Cherilyn G. Murer, JD, CRA, is CEO and founder of the Murer Group, a legal-based health care management consulting firm in Joliet, IIl, specializing in strategic analysis and business development. Murer may be reached at (815) 727-3355 or viewed on her Web site:

When President Obama signed the American Recovery and Reinvestment Act (ARRA) on February 17, 2009, he took an important initial step toward fulfilling campaign promises to reform the American health care system. During his campaign and in his inaugural address, President Obama vowed to improve quality and reduce inefficiencies in the health care system by dedicating significant federal funds to health information technology. The President proposed a $10 billion investment in health care IT over 5 years, but Congress increased this amount significantly, nearly doubling it in the final ARRA legislation.


Two separate sections of the Recovery Act comprise what is referred to collectively as the “HITECH Act” (Health Information Technology for Economic and Clinical Health Act). The purpose of the HITECH Act is to promote the use of health information technology with a goal of utilization of an electronic health record (EHR) for each person in the United States by 2014. The HITECH Act authorizes an investment in health care IT that is expected to top $20 billion. The bulk of this funding is allocated to direct financial incentives intended to encourage hospitals and other health care providers to invest in IT infrastructure, training, and electronic health records.

Other provisions in the HITECH Act fund a greatly expanded Federal role in regulating health care information technology. The legislation also provides funds for programs run by states, state contractors, and academic institutions to promote the use and exchange of electronic health information.

Most notably, the HITECH Act provides financial incentives to physicians and hospitals to adopt and use certified electronic health records technology. Providers that participate in the Medicare and Medicaid program stand to receive between $43,000 and $64,000 (for individuals) and up to $11 million (for hospitals) in cash incentives over 4 to 6 years. These incentives come with attached conditions—the provider must be considered a “meaningful EHR user.”

To be considered a meaningful EHR user, the eligible physician or eligible hospital will need to meet the following three requirements:

  1. Certified Technoogy—Demonstrate that the physician or hospital is using certified EHR technology in a meaningful manner, which shall include the use of electronic prescribing;
  2. Interoperability—Demonstrate that the certified EHR technology is connected in a manner that provides for the electronic exchange of health information to improve the quality of health care in accordance with the standards and criteria adopted under the act;
  3. Quality Measures—Submit information on clinical quality measures and other measures in a form and manner that will later be specified by the HHS Secretary.

Additionally, the HITECH Act’s economic incentives phase out over time, and become penalties beginning in 2015. Providers that cannot demonstrate “meaningful use” of an electronic health record by 2015 will see their reimbursement reduced by a percentage that begins at 1% and increases in subsequent years.

A problematic issue lies in what exactly “certified” EHR technology means. Currently, the Office of the National Coordinator for HIT (ONC) and National Institute of Standards and Technology (NIST) are working on this very issue. The ONC will turn over $20 million to NIST, which will define the test standards, implementation specifications, and testing infrastructure for a “certified EHR.” The HITECH legislation also includes language regarding the testing NIST will manage, referencing “including a program to accredit independent, non-Federal labs to perform testing.” This backdrop for defining “certified” technology creates a slippery slope for a monopoly of electronic record vendors. Competition is important in an evolving market, and limiting HER technology to only “certified vendors” may quash innovativeness. However, it is critical that we have national universality of systems to assure uniformity of compatibility of technology.


While the HITECH Act has well-placed goals, the incentives described above have inequitable applicability throughout the health care delivery system. The financial incentives are available only for “eligible hospitals.” Section 4102(a)(6)(B) of the HITECH Act defines an “eligible hospital” as a “subsection (d) hospital.” Subsection (d) hospitals are only short-term acute care hospitals. Long-term care facilities, rehabilitation hospitals, psychiatric hospitals, children’s hospitals, and cancer centers are not “subsection (d)” hospitals per 42 USC 1395ww(d)(1)(B). Therefore, as written, the HITECH Act incentive provisions for the adoption of certified electronic health records are not applicable to rehabilitation hospitals or LTACHs.

Since one of the purposes of the HITECH Act is to help develop a uniform technological infrastructure that will ultimately support personal electronic health records, it is important for all venues of care to be afforded the incentives to adopt an electronic system. The postacute continuum of care is a vital component of the health care delivery system that the aging population utilizes on a regular basis, including both rehabilitation hospitals and LTACHs. Unfortunately, these smaller hospitals have been specifically excluded from receiving any of the financial incentives under the HITECH Act.

Thus, it is important for noneligible hospitals to lobby for change and inclusion in the HITECH Act incentives. Notably, critical access hospitals were originally going to be exempt from receiving the financial incentives for adoption of EHR due to size concerns. After strong lobbying, provisions for critical access hospitals to be eligible for these incentives were included in the HITECH Act.


Despite the apparent inequality for all health care providers in the HITECH Act, the Recovery Act also includes two relevant studies for excluded providers: a technology study related to aging service providers, and a study on need for incentives for the excluded providers discussed above.

The ARRA contains a study on aging services technology proposed by the Center for Aging Services Technologies (CAST). This study by HHS will examine “matters relating to the potential use of new aging services technology to assist seniors, individuals with disabilities, and their caregivers throughout the aging process.” The study shall include evaluation of technology methods and identification of barriers to innovation and adoption of technology within aging services.

The second study examines need by health care providers for incentive payments. It specifically focuses on those providers that are excluded from the incentive payments in the HITECH Act and on whether they have a need to receive the same or similar incentive payments to invest in electronic health record technology (hardware and software). The study will examine adoption rates, clinical utility, and potential costs for these providers among other issues. The HHS Secretary must submit a report to Congress on the findings and conclusions of this study no later than June 30, 2010.


Bringing 21st technology to the United States health care delivery system is a valid and important goal. With the ultimate goal for each individual in this country to have an electronic health record by 2014, it is imperative for all venues of care to be afforded the opportunity to invest in an electronic medical record system. The promises of more than $20 billion for health-information technology investment specifically excluded many smaller hospital settings, like rehabilitation hospitals and LTACHs, both of which are an integral postacute component in this country’s health care system. While there are studies under way to determine if funds should be allocated for the investment of health care IT in these venues, it is critical for providers to immediately become involved in the legislative lobbying for an end to the current incentive inequality.

Cherilyn G. Murer, JD, CRA, is CEO and founder of the Murer Group, a legal-based health care management consulting firm in Joliet, Ill, specializing in strategic analysis and business development. Murer may be reached at (815) 727-3355 or viewed on her Web site at