GOP bill proposes repeal of HITECH Act

 Via Healthcare IT News:

The Spending Reduction Act of 2011 (H.R. 408), introduced on January 24 by Rep. Jim Jordan (R-Ohio), seeks to reduce federal spending by $2.5 trillion over the coming decade. As it does so, it singles out many federal programs for elimination.

Section 302 of the bill, titled "REPEAL OF CERTAIN STIMULUS PROVISIONS," states that "effective on the date of the enactment of this Act, subtitles B and C of title II and titles III through VII of division B of the American Recovery and Reinvestment Act of 2009 (Public Law 111-5) are repealed, and the provisions of law amended or repealed by such provisions of division B are restored or revived as if such provisions of division B had not been enacted."

Since the Medicare and Medicaid EHR Incentive Programs set up under the ARRA/HITECH Act of 2009 fall under division B, it would appear that the $27 billion earmarked for disbursement to healthcare providers to spurring EHR adoption would fall on the chopping block were the bill to ever pass.

For good measure, Jordan's Republican Study Committee also decrees that the enacted legislation would "further prohibit any FY 2011 funding from being used to carry out any provision of the Democrat government takeover of health care, or to defend the health care law against any lawsuit challenging any provision of the act.


 Of course, the measure has little chance of succeeding, considering it would have to pass the House of Representatives, the Senate, and avoid an almost-certain veto from President Obama. Still, the GOP-backed proposal does add a bit of uncertainty in the market.  

Dave Roberts, vice president of government relations for HIMSS, is less worried about the bill being signed into law than he is about the climate it creates.

The draft has already been referred to 14 different committees in the House, he says, so it's going to be a while before it sees any floor action.

The problem is that it's already "creating confusion in the industry," says Roberts. "We've heard from some CIOs, asking us, 'What is this? We hear the House is going to rescind our money.' It adds to the confusion in the whole marketplace. And providers and hospitals who want to purchase this [technology] are wondering, 'Do I really want to start down this path?'

"We're trying to tell people," he says, "that this process is going on. This is only one body [of Congress]. Don't let this be a concern."

But, Roberts cautions: "We're leading up to the 2012 elections. The Senate's majority is very reduced right now. And if this is a new way of thinking, that could be concerning. So I think that while this particular bill may not pass, it's something that has to be watched closely.

HIMSS has issued a Legislative Action Alert on January 25, 2011. As a strong proponent of the EHR incentives program included in the HITECH Act, there is little doubt that HIMSS will be quite engaged in defending this portion of the stimulus bill.

"GOP-sponsored bill threatens MU funding," Healthcare IT News (January 28, 2011).


Free Webinar on Meaningful Use: Slides included below

Here are the slides from  our February 25, 2010 Webinar on Meaningful Use.  This webinar was first in a series, and focused on the critical definition of "meaningful use" of "certified EHR technology," as described in proposed regulations released and published by CMS pursuant to the HITECH Act on January 13, 2009.  Steve and I discussed:

  • Key policy goals and objectives behind meaningful use
  • Measures required to achieve meaningful use
  • Structure of incentive payments under Medicare and Medicaid
  • Eligibility requirements for professionals and hospitals

Our next webinar, to be held on Thursday March 18, 2010, from 1:00 to 2:00 PM, will focus on how to negotiate software and EHR licensing agreements and other transactional issues with respect to dealing with health IT vendors.

For more information, please contact me at or 202-661-6945.

Maryland's new HIT legislation

On May 19, 2009, Governor O'Malley of Maryland signed into law a bill requiring private insurance companies to offer healthcare providers financial incentives to adopt healthcare information technology (HIT), while establishing penalties for those providers who do not bring an electronic medical records system on line by 2015.  According to the Baltimore Sun,

The stimulus money went to Medicare and Medicaid, which are to give it to doctors who adopt electronic medical records. But because Medicare and Medicaid account for less than half of payments to many providers, state Health Secretary John Colmers said, private insurers are now being enlisted to add incentive, beginning in 2011.

The bill allows insurers to choose among several forms of inducement - increased reimbursements, lump-sum payments or in-kind services - so long as it has a monetary value.

"The goal here in Maryland was to assure that all of the payers pull their oars in the same direction," Colmers said. "There is a great promise in electronic health records, but the greatest promise comes when it's done in a coordinated fashion, across all of the payers.

