About the Federal Stimulus Package

Overview
On February 17, 2009, President Barack Obama signed into law the American Recovery and Reinvestment Act of 2009 — more simply known as the Federal Stimulus Package. The package includes a mix of government spending and tax measures totaling $789 billion intended to stimulate the economy through investments in infrastructure, unemployment benefits, transportation, education and healthcare. It specifically directs almost $23 billion to healthcare information technology and certified EHR technology through the Health Information Technology for Economic and Clinical Health (HITECH) Act (see page H1337), which was incorporated into the broader act.

The two major areas of new health IT funding include:

• $2 billion for the Office of the National Coordinator (ONC) to "jump start" electronic health record (EHR) adoption and spur the development of the national health information infrastructure

• $20.8 billion in incentives through the Medicare and Medicaid reimbursement systems to assist providers and organizations in adopting certified EHR technology

Medicare Incentives
The act stipulates that an eligible professional (physician) may receive incentive payments for the first five years (2011-2015) by demonstrating "meaningful use" of certified EHR technology. Although "meaningful use" has not yet been defined, providers and healthcare organizations must act quickly so that they have selected, implemented and begun using a certified EHR by 2011 in order to fully benefit from the incentives. LSS Data Systems continues to participate in the EHR certification process as defined by the Certification Commission for Health Information Technology (CCHIT®). LSS Data Systems' Medical and Practice Management (MPM) Suite Version C/S 5.54, 5.55 & 5.56 are CCHIT Certified® products for CCHIT Ambulatory EHR 2007. C/S 5.6 is a CCHIT Certified® 08 Ambulatory EHR, additionally certified for Child Health. MAGIC 5.64 is also a CCHIT Certified® 08 Ambulatory EHR [additionally certified for Child Health] pending completion of advanced ePrescribing requirements.

Physicians who have not demonstrated meaningful use by 2015 will begin to see a reduction in Medicare reimbursement payments. Between 2015 and 2017, the professional's total reimbursement will decrease by one percent each year. In 2018 and any year thereafter, if industry-wide adoption of certified EHR technology has not yet reached 75 percent, a provider's reimbursement may be decreased by an additional one percent.*

Medicaid Incentives
The act also authorizes incentive programs through the State Medicaid programs to Medicaid providers (both professionals and hospitals) that demonstrate "meaningful use" of certified EHR technologies. In order to be eligible for state Medicaid incentives, providers must meet one of the following conditions:

1. A non-hospital-based provider with at least 30 percent of patient volume attributable to individuals receiving Medicaid Assistance.
   
   
2. A non-hospital-based pediatrician with at least 20 percent of patient volume attributable to individuals receiving Medicaid assistance.
   
   
3. A non-hospital-based provider practicing predominately in a Federally Qualified Health Center (FQHC) or rural health clinic with at least 30 percent of patient volume attributable to needy individuals.

This incentive is likely to begin in 2011 with professionals receiving up to 85% of $25,000 (or the average allowable costs specified by the Secretary)* in the first year for: the purchase or upgrade of a certified EHR technology; engagement in efforts to adopt or implement a certified EHR technology; or investment in the adoption or use of a certified EHR technology. To receive this incentive the professional will need to demonstrate one of the three conditions by 2016. In the second through fifth payment years, but not extended past 2021, a Medicaid professional is eligible for up to 85% of $10,000* to pay for the cost of operation, maintenance and use of a certified EHR technology.

For Medicaid professionals who meet the second eligibility requirement, the incentive amount is adjusted to two-thirds of the amounts specified. Therefore, a professional could receive up to 85% of $16,500* in the first year and up to 85% of $6,600* in subsequent years. It is important to note that eligible professionals can only receive funding under a single incentive program and may not receive duplicate payments.

*The incentives represented on this page are the maximum that are allowed under the American Recovery and Reinvestment Act of 2009. The actual incentive payment will vary by provider based on the provider’s total reimbursement from Medicare and Medicaid. The Medicaid incentive payments may also vary based on the total costs of the certified EHR technology that is being implemented. Each organization should directly review the American Recovery and Reinvestment Act of 2009 for complete details and determination of how it would apply.