WASHINGTON – The economic stimulus package has allotted $17.2 billion to reward Medicare and Medicaid providers who can prove they are using certified healthcare IT "in a meaningful way."
The incentives are scheduled to take effect starting Oct. 1, 2011. Experts say providers should not waste time getting prepared because there is a shortage of change management experts available to help.

According to Dave Garets, president and CEO HIMSS Analytics, 94 percent of hospitals currently don't have enough healthcare IT in place to meet the stipulations required to receive bonuses. Under the new law, they must prove "meaningful use," which will require capturing certain data.

Garets expects that healthcare organizations will adopt healthcare IT "with a vengeance" in 2009. He and other members of the Healthcare Information and Management and Systems Society are concerned there are "precious few" change management experts to help providers make the complicated transition to healthcare IT by 2011.

Garets said it's not as simple as hiring a software technician to make the transition. There is a need for qualified people who know how to help with workflow adaptation and how to implement software packages so they work for the organization. 
"These people are extremely valuable and extremely rare," he said.

Payments under the American Reinvestment and Recovery Act are graduated in descending amounts for federal fiscal years 2011 and 2015. After 2015, there are penalties for providers that do not use healthcare IT. The sooner a provider is ready to go with healthcare IT, the more likely they are to cash in on the maximum possible, Garets said.

According to HIMSS leaders' interpretation of the law, physicians can earn from $44,000 to more than $60,000 in extra payments over the five-year period, including $18,000 the first year. Incentives for hospitals will start at a base of $2 million annually.

To qualify for bonuses, providers must have certified electronic health record technology capable of providing clinical decision support to physician order entry and capturing query information relevant to healthcare quality. The system must also be able to exchange and integrate electronic health information with other sources.

The maximum payment for qualifying physicians under the stimulus package is $18,000 for the first year, $12,000 for the second year, $8,000 for the third year, $4,000 for the fourth year and $2,000 for the fifth year.

For those failing to use certified qualifying healthcare IT by 2014, Medicare payments will be reduced to 99 percent in 2015, 98 percent in 2016 and 97 percent thereafter.

Hospitals will have to submit data on clinical quality measures and other measures to be determined by the Department of Health and Human Services secretary.

Payment for hospitals is a complicated formula that includes the discharge amount and Medicare share a hospital receives.

The state is authorized to make bonus payments, beginning in 2011, to physicians who provide Medicaid services,  are not hospital-based and have at least 30 percent Medicaid patient volume. Federally qualified health centers or rural health clinics with at least 30 percent Medicaid patient volume can receive up to $63,750 in incentives and will not face reductions in Medicaid payments if they do not adopt certified EHR technology.

The "meaningful use" of healthcare IT is yet to be determined by the HHS secretary under the new law.
On Monday, President Barack Obama nominated Kansas Gov. Kathleen Sebelius to fill this role. If Sebelius is confirmed by the Senate, she will also oversee standards development and select clinical quality measures used to determine providers' worthiness for receiving healthcare IT incentives under the new law.