Funding and incentives are available through three identified vehicles: grants to states, loans to providers, and incentive programs.

State Grants to Promote HIT

Under Section 3013, HHS may award grants to States for the advancement of HIT. Grants are available for use of either planning for one or more HIT activities or to implement one or more HIT activities, defined in subsection (d) as follows:

• broad and varied participation in nationwide exchange and use of health information,
• identification of State or local resources that work towards a nationwide effort to promote health IT,
• complementing Federal grants, programs, and efforts promoting health IT,
• technical assistance designed to overcome the barriers to the e-exchange of health information,
• effective strategies to enable medically underserved communities to adopt and use health IT,
• assisting patients to use health IT,
• encouraging clinicians to work with health IT regional extension centers,
• supporting public health agencies authorized use and access to e-health information,
• promoting the use of EHRs for quality improvement via quality reporting, and
• other uses as determined by the Secretary.

Prior to FY2011, the Secretary has the discretion to require a contribution of non-federal matching funds. Beginning FY2011, the discretion is removed and the Secretary must require contributions as follows:

1. FY2011 – not less than $1 for each $10 of federal funds
2. FY2012 – not less than $1 for each $7 of federal funds
3. FY2013 and forwards – not less than $1 for each $3 of federal funds

It is this author’s opinion that the above structure is designed to create a sense of urgency to move forward with HIT adoption quickly and effectively, without delay.

Grants to States and Indian Tribes for Development of Loan Programs

The ONC may award competitive grants to States and Indian Tribes to establish loans to assist providers with purchase, utilization, and/or training of personnel to use Certified EHR Technology and to improve the secure electronic exchange of health information. In accordance with governing State law, the State may combine administrative tasks with any other revolving fund to make administration of the loan fund convenient and to avoid/reduce costs. Administrative costs are capped at 4% of the federal grant funds provided. The ONC will need to further define guidelines and regulations for appropriation of funds.

 

Incentives for Eligible Professionals

ARRA provides incentives to eligible professionals in one of two programs: the Medicare Incentive Program and the Medicaid Incentive Program. Each program is mutually exclusive of the other: opting for one program means that a provider waives rights to the other incentive program. For purposes of ARRA, an eligible professional is a doctor of medicine or osteopathy, a doctor of dental surgery or dental medicine, a doctor of podiatric medicine, a doctor of optometry, and a chiropractor. To maximize opportunity for incentive payments, implementation of a Certified EHR Technology should be underway by 2010, with meaningful use demonstration by 2011. Additional requirements to meet the test of eligible professional as defined by ARRA include the following:

• “Meaningful use” of a “certified EHR Technology,” including ePrescribing
• Certified EHR Technology meets standards for and connects to the exchange of health information
• Reporting clinical quality measures

Incentive payments would follow an “adoption year” timeframe instead of a calendar year. For example, a provider qualifying for the “first year incentives” would adhere to the 2011 Measures, even if that qualification did not occur until 2012.

Eligible Professionals Medicare Incentive Program

Beginning in FY2011, and available for the first five years, eligible professionals would be entitled to incentives up to the dollar amount set forth below [See Chart 1], capped at 75% of allowable charges for Medicare-covered professional services. After FY2014, if no “meaningful use” is met, Medicare payments will begin being reduced by 1% each year thereafter (E.g. -1% if no use by 2015, -2% after 2016, -3% after 2017, etc.). Additionally, after FY2014, incentive payments are $0.

Additional considerations include the following:

• Minimum Participation Requirement: Must bill 125% of the total incentive received over the 5-years period of distribution.
• Hospital-based professionals (e.g. pathologists, ER physicians, anesthesiologists) are ineligible.
• There is an opportunity for a ten percent (10%) increase in incentives for those practicing in identified shortage areas.

Eligible Professionals Medicaid Incentive Program

Under the Medicaid Incentive Program, the definition of eligible professional may be expanded upon and approved by the State, and must be acceptable to the Secretary of HHS. This means that there could be variance by State as to the requirements of eligible professional.

Like the Medicare incentive program, payments under the Medicaid incentive program would begin in 2011. Additionally:

• Physicians under Medicaid incentives can receive up to $25,000/provider during Year 1 and up to $10,000/provider for 4 additional years to support “meaningful use” of an EHR. [See Chart 2]
• There is no reduction in Medicaid reimbursement for non-adoption.
• Non-hospital based with 30% Medicaid patient volume; and, pediatricians not-hospital based with at least 20% patient volume; and, FQHCs or Rural Health Clinics with at least 30% Medicaid patient volume are eligible for no more than 85% of net average allowable costs for certified HER technology (includes support, maintenance, and training). [See Chart 3]
• Medicaid providers that are a children’s hospital, or non-children’s acute hospital with at least 10% Medicaid patient volume would be eligible for the maximum amount permitted for the provider involved.

Eligible Provider Type	Percent of Patient Volume	Incentive
Non-hospital Based (E.g. Family Medicine)	At least 30% Medicaid	85% of net average allowable costs for EHR
Non-hospital Based Pediatrician	At least 20% Medicaid	85% of net average allowable costs for EHR
FQHC or Rural Health Clinic Provider	At least 30% Medicaid	85% of net average allowable costs for EHR
Children’s Hospitals or Non-Children’s Acute Hospitals	At least 10% Medicaid	Max. Amount permitted for the provider involved