If you have been following the news, you have probably heard about federal money set aside to encourage physicians to adopt electronic health records (EHR). Although EHRs are widely regarded as beneficial, physicians have been reluctant to adopt them. There are many reasons why implementations are lagging; chief among them seems to be the high price tags.

Congress passed the Health Information Technology for Economic and Clinical Health (HITECH) Act, part of the American Recovery and Reinvestment Act to help overcome the price barrier. The law allocates $19.2 Billion to help reimburse physicians and hospitals for purchasing EHR systems. Applicants for the stimulus money must meet three criteria.

First, they must be on the “eligible professionals” list. The Social Security Act (§1861(r)), defines physicians as “medical doctors, dentists, podiatrists, optometrists, and chiropractors.” However, hospital-based physicians are not eligible for the incentives; hospitals are reimbursed as a unit under separate guidelines. Physical therapists are also ineligible.

Second, physicians must purchase a “certified EHR” system. Although the Centers for Medicare and Medicaid Services (CMS) have not yet adopted certification requirements, the Health Information Technology Policy Committee has made some basic recommendations. A certified EHR system will have to be capable of submitting electronic prescriptions, checking for drug interactions, maintaining an up-to-date problem list, and share data with other EHR systems. Most EHR systems should be capable of meeting these requirements.

Third, physicians must utilize their EHR systems according to the “meaningful use” guidelines. These requirement guarantee that physicians must actively use the important functionality in their systems, such as electronic prescribing, checking for drug interactions, and formulary compliance. These features will make medical practices more efficient and help reduce the growing cost of healthcare.

Once physicians meet these requirements, physicians could receive up to $44,000 per provider under Medicare, based on their allowable charges. Medicaid offers up to $66,000 per provider if at least 30% of a physician’s patients are on Medicaid. Physicians can also qualify for the Medicaid program at 20% if they are pediatricians.

The reimbursements start in 2011, so physicians need to get on track as soon as possible. Demand is already increasing, and many of the large vendors have installation back-logs. Implementation for the more complicated systems can take up to six months, not counting any back logs. Physicians need to find a simple, easy-to-implement system and start purchasing as soon as possible if they want to qualify for the 2011 payment.

President Obama signed the Health Information Technology for Economic and Clinical Health (HITECH) Act into law on February 17th, 2009. Part of the American Recovery and Reinvestment Act (ARRA), the HITECH act sets aside federal money to reimburse physicians who purchase and implement an Electronic Health Record (EHR). In order to participate in the program, physicians themselves must qualify; they must adopt a certified EHR, and implement it in their practice according to the “meaningful use” guidelines.

Meaningful use is the key focus, because it will determine how physicians must use their systems and what features EHR vendors will have to provide to obtain certification. The problem lies in the fact that the “meaningful use” requirements have not yet been formally defined. The current proposal will require computerized order entry, drug interaction checking, maintaining an updated problem list, and generating and transmitting permissible prescriptions. However, many fear these requirements will be too complex for EHR vendors and physicians to implement and use before 2011.

Dr. David Blumenthal, National Health IT Coordinator, delivered a speech last Monday where he stated that “the meaningful use framework will be about the goals of care, not the technology.” This is an important statement, because physicians should recognize the point of adopting an EHR is not to spend money on new gadgets, but to use technology as an enabler to provide better healthcare. The meaningful use guidelines will help ensure physicians are using their EHR systems for things like drug interaction checking, and order management, two areas where EHRs have the most to offer.

Blumenthal and the Obama administration hope that EHRs will be “symbolic of professionalism in medicine” in the near future. Blumenthal pointed out that “information is really the lifeblood of medicine,” and that “health information technology is its circulatory system.” While many agree EHRs are important, reimbursement funding under the HITECH Act won’t last forever. Blumenthal stressed that “the idea that government should subsidize health IT will be as foreign an idea that the government should buy stethoscopes or exam tables for doctors.”

Currently, qualified professionals can expect about $66,000 in reimbursements if at least 30% of their patients are Medicaid. Under Medicare, physicians can receive up to $44,000, depending on their claims. The reimbursements start in 2011 and go through 2014. Physicians who wish to take advantage of the $18,000 offered in 2011 need to get started as soon as possible. Conversely, those who fail to adopt a qualified EHR system will see their reimbursements decreased starting in 2016.

The end of the year is upon us, and that can only mean one thing. Everyone is looking forward to the joys of turkey dinners and holiday festivities. However, for most of us that run or own businesses, the end of the year means we have to start thinking about taxes.

