The HITECH Act portion of the American Recovery and Reinvestment Act of 2009 (ARRA) includes substantial incentives for hospital and physician adoption of EHR technology. These incentives will flow through Medicare and Medicaid payments .The incentives will begin in 2011 and run through 2015 for Medicare and 2021 for Medicaid. Beginning in 2015, Medicare will start applying penalties to hospital and physicians who fail to adopt EHRs. The Act does not include any Medicaid penalties. The Congressional Budget Office estimates the total outlays of over $36 billion dollars for incentive payments (If you do the math and take out $10 billion for hospitals , this still assumes 600,000 adopting Physicians at the maximum of $44,000 each). They also estimate that these costs will be off-set by over $15 billion in reductions in health expenditures and in penalties resulting in the net
Medicare Physician Incentives
Early adopter physicians in place in 2011 who can demonstrate they are a “meaningful EHR user” will receive the highest incentive, up to $48,400. Year One incentive payments are reduced in 2013 and no incentives will be available to physicians who wait to adopt the EHR in year 2015 or later. An additional 10% reimbursement is available for physicians providing services in an area designated by the Secretary of HHS as a “health professional shortage area.” Physicians who fail to adopt EHRs will see their Medicare reimbursement reduced to 99% in 2015, 98% in 2016, and 97% in 2017 and thereafter. Table 1 displays the incentives by year of adoption.
