House EHR bill mixes Medicare physician bonuses with cuts

Washington -- Physicians would receive additional Medicare funds to implement electronic health records systems under a bill introduced by Rep. Pete Stark (D, Calif.) in September. For doctors who did not take the government up on that offer, Medicare penalties would start kicking in just as the bonuses are tapering off.

The Health-e Information Technology Act of 2008 would provide yearly bonuses starting in 2013 to every physician who has put into operation a federally approved EHR. The total additional payments would max out at just more than $40,000 over five years. Those who did not have a system in place by 2016 would start receiving Medicare reductions eventually reaching 3% annually, unless the physician could obtain a five-year hardship exemption.

Other bill provisions would establish a federal advisory panel tasked with finalizing health IT standards by 2011, provide additional grant money and open-source technology to doctors who needed it, and employ new security rules for the protection of confidential patient data in EHRs. Medicare bonuses would kick in more quickly if the open-source technology becomes available before 2013.

"If we want a uniform, interoperable health care system in America, time has shown us that we can't depend on the private sector to do it on their own," Stark said. "This is the perfect role for government. We should work with stakeholders to develop the standards, ensure an affordable product is available and pay providers to adopt it."

Stark, who is the House Ways and Means health subcommittee chair, modeled his incentive plan on a Medicare electronic prescribing measure enacted in July. Under that law, physicians who use e-prescribing technology would receive federal bonuses starting next year but would see penalties starting in 2012 if they are not compliant with the mandate.

The American Medical Association, which supported the Medicare physician payment legislation that contained this requirement, gave a nod to the federal assistance in Stark's bill and in several other pending health IT measures in Congress.

"The AMA commends members of Congress, including Chairman Stark, for recognizing the importance of moving toward an interoperable, nationwide health IT infrastructure and for recognizing the crucial role the federal government plays in assisting the health care industry accelerate the adoption and implementation of health IT systems and tools," said AMA Board of Trustees Chair-elect Rebecca J. Patchin, MD.

Stark expressed an interest in quickly moving the legislation to the full Ways and Means committee for consideration. Congressional aides acknowledged, however, that action on the measure before the end of the session is unlikely given the short time frame and the issue's complexity.

The Stark bill may figure prominently in the health IT debate in 2009 because of its use of the dual financial incentive tracks for adoption, a concept that found legislative success in the e-prescribing debate earlier this year. Other pending bills incorporate bonuses for physician adopters but don't reduce pay for those whose patient records stay on paper.