An Overview of Medicare and Medicaid Health IT for Economic and Clinical Health (M-HITECH) Act

By Jay Anders, MD, CMIO of MED3OOO

February 17, 2009, President Obama signed into law the largest stimulus package ever created in the United States. It contains $19 billion for healthcare IT. The Medicare and Medicaid Health Information Technology for Economic and Clinical Health (M-HITECH) Act accomplishes several things.

Primarily, it provides funds for the adoption of EHRs that will closely, if not completely, remove any financial barriers for physicians to acquire an EHR. It also puts the Office of the National Coordinator of Healthcare IT (ONCHIT) in the driver’s seat regarding further regulations, certification of EHRs, and setting up a national infrastructure for monitoring the effectiveness of electronic healthcare in the improvement of the health of Americans.

First, what physicians can expect as far as reimbursement or support and there adoption of electronic healthcare? In this law, a physician can eligible to receive up to $41,000 over 5 years to help offset the cost of an EHR. This will be paid yearly in a decreasing schedule. Early adopters (i.e., physicians who implements EHRs in 2011 or 2012) receive an additional $3,000 “bonus” payment in the first year:
Year 1    $18,000 (2011-2012)  |  $15,000 (2013-2014)
Year 2    $12,000
Year 3    $8,000
Year 4    $4,000
Year 5    $2,000

Starting in year 2015, there will be no reimbursement or incentive for the adoption of an EHR. To qualify for this money, physicians must be able to demonstrate "meaningful adoption" of a CCHIT-certified EHR. This can be accomplished by reporting PQRI measures electronically, attesting to CMS that you are using CCHIT-certified system, responding positively to a survey by HHS, or coding your visits as “documented” on a certified system. Currently, the office of the National Coordinator for Healthcare IT has constituted the policy committee to address the definition of meaningful use. These regulations should be generally available by December 31st, 2009. The policy committee has issued some interim guidance regarding the direction of meaningfully use. The meaningful use guidelines will incorporate several policy priorities. They will be directed towards improving quality safety and efficiency and reducing health errors ability to engage patient's and family's, improve care coordination, improve population and public health, and ensure adequate privacy and security protections for personal health information.

Here are some of the details:

• To improve quality, safety, efficiency and reduced health disparities; the system should be able to do the following:
  o Provide access to comprehensive patient health data for the patient’s healthcare team.
  o Used evidence-based order sets and have physician directly enter all order types including medications.
  o Apply clinical decision support at the point of care.
  o Generate lists of patients who need care and use them to reach out to patients.
  o Report the patient registries for quality improvement, public reporting etc.
• To engage patient' and families:
  o The system should be able to provide patients and families with access to data, knowledge, and tools to make informed decisions and to manage their health.
• To improve care coordination:
  o The system should be able to exchange meaningful clinical information amount professional healthcare teams.
• To improve population and public health management:
  o The system should be able to communicate with public health agencies with meaningful clinical data.
• To ensure privacy and security and protections were personal health information:
  o The system should ensure privacy and security protections for confidential information through operating policies, procedures, and technologies and compliance with applicable law.
  o The system should also provide transparency of data sharing to the patient.

All the above directives have specific measurements that an EHR must be able to accomplish. These will be incorporated into the ongoing certification process that will most likely be administered by CCHIT. The final regulations have yet to be written and we are currently in a public comment were all the stakeholders in this process will have a chance to comment.
That was the carrot, now let's discuss the stick. Starting in 2015, physicians who have not successfully adopted an EHR into their practice will face penalties from CMS in the form of Medicare fee schedule reductions. This will start at 1% in 2015 and increase by 1% per year up until 2018. The Secretary of Health and Human Services has great latitude in extending and modifying this reimbursement schedule.

Contained in this law is approximately $300 million in grant money that will be directed by ONCHIT. In addition to this money, the HHS Secretary will set up a fund that will be able to loan money to physicians or hospitals at market rates over a ten-year term.

Also, in this law ONCHIT becomes one of the chief architects of how healthcare IT will be adopted and reviewed in the future. The responsibilities of this office are now expanded to include review and determination of whether to endorse standards and certification criteria as well as rules that govern the electronic exchange and use of health information. They are also responsible for reviewing Federal health information technology investments to ensure that Federal health information technology programs are meeting the financial objectives contained in the law. ONCHIT is now responsible for developing a Federal IT strategic plan. That plan must include guidelines for the electronic exchange and use of health information and the enterprise integration of health information. The plan must also identify how each person in United States will have their healthcare recorded and stored electronically by 2014. Privacy and security of health information will also be under the direction of the national coordinator.
What is the overall object of the Federal Government in allotting so much money in this area? The simple answer is they expect to get it back in savings. The Congressional Budget Office projects that acceleration of the adoption of healthcare IT in United States will save the U.S. healthcare system $60 billion between 2011 and 2019. They also project that, without the stimulus package, only 45% of hospitals and 65% of physicians will have adopted qualifying healthcare IT by the year 2019.

With this law, there is money available to physicians, hospitals, and other healthcare institutions for the adoption of healthcare IT. It effectively removes cost as a barrier to adoption of an EHR. The regulations for this law have yet to be written, so the particular mechanism of how money will be distributed is yet to be determined. So, for now, there may be funds to change the face of electronic healthcare in America in the next 5 years.