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Healthcare IT Services Breakdown: Requirements and Incentives FAQs

The healthcare IT legislation offers cash incentives to eligible providers, as long as they meet meaningful use and EHR requirements. All of these providers are potential clients for IT service providers, so understanding the requirements and incentives could help land healthcare customers. By Elaine J. Hom By Elaine J. Hom

Under the American Reinvestment and Recovery Act (ARRA) of 2009, healthcare providers are eligible for incentive payments for meeting meaningful use of electronic health record (EHR) requirements. These payments are incentives for both providers to get with the program, but also for providers to hire the right healthcare IT service providers to help them achieve these goals and avoid penalties.

The channel opportunity here is huge. Many hospitals have their own IT staff and aren't necessarily going to be hiring IT service providers. But healthcare providers go beyond the huge hospitals. There are rural hospitals and doctors' offices that are generally too small to hire a dedicated IT staff. And until now, they haven't needed one.

"The idea is to incentize rather than penalize healthcare providers to get on board with compliance," says Jim D'Itri, partner at CSC Healthcare Group, a global IT service provider. "If the incentives don't get you and don't entice you, then avoiding the penalties certainly should. The penalty is a reduction in Medicare reimbursement from the government, which is already a problem as it is."

Many doctors' offices are still on paper records, and every one of the requirements means upgrading to the digital age. Doctors' offices are going to need hardware, software, networks, and most of all, data security. And with the promise of large financial incentives coming from meeting requirements and the threat of penalties from not meeting the requirements, doctors are going to be willing to invest in an IT service provider to make sure it's done right.

"[Large IT service providers] are not well-positioned to assist the really small hospital or individual physician practice," says D'Itri. "The rates and costs are higher than what those people would look to spend. For a smaller entrepreneur in the service area or a consultant, there's a huge opportunity in small organization or physician practice and if you can provide service at an attractive price, there's business to be had."

Even if you are not well-versed in healthcare IT services, it's as simple as looking to your vendors for help. HP, for example, offers healthcare IT training and certification for its channel partners, regardless of experience. HP also offers managers who are dedicated to healthcare channel business and work with partners to help them understand the healthcare industry, HP's products, and HP's healthcare channel program, Healthcare Elite.

"We've see several channel partners wanting to explore new opportunities in healthcare who haven't been investing in healthcare before," says Chris Mertens, VP of healthcare in HP's Personal Systems Group.

The following FAQs are about requirements, dates, and eligible funds for private practices and physician's offices, so that if a potential healthcare client calls you, you know what to expect.

Q. How much money is my customer eligible for?

A. If a provider demonstrates meaningful use of EHR, then it is eligible for incentive payments of up to $44,000 per physician (so it gets multiplied out per physician in a practice), which starts being paid out in the beginning of the 2011 fiscal year. For eligible providers in a Health Professional Shortage Area, the payments increase to $48,400 per physician.

Q. What an eligible healthcare provider doesn't meet meaningful use requirements?

A. If a healthcare provider does not demonstrate meaningful use by the beginning of the 2015 fiscal year, it will incur penalties in the form of reduced Medicare reimbursements.

Q. How many stages of requirements are there?

A. There are three stages of criteria – only Stage 1 has been officially spelled out. Compliance with the list means incentives being paid out over a few years. Proposed rules for Stage 2 have been published, and Stage 3 rules are planned for publication in 2014.

Q. How long does my customer need to meet the compliance requirements?

A. For the initial payment, 90 days. But compliance must be maintained after that. If a year is missed, the reimbursement for that year will be voided.

Q. How many requirements does my customer's practice need to meet?

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