Tuesday, July 7, 2009

Crystal Ball Required to Earn ARRA Medicare EHR Incentives

Who Will Benefit from ARRA Medicare Incentives?


In 2011, Medicare and Medicaid incentive payments will start flowing to hospitals, clinics, and physicians. In addition, the American Recovery and Reinvestment Act (ARRA) appropriates $2 billion in funds intended to begin implementing healthcare IT, before the incentives take place, and clear requirements of “Meaningful Use” for the receipt of these payments has yet to be definitively identified, although drafts have been identified as probable definitions. (See link to CSC Update of Meaningful Use below).

This expensive endeavor by private physicians may turn out to be a risky and premature proposition, as long as the details of the promised massive health care reform are also undefined. It is also premature in that an IT infrastructure is being built prior to defining the grand new American healthcare design. Physicians are being asked to implement an expensive and complicated system with a large learning curve prior to knowing what type of health care system will eventually be in place.

According to CSC Update of Meaningful Use, physicians or groups implementing an EHR program solely for the Medicare Incentives may be making an expensive mistake, and the ROI of system implementation should be closely examined. In addition, the “meaningful use” requirements become more stringent every year, requiring vendors to guarantee that their system will meet all of the requirements for incentives (Health Data Management, April, 2009). The table of incentive payments is listed below, with nearly half of the payments available in years 1 and 2 (2011 and 2012), leaving little incentive for small practice physicians to make such a large investment in time and money.

Another concern is that simply implementing technology will not reverse the current healthcare crisis, or provide healthcare for the millions of uninsured/underinsured. A new healthcare system is imminent, and as some of the best minds in the country study foreign healthcare models, alternative business models, and even government models, we know very little of what health care in America will look like 5 to 10 years from now. Undoubtedly, it is time to implement healthcare technology into the system, and bring U.S. healthcare into the 21st century, reduce medical errors, and lower healthcare costs with IT.

Estimates of the time it will take to recoup the costs of implementing EHRs vary from 5 to 10 years, perhaps less for those who have already begun, and more for those who have not. Analysts also believe that it will be the small practice and rural physicians who will have the most difficulty implementing EHRs. During this same time period, discourses on various health plans, including a national plan, loom over the current free-market health care system. Implementation of EHRs before a healthcare reform plan has been created may be a waste of physicians resources that will never be recouped. Yet with so much change yet to come into the healthcare arena, planning the future of a small private practice may require a crystal ball.

MEDICARE/MEDICAID EHR INCENTIVE AMOUNTS
Year
Amount
Note
1
$18,000.00
15,000 if after 2012
2
12,000.00

3
8,000.00

4
4,000.00

5
2,000.00
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