for meaningful EHR use in 2011 or 2012. This "early adopter" incentive raises the total amount physicians can qualify for from $41,000 to $44,000. A benefit for office-based physician early adoption does not exist under the Medicaid incentive program.

20. Can I wait and call an EHR vendor in 2010 or beginning 2011?

We recommend starting the process now. Most analyst believe this is going to be a little bit like Y2K, when you're going to have every practice in the country calling up their vendors, calling up their lawyers, calling up their consultants and saying, 'We need you in here next week.‘ The worse thing is going to be when people see these dates 2011-2012 and think they can wait. If they do that, besides just the normal lag time, there is going to be so much demand on vendors and IT people that it‘s going to be difficult to actually get these systems implemented in time to take advantage of the programs.

21. Will the incentives be applied to systems already in use, or will they be applied to the purchase of new systems only?

The incentives are available to meaningful users of certified IT systems described in thel egislation regardless of when they were implemented. The qualifier is the date at which the eligible provider can demonstrate "meaningful use" of the certified technology.

22. What is the financial impact if I wait?

If you are below the Medicare or Medicaid thresholds there is a minimum impact to your practice. Practices that have a significant amount of Medicare, the impact will be meaningful as 70% of the stimulus money is paid out in the first two years. You are also missing the opportunity for PQRI and eRx bonuses. The dollars add up quick for apractice with a substantial sum of collections coming from Medicare.

23. Does the HITECH Act require our practice to purchase a certified EHR?

Yes – The Act makes it very clear you must purchase a certified EHR. What is not clear is what will determine if an EHR is certified.

Certification Issue

• EHR must be "certified" but leaves the specifics to be determined
• Likely that CCHIT will be deemed the certifying body for the incentive program
• CCHIT EHR certification began in 2006 – that certification was valid for three years
• For 2007 and beyond, certification is only valid for two years Certification criteria have become more stringent each year
• Some vendors recertify every year
• CCHIT certified 89 products in 2006; 55 in 2007; and only 22 so far for 2008 criteria

Depending on EHR criteria defined by the HHS secretary, you may have a product that was previously certified but does not qualify for the incentive.

24. 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.

25. Will CCHIT be the certification body?

The Healthcare IT Policy Committee recommended that the National Institute of Standards and Technology, in coordination with the Office of the National Coordinator, should create an accreditation and monitoring process for the HHS certifying agencies.  In the interim, however, CCHIT will lead the way in mapping out the certification criteria based on the HIT Policy Committee’s recommendations outlined in the “meaningful use” matrix. (Source: Health Leaders Media, August 18, 1009)

26. What about vendors who are saying don’t worry about the certification?

Many practices who were in the midst "prior to the Stimulus Bill" of discussions with vendors for systems that are not certified by CCHIT have been told, 'Don‘t worry about it; our system is just as good as one that‘s certified.‘ However, to now qualify for HITECH incentive and avoid penalties, your EHR MUST BE CERTIFIED to the standards being set as discussedin Qs: 14 and 23. It is important practices be very careful in any contracts that they enter into, between now and the end of the year when the regulations come out, that they make sure their vendors are agreeing to comply with the regulations, even though they don‘t know exactly what they're going to be.

27. What is meant by “meaningful use” of healthcare IT?

Funding and incentives are tied to "meaningful use". While no one yet knows the full definition of meaningful use, preliminary descriptions include the following:

An eligible professional shall be treated as a meaningful EHR user for a reporting period for a payment year if the following requirements are met:

• Meaningful use of certified EHR technology. The eligible professional demonstrates to the satisfaction of the HHS Secretary, that during such period the physician is using certified EHR technology in a meaningful manner. The certified EHR shall include the use of electronic prescribing as determined to be appropriateby the HHS Secretary.
• Information exchange. The eligible professional demonstrates to the satisfaction of the HHS Secretary that during such period such certified EHR technology is connected in a manner that provides, in accordance with law and standards applicable to the exchange of information, for the electronic exchange of health information to improve the quality of health care, such as promoting care coordination.
• Reporting of measures using EHR. Using such certified EHR technology, the eligible professional submits information for such period, in a form and manner specified by the HHS Secretary, on such clinical quality measures and such other measures as selected by the HHS Secretary. The HHS Secretary shall seek to improve the use of EHRs and healthcare quality over time by requiring more stringent measures of meaningful use selected under this paragraph.

