Medicare, Medicaid and health IT provisions key part of final stimulus bill

Late on Wednesday, Feb. 11, the House and Senate reached agreement on final language for the American Recovery and Reinvestment Act. President Obama is expected to sign the bill into law as soon as it reaches his desk. An unofficial  summary of the conference agreement includes the following health-related provisions --

Medicare Payments to Hospice -- blocks FY09 Medicare payment cut to Hospice providers related to a wage index payment add-on.

Medicare Payments to Long Term Care Hospitals -- technical corrections to the Medicare, Medicaid, and SCHIP Extension Act of 2007 related to Medicare payments for long-term care hospitals

STATE FISCAL RELIEF AND MEDICAID -- $90 BILLION

Temporary FMAP increase -- increases FMAP funding as follows [$86.7 billion]: (1) funding distributed for a 27-month period beginning 10/1/2008 through 12/31/2010; (2) across-the-board increase to all states of [6.2%] and corresponding increase for territories; (3) bonus structure (in addition to across-the-board increase)in the form of a decrease in the state share based on the state’s increase in the unemployment rate; and (4) maintenance of effort on eligibility.

Temporary Increase in Disproportionate Share Hospitals (DSH) Payments [$500 million]: (1) increases states’ FY2009 annual DSH allotments by 2.5%; (2) increases states’ FY 2010 by 2.5% above FY2009 DSH allotment (with the adjustment); (3) after FY 2010, states’ annual DSH allotments would return to 100% of the annual DSH allotments as determined under current law.

Extends Moratoria on Medicaid Regulations [$100 million] -- (1) extends moratoria on Medicaid regulations for targeted case management, provider taxes, and school-based administration and transportation services through June 30, 2009; (2) adds moratorium on Medicaid regulation for hospital outpatient services through June 30, 2009; (3) sense of Congress that the Secretary of HHS should not promulgate regulations concerning intergovernmental transfers, Graduate Medical Education, and rehabilitative services.

Transitional Medical Assistance (TMA) [$1.3 billion] -- extends TMA through December 31, 2010 (current program expires June 30)

QI Program [$550 million] -- extends the Qualified Individual (QI) program through December 31, 2010.

Indian Health provisions from IHCIA [$100 million] -- (1) eliminate cost-sharing for Americans Indians and Alaska Natives in Medicaid; (2) provides protections for Indian Tribal property and protections for access to Indian facilities.

Prompt Payment Requirements for Nursing Facilities and Hospitals [$680 million] -- applies prompt pay requirements to nursing facilities and hospitals in Medicaid.

HEALTH INFORMATION TECHNOLOGY -- $19 BILLION

Adoption and Use of Health Information Technology (HIT) [$19 billion]: (1) provides $19 billion funding for health information technology – $17 billion for Medicare and Medicaid incentives and $2 billion for HIT grants.

Summary of Standards Adoption, Grants, and Privacy Protections: (1) codifies the Office of the National Coordinator for Health Information Technology (ONCHIT) and establishes an open and transparent process led by the National Coordinator to develop standards by 2010 that allow for secure nationwide electronic exchange of health information; (2) provides $2 billion in immediate funding for health information technology infrastructure, training, dissemination of best practices, telemedicine, inclusion of health information technology in clinical education, and state grants to promote health information technology; (3) improves and expands current federal privacy and security protections for health information such as requiring that an individual be notified if there is an unauthorized disclosure or use of their health information and requiring a patient’s permission to use their personal health information for marketing purposes.

Summary of Medicare and Medicaid HIT provisions: (1) invests in the adoption and use of health IT, such as electronic health records by providers who serve Medicare and Medicaid patients; (2) provides temporary bonus payments ranging from $44,000 to $64,000 for physicians and up to $11 million for hospitals that meaningfully use electronic health records; (3) supports Medicare and Medicaid incentive payments for critical access hospitals, federally qualified health centers, rural health clinics, children’s hospitals, and others; (4) phases-in Medicare payment penalties for those physicians and hospitals not using electronic health records starting in 2014; (5) achieves 90% adoption rate for physicians and 70% for hospitals for using electronic health records; (6) generates savings of over $12 billion through improvements in quality of care and care coordination and reductions in medical errors and duplicative care.