Stimulus bill creates health IT incentives.(PRACTICE TRENDS)

The newly enacted economic stimulus law will infuse tens of billions of dollars into the health care sector, providing incentives for using health information technology, increasing funds for primary care training, and launching initiatives in comparative effectiveness research.

President Obama signed the $787 billion American Recovery and Reinvestment Act of 2009 (H.R. 1) into law on Feb. 17, following weeks of congressional debate and deal-making. A final compromise package largely kept health care priorities on the table.

In terms of health information technology, the law includes about $17 billion in financial incentives through the Medicare and Medicaid programs to physicians and other health care providers to adopt and use electronic health records (EHRs), as well as another $2 billion in funding for the Office of the National Coordinator for Health Information Technology to encourage health IT adoption, aid in standard setting, and support regional efforts at health information exchange.

The bulk of the $ 17 billion will create a program of financial carrots and sticks aimed at encouraging EHR adoption, starting in 2011. For example, under Medicare, providers could receive incentives for EHR use over 5 years starting at a maximum of $18,000 in the first year and dropping to a maximum of $2,000 in year 5. However, physicians who do not engage in "meaningful" EHR use by 2015 could see cuts to their Medicare payments starting at 1% in 2015 and rising to 3% in 2017 and subsequent years.

Physicians who have a Medicaid patient volume of at least 30% will be eligible to receive incentive payments for EHR adoption and use.

Eligible Medicaid providers could receive incentives of up to $75,000 over 5 years. Under the law, Medicaid providers could receive up to $25,000 for the purchase and initial implementation of a certified EHR system and up to $10,000 a year for the maintenance and use of the system.

The law includes expanded eligibility for pediatricians. For example, pediatricians who have a Medicaid patient volume of between 20% and 30% will be eligible to receive up to two-thirds of the incentive payments.