In other words, qualification for incentives focuses on what is done with the EHR, not simply having an EHR.

28. What % of physicians are using EHR today?

Only about 17 percent of the nation‘s physicians are using computerized patient records, according to a government-sponsored survey published last year in The New England Journal of Medicine. Some believe full adoption of EHR at the practice/physician level is somewhere around 4%.

29. What leadership offices were created through the HITECH Act?

Office of the National Coordinator: Establishment of the Office to be headed by a National Coordinator appointed by the Secretary of HHS. The National Coordinator is responsible for such duties as endorsing standards and certification criteria, coordinating health IT policy and programs, serves as leading members of the HIT Policy and HIT Standards Committees, and updating the Federal Health IT Strategic plan.
The legislation authorizes and appropriates $2 billion for Office of the National Coordinator. The Congressional Budget Office (CBO) projects that of the $2 billion that isauthorized and appropriated for the ONC, that $300 million will be spent in fiscal year2009, $1.28 billion in fiscal year 2010, $360 million in fiscal year 2011, and $40 million in fiscal year 2012.

HIT Policy Committee: The HIT Policy Committee, a federal advisory committee, is established to make recommendations to the National Coordinator relating to the implementation of a nationwide health IT infrastructure, including implementations of the strategic plan. The Committee is responsible for recommending the areas in which standards, implementation specifications, and certification criteria are needed for the electronic exchange and use of health information.

HIT Standards Committee: The HIT Standards Committee is established to recommend to the National Coordinator standards, implementation specifications, and certification criteria for the electronic exchange and use of health information, which have been developed, harmonized, or recognized by the HIT standards Committee.

National eHealth Collaborative: Nothing shall prohibit the National eHealth Collaborative (NeHC) from modifying its charter to allow the Secretary to recognize NeHC as the HIT Policy Committee or the HIT Standards Committee

30.  What would the HHS Secretary, Kathleen Sebelius, oversee?

• $17.2 billion in Medicare and Medicaid reimbursement incentives for health care providers who have adopted EHRs;
• $4.7 billion for the National Telecommunications and Information Administration's Broadband Technology Opportunities Program;
• $2.5 billion for the Department of Agriculture's Distance Learning, Telemedicine and Broadband Program;
• $2 billion for the Office of the National Coordinator for Health IT; $85 million for health IT, including telemedicine services, within the Indian Health Service; and
• $50 million for IT within the Veterans Benefits Administration.
• HSS Secretary also would play a large role in determining the fate of many of the health IT initiatives started under former HHS Secretary Mike Leavitt.

31. What additional stimulus funding pertains to healthcare IT, beyond HITECH?

• $1.1 billion for comparative effectiveness research, which will be enhanced by greater adoption of EHR
• $1.5 billion for renovation and repair of community health centers and for the acquisition of health IT systems
• $500 million in grant funds for services provided by community health centers
• $85 million for health IT within Indian Health Service facilities
• $4.7 billion for the National Telecommunications and Information Administration‘sBroadband
• Technology Opportunities Program

32. 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 thespecific conduct.

33. If you and your practice do not currently utilize a reputable EHR, the TIME TO ACT IS NOW!

While it is true that the stimulus payments are not scheduled to begin until 2011, the window for qualifying to receive the maximum payments will close quickly for several reasons.

First of all, to qualify for the incentive payments you must demonstrate "meaningful use" of a certified EHR. Purchase and implementation are not enough. The transition to a new EHR system can be a timely process when you include the following steps: evaluate your workflows, develop your selection criteria, select a vendor, develop your implementation plan, install your EHR, connect to other providers and have your physicians fully functional.

Typically, the time requirements of the steps increase in proportion to the size of the group. If you haven‘t started the process, 2011 is a lot closer than many would like.

Next, if you do not act before the "masses" you may have a difficult time getting on any vendor‘s implementation schedule in the near future. As indicated earlier, only 4% - 20% of the market has implemented an EHR system. The Congressional Budget Office predicts 90% of physicians will be using an EHR in a matter of just a few years. That means 60% to 70% of the market is going to try to get implemented in the next several years. Even prior to the Stimulus Act, some vendors had waiting lists up to 6 months. Those physicians, who wait, may have little chance of qualifying as an early adopter.

Furthermore, great opportunities are already in place and physicians should take advantage of them now. Besides the many cost saving opportunities and positive ROI traits inherent in an EHR, CMS has current incentives for eRx and PQRI.