Medicare offers cash incentives for IT implementation

As part of the economic stimulus package, the federal government is expected to spend more than $35 billion during the next decade on Medicare and Medicaid bonuses to physicians and hospitals that adopt certified electronic health records (EHRs), American Medical News (3/16/09) reported. Physicians who act quickly will get bigger payouts than those who delay, and those who wait too long will be subject to penalties.

Physicians with approved EHRs in place before 2011 or 2012 will receive bonuses equal to 75% of their allowed Medicare Part B charges-up to a sliding cap-in each of the 5 years after adoption. The maximum of $18,000 in the first year will phase down to $2,000 in the fifth year for a total 5-year bonus of up to $44,000 for these early adopters.

Those who wait until 2013 to put a system in place can get a maximum of $39,000 over 4 years, while 2014 adopters can claim up to $24,000 over 3 years. Medicaid will have a separate 5-year bonus schedule that will offer as much as $64,000 to eligible physicians. A physician cannot claim both a Medicare and Medicaid bonus.

But physicians who have not adopted an EHR before 2015 will be penalized with a 1% cut to their Medicare pay, a reduction that phases up to 3% for 2017, where it will remain in subsequent years.