The new law also requires Maryland to develop "a health information exchange, a computer network that would link all of Maryland's physicians, hospitals, medical laboratories and pharmacies. It could be linked with those of other states to create [a] national network."

"Bill pushes doctors to computerize records", The Baltimore Sun, May 19, 2009.

Maryland General Assembly HB706 "Electronic Health Records - Regulation and Reimbursement"

HHS releases Recovery Act Implementation Plans

On May 15, 2009, the U.S. Department of Health and Human Services (HHS) released Recovery Act implementation plans:

HHS is moving quickly and carefully to award Recovery Act funds in an open and transparent manner that will achieve the objectives of each ARRA program. Implementation plans provide detailed information regarding the goals, funding, contracts competition, contract type, and accountability mechanisms.

HHS and the Office of National Coordinator for Health IT (ONC) released two such implementation plans aimed specifically at accelerating the adoption of health information technology pursuant to the HITECH Act:  the Recovery Act Implementation Plan for Medicare and Medicaid incentives, and the accompanying Implementation Plan from the ONC.

Debate on EHR Savings Rages at Harvard

A battle royal rages on among various Harvard physicians about the effects of a widespread adoption of EHR technology.  In a Wall Street Journal op-ed, two Harvard doctors questioned President Obama's claim that nationwide adoption of EHR technology will save the taxpayers as much as $80 billion annually.   Drs. Groopman and Hartzband call on Mr. Obama to "apply real scientific rigor to fix our health-care system rather than rely on elegant exercises in wishful thinking."  

However, three other Harvard physicians, including Geek Doctor John Halamka, published a Letter to the Editor in response to the Groopman/Hartzband Op-Ed, claiming that the latter did not present a full or accurate picture of the positive effects of widespread adoption of EHR technology.  In part, Drs. Halamka, Bates and Middleton claim that:

The electronic health record represents a transformational change in healthcare, and will enable an array of improvements—although it will not necessarily result if implemented badly. The electronic record is to the paper record as the automobile was to the horse and buggy. No one will want to go back.


Separately, Stephen B. Soumerai, a Harvard Medical School professor (with a University of Alberta co-author, Sumit R. Majumdar) published an Op-Ed in the Washington Post supporting the Groopman/Hartzband claim that EHR technology is not going to produce the promised mass savings because major studies

have found that electronic records with computerized decision support did not result in a single improvement in any measure of quality of care for patients with chronic conditions including heart disease and asthma.

Soumerai and Majumdar sadly concluded that "a $50 billion investment in health information technology won't do much for many Americans." 

This did not go unnoticed by Halamka and the EHR enthusiasts, Drs. Bates and Middleton.  Their response in another Letter to the Editor (this time, in the Washington Post), systematically deconstructed Soumerai and Majumdar's conclusions, reinforcing the theme articulated by Halamka, Bates and Middleton in the Wall Street Journal:  bad implementation can lead to bad results; EHRs are the way of the future, and the focus should be on how to improve quality of care, not whether to implement EHR technology.  The Letter to the Editor also cited specific examples of savings produced by successful adoption of EHR technology:

a detailed case study of the cost and quality benefits of EHR at Family Care of Concord, NH found net benefits per clinician per year of $30,324. Another study of hospital-based provider order entry identified net savings of $1.7 million per year from drug dosing guidance, nursing time utilization, and error prevention.

While the fight continues at Harvard, there is some positive news from Wall Street.  The Wall Street Journal reports that the HIT funding included in the stimulus appears to boost stock prices of certain HIT vendors, including Quality Systems Inc. (QSII), Athenahealth Inc. (ATHN) and Allscripts-Misys Healthcare Solutions Inc. (MDRX).  Thus, it appears the stimulus is working for someone.  Let's hope the EHR enthusiasts at Harvard are correct, and that we will all benefit from lower-costs, increased efficiency and higher-quality health care as a result of nationwide EHR adoption.

"Obama's $80 Billion Exaggeration", Wall Street Journal, March 11, 2009.
"Bad Bet on Medical Records", The Washington Post, March 17, 2009.
"Health IT Push Helps Physician Practice Software Stocks", Wall Street Journal, March 23, 2009.

