Under the Stimulus Package signed into law by President Obama earlier this week, $19 billion has been appropriated to fund the promotion of a national infrastructure for the electronic exchange of health information and the widespread adoption of electronic health record (EHR) technology. The $19 billion includes $2 billion appropriated under the Health Information Technology for Economic and Clinical Health (HITECH) Act. These funds are to be spent by the Department of Health and Human Services (HHS) to fund private and public/private initiatives to promote the adoption of health information technology. Congress has instructed HHS to expend these funds “as quickly as possible consistent with prudent management.”

The remaining $17 billion is in the form of incentive payments to be made to “eligible professionals” and hospitals that are “meaningful users” of health information technology. These incentive payments will commence in fiscal year 2011, and are phased out over a four-year period for hospitals and five years for “eligible professionals.”

The key provisions of the HITECH Act include:

  • $17 billion in incentive payments to Medicare and Medicaid hospitals and “eligible professionals” that become “meaningful users” of EHR technology. Payments for hospitals will be phased out over a four-year period, and over five years for “eligible professionals.” The formula for determining hospital payments involves a $2 million base payment adjusted by a variety of factors including annual Medicare discharges and inpatient days.
    • Meaningful use includes: i) electronic exchange of health information to improve the quality of care, such as promoting coordination of care; and ii) reporting on clinical quality measures (which will become more stringent over time).
  • An appropriation of $2 billion to support regional and state initiatives that promote the adoption of EHR Technology and best practices;
  • The formal establishment of the Office of the National Coordinator for Health Information Technology (HIT), and creation of the HIT Policy Committee and the HIT Standards Committee.

In addition to the $19 billion discussed above, the stimulus package includes significant funding for other health care related initiatives, including:

  • $1.5 billion for grants for construction, renovation, equipment and acquisition of HIT systems for community health centers.
  • $1 billion for wellness and prevention programs.
  • $1 billion for grants or contracts to construct, renovate, or repair existing nonfederal research facilities.
  • $1.1 billion for comparative effectiveness research.
  • $500 million for grants to community health centers.
  • $500 million to expand training of primary care professionals.
  • $360 million for the construction of research facilities.
  • Improved privacy and security protections for health information as health IT usage increases.