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Breaking down the stimulus

March 6, 2009
by David Raths
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The avalanche of grant and incentive funding promised in the American Recovery and Reinvestment Act has launched a new cottage industry of consultants, experts and seminars to explain the potential impact.

Because details are expected to trickle out over the next several months, the editors of Healthcare Informatics thought it would be helpful to readers to provide timely updates and analysis on new developments in this new blog to supplement the magazine's more in-depth pieces. Ideally, I would like to start a conversation here about which policy issues are of most concern to you and get direction from CIOs about how to direct our reporting.

I hope to become another useful set of eyes and ears on ARRA and other health IT policy issues, alerting readers to new regulations or key appointments they may have missed.

For instance, on March 4 I attended a HIMSS webinar that covered both the Medicare and Medicaid incentives and grant funding. In case you missed it, here are just a few bullet-point highlights of those presentations:

Heidi Echols, a partner in the Chicago law firm of McDermott, Will and Emory, outlined some of the restrictions of the CMS incentives, including:

• Hospitals can't get both Medicaid and Medicare incentives for using EHRs, so hospitals that treat a considerable number of both types of patients will have to run the numbers to determine which program it makes most financial sense to participate in.

• The Medicare incentives apply only to what are termed "subsection" hospitals, which do not include children's hospitals, rehabilitation hospitals, cancer centers, or nursing homes.

• According to the law's language, there is no appeals process if it is determined your hospital is not using an EHR in a "meaningful" way.

• The "stick" in the carrot-and-stick approach is flexible. If by 2015 a hospital cannot demonstrate meaningful use of EHRs, reimbursement will be dropped 1 to 3 percent with a floor of 95 percent, at the discretion of the Secretary of Health and Human Services. The secretary can also make hardship exceptions for up to five years - for instance, for rural providers that have no Internet access.

Michael Paddock, CEO of Grants Office LLC, a grant-writing consulting firm, advises CIOs to start developing a plan soon because the money will be coming fairly quickly. In fact, $150 million of the $1.5 billion for Construction, Renovation and Equipment has already been announced. You can see the grant awards on the web site.

A few other highlights of Paddock's presentation:

• The funding amount available for rural telemedicine through the Department of Agriculture is impressive. For instance, the Distance Learning and Telemedicine program usually gets about $25 million per year; the stimulus bill provides $225 million for it. Other money for broadband development through the Department of Commerce includes innovation funding that could be used for e-health projects.

• Comparative effectiveness research will be important. Hundreds of millions will be available from NIH, AHRQ and HHS. Each tends to fund research involving different stakeholders, such as universities and large teaching hospitals. Research will look at how health IT is affecting population health.

Another HIMSS webinar next week will look at the changing roles of federal policy, standards and certification bodies. If there are any important developments mentioned, I'll post them here. For more information on the HIMSS webinar series, got to:

Until then, if there are issues you'd like to read about, let me know. Let the conversation begin!



David, thank you for writing this I am looking forward to this blog alot. Developments are happening so rapidly in the space that it's hard to keep track of them, I'll be happy to have one place to turn to that pulls it all together.