Federal Stimulus Funding
Symposium
HITECH Act
Timi Leslie
Managing Director
Manatt Health Solutions
tleslie@manatt.com
For discussion purposes only – not for distribution
1
Multiple Areas of Focus
The stimulus package included $36B in expected health IT funding from the federal government
Appropriations for Health IT &
HIE
$2 billion for loans, grants & technical
assistance:
• HIE Planning & Implementation
Grants
New Incentives for Adoption
New Medicare and Medicaid payment
incentives to providers for EHR adoption
• $20 billion in expected payments through
Medicare
• EHR State Loan Fund
• $14 billion in expected payments through
Medicaid
• National Health IT Research Center &
Regional Extension Centers
• ~$34 billion in gross expected outlays,
2011-2016
• Workforce Training
Broadband and Telehealth
• New Technology R&D
$4.3 billion for broadband & $2.5 billion
for distance learning/ telehealth grants
Comparative Effectiveness
$1.1 billion to HHS for CER
• Establishes Federal Coordinating Council to
assist offices and agencies of the federal
government to coordinate the conduct or support
of CER and related health services
• Directs ONC to invest in telehealth
infrastructure and tools
• Directs the new FACA Policy Committee
to consider telehealth recommendations
For discussion purposes only – not for distribution
2
New National Policy and Standards Process
HHS Secretary
Reviews
ReviewsONC
ONCendorsements
endorsementsand
anddecides
decideswhether
whethertotoadopt
adopt
3
Endorses
National Coordinator
Receives
Receivesrecommendations
recommendationsand
anddecides
decideswhether
whethertotoendorse
endorse
2
Recommend
1
Sets Priorities
HIT Policy Committee*
HIT Standards Committee*
This
ThisFACA
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committeewill
will
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recommend policies relatingtotoaa
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and
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recommend priorities for the
development,
development,harmonization,
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recognition
recognitionofofstandards,
standards,
specifications,
&
certification
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This
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committeewill
will
recommend
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implementationspecifications,
specifications,and
and
certification
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anduse
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National Institute of
Standards and Technology
Test standards and creates a
conformance testing
infrastructure
* Note: Nothing in the Law prohibits the National eHealth Collaborative (NeHC) from assuming these roles, so
long as NeHC’s charter, duties, and membership are changed to meet the provisions of the Law.
For discussion purposes only – not for distribution
3
The Envisioned Timeline to Interoperability
State grant monies
begin flowing from HHS
to develop technical,
privacy, governance and
financing frameworks
necessary for HIE to take
shape...likely 09/10
2009
2010
HHS to establish
interoperability
standards
by the end of 2009 to
guide HIE development
2011
Medicare and
Medicaid incentive
payments begin,
presuming HIEs have
come online
2012
2013
Medicare and
Medicaid incentive
payments give way to
penalties on providers
for failing to adopt HIT
2014
2015
2016
Setting of standards enables
providers to begin selecting
and/or modifying existing
systems to comply with Medicare
and Medicaid incentive payment
requirements for HIE
interoperability
For discussion purposes only – not for distribution
4
HITECH is Game Changing
• 10,000% increase in federal spending on health
IT
• Contains as many risks as opportunities
• Provides a “down payment” on health reform
• Still needed:
– Payment reform
– Lower-cost models of care
– Increased patient participation in their own care
For discussion purposes only – not for distribution
5
Policy Analysis
• Federal Policy and Standards Development
• New Privacy Provisions
• HITECH Funding Flows
• Medicare & Medicaid EHR Incentive Programs
• “Meaningful Use” of EHRs
• Health Information Exchange (HIE)
• Related Areas of Funding
For discussion purposes only – not for distribution
6
Policy Analysis: New Privacy Provisions
• Extension of HIPAA to Business
Associates
• Security Breach Notification Mandate
• New Use and Disclosure Restrictions
• Consumer Access Requirements
• Increased HIPAA Enforcement
For discussion purposes only – not for distribution
7
Policy Analysis: Funding Flows – Entitlement Funds
Entitlement Funds (roughly $34 billion in gross outlays)
Program
Medicare
Payment
Incentives
Medicaid
Payment
Incentives
Distribution
Agency*
Use of Funds
CMS
Incentive Payments
through Carriers
CMS
Incentive Payments
through State Agencies
and states
Recipients
Acute Care and
Children’s Hospitals
Physicians and
Dentists
Nurse Practitioners and
Midwives
Source: Manatt Health Solutions analysis of federal HITECH Act Legislation.