Healthcare Informatics Interviews Steve Fox and Ed Shay about the HITECH Act

Healthcare Informatics Editor-in-Chief Anthony Guerra recently talked with our own Steve Fox and fellow Post & Schell partner Edward Shay about the substance of the HITECH Act and what this new legislation means for healthcare providers.  The interview appears under the "Online Exclusives" section of the Healthcare Informatics Web site

In Part I and Part II of the interview, Steve and Ed discuss the incentives for hospitals and physician practices included in the HITECH Act; new regulations to be promulgated by HHS Secretary under this Act; and what actions hospitals and physician practices should be considering at this time in order to qualify for the incentive payments under the Act.

Part III is coming soon, and we will update this entry when it is published on 

HITECH Act Will Benefit Higher-Ed Institutions

HHS may award grants to eligible institutions “to carry out demonstration projects to develop academic curricula integrating certified EHR technology in the clinical education of health professionals.” Eligible institutions are limited to:

  • a school of medicine, osteopathic medicine, dentistry, or pharmacy, a graduate program in behavioral or mental health, or any other graduate health professions school;
  • a graduate school of nursing or physician assistant studies;
  • a consortium of two or more schools described above; or
  • an institution with a graduate medical education program in medicine, osteopathic medicine, dentistry, pharmacy, nursing, or physician assistance studies.


However, the Act imposes two major limitations: (1) Applicant schools must contribute at least 50 percent of the funding (unless such co-payment would be detrimental to the program due to national economic conditions, in which case upon notification to Congress such cost-share arrangement may be waived); and (2) Eligible schools cannot use amounts received under this program to purchase hardware, software, or services. These funds are meant exclusively for adapting the school’s curricula to the new technology, and may mean that school may not use HHS funds to hire consultants to develop such programs for them.

The Act also authorizes HHS to assist all education institutions in establishing or expanding health informatics programs. Schools may receive federal assistance to develop and implement HIT curricula, courses and certification programs; recruit students; acquire necessary equipment (and installation of such equipment); and establish or enhance bridge programs between community colleges and universities. Priority will be given to existing education programs and programs designed to be completed in six months. However, as noted above, eligible programs must contribute at least 50% of the funding, subject to the economic conditions exception described in the above paragraph.

HITECH Act Will Benefit Physician Practices

Physician practices are eligible to receive up to $44,000 per physician for meaningful use of certified EHR technology (as described here*):

  • Up to $18,000 for the first year (dropping to $15,000 if first year is not 2011 or 2012); $12,000 for the second year; $ $8,000 in year 3, $4,000 in year 4 and $2,000 in year 5.  (See table after the jump.)
  • There will be no incentive payments for practices establishing their meaningful EHR use after 2014 (e.g., beginning 2015).
  • Meaningful EHR use by physicians will be further defined by regulations, but at a minimum, includes the use of e-prescribing and participation in “the electronic exchange of health information to improve the quality of health care, such as promoting care coordination,” i.e., HIEs or RHIOs.
  • For the electronic exchange of health information to improve the quality of health care, such as promoting care coordination.
  • There is a 10% premium for physicians with practices in under-serviced areas.
  • However, if a physician practice does not achieve meaningful EHR status by 2015, Medicare reimbursement fees will be reduced by 1% in 2015, 2% in 2016, 3% in 2017 and beyond; and the Secretary will have the right to reduce fees by 5% starting in 2018 for those practices where meaningful EHR use is under 75%.


In lieu of Medicare reimbursements, certain physician practices may be also eligible to receive for up to $65,000 in Medicaid reimbursement payments if they achieve standards of meaningful use similar to the Medicare requirement.

  • States will reimburse up to 85% of the cost of implementation of EHR, possibly starting in 2011, but starting no later than 2016, with 2021 being the final year for Medicaid reimbursements.
  • First year’s payment is capped at $25,000 and may include reimbursed costs associated with purchase, implementation or upgrade of EHR technology, or, if provider achieves the meaningful user status, costs incurred if EHR technology is already implemented.
  • Subsequent annual reimbursements will not exceed $10,000 per annual payment, and are intended to cover costs of operation and maintenance of EHR technology.

 * Physicians, unlike hospital systems, are specifically required to demonstrate the use of e-prescribing as part of their EHR use.


