Take a look at the 2010 federal budget, and you'll see that the proposed deficit for the year ended September 30, 2010 is $1.171 trillion on a federal budget of just under $4 trillion. Even so, the federal government is willing to pay any physician $44k who implements Electronic Health Records (EHR) within his or her practice.
Included in the narrative section of the 2010 federal budget called Jumpstarting the Economy and Investing for the Future, President Obama states, "The current, paper-based medical records system that relies on patients’ memory and reporting of their medical history is prone to error, time-consuming, costly, and wasteful. With rigorous privacy standards in place to protect sensitive medical record, we will embark on an effort to computerize all Americans’ health records in five years. This effort will help prevent medical errors, and improve health care quality, and is a necessary step in starting to modernize the American health care system and reduce health care costs."
The American Recovery and Reinvestment Act of 2009 earmarked $19 billion to provide an incentive for healthcare professionals to implement an EHR system. Based on these rules, each qualifying provider could receive a subsidy from the federal government of up to $44k for "meaningful use" of a certified EHR technology, as follows:
· $18k for first year of implementation during 2011 or 2012 - decreasing to $15k if first year of implementation is after 2012.
· $12k for the second year
· $8k for the third year
· $4k for the fourth year
· $2k for the fifth year
Please note that there is a reduced subsidy for professionals who implement EHR in 2013 or 2014. "Wait until 2015 or later, and you won't be eligible for any subsidy. Actually, starting in 2015, there will be a penalty equal to 1% of your Medicare and Medicaid reimbursements for failure to implement EHR," warns Andrew Schwartz, the founder and editor of The MDTAXES Network (www.mdtaxes.com), an association of CPAs who specialize in healthcare professionals and their practices.
"The penalty will increase by 1% per year over the following two years - to 2% in 2016 and 3% in 2017. The Secretary then has the authority to continue decreasing your Medicare and Medicaid reimbursements by 1% per year for each of the next two years if less than 75% of the medical community has implemented EHR. Each year that you don't implement EHR, therefore, could cost you as much as 5% of your Medicare and Medicaid receipts starting in 2019," says Schwartz.
How do you qualify for this subsidy? For starters, the new rules require that you demonstrate meaningful use "through means specified by the Secretary which may include an attestation, the submission of claims with appropriate coding, a survey response, or other means specified by the Secretary." You must also use electronic prescribing in connection with your patient care.
The rules also require that your EHR is "connected in a manner that provides, in accordance with law and standards applicable to the exchange of information, for the electronic exchange of health information to improve the quality of health care, such as promoting care coordination."
The final requirement is that you meet the standard for reporting on measures using EHR, and "submit information for such period, in a form and manner specified by the Secretary, on such clinical quality measures and such other measures as selected by the Secretary."
"Assuming you comply with these provisions, even if you hve already implemented EHR for your practice, expect to receive your subsidy payments directly from the federal government in a manner similar to how you receive your Medicare payments. And the $44k that you get from the federal government might very well cover the bulk of the costs associated with the purchase, installation, and implementation of an EHR system for your practice," says Schwartz.
About Andrew Schwartz CPA
Andrew D. Schwartz, CPA is the editor and a major contributor to www.MDTAXES.com, a website that provides income tax and financial planning information geared towards healthcare professionals. Schwartz has provided financial planning advice in interviews with various media, including the Washington Post, Smart Money, and the Wall Street Journal. He is available for interviews.
