The newly enacted economic stimulus law will infuse tens of billions of dollars into the health care sector, providing incentives for using health information technology, increasing funds for primary care training, and launching initiatives in comparative effectiveness research. The legislation specifically makes long-term care facilities eligible for health information technology (HIT) aid and will affect LTC by boosting Medicaid funding (see page 9).
President Barack Obama signed the $787 billion American Recovery and Reinvestment Act of 2009 (H.R. 1) into law on Feb. 17, following weeks of congressional debate and deal making. The law includes about $17 billion in financial incentives through the Medicare and Medicaid programs to physicians and other health care providers to adopt and use electronic health records (EHRs), as well as another $2 billion in funding for the Office of the National Coordinator for Health Information Technology to encourage health IT adoption, aid in standard setting, and support regional efforts at health information exchange.
The bulk of the $17 billion will create a program of financial carrots and sticks aimed at encouraging EHR adoption, starting in 2011. For example, under Medicare, providers could receive incentives for EHR use over 5 years starting at a maximum of $18,000 in the first year and dropping to a maximum of $2,000 in year 5. However, physicians who do not engage in “meaningful” EHR use by 2015 could see cuts to their Medicare payments starting at 1% in 2015 and rising to 3% in 2017 and subsequent years.
Physicians who have a Medicaid patient volume of at least 30% will be eligible to receive incentive payments for EHR adoption and use. Eligible Medicaid providers could receive incentives of up to $75,000 over 5 years. Under the law, Medicaid providers could receive up to $25,000 for the purchase and initial implementation of a certified EHR system and up to $10,000 a year for the maintenance and use of the system.
AMDA, through the Elder Workforce Alliance, has supported the use of electronic health records to improve not only patient safety but also the state survey process and public health activities, such as reporting on immunizations rates and reducing costs to payers by eliminating duplicate diagnostic tests.
Sen. Herb Kohl (D-Wis.) made certain that the stimulus package would allow long-term care facilities to benefit from the HIT funding. Sen. Kohl, who chairs the Senate Special Committee on Aging, amended the bill to expand the general definition of “health care provider” to include nursing facilities, long-term care facilities, skilled nursing facilities, and home health care entities.
“Long-term care facilities are an important part of our health care system. It was crucial that they be included in the national push to adopt health IT,” Sen. Kohl said in a statement.
Dan Osterweil, MD, CMD, of the University of California-Los Angeles Borun Center for Gerontological Research said that the need for HIT help is great in LTC facilities. “Most nursing homes have limited access to computers,” he said. “Most have one for business … purposes and another for transmitting [government-required] data. In the ‘more advanced’ nursing homes, they have ability to link with lab and pharmacy. … Otherwise, fax is the most advanced communication technology that is prevalent in U.S. nursing homes.”
The financial incentives and disincentives included in the law will finally make the business case for EHRs, said Blair Childs, senior vice president for public affairs at Premier Inc., an alliance of not-for-profit hospitals and health care systems. “I think everyone agrees that this is what is necessary.”
Also under the new law, the Health and Human Services department will provide competitive grants to states to help them develop loan programs to drive adoption of EHRs by health care providers. Providers will be able to use the loans to purchase, upgrade, or improve the security of EHR systems or to train staff on the technology.
The law also includes $87 billion to help states pay for their Medicaid programs. The money will allow states to get a higher percentage of funds for their Medicaid programs from federal dollars as opposed to state dollars. As a result, “a state with a budget shortfall won't feel as much pressure to cut Medicaid back,” said Kathleen Stoll, deputy executive director of Families USA, noting that at least 40 states have proposed cuts to their Medicaid programs. “In some states, it may free up money to spend on other health programs,” but none of the federal stimulus money is allowed to fund any expansion of Medicaid, she said.
Alan Weil, executive director of the National Academy for State Health Policy, said that although no one knows whether the Medicaid funding is sufficient, “states are going to need these dollars to retain the coverage that they have and deal with the expected increase in enrollment due to the economic downturn. Without it, we would have expected really substantial cuts in coverage.”
The law includes about $10 billion in funding for the National Institutes of Health to be used for research grants, construction, and the purchase of research equipment.
The significant boost in NIH funding was praised by the nonprofit organization Research!America. “This step is a dramatic reversal of the discouraging funding our federal health research agencies saw in the past 6 years and will do much to make up for spending power lost during that time,” former Rep. John Edward Porter (R-Ill.), chair of Research!America, said in a statement. “In recent years, the NIH has been able to fund just 1 in 10 research projects deemed worthy of funding.”
Another $1 billion was directed toward comparative effectiveness research to be overseen by a new national council. Many in the pharmaceutical and medical device industries supported the notion of comparative effectiveness studies but worked hard to ensure that the money would not be used to support coverage decisions. The House and Senate conference report specifically stated that the research could not be used to “mandate coverage, reimbursement, or other policies for any public or private payer.”
Primary care also got a boost in the bill, with $2 billion going to new and existing community health centers, and $500 million to training for primary providers including doctors, dentists, and nurses. Some of that $500 million will help cover medical school expenses for students who agree to practice in underserved communities through the National Health Service Corps.
Mary Ellen Schneider is with the New York bureau of Elsevier Global Medical News. Alicia Ault, Joyce Frieden, and Jane Anderson contributed to this story.
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