The HITECH Act specifies incentive payments from two federal programs: Medicare and Medicaid.
Physicians and other eligible healthcare professionals may apply for incentive payments from only one of the programs, while hospitals may receive incentive payments from both programs. Both the Medicare and Medicaid incentive programs require that the provider demonstrate “meaningful use” of a certified HER product.

WHAT INCENTIVE PAYMENTS ARE AVAILABLE TO PHYSICIANS THROUGH THE MEDICARE PROGRAM?

Starting in 2011, physicians are eligible to receive Medicare incentive payments for being a “meaningful user of a certified EHR”. These incentive payments are calculated on a per physician basis. The proposed payments are greatest in the first year, decreasing in amount for the following four years or until 2016, depending on the incentive program.

Physicians who do not meet the “meaningful user” criteria will face penalties, calculated as a percentage of allowed charges, beginning in 2015 with a one percent penalty. These penalties increase each year up to a maximum potential cap of five percent per year for 2017 and beyond.

Medicare incentives will not be paid to hospital-based professionals, such as emergency physicians, anesthesiologists or pathologists.

While there are many details yet to be resolved, the broader stimulus bill includes a package of approximately $31.2 billion for healthcare infrastructure and EHR investment, and this legislation is expected to impact providers and vendors quickly. The $31.2 billion is the gross investment, with the Congressional Budget Office assumption that the program will save an estimated $12 billion over a ten year period, resulting in a net cost to the federal government of $19.2 billion. This portion of the bill is collectively known as the “HITECH Act”.

The goals of the legislation are to create and expand the current U.S. healthcare IT infrastructure, promote electronic data exchange, and substantially and rapidly increase EHR adoption to 90 percent for physicians and 70 percent for hospitals by 2019. Initial spending will begin in 2009 and is projected to increase considerably in 2010 and 2011.