American Recovery and Reinvestment Act 2009 - "Stimulus Package"

The American Recovery and Reinvestment Act of 2009, commonly known as the "Stimulus Package", was signed into law by President Obama on February 17, 2009. The stimulus package of $787 billion was announced by President Obama, in order to improve the economic growth of the United States.

The proposed investment for Healthcare IT was allocated $30 billion initially, but with modifications, it is now just under $20 billion, which is intended to be used to enhance the use of EHR by providers and hospitals. This part of the bill is called the Health Information Technology for Economic and Clinical Health Act, or HITECH Act.

President Obama promised to spend $50 billion in all, over five years in order to improve the situation of the American Healthcare system. At the same time, he planned to offer incentives of $17 billion through Medicare and Medicaid, hence encouraging providers/physicians to adopt certified EHR.

The Main Objective of President Obama's Stimulus Package:

• To lower health care costs
• To reduce medical errors
• To improve point care
• To improve access to data, such as healthcare IT, opportunities will arise to improve business intelligence programs in healthcare
• To improve quality care

Providers will get incentive either from Medicare or from Medicaid under the stimulus package, they are not eligible for both.

Incentives for Physicians:

Physician incentives are allocated in two different payment forms of Medicare and Medicaid reimbursements in addition to grant programs. Physicians can start earning incentives in 2011 by demonstrating "meaningful use" of EHR. Physicians can earn from $2,000 to $18,000 in a given year. The department of Health and Human Services (HHS) will be defining the clear definition of "meaningful use" in the year ahead.

This "meaningful use" imbibes using the technology to exchange electronic health data to improve care quality and submitting care quality measures to HHS. In addition, hospitals and doctors will need to meet these requirements within a specified time frame.

In order to provide information about receiving incentive payments, HIMSS has a few suggestions:

• Rely on CCHIT as the certifying body for EHRs.
• Adopt metrics that can demonstrate meaningful use, and make them increasingly more stringent over two years or so.
• Work with HITSP and IHE to make sure systems are interoperable.
• Close the existing gap between "certified EHR technologies," "best of breed," and " open source" technologies.

Eligible providers will be treated as a meaningful user of EHR technology if they meet the following
three criteria:

• Uses a certified EHR in a meaningful manner, which includes the use of Electronic prescribing (e-prescribing)
• Uses a certified EHR that can accommodate the electronic exchange of Health information to improve quality of health care
• Submit information on clinical quality measures, as chosen by the Health and Human Services (HHS) Secretary, for the reporting period

Medicare Incentive

Those providers who are not adopting EHR by 2015 will see reductions in their Medicare reimbursements of 1 % in 2015, 2% in 2016 and 3 % in 2017. The possible incentive will offer a maximum of $44,000 per physician, depending on when providers implement EHR. In order to receive the full amount, physicians must be implementing EHR by 2012; therefore, no payment will be made available after 2015.

Source: American Recovery and Reinvestment Act 2009

Medicaid Incentive

Under the ARRA, providers will earn from $ 21,250 to $25,000 for the first year of payments, which may be not after 2016.

Eligibility of the provider

• Physicians, nurses and midwife nurses who are not hospital based and whose patient volume is at least 30 percent attributable to Medicare, are eligible for up to maximum 85 percent of their net allowable technology costs, which is subject to specific annual limits.
• Medicaid Incentives will be available only to non-hospital based clinicians, encompassing dentists, certified nurse midwives, and physician assistants practicing in rural health clinics.
• Medicaid incentives range up to $65K over a five-year period.
• Acute care hospitals with Medicaid patient volume of 10 percent or more and children's hospitals with any Medicaid volumes are also eligible.
• Medicaid has not mentioned any penalties for lack of adoption of EHR.
• After obtaining startup funds, providers who will prove "meaningful use" can eligible to receive up to $10 K annually payments for an additional four years.

Congressional Budget Office estimates that approximately 90 percent of doctors and 70 percent of hospitals will be using EHR within the next decade, as a result of the American Recovery and Reinvestment Act of 2009.

For more information on the Stimulus Package, refer to our Frequently Asked Questions.