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The House of Representatives and Senate passed the American Recovery and Reinvestment Act of 2009 (ARRA) on February 13th (with a House vote of 246-183, with no Republican support and 7 Democrats voting no; and a Senate vote of 60-38, with 3 Republicans voting yes (Senators Collins, Snowe, and Specter). President Obama signed the bill on February 17, 2009.
Major health care provisions in the bill include funding pertaining to:
Those provisions that deal with Medicare funding and payments are discussed in greater detail below.
One of the most significant health provisions of ARRA has to do with the health information technology (HIT), also known as electronic health records (EHR). The way the law works, according to The American Academy of Professional Coders (AAPC), is the health care providers will receive financial incentives beginning in 2011 for implementing qualified electronic health records systems (EHRs). Physicians, facilities, and other providers will receive money through Medicare -- or Medicaid for their "meaningful use" of EHRs. Payments will be structured to encourage early adoption and penalties will discourage procrastination. "Meaningful user" is not defined in the bill. The law defers to the Secretary of Health and Human Services to set specific guidelines for determining what constitutes a "qualified EHR" in a "meaningful manner. However, the bill does specify that e-prescribing, electronic exchange of medical records, and interoperability of systems will determine criteria.
Title IV of the Act, entitled "Health Information Technology for Economic and Clinical Health Act" or "HITECH Act," authorizes nearly $21 billion in grants, loans, and incentive payments for promoting the use of HIT. HITECH formally established an Office of the National Coordinator for Information Technology within the Department of Health and Human Services (HHS) and requires that agency to develop clear standards for interoperability by the end of 2009. In addition, the Act allows the National Coordinator to distribute various grants and loans to states as well as incentive payments to individual physicians and hospitals that can demonstrate their use of EHR technology.
Hospital payments beginning in 2011 will be based on a $2 million base amount. Added to the base amount is an additional discharge-related payment multiplied by the Hospital's Medicare share. Before receiving the payment however and after a comment period, hospitals will be required to submit quality data on measures identified by HHS.
Hospitals will be - penalized for not meaningfully adopting certified RHR systems and the quality measures. They will see their amounts reduced by the applicable percentage for the year in which they first adopt:
Other HIT/EHR provisions include:
The conference agreement clarifies that the Medicare Improvement Fund can be used to increase the physician conversion factor to address any projected shortfall in 2014 relative to the 2008 conversion factor and to adjust Medicare payments for Parts A and B items and services. It would also require, in 2020 and beyond, that any savings from HIT penalties be applied to the Medicare Improvement Fund.
Repeal Of The 3 Percent Withholding Tax
The conference agreement delays, from December 31, 2010, to December 31, 2011, implementation of the 3 percent withholding tax on government contractors (including Medicare providers) that was enacted under section 511 of the Tax Prevention and Reconciliation Act of 2005.
While ARRA provides an extensive collection of financial incentives that relate to health care, not everyone is confident of its value to the health care delivery system overall. The Institute for Health Freedom, which bills itself as a national nonprofit, educational organization whose mission is to bring the issues of personal health freedom to the forefront of the American health-policy debate, has raised concerns about the mandate for electronic health records and warns that "Economic Stimulus Bill threatens medical privacy.
Another problem is that almost five months after the signing of ARRA by President Obama, only a fraction of the funds, intended to create or save jobs, has been disbursed. The federal government has paid out less than 6 percent of the money, largely in the form of social service payments to states, points out Michael Cooper writing in the New York Times. "Although administration officials say the program is right on schedule, they have actually spent relatively little so far."
"The stimulus bill has directly injected around $45.6 billion into the economy, mostly to help states cover the costs of Medicaid and unemployment benefits, one-time $250 checks that were mailed to Social Security recipients, and income tax cuts that began to take effect this spring…
"The intent of the stimulus program was to pump money into the economy quickly, and many members of Congress said at the time of its passage that speed was of the essence. But the huge program has been a challenge to administer for both a new administration and for states and local governments grappling with their own fiscal problems.
Some states and cities are beginning to complain that the money has yet to reach them. Others have been slow to get their paperwork to Washington."
For more details on the health care provisions in the American Recovery and Reinvestment Act of 2009 (ARRA) from the American Medical Association (AMA), click on one of the links below:
More on Medicare-related legislation...
Publication Date: Wednesday, August 12, 2009
Brian Kueppers, founder and CEO, Apex, discusses the importance of a robust patient payment strategy in boosting organization revenue and enhancing patient satisfaction.
Brian Grazzini, CFO, HealthPort, describes the importance of efficient and compliant information exchange and audit management in helping HIM staff spend less time on paperwork and more on mission-critical projects.
Cindy Matthews, executive vice president, Community Hospital Corporation, discusses how rural and community hospitals can use collaborative partnering to position for success through tough market conditions.
Rick Heise, senior vice president, revenue cycle, at Cerner Corporation, discusses the importance of integrating clinical and financial data to excel in health care’s changing payment environment.
Dale Hockel, senior vice president of operations, and Jim Fanelli, CFO, TriMedx, share strategies for elevating clinical engineering through innovative management programs.
Russ Graney, founder and CEO for Aidin, and John Laursen, head of business development for Aidin, share insights on how to improve care transitions between acute and post-acute care settings and incentivize high-quality patient outcomes.
Scott Elston, strategic accounts manager, GE Healthcare Services, describes how substantial cost reduction in health care requires rethinking business strategy and asset use.
Robert Williams, MD, director, Deloitte Consulting LLP, and Arielle Freiberger, product strategist, ConvergeHEALTH by Deloitte, explain how sophisticated retrospective, real-time, and predictive data analytics can inform decision making to reduce costs and improve care.
Stuart Hanson, director of business development (healthcare solutions) at Citi Retail Services, discusses how improving the payment experience can benefit consumers and healthcare providers.
Scott Schmidt, vice president, Cerner RevWorks, LLC, shares insights on best practices for maximizing a revenue cycle management partnership.
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