HIPAA Regulatory Alert

Will Medicaid take full advantage of HITECH?

Will funding from the Health Information Technology for Economic and Clinical Health (HITECH) Act, part of the American Recovery and Reinvestment Act (ARRA), propel state Medicaid programs forward with the use of electronic health records (EHRs)? Or will state fiscal crises or other unforeseen problems prevent the hoped-for progress?

The answer probably is a little of both, but efforts are redoubling now that the Centers for Medicare & Medicaid Services (CMS) actually is releasing funds to Medicaid programs.

The HITECH funding "provides momentous opportunities, significant funding, immense expectations, tight time frames, and huge financial and human resource demands on state Medicaid programs, CMS, and Medicaid providers," says Patricia MacTaggart, a lead research scientist/lecturer at George Washington University's Department of Health Policy in Washington, DC. "The potential is great for real transformation in health care, health care delivery, and health care administration."

There is 90% federal funding for administrative activities, including oversight and promotion of health information exchange, and 100% federal funding for provider incentives. However, for providers to get incentive payments in 2010 for adopting, implementing, and upgrading certified EHR technology, states must have a process and infrastructure for administering and disbursing the incentive payments to Medicaid providers. At the same time, duplication of payments made through Medicare must be avoided.

States are now sorting through the Office of the National Coordinator's Interim Final Regulation relating to HIT standards, implementation specifications, and certification criteria, and CMS' proposed rule on the Electronic Health Record Incentive Program for Medicare and Medicaid programs, often referred to as the "meaningful use" Notice of Proposed Rulemaking.

"They are identifying and clarifying numerous governance, legal, policy, technical, and business process complexities, while educating their stakeholders, including governors, state legislators and their own staff, on what must be done, by when, and how many state dollars will be needed," says MacTaggart. "They are balancing doing it quickly with doing it well, and they are doing it with limited staff in an economic environment that is stretched."

As for the proposed meaningful use regulation, MacTaggart says CMS "did a great job of clarifying many things and requesting comments on areas where there is more than one option being considered."

It will be important for states and providers to review the proposed language, understand the terminology, and comment on feasibility related to operational issues, time lines, and interdependencies with other regulations and activities. These include certification and standards of EHRs, and the commonalities and differences between Medicare and Medicaid.