Most of us are aware of the more common tax deductions. Some of us even meticulously keep track of expenses and receipts to make the paperwork easier. Many small business owners, especially physicians, may not be aware of the deductions offered by Tax Code 179.

Internal Revenue Code Section 179 allows a sole proprietor, partnership, or corporation to deduct up to $250,000 of software and equipment purchased before the end of the year. Under normal circumstances, business property that has more than one year of useful life must be deducted over several years, accounting for depreciation. However, Tax Code 179 will allow businesses to deduct the entire cost, up to $250,000 in the same year it was purchased.

$250,000 is a huge deduction, and should completely cover the cost of any EHR system for small and medium-sized practices. Another benefit of Tax Code 179 is that it will reduce the effective cost of your EHR system. For example, if you purchased a $23,000 system, and your tax rate is 35%, you could save $8050 in actual income tax. This would reduce the actual cost of your system to about $14,950.

One thing to keep in mind is that the exemption does not roll over each year. Previously, the exemption was only $25,000. The current exemption is $250,000. However, there is no guarantee that will be in effect next year, particularly with the expensive bills Congress is passing.

Physicians who have already purchased an EHR this year should check with their accountants to see if they can take advantage of this huge deduction. If you have not purchased an EHR yet, it isn’t too late. I understand physicians may not want to purchase an EHR over the holidays when budgets are tight and revenues are down. However, purchasing an EHR now offers several benefits.

Many medical software financing companies offers three, six, and nine month deferred payment plans. That means you can get your system up and running this year, which is required by Tax Code 179, and not have to make any payments until next year. Deferred payments eliminate additional expenses while your revenues may be down due to training and implementation.

Another reason to purchase before the end of the year is to avoid the market rush due to the HITECH stimulus package. Analysts predict physicians will rush to purchase systems early next year to qualify for the stimulus money offered in 2011. Be sure you get in before the rush so you have plenty of time to implement your EHR.

Electronic Prescriptions/E-Prescribing is a big plus when implemented as a part of your EMR Solution. E-prescribing allows physicians, nurse practitioners, and physician assistants to transmit new prescriptions or renewals electronically to pharmacies. E-prescribing will improve the quality, safety and care of patients by increasing the accuracy of prescriptions and reducing the number of adverse drug reactions. When physicians use E-prescriptions they are able to automatically and electronically exchange information securely with pharmacies. They can access payer information, verify patient eligibility, formulary information and medication history in real-time before writing a prescription; increasing physician proficiency, improving overall patient safety and quality of care, and reducing any potential errors,
Additionally, e-prescribing will increase efficiencies and decrease spending by reducing the amount of time spent communicating with pharmacists and increasing substitution of generic drugs for brand name drugs.
Excerpt from - A Clinician’s Guide to Electronic Prescribing:

“In 2009 Medicare began a program for clinicians, offering a 2% financial incentive for those
prescribers using a “qualified” e-prescribing system. A “qualified” e-prescribing system
must be capable of performing all of the following functions:

• Generating a complete active medication list incorporating electronic data received from applicable pharmacy drug plan(s) if available

• Selecting medications, printing prescriptions, electronically transmitting
prescriptions, and conducting all safety checks (safety checks include: automated
prompts that offer information on the drug being prescribed, potential inappropriate dose or route of administration, drug-drug interactions, allergy concerns, or warnings or cautions)

• Providing information related to the availability of lower cost, therapeutically
appropriate alternatives (if any)

• Providing information on formulary or tiered formulary medications, patient
eligibility, and authorization requirements received electronically from the patient’s drug plan

E-prescribing encompasses clinical decision support to aid in safer, more informed prescribing such as access to information on drug-drug interactions, drug allergy interactions, patient medication history, pharmacy eligibility, formulary (which specifies a patient’s drug coverage), and benefits information. Electronic prescribing should be seen as an important step in improving patient care, with an eye toward moving to implementation of a complete EHR system.

E-prescribing offers a wealth of benefits to your practice. However, some traditional web-based e-prescribing systems can be tedious and slow, requiring physicians to enter information by hand. This can take up to five minutes per patient. Many physicians are reluctant to spend this much time when they can generate a traditional paper script in a few seconds.

An ideal system can give you the features you need without slowing you down. If you are not currently e-prescribing, your practice is missing out on thousands of Medicare incentive dollars each year. Contact us to find out how you can start using an efficient EMR system and start collecting your Medicare incentives.