On January 13, 2010, the Office of the National Coordinator for Health Information Technology (ONC) published an interim final rule (the “Standards Rule”) to adopt an initial set of standards, implementation specifications, and certification criteria for health information technology. Designed to be “the first step in an incremental approach . . . to enhance the interoperability, functionality, utility and security of health information technology and to support its meaningful use,” the Standards Rule outlines capability requirements for electronic health records (EHR) systems and establishes standards for the exchange of information between systems. It also provides guidance with respect to maintaining the privacy and security of patient data and adherence to the requirements of the HIPAA Privacy Rule. The rule is effective February 12, 2010, although comments will be accepted until March 15, 2010. Also on January 13, the Centers for Medicare and Medicaid Services (CMS) published a proposed rule (the “Incentive Rule”) implementing the EHR incentive payments provided for in the American Recovery and Reinvestment Act of 2009 (ARRA). Under the ARRA, hospitals and eligible professionals (EP) may qualify to receive incentive payments under the Medicare fee-for-service, Medicare Advantage, and Medicaid programs if they adopt and meaningfully use certified electronic health technology. Beginning in 2015, hospitals and EPs that do not adopt and meaningfully use such technology will have downward payment adjustments. The Incentive Rule sets forth a broad outline of the manner in which providers will be eligible for EHR incentive payments. It includes the long-awaited initial criteria to determine whether a hospital or EP is a “meaningful user” of certified EHR technology, as well as the methods which will be used to calculate the payments and adjustments. Functionality and clinical quality measures for each type of provider are proposed for each program. The Incentive Rule proposes a three-stage approach to assessing meaningful use of EHR technology, with progressive reliance on and use of electronic medical records. While the criteria for Stage 1 are set forth in detail, the criteria for the remaining two stages are expected to be developed later, taking into account progress in technology and within the health industry. The meaningful use criteria will be updated on a biennial basis; proposed criteria for Stages 2 and 3 are anticipated to be released in 2011 and 2013, respectively. The significant impact that the meaningful use criteria may have on reimbursement for providers warrants close scrutiny. The proposed rule is posted here. CMS will accept comments on the proposed rule until March 15, 2010. Reed Smith is preparing a client bulletin summarizing the Incentive Rule.