8/24/2009 updated
Sajid Ahmed
Federal Stimulus Funds: Resources and Information
for Physicians
The information provided below is intended to assist physicians in their interest
and pursuit of federal economic stimulus funds for the promotion of health
information technology.
L.A. Care has brought together information from numerous trusted sources but
cannot guarantee the accuracy or effectiveness of what has been provided.
Links provided are for information only and do not imply any L.A. Care
endorsement of any product or service.
The Health Information Technology for Economic and Clinical Health (HITECH)
Act, a component of the American Recovery and Reinvestment Act of 2009,
provides up to $36 billion over six years for health information exchange
infrastructure and incentive payments to physician practices adopting electronic
health records (EHRs). This includes significant incentives for physicians who
use electronic medical records (EMRs) in a "meaningful" way.
Who is eligible for these incentives?
Incentives are available for physicians who treat Medicare and/or a minimum
number of Medicaid patients. For Medicaid only, the stimulus legislation
stipulates the following patient volume requirements:
 Non-hospital-based professionals with at least a 30-percent Medicaid
patient volume;
 Non-hospital-based pediatricians with at least a 20-percent Medicaid
patient volume; and
 Eligible professionals who practice predominantly in federally qualified
health centers or rural health clinics and have at least 30 percent of the
patient volume attributable to needy individuals.
How does a physician apply for such incentives?
The method for applying is still being determined. Once released however,
expect extremely quick turnaround times. The following links can be monitored
for up to date information:
 www.recovery.gov
 http://grants.nih.gov/grants/oer.htm
 www.grants.gov/
When is it too late?
Medicare funds are available over five years, ending in 2014. It is anticipated
funding payouts will start in 2011. The later you qualify, the less money
available to you. For example, if you don’t qualify until year 3, you will forfeit
the first 3 years of payments but would still be eligible for payments in year 4
and 5. Early adopters (including those who have already implemented HIT
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systems) whose first payment year is 2011 or 2012 will also be eligible for an
initial, larger incentive payment up to $18,000. In 2014, the payment limit for
new adopters will be reduced to $12,000.
The Medicaid incentive program has a more complex funding schedule, with
payments extending to 2021, but is also anticipated to start funding in 2011,
though highly dependent on states.
How much money is available for an individual physician?
Medicare: Up to $44,000 in Medicare reimbursements over 5 year period
The Medicare incentive program is administered via Medicare carriers and
contractors
Medicare incentive payments will be based on an amount equal to 75% of the
Secretary’s estimate of allowable charges, up to $15,000 for the first payment
year.
Incentive payments would be reduced in subsequent years: $12,000, $8,000,
$4,000, and $2000, ending in 2015.
Physicians who report using an EHR that is also capable of e-prescribing will no
longer be eligible for the e-prescribing bonuses established by the Medicare
Improvements for Patients and Providers Act (MIPPA); they will be eligible for
HIT incentives only to avoid “double-dipping.”
Early adopters (including those who have already implemented HIT systems)
whose first payment year is 2011 or 2012 will be eligible for an initial, larger
incentive payment up to $18,000. In 2014, the payment limit for new adopters
will be $12,000.
For eligible professionals in a rural health professional shortage area, the
incentive payment amounts will be increased by 10 percent.
Physicians who do not adopt/use a certified HIT system will face reduction in
their Medicare fee schedule payments of -1% in 2015, -2% in 2016, and -3% in
2017 and beyond. E-prescribing penalties sunset after 2014.
Medicaid: Up to $64,000 over a 5 year period
The Medicaid incentive program will be administered by the states, and has a
more complex funding schedule, with payments extending to 2021, and a
lengthier and more measured adoption rate.
Includes $25,000 for purchase, $10,000 for operations/maintenance (including
a 15% match)
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Covers up to 85% of eligible implementation costs:
 Medicaid will contribute 85 percent of defined allowable costs for HIT
adoption and implementation.
 In the first year, physicians who purchase and implement HIT systems
can receive up to $21,250 (85 percent of a $25,000 maximum) as a
Medicaid incentive.
 During each of the following four years, Medicaid professionals can
receive up to $8,500 (85 percent of a $10,000 maximum) for operation
and maintenance.
 The payment period for purchase, implementation, operation, and
maintenance of the HIT system cannot exceed five years.
Physicians must see a minimum number of Medicaid patients to qualify
(minimums for Medicaid vary by provider type but estimates for an independent
physician are at 30% of practice patient volume)
Does not penalize eligible physicians for failing to adopt a certified technology
Can a physician receive incentive dollars from both programs?
If a physician participates in both Medicare and Medicaid, they can still only
receive incentives from one program.
What is using EMRs in a “meaningful” way?
“Meaningful” use is still being finalized. However, preliminary discussions have
focused on the following minimum requirements:

Use of EHR in a meaningful manner as an EHR system was intended,
which includes electronic prescribing (eRx)

Capable of exchanging electronic health information to improve the
quality of health care, such as promoting care coordination (i.e. through a
Health Information Exchange or Regional Health Information
Organization)

Submission of information on clinical quality measures

Use of a certified EHR vendor (as determined by the Certification
Commission for Healthcare Information Technology (CCHIT,
www.cchit.org/)

Other measures as determined by HHS Secretary
How do I know if my EHR is certified?
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For EHR technology to qualify for certification, it must include patient
demographic and clinical health information such as medical history and
problem lists, provide clinical decision support for physician order entry, and be
able to capture and query information relevant to health care quality
For a list of current certified products and more information about the
certification process, visit the CCHIT Web site at www.cchit.org/.
What other programs are available to assist physicians with EHRs?
The Health Information Technology for Economic and Clinical Health (HITECH)
Act also provides for State EHR loan programs, however they require a 1 to 5
match (1 from state/5 from federal), so the implications for California are not
yet known. The federal provisions are as follows:
Level



of Funding
TBD, at the discretion of HHS/ONC
States may accept contributions from private sector
States are on the hook for $1 in matching funds for every $5 in
federal funding
Requirements for Funding
States and Indian tribes must submit strategic plans that include
 A list of the projects to be assisted through the loan fund
 A description of the criteria and methods established for the
distributions of funds
 A description of the financial status o f the loan fund
 Short and long-term goals for the fund
How can I get more information?
• Office of the National Coordinator of Health IT
http://healthit.hhs.gov/portal/server.pt
• California HealthCare Foundation http://www.chcf.org/
Stimulus Issue Briefs
http://www.chcf.org/topics/view.cfm?itemID=133864
• Manatt Webinars
Privacy and Security – "What You Need to Know About New Privacy
Provisions in the HITECH Act and How They Could Impact Your
Organization"
Health Information Technology Funding – "The Latest Updates on
ARRA and HITECH Available Funding for the Healthcare Industry, How
Funding Will Be Administrated, and What that Means for Your Business"
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Register online at
http://www.manatt.com/newsevents.aspx?id=9304
• Center for Healthcare Strategies Webinars
http://www.chcs.org/info-url3966/info-url_list.htm?cat_id=394
How do I get started with the selection and purchase of an EMR?
EMR Readiness Assessment
EMR Project Management Checklist (PDF)
EHR Critical Success Factors (PDF)
Questions for Vendors (PDF)
Questions for Vendor References
How to do an RFP for an EHR (PDF)
Guide to Licensing and Service Agreements (PDF)
Contracting Guidelines
EHR Decisions
Leasing and Financing options (www.mcicomputerleasing.com)
Other tools and resources:
American Recovery and Reinvestment Act of 2009 (PDF)
The HHS Web site for Health IT