WASHINGTON – About 45,000 office-based physicians may be eligible for up to $63,750 in ARRA funding over six years to improve and maintain their health information technology systems because of their participation in Medicaid, according to a new study.

Researchers at George Washington University, funded through the Geiger Gibson/RCHN Community Health Foundation Research Collaborative, examined the Medicaid healthcare IT adoption incentives contained in the American Reinvestment and Recovery Act (ARRA).

Their report, "Boosting Health Information Technology in Medicaid: The Potential Effect of the American Recovery and Reinvestment Act," reveals that nearly all physicians who practice at federally qualified health centers and half of office-based pediatricians may be eligible for the ARRA payments.

The 2009 law included about $49 billion in investments in healthcare IT, including financial incentives for healthcare providers who treat Medicaid or Medicare patients and who can demonstrate meaningful use of technology.

The authors say the study is the first to map the potential impact of the Medicaid provisions on physicians' access to incentive funding. They say it underscores the importance of the Medicaid amendments to the successful transformation of the nation's health information infrastructure.

Beginning in 2011, office-based physicians whose patient mix includes at least 30 percent Medicaid beneficiaries are eligible for up to $63,750 over six years, as long as they are able to demonstrate "meaningful use" of healthcare IT.  A lower 20 percent threshold can be used in the case of pediatricians.

Physicians who predominantly practice at FQHCs and other settings can qualify if 30 percent of their patient base is characterized as "needy," including those covered by Medicaid, those who receive uncompensated care and patients who are charged income-related, sliding-scale fees.

"Health centers have historically faced many challenges in acquiring and implementing HIT," said Julio Bellber, president and CEO of the RCHN Community Health Foundation. "The opportunity provided by the ARRA incentives is significant and ongoing support is crucial if health centers and their patients are to derive the full benefits promised by HIT adoption."

GW researchers estimate about 15 percent of all office-based physicians in the nation would qualify for the Medicaid healthcare IT incentives, including nearly 99 percent of FQHC physicians. If all qualifying physicians apply for the Medicaid incentives and receive the maximum level of payments, the federal government would invest more than $2.8 billion in healthcare IT.

"The ARRA Medicaid incentives offer a critical first step in the transformation of healthcare practices on which millions of Medicaid beneficiaries rely," said Leighton Ku, one of the study's authors and a professor at GW. "Successful implementation will depend on comprehensive guidance from HHS as well as ongoing technical assistance to both states and providers."

The research was conducted by GW faculty at the Geiger Gibson/RCHN Community Health Foundation Research Collaborative, located in the Department of Health Policy at The George Washington University School of Public Health and Health Services.