What the Federal Stimulus Package Means for Healthcare

By: 
Dave Fornell

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May 19, 2009

The federal government has made it known for years it was interested in overhauling the American healthcare system and its desire to migrate to electronic medical records (EMRs). The key issue with EMRs has been funding, and it would take a lot to make a nationwide-wide effort to bring healthcare into an interoperable, computerized state. Currently less than 40 percent of healthcare providers in the U.S. currently use an EMR system, and even fewer can connect patient information from their systems into those of other providers.

However, with the downturn in the economy came the stimulus package, officially called the American Recovery and Reinvestment Act of 2009 (ARRA). President Obama signed the legislation in February and it essentially offers a New Deal program for healthcare. ARRA includes a variety of provisions intended to assist in the development of a nationwide health information technology infrastructure that allows for the electronic use and exchange of information. It also provides $19 billion in incentives for the “meaningful use” of certified EMR technology, utilizing both bonuses and penalties under Medicare and Medicaid. If there is any doubt what this means to healthcare, it is the beginning of a new electronic, interconnected U.S. healthcare system.

The law firm of Sonnenschein, Nath and Rosenthal LLP specializes in healthcare and recently focused on ARRA’s impact. Bruce M. Fried, J.D., and Lauren Mack, J.D., from the firm spoke on ARRA at the Healthcare Information and Management Systems Society (HIMSS) conference in April in Chicago.

“There are still enormous amounts of work that need to be done,” Fried said, explaining while the money is set aside, the agencies responsible for distributing it need to develop regulations to govern how it is spent.

“As we think about what we plan to do with this money, keep in mind there will be more,” Fried added. He said ARRA is a down payment and future federal budgets will likely contain more funding for the expansion of EMRs.

“Healthcare IT is a fundamental tool to help reform healthcare,” he said. Eventually, he said the IT will enable pay-for-performance, and influence reimbursements and incentives.

Mack said there is a benefit to getting into the technology early, as the government will offer higher reimbursements to providers who are “meaningful users” of EMRs starting in 2011, and penalties for those who are not starting in 2015.

EMR systems that are adopted need to meet some basic criteria to receive funding. The system must be certified to show it meets or exceeds industry standards, which is currently done by the Certification Commission for Healthcare Information Technology (CCHIT). The system needs to offer information exchange between systems (meeting HL7 and DICOM standards for interoperability) to help improve and better coordinate patient care. The EMR needs a reporting system to show the provider is meeting clinical quality standards or guidelines, such as those set by ACC. The provider must demonstrate meaningful use of the technology, which will almost certainly include use of computerized physician order entry (CPOE) for prescriptions, clinical decision support and quality outcomes reporting. However, specific government policies have yet to been written explaining the definitions of meaningful use, interoperability, certification and what specific quality measures need to be followed.

“If you haven’t read the legislation, there are a lot of details,” Fried said. You have to read the underlying legislation. While we don’t have the regulations, if you read the legislation you will get a pretty good idea of what regulators will be dealing with.”

He suggests providers start preparing today by figuring out what projects are needed to make an EMR system operational to government standards. This may include working with your vendors to ensure technology already in place will meet new regulations. If you are working on a contract with a vendor for a new EMR project, he suggests including provisions that their technology meets and continues to conform to any new regulations. An inventory of technology currently on hand and gaps that need to be connected is also useful, Fried said.

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