Federal Stimulus Funding for Health Information Technology

ARRA Overview
The American Recovery and Reinvestment Act of 2009 (ARRA), or the federal “Stimulus Law” was signed by President Obama on February 17. This marks an unprecedented effort to jumpstart the economy, create or save jobs, and address vital resources and challenges. The Act includes provisions to modernize the nation's infrastructure, enhance energy independence, expand educational opportunity, provide affordable health care, offer tax relief, and protect those most in need.

Health Information Technology Stimulus
The HIT component of the Stimulus law, also known as the Health Information Technology for Economic and Clinical Health Act or HITECH, appropriates $19.2 billion to encourage healthcare organizations to adopt and effectively utilize Electronic Health Records and establish health information exchange networks at the state and regional level, while ensuring that the systems safeguard critical patient data and privacy. Implementation of HIT activity due to these incentives is expected to reduce federal health spending by approximately $12 billion. Total effect on the federal deficit is $16-$17 billion through 2019.

Two parts of the ARRA are particularly relevant to FAR members and friends. The first provides $2 billion of immediate funding to the Department of Health & Human Services (HHS) and the Office of the National Coordinator for HIT (ONC) to encourage greater use of electronic health records and information exchange and mandating adoption of national standards and policies. The second part appropriates $17.2 billion of “incentives” for healthcare providers who can demonstrate “meaningful use” of electronic health records and information exchange.

HIT Funding under ARRA
• $2 billion in direct funding for HIT efforts channeled through HHS and ONC
• $300 million reserved for support of regional health information exchange efforts
• $20 million reserved for NIST to work on HIT enterprise integration
• $17 billion for Medicare/Medicaid incentives to providers who demonstrate use HIT systems

Other HIT- related Stimulus spending
• $85 million for HIT development for Indian Health Services
• $1.5 billion for community health centers (and FQHCs) for HIT acquisition and expansion
• $500 million for SSA to improve processing of disability/retirement claims ($40M for HIT)
• $1.1billion to AHRQ/ HHS/NIH to do comparative effectiveness research

HHS / ONC Efforts
HHS has $300 million to establish health information exchange (HIE) initiatives in regions and towns across the country, and help existing HIEs make progress in connecting providers. $20 million is allocated to ensure that HIE standards are integrated and consistent across products and care settings.

The Secretary will decide how to allocate remaining funds, with likely areas including:
• developing further standards related to interoperability and privacy
• building infrastructure to promote use of telemedicine
• expanding HIT use in public health departments
• establishing a national HIT Research Center and regional HIT Extension Centers to provide information to technology selection, HIE implementation, best practices, user training, etc.
• providing federal grants via AHRQ, HRSA, CMS, CDC, as well as grants to states and state-designees to assist healthcare organizations to adopt EHRs

Through other provisions of the Stimulus law, the Secretary has resources to expand and improve the Federally Qualified Health Centers and increasing their use of HIT, helping Indian Health Services adopt EHRs and telemedicine services, and improving the technology used to process disability claims.

Provider Incentives
The government is focused on two primary goals: incentivizing physicians and hospitals that have been slow to adopt Electronic Health Records and facilitating active exchange of patient data between non-affiliated providers to ensure informed and non-duplicative care. Most of the funds are designated for direct payments that reward physicians and hospitals adopting robust, connected EHR systems.

One incentive program targets providers who see large volumes of Medicaid patients and another focuses on physicians seeing Medicare patients. To qualify for the incentive payments, providers (definition includes physicians, dentists, certified nurse mid-wives, nurse practitioners, physician assistants) must prove three capabilities:
1.”Meaningful Use” of certified EHR product with e-prescribing capability that meets HHS standards
2. Connectivity with other providers to improve electronic access to patients’ full medical/health history.
3. Ability to report on use of health information technologies to HHS.

The Secretary may exempt hospitals and providers from penalties on a case-by-case basis for hardship situations. Providers may not receive multiple incentives. Those who qualify for both Medicare and Medicaid incentives must choose to pursue benefits through only one program. To stimulate HIT adoption, incentive payments can be made for up to five years, but the largest payments coming in initial years. Those who do not adopt EHR will be penalized in later years through lower payments. Incentive payments begin in 2011/2012, with the penalties starting in 2015.

Physician Incentives
Medicaid: Physicians who see more than 30% of patients covered by Medicaid (20% for pediatricians) are eligible for incentive payments of up to $64,000 over five years. The incentives are calculated through a formula that factors in the Medicaid mix seen by the provider as well as HER adoption incentives ranging from $25,000 in the first year to $10,000 in subsequent years.

