Q&A: The HITECH Act

The nearly $800 billion American Recovery and Reinvestment Act of 2009 made $19 billion available for health information technology through the Health Information Technology for Economic and Clinical Health Act, better known as the HITECH Act. The comprehensive stimulus package was signed into law by President Obama on February 17.

Of the $19 billion, $17 billion is set aside to pay incentives through Medicare and Medicaid to physicians and hospitals that implement and use HIT, such as electronic health records and e-prescribing by 2014. The remaining $2 billion will be distributed through the Office of the National Coordinator for Health Information Technology for a number of projects, including health information exchange infrastructure, standards evaluation and development, grants to states for the purpose of furthering EHR adoption, improvements in telemedicine delivery and the establishment of regional HIT resource centers.

According to health care attorney Jeff Baird, “The intent of the new law is clear. All providers are encouraged to take two large steps by 2014: purchase ‘certified’ EHR technology and use it in a ‘meaningful way.’ Physician and hospital providers that do not achieve this objective by the deadline will pass up available payment incentives, and all providers that do not achieve this objective by the deadline will begin incurring Medicare payment reductions.”

Q: Do the EHR requirements of the HITECH Act apply to HME suppliers?

A: Yes. The term “health care provider” is broadly defined in the Act, and the Act further indicates that it will apply to all providers that do business with the federal government.

Q: What is the purpose of the Act?

A: The Act is part of President Obama’s stimulus package. It is designed to help fulfill a promise that the president made in a speech on Jan. 8, 2009, at George Mason University. In that speech, he said: “To improve the quality of our health care while lowering its costs, we will make the immediate investments necessary to ensure that, within five years, all of America’s medical records are computerized. This will cut waste, eliminate red tape and reduce the need to repeat expensive medical tests … But it just won’t save billions of dollars and thousands of jobs; it will save lives by reducing the deadly but preventable medical errors that pervade our health-care system.”

Q: Have any regulations been proposed to implement the Act?

A: Yes. On Dec. 30, 2009, HHS released two proposed regulations that implement major provisions of the Act. The first regulation is a proposed rule that outlines an incentive program for physicians and hospitals that make meaningful use of EHR. The second is an interim final rule that establishes an initial set of standards, specifications and certification criteria for EHR. These regulations were published in the Federal Register on Jan. 13, 2010. Each regulation has a 60-day public comment period that expires at 5:00 p.m. EST on March 15, 2010.

Q: So what exactly do these two regulations say?

A: The proposed incentive program rule was issued by CMS. This rule sets out what eligible physician and hospital providers need to do to qualify for incentive payments; that is, how they can demonstrate that they are “meaningful users.” The proposed rule also addresses a number of related matters, such as the calculation and timing of payments.

The Standards, Specifications and Certification interim final rule was issued by the HHS Office of the National Coordinator for HIT and by the Secretary of HHS. The interim final rule sets out the substantive requirement that an electronic health records technology must possess in order to be considered “qualified” and thus be able to be “certified.” In other words, this regulation pertains to the capabilities that an electronic health records technology must possess to meet the requirements of the law.

Q: Does the incentive program of the HITECH Act apply to HME suppliers?

A: No. The incentive payments are limited to physicians and hospitals.

Q: If no incentives are available, why should my HME company implement EHR?

A: The Act also creates penalties or disincentives for providers that fail to utilize EHR. If providers do not become “meaningful users” of EHR by 2015, their Medicare payments will be reduced yearly in accordance with a schedule outlined in the Act. An exemption from this penalty is available if the provider can demonstrate that compliance with the requirement for being a meaningful user of EHR would result in a significant hardship.

Q: Will any additional regulations be issued?

A: Yes. HHS will issue a third regulation to define the process by which technology vendors can obtain the required certification to ensure that their EHR systems meet all the relevant standards and specifications. The certification process is expected to involve HHS accrediting third parties that can administer the certification process on a biennial basis and apply the federal requirements.

Jeffrey S. Baird, Esq., is chairman of the Health Care Group at Brown & Fortunato, P.C., a law firm based in Amarillo, Texas. He represents pharmacies, infusion companies, home medical equipment companies and other health care providers throughout the United States. Baird is Board Certified in Health Law by the Texas Board of Legal Specialization. He can be reached at 806/345-6320 or [email protected].