Unpacking ARRA

“The world changed yesterday at 1 pm Mountain time,” Steve Lieber, President of the Health Information Management Systems Society (HIMSS), told over 1,500 attendees of a webinar on February 18. These new times, Lieber said, “will require our vendor community to react a little bit differently and change business practices.” Lieber said that
health information technology vendors will need to be, in his words,
“more forthcoming” as well as “make absolute iron clad binding

The bottom line: time is of the essence, based the HIT details written within the 1,100 pages of The American Recovery and Reinvestment Act of 2009 (ARRA)…aka, “the stimulus bill.”

Lieber called ARRA, “the most important legislation to ever impact health IT.”

The amount of funding
related to HIT is about $20 billion. Never before in the American
health system has there ever been such an investment, especially at one
time, Lieber told those of us listening on the line. Some
money will flow in the current calendar year, some dollars will flow in
subsequent years, and some funding will be available until they are
completely spent.

Nine areas will receive HIT funding:

1. The Office of the National Coordinator of HIT (ONCHIT) will receive $2
billion to fund initiatives that grow out of a plan that will be issued
later this year.

2. HIT adoption incentives through Medicare and Medicaid reimbursement will begin funding to physicians
and hospitals beginning in 2011. A and MC reimbursement system for
2011. Although this money does not begin for another 18-21 months, any
entity that wants to participate in this incentive program must be
using systems at that time. Considering how long it takes to get
systems implemented, Lieber suggests, means any entity not yet using
HIT may well be behind schedule. Both the provider and vendor
communities need to understand this.

3. $1.1
bn will be allocated to comparative effectiveness with the Agency for
Healthcare Research and Quality (AHRQ). Issues to be considered will
range from evaluation of clinical and practice effectiveness as well as

4. The Indian Health Service will receive funding.

5. Construction funds will go to the Health Resources and Services Administration (HRSA), focusing on community health centers.

6. $500 mm will be allocated to the Social Security Administration to upgrade HIT systems.

7. The Veterans Administration has some funding identified in ARRA.

8. The Dept. of Agriculture will receive HIT money — in the form of
telemedicine funding. Think about distance learning, and broadband for
health applications.

9. $4.7 bn will go to the National Telecommunications Administration for broadband. This isn’t specific to health care but broadband is key to enable telemedicine diffusion.

Jane’s Hot Points:
Time is indeed of the essence if physicians and hospitals want to
receive the full incentive payment for HIT adoption beginning in 2011.
The monies are significant: for physicians, the full payment between
2011 and 2015 will range between $44K and $60K. For each year a
physician is not in the program, the incentive payments decline by 1%
each year. The ultimate calculation of payments to physicians is based
on Medicare patient volume.

For hospitals,the incentive payment begins at $2 million in 2011, with additional
payments based on Medicare volumes. As with physicians, the incentive
stops in 2015. In 2015, there will be penalties for providers not
participating in the program.

Thus, ARRA is not only an economic stimulus bill. It’s an HIT stimulus bill for adoption by providers.

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