UPDATED: HITECH Act will Benefit Hospitals

Each eligible hospital (a “subsection (d) hospital,” as defined under 42 U.S.C. §1395ww(d)(1)(B)) which does not include psychiatric hospitals, rehabilitation hospitals, children’s hospitals or long term care hospitals) that achieves "meaningful" EHR use may qualify to receive from Medicare an amount equal to the product of the following formula:

Initial Amount
($2 million plus additional amounts calculated in accordance with each hospital’s Medicare discharges)


Medicare Share
(roughly, a hospital’s share of Medicare discharges over total discharges)


Transition Factor:

Year 1 – 100%
Year 2 – 75%
Year 3 – 50%
Year 4 – 25%
Year 5 – 0%

“Meaningful users” are hospitals or physician practices able to demonstrate that one’s 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. Meaningful EHR use includes quality reporting and may be demonstrated by attestation, survey response, appropriate claims or quality reporting, or such other manner as the Secretary specifies.  Of course, the question remains as to how HHS will define “meaningful” use, and we will just have to wait until the end of this year to find out. The concern is that if HHS raises the bar too high, it will exclude hospitals who will be unable to achieve it within a reasonable time.


“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.

Hospitals can receive both Medicare and Medicaid incentives (calculations for the latter are linked to Medicaid discharges). The Medicaid portion can be accelerated (50% in one year or 90% in two years).  Also, Medicaid incentives are not restricted to subsection (d) hospitals. Thus, for example, although a children’s hospital does not qualify for Medicare incentive payments, its Medicaid incentives may produce a much higher amount of reimbursements.

Some calculations indicate that the maximum combined Medicare and Medicaid payments may total up to $11 million, while $6 million to $8 million payments should be more typical. Below is a sample breakdown* of reimbursement payments (from both Medicare and Medicaid) for hospitals under the Act:


Hospitals may also receive additional aid from the federal government if they participate in HHS’s health information technology extension program. At the heart of the program, the newly established HIT Research Center (“Center”) will provide technical assistance and disseminate best practices to support and accelerate efforts to implement and operate healthcare information technology in accordance with the standards, specifications and certification criteria to be established under the Act. As part of its duties, the Center will

  • provide a forum for the exchange of knowledge and experience;
  • accelerate the transfer of lessons learned;
  • analyze and disseminate evidence and experience;
  • provide technical assistance to regional and local information exchanges;
  • develop solutions for barriers to the electronic exchange of information; and
  • develop effective strategies for the use of HIT in medically underserved communities.

On a more local level, Regional Extension Centers (REC) will provide technical assistance and disseminate best practices learned from the Center to aid and accelerate implementation and use of HIT. Each REC must be affiliated with one or more nonprofit organizations. Support will be available for up to four years of funding aimed to cover up to 50% of each REC’s capital and operating expenses.

In making its funding decisions, HHS will consider the REC applicant's ability to provide assistance and utilize technology appropriate to the needs of particular categories of health care providers; the types of services the proposed REC will provide to health care providers; the geographical diversity and extent of the proposed REC’s service area; and the percentage of funding and amount of in-kind commitment from other sources the REC applicant can secure.

Public, nonprofit and critical access hospitals, community health centers, individual or small practices and entities that serve the uninsured and underinsured, as well as medically underserved persons, will be given priority in receiving assistance. In less than 90 days, HHS will produce a description of the extension program, including a detailed explanation of the program and the programs goals; procedures to be followed by the REC applicants; criteria for determining qualified REC applicants; and the maximum support levels expected to be available to REC’s under the program.

Congress Offers Incentives to Implement EHR

In the economic stimulus legislation recently signed by President Obama (the American Recovery and Reinvestment Act of 2009), the U.S. Congress has provided the health care industry with more than $17 billion in incentives to acquire and implement electronic health record (EHR) technology and the associated infrastructure.

The HITECH Act (“Act”) portion of the stimulus includes major incentives for, among others:

In addition to the incentives, the Department of Health and Human Services (HHS) will have broad discretion in determining the amounts of grants, loans or subsidies extended to potential beneficiaries. HHS will also propose a set of procedures for claiming or applying for such assistance, to be published in the Federal Register for comment.