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Unreal Repeal: Healthcare Reform and HITECH

Last Wednesday, Republicans in the House of Representatives (+3 Democrats) voted to repeal the health-care reforms signed into law by President Obama less than 1 year ago. Although the 245-189 vote made good on a GOP mid-term election promise, it was largely symbolic. The Senate is not likely to consider (much less pass) the bill, nor would it ever get past an Obama veto.

Yet, reform of reform is in the air. Spending cuts as the path to deficit reduction are mentioned in every news cycle. It’s possible that congressional budget maneuvering will decrease or delay funding for some of the provisions of Obama’s Health Plan (The Patient Protection and Affordable Care Act).

Thus, it’s not surprising that some healthcare IT professionals wonder if the potential $29 billion in EHR meaningful use incentive payments promised under the HITECH Act are secure. During our January 20th webinar “Assessing HIPAA/HITECH Risks:  What You Need to Know,” I was asked this question several times.

My response? I believe that the HITECH Act will proceed as planned with full funding. Here’s why:

1)      HITECH was passed as part of the American Recovery and Reinvestment Act (ARRA) and not part of Obama’s healthcare reform initiative. It had broad bi-partisan support. As Allscripts Healthcare Solutions CEO Glen Tullman told the Wall Street Journal Health Blog, “Healthcare IT is a nonpartisan issue.”

2)      The goal of HITECH was to create jobs and begin a massive overhaul of the US healthcare system. Right after the mid-terms, Politico healthcare reporter Jennifer Haberkorn addressed a HIMSS press briefing and said cutting back HITECH was “not on the radar. The attitude on [Capitol] Hill is that health IT funding is creating jobs.”

3)      In addition to creating jobs, HITECH provides the foundation for an even broader national economic goal: increasing the efficiency and competitiveness of the U.S. healthcare system in one of the worlds’ largest and fastest growth industries (over $2.2 trillion dollars in expenditures per year).

For these reasons and others, I think HITECH funding is safe for now. That said, I urge covered entities to make achieving Stage 1 “meaningful use” of electronic health records, including conducting a HIPAA Risk Analysis, among their highest priorities. The best guarantee for “staying the course” is the success of the program itself.

This Post Has 2 Comments

  1. You may be correct, but I don’t think the future is as clear as that for a few reasons:

    The Federal debt and deficit will likely continue to grow in the near to mid-term future, both due to reduced tax receipts from an economy slow to grow out of recession, and to the untouchability of the majority of Federal spending. The incentive program is something that COULD be cut in an effort to address that, with much less political fallout than something like reducing Medicare payments (for instance).

    In addition to the much discussed Republican gains in the House, the party also did quite well in state legislatures and governorships. As the census was taken in 2010 – it is redistricting time, and like any party in the driver’s seat, you can be sure they will use that to their advantage. I think this bodes well for the party in the next few elections, and as a group the Republicans tend to regard government incentives poorly, preferring to allow market forces to determine the course.

    Many of the small medical practices I work with are not interested in pursuing Meaningful Use certification at this time because they don’t think the incentives will cover the cost. A large scale system upgrade simply isn’t feasible to “front” the money for. There are also concerns about practices footing the bill, while the individual employee-physicians get to reap the reward without any obligation to share it. Finally, there are concerns about the vendors rushing certified products to market without fully working out the defects. Most practices I work with are taking a wait-and-see approach, at least for the first few years, and the minor increases in 2011 & 2012 payments aren’t enough to discourage that. The more that budgeted money remains unclaimed, the more attractive it will be to recoup the liability on the government ledger via repeal.

    Another thing that many people are not aware of: the incentives that go directly to the Eligible Providers are taxable income. (see reference link on this below) For a high income individual like a doctor, the tax rate would be substantial, even approaching 50% once state and local taxes are considered. There are other caveats that reduce payment as well, such as only being able to receive a Medicare incentive up to 75% of your Medicare billable charges. For EPs with limited Medicare billing, that matters. In short, the incentives are not as attractive in the details as they look in a powerpoint summary.

    So for all of the above reasons, I don’t consider a repeal of the incentives to be unlikely, I instead consider it in the realm of “definitely possible”. Only time will tell of course.

    Reference:
    http://questions.cms.hhs.gov/app/answers/detail/a_id/10138/p/21%2C26%2C1058/session/L3NpZC9BZ0RUTG9raw%3D%3D

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