Medicare: Physicians who do not have large Medicaid volume but accept Medicare patients can receive up to $44,000 over the five years. Additionally, physicians operating in a "provider shortage area" are eligible for 10% bonus. Physicians delivering care only in a hospital environment, such as anesthesiologists, pathologists and emergency/trauma care physicians, are ineligible for these payments, while their hospitals may be eligible for HIT incentives.

Medicaid incentive payments will be determined by the same calculation as the Medicare algorithm, weighted for the first four years, based on the Medicaid patient load. No reductions in Medicaid payments will be made if a provider does not adopt certified EHR technology, although incentives are available only through 2021, and providers must start receiving payments by 2016.

Eligible providers for Medicaid incentives include:
• Non-hospital based professionals with at least 30% patient volume from Medicaid
• Non-hospital based pediatricians who have at least 20% of patient volume from Medicaid

Hospital Incentives
To qualify for ARRA incentives, eligible hospitals must use certified EHRs that meet HHS standards, and demonstrate “measurable usage” of the system. The EHR system must also have the capacity to:
• Provide clinical decision support
• Support physician order entry and e-prescribing
• Capture and query information relevant to health care quality
• Exchange electronic information with and integrate information from other sources

CMS will post on its website the names, addresses, and phone numbers of eligible hospitals that are meaningful EHR users and receiving incentive payments.

Medicare incentives are available for acute-care and Critical Access Hospitals.
Acute-Care Hospitals: Starting in 2011, acute-care hospitals are eligible to receive payments through Medicare for up to four years if they have a qualified EHR and show meaningful use of the EHR in treating Medicare patients. The maximum amount available under this incentive has been estimated at around $11 million for the largest hospitals. Medicare will use an ARRA algorithm to determine the payment for an acute-care hospital, based on this documentation of these services: Discharges; Medicare A and C Inpatient Days; Total Inpatient Days; Total Revenue; Total Charity Care. Hospitals adopting HER after 2013 will receive reduced payments.

Critical Access Hospitals: Under ARRA, Critical Access Hospitals that are meaningful users are allowed to completely depreciate their certified EHR costs, starting in fiscal year 2011. ARRA also alters the methodology used for determining a CAH's Medicare share in relation to the cost of EHRs, applying the system for acute-care hospitals. In addition to altering the methodology, ARRA automatically increases the Medicare share of a CAH's EHR costs by 20 percent for fiscal years 2011-2015 so long as payments do not exceed 100% of costs and do not continue for more than four years. Currently, CAHs are reimbursed at 101% of Medicare allowed costs for inpatient services. Penalties rise under ARRA. For CAHs that are not meaningful users by 2015, reimbursement decrease by 1/3 of one percent each year until penalties reach 100% or the CAC achieves meaningful user status.

Medicaid incentives are available to the following hospital and clinic providers:
• Children’s hospitals
• Acute-care hospital that has at least 10% patient volume attributable to Medicaid
• Federally Qualified Health Center or Rural Health Clinic with at least 30% patient volume attributable to needy individuals

Standards and Certification
Certified EHR technology means that the system meets certain functional standards; provides data on designated patient demographic, medical and clinical information; has capacity to provide decision support, physician order entry, and e-prescribing; can capture and query healthcare quality information; and allows electronic exchange of health information with other sources.

The HHS Secretary is mandated to review all existing standards and promulgate initial standards that address the “Meaningful Use” criteria for certified products. This work must be completed by the end of 2009, by the Secretary and the HIT Policy and HIT Standards Committees.

HHS must announce the initial standards, implementation specifications, certification criteria by 12/31/09. It may adopt standards, implementation specifications and certification criteria already in use. Within 90 days after he law is effective, the Secretary must determine whether or not to propose new standards. ARRA allows for voluntary adoption of standards by private sector entities. NIST will establish HIT and HIE testing infrastructure and procedures; or, HHS may contract with independent, non-federal laboratories to do the testing.

Meaningful Use
"Meaningful use" has not been fully defined by HHS, but in order to be a meaningful user, an eligible hospital must also be using its EHR for information exchange to improve the quality of care, as well as for reporting on clinical quality measures. Meaningful use, once fully defined by HHS, can be shown through a variety of methods left up to the Secretary, including:
• Attestation
• Submission of claims with appropriate coding
• Survey response
• Reporting of clinical quality measures.

Federal Grants
The HHS Secretary is expected to invest in the infrastructure necessary to allow for and promote the electronic exchange and use of health information consistent with the goals of the National Coordinator's strategic plan. Some of the money will transferred to agencies with expertise in HIT (HRSA, AHRQ, CMS, CDC, IHS) to support:
• Health IT architecture
• Development and adoption of certified EHRs for providers not eligible under Medicare/Medicaid
• Training on and dissemination of information on HIT best practices
• Infrastructure and tools for the promotion of telemedicine
• Promotion of the interoperability of clinical data repositories or registries
• Promotion of technologies and best practices that enhance the protection of health information
• Improvement and expansion of the use of health IT by public health departments.

