WASHINGTON – Healthcare IT legislation in the U.S. House of Representatives is stalled and unlikely to move before the July 4th congressional recess.

Two key committees – House Ways and Means and Energy and Commerce – have passed different versions of H.R. 4157, a bill from Reps. Nancy Johnson, R-Conn., and Nathan Deal, R-Ga. The bills would codify the Office of the National Coordinator for Health Information Technology, provide safe harbors in Stark and anti-kickback laws to allow hospitals and other healthcare groups to share IT tools with doctors and examine variations in state privacy laws. A provision that called for a transition by Oct. 1, 2009 to ICD-10 billing codes was dropped. The transition by 2009 was opposed by insurance companies, which wanted a longer time to prepare for the new coding system. The Energy and Commerce version of the bill calls for a demonstration program that would provide grants to small physician practices.

Lawmakers must now work out difference in both versions of this legislation before a bill can move to the House floor. However, the bill faces some roadblocks. First, the Congressional Budget Office forecast that the bill could increase spending and reduce revenues over the 2007-2011 and 2007-2016 periods. The CBO said the increase in direct spending would result from “safe harbors” that allow for donations of health information technology and that such donations by entities other than hospitals, group practices, Medicare Advantage plans, and prescription drug plans would lead to an increase in the volume of services that Medicare and state Medicaid programs pay for, thus increasing costs.

The CBO also said the move from ICD-9 to ICD-10 codes would carry a substantial cost to providers and claims processors. The CBO argued that a transition before 2012 would result in higher premiums for health insurance in those years.

David Merritt, a project director for the Center for Health Transformation, a group led by Former House Speaker Newt Gingrich, called the CBO’s estimate disappointing but not surprising.

“What they failed to understand and failed to look at is the effects of the technology,” he said. “At the same time they do not look at the impact on costs and quality.”

Gingrich has been a long-time critic of the CBO, which scores legislation for Congress. Merritt called CBO’s estimate a minor setback for healthcare IT legislation in the House.

“It’s a speed bump,” he said.

House Democrats have also opposed both versions of the bill, saying it does not go far enough to protect patient privacy or provide adequate incentives to spur healthcare IT adoption.

“There is substantial democratic concern about the content of these bill,” said Michael Zamore, a policy advisor for Rep. Patrick J. Kennedy (D-R.I.). Kennedy introduced his own healthcare IT bill last year.

“I think they’re going to push through a bad health IT bill. They don’t need Democrats and they don’t want Democrats’ input,” he said.

Once differences in the bills are resolved, the bill would move to the House floor for a vote. The bill will then need to be reconciled with a similar Senate bill (S.1418), which passed last year with bi-partisan support. The bills would need to pass both Houses again before moving to the President’s desk for a signature.