Louisiana creates loan program for EHR purchases

Louisiana Gov. Bobby Jindal signed into law a bill that would create a loan program for physicians and hospitals hoping to buy an electronic health record system.

The Electronic Health Records Loan Program Act, signed July 9, gives the Louisiana Dept. of Health and Hospitals the authority to apply for $25 million in federal stimulus funds in order to administer loans for EHR purchases. The measure also included $5 million in matching funds from the state, a requirement under the American Recovery and Reinvestment Act. The state will learn later this year if it will get the federal grant.

"This is another step in updating and improving Louisiana's health delivery system for all Louisianians," Jindal said in a prepared statement.

The measure builds on legislation passed in 2007 that helped seven rural hospitals acquire EHRs. The law also established the Louisiana Rural Health Information Exchange. In 2008, additional funding allowed another seven rural hospitals to become connected.

To qualify for the loans, the purchased EHR system must be certified by the body eventually chosen by the U.S. Dept. of Health and Human Services for such approval. Loans could also apply to fully integrated telemedicine systems.

Acknowledging upfront costs are a barrier that the incentives wouldn't help alleviate, many EHR vendors also launched financing options for physician practices as a result of the stimulus. General Electric Co., for example, is giving practices the options of deferring payments until incentives start being paid in 2011.

Jenny Smith, health information technology project manager for the Louisiana Health Care Quality Forum, which is the state-designated entity for distributing all grants coming out under the federal stimulus package, said details are still being worked out in terms of the loan agreements. Work groups consisting of several stakeholders in the state are currently working on structuring the loan program, she said.

"The goal is to maximize the amount of support we can give to providers in Louisiana who couldn't otherwise purchase an electronic health record or upgrade their electronic health record to meet the meaningful-use criteria for the incentives," Smith said.

Once the state has reached 100% compliance, Smith said, the fund would likely be used for support such as upgrading systems or training.