Answer: On February 17, 2009, President Obama signed the American Recovery and Reinvestment Act of 2009.  Within the Act is a separate new law called the Health Information Technology for Economic and Clinical Health Act (HITECH Act) which devotes a sizable portion ($19 billion of the $787 billion stimulus) to health information technology, health information exchange, privacy and security.  The funds are to be used to reach an aggressive goal of national electronic health exchange by 2014.

The Administration believes the federal money and standards setting provisions in the new law will be the force that breaks the barriers that have kept the electronic health record system adoption at relatively modest levels.  Part of the law includes a total of $17.2 billion in Medicare reimbursement to doctors and hospitals that show ‘meaningful use’ of a ‘qualifying’ electronic health record (EHR) by 2014.  While many groups are weighing in on these definitions, there is not yet a definition for meaningful use or parameters around what qualifies an EHR solution. Partners in the healthcare space are collaborating to define these terms and monitoring closely the requirements that will be set-forth in the HITECH Act.

The reimbursement schedule contained with the Act has been better outlined.  Physicians or other qualified health professionals will receive up to $44,000 in reimbursement over 5 years.  It is reported that hospitals’ reimbursements will start at $2 million and could reach $11 million depending on discharges and additional metrics.  One thing is clear; the reimbursement schedule is designed to provide an incentive to implement quickly.  Physicians receive a first year payment of $18,000 if implementation occurs in 2011 or 2012 and lesser amounts if they implement later.  Also, all payments stop after 2016; thus, to maximize reimbursement implementation needs to occur by 2011 since the Act provides for 5 years of payments.

Alternatively, for physicians and hospitals that do not demonstrate a meaningful use of a qualified EHR solution there is a punitive language in the law.  For them, reimbursement for Medicare payments is reduced 1% starting in 2015 with an increasing percentage point each year thereafter with a jump to 5% in 2018 if less than 75% of physicians are using EHRs.

Given the strong incentives contained in the law to implement a solution as soon as practical along with the current ‘unknowns’ surrounding the language hospitals are wondering what they can do now to ready themselves now.  One way to ready yourself for these requirements is via a forms automation solution.  Forms automation serves as the critical first step in the migration from paper to electronic health records.  Another clear advantage of implementing now is cost.  Forms automation solutions typically provide quick return on investment, those savings can then be used to finance an EHR implementation when it is time to implement.  Thus, moving from paper to electronic records now and using those savings to fund EHR implementation that provides significant reimbursement later is a win-win.