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Cash for Computers

John Commins and Jim Molpus, for HealthLeaders Magazine, May 11, 2009
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The primary requirements for EHRs were included in the stimulus package in three major areas: electronic prescribing; data exchange outside the walls of the institution; and quality measurements, using EHRs to gather and report quality measures.

"That may not be all they'll ask for but those were set in the bill and you can count on those," Leavitt says. "If you look at doctors' offices and hospitals that have adopted electronic health records and if you look at the benchmark installations, there is no question those are going to qualify for meaningful use in my mind," he says.

"But if you are just thinking, 'What is the minimum we can do to get this benefit?' then you are going to run a risk until you see the specific rules," he says. "They are pretty bright lines. You know if you're using your system to send prescriptions electronically or not. But if you say 'What if we've only got 38% and not 52%?' that is where you might have to wait for the rules."

John Commins


Federal Stimulus Spending For HIT

The Congressional Budget Office says $36.3 billion will be rebated between 2009 and 2015 for providers that adopt electronic health records. From 2016 to 2019, however, the federal government anticipates cost savings of $15.5 billion in part because of the presumed money-saving efficiencies of healthcare IT, and also because the government in 2014 will begin to trim reimbursements for providers who aren't "meaningful users" of electronic medical records. Another $3.3 billion in estimated revenue related to HIT means an estimated net cost of about $17.5 billion.


More From Medicaid, COBRA, DSH

Compared to health IT, the normally arcane world of Medicaid reimbursements seems refreshingly simple. The single largest chunk of the healthcare sector stimulus is the $86.6 billion to increase the federal Medicaid match by at least 6.2% in every state and territory. States with higher unemployment get a higher match. The additional funds are good for 27 months, retroactive to October 2008.

"We expect it to have a substantial good effect on us because everybody that will be newly covered by Medicaid is somebody we will have to have cared for and gotten no money for," says Bill Roper, MD, CEO of the University of North Carolina Health Care System. "We are taking this seriously and working with our Medicaid agency to ensure that we take advantage of the maximum amount of federal dollars."

Many states have collected the first two quarters of the money, even before the federal government issued maintenance-of-effort guidelines.

"It's something of a crapshoot to spend that money before you see the guidelines," says Joy Johnson Wilson, health policy director at the National Conference of State Legislatures. "It's like anything Medicaid does. If there are guidelines that need to be issued, you'd like to see them before you do anything too big because paying back Medicaid money is not something any state wants to do."

Johnson Wilson says that states that have recently either raised or lowered Medicaid eligibility requirements may find themselves out of compliance with new federal guidelines. In addition, the prompt pay requirement that states pay 90% of their Medicaid claims within 30 days has been expanded from physicians to include hospitals and nursing homes.

States will be required to daily monitor prompt pay, which may pose problems. "Whether or not a state system is capable of pulling that off right now is a question," Johnson Wilson says. "Maybe something in the guidelines will help states figure out if their current systems meet whatever the standards are."

Johnson Wilson says that because of the federal strings attached, she's confident that providers will see the benefit of the increased Medicaid dollars. "This isn't a block grant where states can get a pot of money and do funny things with it," she says. "It does mean the states will be more likely to pay those bills, and because of prompt pay they will be paying them on time. That is a good thing for hospitals."

There is also an additional $39 billion to supplement COBRA premiums for newly displaced workers. Johnson Wilson says at least 39 states have created "mini-COBRA" laws that will provide premium supplements for laid-off workers at businesses with 20 or fewer employees. "Some states are changing their laws to facilitate that extra enrollment opportunity, and a lot of states are interested in making that available at the state level," she says.

The stimulus bill in March issued some of the $460 million in temporary increases for the Medicaid DSH Payment Program, which is being allotted through funding increases of 2.5% in 2009 and 2010.

John Commins

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