On February 17, 2009, President Obama signed the American Recovery and Reinvestment Act of 2009 (Recovery Act), which, among other things, created financial incentives for physicians and other providers to adopt and utilize electronic health records (EHR) and penalties for those physicians who do not.  The provisions addressing the incentives are known as the Health Information Technology for Economic and Clinical Health Act or the "HITECH Act".  Many physicians remain uncertain about the details of the incentives so CMS has now published a Fact Sheet which is intended to shed some light on the HITECH payment incentives. 

Here are some of the key points from the Fact Sheet:

  • Financial incentives will begin in January 2011 for eligible professionals (EPs) who are meaningful EHR users.
  • Beginning in 2015, payment adjustments will be imposed on EPs who are not meaningful EHR users by that date.
  • Hospital-based physicians who substantially furnish their services in a hospital setting are not eligible for incentive payments.
  • Incentive payments will equal to 75 percent of Medicare allowable charges for covered services furnished by the EP in a year, subject to a maximum payment in the first, second, third, fourth, and fifth years of $15,000; $12,000; $8,000; $4000; and $2,000, respectively.
  • For early adopters whose first payment year is 2011 or 2012, the maximum payment is $18,000 in the first year.
  • There will be no payments for meaningful EHR use after 2016.
  • The Medicare fee schedule amount for professional services provided by an EP who was not a meaningful EHR user for the year would be reduced by 1 percent in 2015, by 2 percent in 2016, by 3 percent for 2017 and by between 3 to 5 percent in subsequent years.
  • For 2018 and thereafter, if the Secretary finds that the proportion of EPs who are meaningful EHR users is less than 75 percent, then the reductions will be increased by 1 percentage point each year, but by not more than 5 percent overall.