The Remington Report

The Senate Finance Committee approved a legislative package that includes $180 billion in investments in health information technology and a host of other domestic programs to help lift the sagging economy. Providers have incentives tied to technology adoption. The Senate Finance Committee approved a legislative package that includes $180 billion in investments in health information technology and a host of other domestic programs to help lift the sagging economy. Providers have incentives tied to technology adoption.

Spending would allot more than $20 billion to help doctors and hospitals go paperless and help spur the adoption and use of electronic health records giving them incentive payments starting in 2011. It also allows those providers who see a high number of Medicaid patients to do the same. The catch – providers who don’t adopt the new technology – or don’t use it in a meaningful way to improve quality – will see a reduction in payments. In other words, the adoption of IT technology moving forward will be tied to performance.

Here’s how it will work. Under the committee’s bill, hospitals and physicians who are paid by Medicare and Medicaid would be eligible for temporary bonus payments starting in 2011. The amount varies and, for the most part, would be capped in the first year at $15,000 and would decrease over the next four years to $12,000, then to $8,000, then $4,000 and then $2,000. Providers who don’t adopt the certified technology will be responsible for payment reductions starting in 2015 of 1% over each year.

For hospitals, the payments are higher. Starting in 2011, eligible hospitals would receive additional payments from Medicare of at least $2 million. It would phase down annually to 75%, then 50% and finally 25%. Those numbers, however, vary depending on when the hospital shows that it is using the technology in a meaningful way. Eligible Medicaid providers would also see added dollars. The Senate bill proposes a 100% federal match for certain procedures where health IT is used.