CMS is the Center for Medicare and Medicaid Services
For discussion purposes only – not for distribution
FQHC
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Policy Analysis: Funding Flows – Appropriated Funds
Appropriated Funds (roughly $2 billion in gross outlays)
Program
Distribution
Agency
HIE Planning and
Development
EHR Adoption
Loan Program
Health IT
Extension Program
Workforce
Training Grants
New Technology
Research and
Development Grants
ONC
Recipients
Use of Funds
Planning Grants
State-designed
Entity
Implementation
Grants
States
Loans
ONC
ONC
HHS,
NSF
NIST
,
NSF
Loan Funds
Health Care
Providers
Health IT Research
Center
Indian Tribes
Regional Extension
Centers
Medical Health
Informatics
Nonprofits
Services
Least-advantaged
Providers
EHR in Medical
School Curricula
Health Care Information
Enterprise Integration
Research Centers
Higher Education
Medical/Graduate Schools
Source: Manatt Health Solutions analysis of federal HITECH Act Legislation. ONC is Office of the National
Coordinator, HHS is Department of Health and Human Services, NSF in National Science Foundation, and
NIST is National Institute of Standards and Technology.
For discussion purposes only – not for distribution
Federal
Government Labs
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Policy Analysis: Medicare and Medicaid EHR Adoption Incentives
Medicare
Medicaid
Funding
mechanism(s)
Federal Incentive Payments
Federal Incentive Payments
90% state matching payments (for
administration costs)
Payment
Agent
Medicare carriers and contractors
State Medicaid agencies
Payment
Recipients
Hospitals and physicians
Hospitals, physicians, NPs,dentists,
mid-wives, third-party entities
promoting EHR adoption
State Medicaid agencies for program
admin
Amounts for
Hospitals
$2 million base amount
Plus increases for annual
discharges, number of inpatient
days attributable to Medicare, and
charges attributable to Medicare
$2 million base amount
Plus increases calculated using
similar methodology as Medicare
incentive
Eligible entities include Acute Care
and Children’s Hospitals
Amounts for
physicians
&others
Up to $44,000
Over 5 year period
Up to $64,000
Over a 5 year period covering up to
85% of eligible implementation costs
For discussion purposes only – not for distribution
10
Policy Analysis: Existing “Meaningful Use” Definition
• Use of EHR in a meaningful manner,
which includes electronic prescribing (eRx)
• Capable of exchanging electronic health
information to improve the quality of health
care, such as promoting care coordination
• Submission of information on clinical
quality measures
• Other measures as determined by HHH
Secretary
For discussion purposes only – not for distribution
11
Policy Analysis: Health Information Exchange (HIE)
• Development of a state plan
• State or state-designated entity to carry it out
• Compete for planning or implementation grants
State Designated Entity (SDE) Requirements
– Nonprofit with representative governing structure
– Defined technical plan and clinical use cases
– Policy guidance for privacy and security
For discussion purposes only – not for distribution
12
State-level HIE Landscape... Progress toward interoperability, Dec 2008
(CT)
(RI)
(DE)
1. Formative
State/Regional Contracts (6)
2. Foundational
Medicaid Transformation
Grants – HIE/EHR focus (15)
3. Implementation
4. Operational
NHIN Trial Implementation (9)
CDC HIE Biosurveillance (4)
For discussion purposes only – not for distribution
13
State-level HIEs...Key Roles, Functions and Activities
Roles
Functions
Tasks
Governance
Convene
Technical Operations
Coordinate
Operate
1. Promote consistency and
effectiveness of statewide
HIE policies and practices
1. Serve as central hub for statewide or
national data sources and shared
services
2. Own or contract with vendor(s) for
the hardware, software, and/or
services to conduct HIE
3. Advocate for statewide HIE
2. Support integration of HIE
efforts with other health care
goals, objectives, and
initiatives
4. Serve as an information
resource for local HIE and
health IT activities
3. Facilitate alignment of
statewide, interstate, and
national HIE strategies
1. Provide neutral forum for
all stakeholders
2. Educate constituents and
inform HIE policy
discussions
3. Provide administrative support &
serve as a technical resource to
local HIE efforts
5. Track/assess national HIE
and health IT efforts
6. Facilitate consumer input
For discussion purposes only – not for distribution
14
Policy Analysis: Related Areas of Funding
• Broadband and Telehealth
– $4.3B for broadband and $2.5B for distance learning/
telehealth grants
– Directs ONC to invest in telehealth infrastructure and
tools and FACA Policy Committee to consider
telehealth recommendations
• Comparative Effectiveness
– $1.1B to HHS for comparative effectiveness research
(CER)
– Establishes Federal Coordinating Council to assist
government coordinate the conduct or support of
CER and related health services
For discussion purposes only – not for distribution
15