For HIT, Medicaid Outpays Medicare

Abstract

While Medicare is almost always a better payer than Medicaid, one notable exception is the health information technology funding contained in the Recovery Act.For physicians applying for incentive money to purchase electronic health record (EHR) systems, “Medicaid is a little better than Medicare because there's more upfront money,” William Jessee, MD, president and CEO of the Medical Group Management Association (MGMA), said during a teleconference.The Recovery Act—formally known as the American Recovery and Reinvestment Act of 2009—includes about $19 billion for spending on health IT, said Dr. Jessee. Physicians can apply for money through either Medicare or Medicaid, but not both.To qualify for the incentive, physicians must be “meaningful electronic health records users” and use electronic prescribing. In addition, the EHR must have the capability of exchanging information with other users, and physicians must report clinical quality measures to the Health and Human Services department, presumably through the Physician Quality Reporting Initiative, Dr. Jessee said.To be eligible for the Medicaid incentive, at least 30% of a provider's practice base must be Medicaid recipients, he said.The states administering the Medicaid portion of the incentive can make payments to Medicaid providers for up to 85% of net average allowable costs, to a maximum of $63,750 over 6 years for a certified EHR. The maximum incentive starts at $25,000 in the first year and then gradually decreases.Under the Medicare incentive, physicians who are using an EHR in 2011 or 2012 can receive an incentive equal to as much as 75% of their Medicare allowable charges per year for the cost of their hardware and software, up to a maximum of $44,000 over a 5-year period. (The maximum allowable benefit per provider is $15,000 in the first year and gradually decreases over the next 4 years.) Physicians practicing in health professional shortage areas can receive a 10% additional payment, he noted.Many provisions—such as who is a “meaningful” user—haven't yet been made clear. Also still to be determined is what constitutes a certified EHR. Still, Dr. Jessee said, “you need to be very careful to make sure that the product you use or are contemplating investing in will be a certified product that qualifies for an incentive. We suggest putting a [clause] in your contract saying that the vendor will make sure the product you're using will qualify for the incentive.”In addition to the federal EHR incentives, Congress allocated another $2 billion for indirect grants to support HIT, primarily at state and regional levels, he said. “It's an HIT extension service modeled on the agricultural extension service, with the idea that people will need assistance implementing HIT. No one knows who's going to be performing that function or whether it will be national, state, or local, but a substantial sum of money has been devoted to supporting that extension service.”Although there has been speculation about whether the government was going to come out with a free EHR for providers, “my guess is, don't hold your breath,” Dr. Jessee said.Physicians looking to hospitals for funding of their EHR systems aren't getting any guidance yet on whether the new EHR rules will help or hurt their cause, according to Rob Tennant, senior policy advisor at MGMA. “There's nothing we've seen that prohibits that, but it's a gray area where we'll have to see what the government does in terms of regulation,” he said.The Recovery Act also contains additional health care privacy provisions, according to Dr. Jessee. “If you liked HIPAA, you'll love the privacy provisions” in this bill, he said. For instance, providers are required to have the ability to track every disclosure of personally identifiable health information, including information released for payment purposes. “The patient has a right to request who you've disclosed their information to for 3 years,” he said.If the patient's information has been disclosed because of a breach of privacy, providers must notify the patient or their next of kin within 60 days; if the breach affects more than 500 patients, the local media must be notified along with HHS, he added.Practices that already have EHRs have until Jan. 1, 2014, to comply with the new rules; those who buy EHRs from now on will have to comply either by the day they purchase the system or by Jan. 1, 2011, whichever is later, he said.Joyce Frieden is a senior editor with Elsevier Global Medical News. While Medicare is almost always a better payer than Medicaid, one notable exception is the health information technology funding contained in the Recovery Act. For physicians applying for incentive money to purchase electronic health record (EHR) systems, “Medicaid is a little better than Medicare because there's more upfront money,” William Jessee, MD, president and CEO of the Medical Group Management Association (MGMA), said during a teleconference. The Recovery Act—formally known as the American Recovery and Reinvestment Act of 2009—includes about $19 billion for spending on health IT, said Dr. Jessee. Physicians can apply for money through either Medicare or Medicaid, but not both. To qualify for the incentive, physicians must be “meaningful electronic health records users” and use electronic prescribing. In addition, the EHR must have the capability of exchanging information with other users, and physicians must report clinical quality measures to the Health and Human Services department, presumably through the Physician Quality Reporting Initiative, Dr. Jessee said. To be eligible for the Medicaid incentive, at least 30% of a provider's practice base must be Medicaid recipients, he said. The states administering the Medicaid portion of the incentive can make payments to Medicaid providers for up to 85% of net average allowable costs, to a maximum of $63,750 over 6 years for a certified EHR. The maximum incentive starts at $25,000 in the first year and then gradually decreases. Under the Medicare incentive, physicians who are using an EHR in 2011 or 2012 can receive an incentive equal to as much as 75% of their Medicare allowable charges per year for the cost of their hardware and software, up to a maximum of $44,000 over a 5-year period. (The maximum allowable benefit per provider is $15,000 in the first year and gradually decreases over the next 4 years.) Physicians practicing in health professional shortage areas can receive a 10% additional payment, he noted. Many provisions—such as who is a “meaningful” user—haven't yet been made clear. Also still to be determined is what constitutes a certified EHR. Still, Dr. Jessee said, “you need to be very careful to make sure that the product you use or are contemplating investing in will be a certified product that qualifies for an incentive. We suggest putting a [clause] in your contract saying that the vendor will make sure the product you're using will qualify for the incentive.” In addition to the federal EHR incentives, Congress allocated another $2 billion for indirect grants to support HIT, primarily at state and regional levels, he said. “It's an HIT extension service modeled on the agricultural extension service, with the idea that people will need assistance implementing HIT. No one knows who's going to be performing that function or whether it will be national, state, or local, but a substantial sum of money has been devoted to supporting that extension service.” Although there has been speculation about whether the government was going to come out with a free EHR for providers, “my guess is, don't hold your breath,” Dr. Jessee said. Physicians looking to hospitals for funding of their EHR systems aren't getting any guidance yet on whether the new EHR rules will help or hurt their cause, according to Rob Tennant, senior policy advisor at MGMA. “There's nothing we've seen that prohibits that, but it's a gray area where we'll have to see what the government does in terms of regulation,” he said. The Recovery Act also contains additional health care privacy provisions, according to Dr. Jessee. “If you liked HIPAA, you'll love the privacy provisions” in this bill, he said. For instance, providers are required to have the ability to track every disclosure of personally identifiable health information, including information released for payment purposes. “The patient has a right to request who you've disclosed their information to for 3 years,” he said. If the patient's information has been disclosed because of a breach of privacy, providers must notify the patient or their next of kin within 60 days; if the breach affects more than 500 patients, the local media must be notified along with HHS, he added. Practices that already have EHRs have until Jan. 1, 2014, to comply with the new rules; those who buy EHRs from now on will have to comply either by the day they purchase the system or by Jan. 1, 2011, whichever is later, he said. Joyce Frieden is a senior editor with Elsevier Global Medical News.