State Grants and Loans
ARRA funds will also be used to create grant and loan programs under ONC. The National Coordinator will establish a program of grants to states or state-designated qualified entities (NFP) to facilitate and expand the electronic movement and use of health information exchange according to nationally recognized standards. These grants shall be for planning or implementation of health information exchange that provides for the electronic movement and use of health information. States receiving such funds will be required to provide matching funds at increasing levels over a period of years.

The National Coordinator may also award competitive grants to states and Indian tribes in order to support the establishment of Loan Funds that assist providers seeking to adopt a certified EHR. Such loans shall support the purchase and use of a certified EHR, provide for training in the use of EHRs, or promote participation in health information exchange.

HIT Implementation Assistance & Education
ARRA takes a two-tier approach to education relating to the use of HIT, providing support for health informatics and clinical education programs. The Secretary, in consultation with NIST, may provide grants to institutions of higher education to establish or expand medical health informatics education programs. In addition, the Secretary may award grants for demonstration projects to develop academic curricula integrating certified EHR technology in the clinical education of health professionals.

HIT Education and Assistance programs funded under ARRA include:
1. Health IT Extension Program
Assistance to providers in adopting, implementing and using EHRs
2. Health IT Research Center
Technical assistance to accelerate adoption and use of EHRs
3. Health IT Regional Extension Centers
Technical assistance and training disseminate best practices. Local support and resources for public/not-for-profit hospitals, federally qualified health centers, providers serving rural, underserved areas, individual or small group practitioners.

Enforcing Privacy Protection
ARRA makes substantive changes to the federal privacy and security laws (HIPAA), provides for enhanced enforcement of HIPAA, addresses health information held by entities not covered by HIPAA, and provides for a series of studies, reports, and other initiatives relating to health information privacy. ARRA creates the position of Chief Privacy Officer in the Office of the National Coordinator. The Chief Privacy Officer will advise the National Coordinator on privacy, security and stewardship issues, and coordinate efforts among local, state, regional, federal, and international entities.

HIPAA coverage was expanded to include more protection of patient health information (PHI), including:
• Breach notification requirements for covered entities and their business associates
• Defining which actions constitute breach, including inadvertent disclosures
• Requiring accounting of disclosures to patients upon request
• Enhanced individual right to restrict disclosures when paying out of pocket for services
• Guidance on definition of "minimum necessary" when using or disclosing PHI
• Accounting for disclosure requirements for entities using electronic health records
• Prohibit "sale" of health records or protected health information, with some exceptions
• Clarify patient right to access his/her electronic health records
Penalties and enforcement procedures were also strengthened to include:
• Authorizing increased civil monetary penalties for HIPAA violations
• Granting authority to state attorneys general to enforce HIPAA
• Business associates of covered entities are now accountable for HIPAA and ARRA compliance
• Extend HIPAA criminal provisions explicitly to individuals
• HHS has ability to pursue civil penalties in cases where violation qualifies as criminal
• HHS is required to impose civil penalties in case of willful neglect
• Civil monetary penalties are spread over four tiers, depending on severity of the violation
• Civil monetary penalties relating to privacy and security violations are awarded to the HHS, and HHHS will distribute funds to individuals who have been harmed by HIPAA violations
• HHS Secretary is required to do periodic audits of HIPAA enforcement
• Temporary breach notification for entities not covered by HIPAA who handle PHI
In addition, HHS and the FTC will conduct a study to recommend new privacy and security rules for personal health records (PHR), including which agency should regulate PHRs.

HIT Oversight
ARRA establishes a permanent structure to oversee federal policy and standards for health information technology. The HHS Secretary is at the top of a new set of bodies that oversee federal policy and standards. The Office of the National Coordinator for Health Information Technology (ONC) is now a permanent part of HHS, charged with development of a nationwide health information technology infrastructure, including the National Health Information Network. Under the National Coordinator are two new entities, the HIT Policy Committee and the HIT Standards Committee. The HIT Policy Committee will make recommendations on implementation of a nationwide HIT infrastructure, including policies to implement the National Coordinator's strategic plan. The Policy Committee will also recommend a framework for adoption of HIT infrastructure, including promulgated standards. The HIT Standards Committee will recommend the specific standards needed for electronic exchange and use of health information. The Standards Committee will work with organizations such as the Health Information Technology Standards Panel (HITSP) to test new HIT standards before they are submitted to ONC and accepted by HHS.

RESOURCES:
http://www.ehealthinitiative.org/stimulus
http://www.himss.org/EconomicStimulus/
http://www.himss.org/content/files/HIMSSSummaryOfARRA.pdf
http://www.healthcareitnews.com
http://www.modernhealthcare.com