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Stimulus Center

What is HITECH and ARRA?

The American Recovery and Reinvestment Act of 2009 (ARRA or Recovery Act) was signed into law by President Obama on February 17, 2009. This law includes the Health Information Technology for Economic and Clinical Health Act or HITECH, which established programs under Medicare and Medicaid to provide incentive payments for enacting “meaningful use” criteria of electronic health records (EHR) and their technology.

CMS (The Centers for Medicare and Medicaid Services) has several roles in the HITECH Act

~They are responsible for the implementation of EHR incentive programs including defining “meaningful use” criteria in EHR technology.

~They also have established standards, implemented specifications, and certification criteria for EHR technology.

~Under the HITECH act CMS also works with Privacy and Security protections

Under the HITECH act a Medicare EHR incentive plan was created. Eligible professionals, hospitals, and critical access hospitals (CAH) that use meaningful use certified EHRs are qualified to receive incentives. Incentive payments would be made to qualifying Medicare Advantage (MA) organizations for the use of meaningful use certified EHRs. The incentive program provides incentive payments to eligible professionals and hospitals for the adoptions, implementation, and/or upgrade of a certified EHR technology meeting meaningful use in the first year up to five years.

CMS administers the EHR incentive programs under Medicare and Medicaid. CMS proposed rules and definitions including “meaningful use” and other requirements for qualifying for incentive payments. CMS worked closely with the Office of National Coordinator for Health Information Technology (ONC) in developing the proposed rules.

The HIT provisions of the Recovery Act are found primarily in Title XIII, Division A, Health Information Technology, and Title IV of Division B, Medicare and Medicaid Health Information Technology. These titles are cited as the Health Information Technology for Economic and Clinical Act or the HITECH act. For a copy of the full bill go to:

EHR Technology Standards and Certification Requirements

Under the HITECH act, ONC developed standards, implementation specifications, and certification criteria for EHR technology.


Funding is available under Title IV for eligible professionals (EPs), and hospitals. Funds will be distributed through Medicare and Medicaid incentive payments to EPs, physicians, and hospitals who are “meaningful use EHR” users.

Criteria for Qualifying for an Incentive

The qualification criteria for incentives through implementation of specifications called “meaningful use criteria” are being finalized. The current guidelines require “meaningful use” EHR users to demonstrate: meaningful use of a certified EHR, the electronic exchange of health information to improve the quality of care, and reporting of quality measures using the certified ERH technology. Medicaid programs will have their own set of guidelines in line with Medicare provisions of the Recovery Act. Incentives will be distributed through Medicare and Medicaid payments to eligible providers and hospitals who are “meaningful use” EHR users.

Who is eligible to qualify for HITECH incentives?

According to Title XXX Section 3000

Medicare Payment Incentives for Eligible Providers

Incentives will begin January 2011 for all eligible professionals (EPs) who are “meaningful use” EHR users. Beginning in 2015 payment penalties will be imposed on EPs who are not “meaningful use” EHR users.

Hospital based physicians who furnish services in hospital settings are not eligible.

The incentive payments are equal to 75% of the Medicare allowable charges for covered services by the EP in one year. Subject to a maximum payment in the first, second, third, fourth, and fifth years of $15,000; $12,000; $8,000; $4,000, respectively. Early adopters who’s first payment year is 2011 or 2012 the maximum payment is $18,000 in the first year.

There will be no payments for meaningful use EHR use after 2016.

There will be no payments to EPs who first become meaningful use EHR users in 2015 or thereafter.

For EPs who predominantly furnish services in a health professional shortage area (HPSA) incentive payments would be increased by 10%.

The Medicare fee schedule amount for professional services provided by an EP who was not using a meaningful use EHR for the year would be reduced by 1% in 2015, by 2% in 2016, by 3% for 2017 and by between 3 to 5% in subsequent years.

Medicaid Payment Incentives

The Recovery Act establishes 100% Federal Financial Participation (FFP) for States to provide incentives to eligible Medicaid providers to purchase, implement, and operate including support services and training for staff of certified EHR technology. It also establishes FFP for State administrative expenses related to carrying out this provision

Certain classes of Medicaid professionals and hospitals are eligible for incentive payments to encourage adoption and use of certified EHR technology. Eligible professionals include physicians, dentists, certified nurse-midwives, nurse practitioners, and physician assistants who are practicing in Federally Qualified Health Centers (FQHCs) or Rural Health Clinics (RHCs) led by a physician assistant.

Eligible professionalas must meet minimum Medicaid patient volume percentages and must waive rights to duplicative Medicare EHR incentive payments. Eligible professionals may receive up to 85% of the net average allowable costs for certified EHR technology up to a maximum level and incentive payments are available for no more than a 6 year period.

Medicaid Incentive Program Qualifications

To be eligible for incentive payments not associate with the initial adoption/implementation/upgrade of EHR technology the provider must demonstrate “meaningful use” of the EHR technology through a means approved by the State and Secretary of the State. In determining “meaningful use” a state must ensure unique needs of population are being met and clinical quality measures are part of “meaningful use”.

Eligible professionals MAY NOT receive incentive payments under both Medicare and Medicaid in any give year.

Which geographic areas qualify for HITECH incentives?

ARRA specifies the following regions and territories as qualifying for HITECH incentives:

  • All 50 US states
  • The District of Columbia
  • Puerto Rico
  • The Virgin Islands
  • Guam
  • American Samoa
  • The Northern Mariana Islands

What types of medical practitioners are included in HITECH?

In addition to the list above, ARRA references “providers as defined in the Social Security Act, section 1842” as qualifying for HITECH incentives. This includes:

  • A physician assistant, nurse practitioner, or clinical nurse specialist
  • A certified registered nurse anesthetist
  • A certified nurse-midwife
  • A clinical social worker
  • A clinical psychologist
  • A registered dietitian or nutrition professional

What types of physicians qualify for HITECH incentives?

The following types of practices can all qualify for $44,000 or more in HITECH stimulus incentives according to the definitions in the Social Security Act, section 1861(r):

  • Doctor of Medicine or Osteopathy – M.D. or D.O.
  • Doctor of Dental Surgery or Medicine – D.D.S or D.D.M
  • Doctor of Podiatric Medicine – D.P.M.
  • Doctor of Optometry – O.D.
  • Chiropractor – D.C.

What types of health care providers can qualify for HITECH incentives?

The American Recovery and Reinvestment Act of 2009 (ARRA – PDF of the ARRA Act) details that the following all qualify for HITECH incentives:

  • Hospitals
  • Skilled nursing facilities
  • Nursing facilities
  • Home health entities
  • Long term care facilities
  • Health care clinics
  • Community mental health centers
  • Renal dialysis facilities
  • Blood centers
  • Ambulatory surgical centers
  • Emergency medical service providers
  • Federally qualified health centers (FQHC)
  • Group practices
  • Pharmacists
  • Physicians
  • Practitioners
  • Indian Health Service providers
  • Rural health clinics
  • Therapists