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One-on-One with Post & Schell Attorneys Steven Fox & Edward Shay, Part III

March 30, 2009
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In this part of our interview, Fox and Shay talk about HITECH and the law of unintended consequences.

Edward Shay Steven Fox

It’s no surprise that the recently passed Economic Recovery Package contains billions for hospitals and physicians to invest in healthcare IT. But only by digging into the legislation — specifically the HITECH Act, part of the massive American Recovery and Reinvestment Act of 2009 — can those responsible for getting that money understand what will be required of them, and when. Healthcare Informatics Editor-in-Chief Anthony Guerra recently talked with Steven Fox and Edward Shay, attorneys and partners at Post & Schell, to better understand the substance of the act.

Part I

Part II

ES: One of the interesting provisions of HITECH – and this is not an incentive payment area, but it’s in that $2 billion bucket that we talked about earlier, is a provision that authorizes HHS to make grants to the states for what is called the loan program. The loan program allows the states to take those funds and use them, in part, to either acquire insurance or other types of credit enhancements for bond issues or other types of financing. So there are some tools that are available, and we’re talking with people in this market here about equipment pools and things like that, but that requires a lot of hospitals to pull together and cooperate and work with their hospital authorities. That’s another thing they should be doing right now. Those conversations need to get started.

AG: What about the competition issue? We've seen this before in health information exchanges and RHIOs. The best laid plans of cooperation can often be sabotaged by natural competitive instincts mixed in with some privacy concerns, that could scuttle a lot of these things. Oh, and don’t forget they have no business model.

SF: I think that’s the one element that is really missing from the whole stimulus bill. You can look at it as this certainly is the first step, if you have all the physicians’ offices wired and have electronic health records in the hospitals. But the thing that’s missing is there’s really nothing, no financial incentive or no new financial model that has come out of this that’s going to make an HIE or RHIO a reality. So I think that if, for instance, it said that in addition to the Medicare reimbursements, every hospital and physician that joins an HIE also get additional X percent reimbursement from Medicare. I think that might help jumpstart it. But without that, the only thing it said as far as moving a little bit along there is as part of the definition of meaningful use, what is a meaningful use? It says that the hospitals and physicians have to demonstrate that the EHR technology is connected in a way that improves the quality of healthcare.

For example, it talks about promoting care coordination. So that would mean that, the way I read that at least, that a physician’s office can’t just have an electronic health record, but must be connected at least to a hospital, it doesn’t have to be connected to an HIE or RHIO, but there still has to be some kind of connection between a hospital and a physician’s office so that there can be some data sharing, at least on that level. I think that’s one of the things that we’re going to see in the regulations, where they’re going to talk about what level of data sharing there has to be. But again, until it requires data sharing among hospitals and among physicians, not just between a physician’s office and a hospital, we’re still not quite there with the establishment of HIEs and RHIOs.

AG: We talked a little bit about the state level and some of the things going on there, any more thoughts on money that’s being funded to the states?

ES: Some states have taken an active interest in the development of health information technology infrastructure, other states are a little bit further behind. There’s been some good spade work done in the past few years in this area, but the states haven’t been given a particularly large role, and they haven’t been particularly well funded, if you will. I mean again, that’s the much smaller bucket by comparison, and I think that’s an area where we won’t see much until the secretary issues guidance on what the state programs are supposed to include when the states come in and apply for the grants that the law provides to them.

SF: I was going to add that there is this new category of entities that they talk about called these regional centers that are designed to be set up by nonprofits. The purpose of them is to help aid the establishment of HIEs and RHIOs and electronic health records. The way I read that, it sounds like hospitals can team together, or a single hospital can create one of these centers. I think in the comments it talked about it being modeled after agricultural extension agents that are set up in different states to help farmers. So it would be the same idea that these centers would be set up, some of them might be run by states, but others would be just non profits that are associated with hospitals and they would be set up and they would get some money; I think it talked about 50 percent funding. The 50 percent would have to come from some other source and then the other 50 percent of their operating expenses would come from the stimulus bill.