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    Financial incentive programs for electronic health records

    Physicians express interest, but obstacles remain


    Webb Millsaps, JD
    Physicians report having a great interest in obtaining federal funds for adopting electronic health record (EHR) technology, but two of the biggest barriers to their adopting EHRs are a lack of information about how to receive federal incentive funds and concerns about the initial cost of adopting EHRs, according to a recent study.1

    Daniel Gottlieb, JD
    In the past year, much of the focus has been on how healthcare reform under the Patient Protection and Affordable Care Act (PPACA) will affect physicians and other providers, but the Medicare and Medicaid incentive programs for adopting EHR technology were established a year before passage of the PPACA under the Health Information Technology for Economic and Clinical Health (HITECH) Act.

    The HITECH Act, which was part of the federal stimulus legislation enacted in February 2009, authorized approximately $27 billion in incentives to providers, hospitals, and critical access hospitals (CAHs) to adopt EHRs. At the time, President Obama told Congress that EHRs could save the healthcare system $80 billion annually.

    Eligible physicians and other providers can receive up to $44,000 by participating in the Medicare EHR Incentive Program and up to $63,750 by participating in the Medicaid EHR Incentive Program. Hospitals can receive base payments of up to $2 million plus additional amounts, depending on several factors.2

    The aforementioned study focused entirely on Florida physicians who participate in Medicaid. As noted in the study, Florida is an important state for assessing physician attitudes toward EHR incentives because Florida has more licensed physicians than any other state, as well as large numbers of both Medicare and Medicaid beneficiaries.


    While increasing the efficiency and improving—or at least not hurting—quality is the stated goal of EHR technology as well as many other health reform initiatives, whether those goals can be achieved using EHR technology remains an open question, particularly when healthcare professionals may be reluctant to adopt the technology. Accordingly, the Florida study sought to identify possible obstacles to adopting EHRs, despite the financial incentives being offered.

    Of the physicians in the Florida study who said they are not planning to seek the financial incentives available to them, 42% said that one significant barrier to their adopting EHRs was that the physicians needed "more information about the incentive program." Sixty-nine percent of the physicians said that they were deterred by the "costs involved" in implementing EHRs, and 42% said that they were deterred by not knowing which EHR system to purchase.

    Many early adopters of EHR technology have used healthcare attorneys and other consultants familiar with details of the EHR incentive programs to simplify the process of determining eligibility and to provide assistance with navigating other requirements. Providers who prefer a more hands-on approach can find applicable information about eligibility and details about timelines and requirements that must be met on government Web sites.

    Certain physicians, such as those who furnish 90% or more of their covered professional services in an inpatient or hospital emergency department, are not eligible for either the Medicare or Medicaid program.