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ARRA HITECH ASC Update - 3-19-09

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During this remarkable time in the healthcare IT industry, we wanted to take a moment to reach out to our customers regarding the recent passage of The American Recovery and Reinvestment Act of 2009 (ARRA), how it impacts our industry, and what SourceMedical is doing to ensure that our customers are positioned to benefit from it.

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Dear Valued Customer,

During this remarkable time in the healthcare IT industry, we wanted to take a moment to reach out to our customers regarding the recent passage of The American Recovery and Reinvestment Act of 2009 (ARRA), how it impacts our industry, and what SourceMedical is doing to ensure that our customers are positioned to benefit from it.

As you know, ARRA is a far-reaching, complex piece of legislation, and many details of how it will be implemented are still emerging. This is one of several ongoing updates we will issue to our customers to communicate how SourceMedical is integrating ARRA into our product strategy and services. We want to assure you that SourceMedical is dedicated to taking whatever steps are necessary to align our products with the forthcoming federal EHR standards.

Overview of ARRA and HITECH

On February 17, 2009, President Obama signed ARRA into law. The Health Information Technology for Economic and Clinical Health Act (HITECH), represents an investment of more than $19 billion towards healthcare IT related initiatives, and is a focal point of ARRA. HITECH calls for the Office of the National Coordinator for Health Information Technology (ONCHIT) to develop methods and systems that will determine how providers will access HITECH benefits, and to work with other government agencies to develop criteria to be used to define an EHR. HITECH mandates that such standards will be final no later than December 31, 2009. The standards will provide guidelines EHR companies must meet in order for their product to be considered an "approved" EHR. Although EHR adoption will not be required, "meaningful use" of an approved EHR will be required in order for providers to qualify for, and continue to receive, benefits from HITECH. SourceMedical is committed to taking the necessary steps to comply with the federal standards as/if required for ASCs and Surgical Hospitals, and is also pursuing involvement in various activities related to the definition of these standards.

The $19 billion dedicated to HITECH is divided into two portions: $17 billion toward a Medicare/Medicaid incentive reimbursement program for providers who can demonstrate "meaningful use" of an approved EHR, and more than $2 billion available to: providers located in qualifying rural areas; providers serving underserved urban communities; and to Indian tribes. It is estimated that this investment will initially save the government more than $10 billion, plus additional savings within the healthcare sector.

What Does it Mean for ASCs?

Based on our review of the legislation thus far, as well as on third party analysis, it is our understanding that ASCs will be among the providers eligible for the $2+ billion in grants, but will not be eligible for the Medicare/Medicaid incentive reimbursement program. The $2 billion package will be dispersed at the discretion of ONCHIT, meaning that ONCHIT will determine what grants will be available to ASCs (or other qualifying providers). ONCHIT is not obligated to allocate any certain amount to ASCs. However, keep in mind that prior to February 17, the EHR space was estimated to be a roughly $2 billion industry, so access to part of a new $2 billion pie could translate into a significant step toward EHR adoption in the ASC care setting.

Based on the information available thus far, it appears that funding for EHR grants will be allocated to state agencies, which will then disperse funds to qualified providers in that state. Grant recipients will not be able to combine HITECH grants with other state or federal grants they may receive toward EHR adoption.

All providers who participate in the HITECH program will be required to produce reports required by ONCHIT to demonstrate meaningful EHR utilization as well as metrics still to be defined by ONCHIT. It is expected that data related to outcomes, variances, disease management, and other aspects of care that impact public health will be included in the reporting requirements, since these are examples of areas where EHRs can have a positive impact on the quality of care. These and other measures will allow ONCHIT to evaluate the extent to which HITECH investments are improving the quality of care and overall efficiencies in the healthcare system. Again, SourceMedical is committed to fulfilling whatever requirements impact our customers.

Clarifications & Additions to HIPAA

Although HITECH keeps all existing HIPAA requirements intact, there are some important additions and clarifications to note. Subtitles A and D define some terms that were previously un- or ill-defined, while also strengthening other existing requirements. In some instances, additional clarifications or decisions remain forthcoming, which will further clarify impacted HIPAA requirements. Some examples include:

  • Clarifications regarding the definition of a data breach, and new requirements re: patient and government notification when/if a data breach occurs
  • Tighter restrictions re: sharing data with insurance carriers when related to services paid out-of-pocket by the patient
  • Enhanced regulations re: the use of PHI for marketing or fundraising purposes
  • Stricter guidelines regarding the "minimum necessary" rules for PHI disclosure used for billing and operational purposes
  • Clarification re: methods that ensure PHI is deemed "secure." A data transmission that falls outside of this would potentially qualify as a trigger event for notification requirements. HHS is expected to provide additional comment on this topic within 60 days of HITECH being signed into law

As with the other areas of HITECH, SourceMedical is committed to following these areas closely so that we can add helpful features and reports to our products that will help you and your staff can remain compliant with any new or fortified HIPAA requirements.

As new information is available and our analysis of HITECH and ARRA progresses, we will continue to communicate with our customers via additional updates such as this, and via educational opportunities and our eServices customer portal. We would also love to hear your feedback and/or questions regarding HITECH and its impact to our industry. Please send any comments or questions to lindsay.mcqueeney@sourcemed.net. By hearing your questions and thoughts, we will be able to focus our attention on the questions that are most relevant to our customer base.

We at SourceMedical feel fortunate to be part of the healthcare IT industry during such an exciting time. Now more than ever, we are committed to investing the time and resources needed to ensure our customers have access to the best in healthcare technology today, and into the future.

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