About 45,000 office-based physicians, including nearly all physicians who practice at federally qualified health centers (FQHCs) and half of office-based pediatricians, may be eligible for up to $63,750 over six years to improve and maintain their health information technology (HIT) systems because of their participation in Medicaid, according to a new analysis by researchers at The George Washington University (GWU), funded through the Geiger Gibson/RCHN Community Health Foundation Research Collaborative.

The new report, “Boosting Health Information Technology in Medicaid: The Potential Effect of the American Recovery and Reinvestment Act,” examines the Medicaid HIT adoption incentives contained in the American Reinvestment and Recovery Act (ARRA). The 2009 law included about $49 billion in investments in HIT, including financial incentives for health care providers who treat Medicaid or Medicare patients and who can demonstrate meaningful use of technology. This study, the first to map the potential impact of the Medicaid provisions on physicians’ access to incentive funding, underscores the importance of the Medicaid amendments to the successful transformation of the nation’s health information infrastructure. Tens of thousands of physicians who care for millions of low-income Medicaid patients will be eligible for federal incentive funding to help them establish, upgrade and operate electronic health record systems to help improve the quality and efficiency of patient care.

Beginning in 2011, office-based physicians whose patient mix includes at least 30 percent Medicaid beneficiaries are eligible for up to $63,750 over six years, as long as they are able to demonstrate “meaningful use” of HIT. A lower 20 percent threshold can be used in the case of pediatricians. Physicians who predominantly practice at FQHCs and other settings can qualify if 30 percent of their patient base is characterized as “needy,” including those covered by Medicaid, those who receive uncompensated care and patients who are charged income-related sliding scale fees. George Washington University researchers estimate about 15 percent of all the office-based physicians in the nation would qualify for the Medicaid HIT incentives, including nearly 99 percent of FQHC physicians. If all qualifying physicians apply for the Medicaid incentives and receive the maximum level of payments, the federal government would invest more than $2.8 billion in HIT.

“The ARRA Medicaid incentives offer a critical first step in the transformation of health care practices on which millions of Medicaid beneficiaries rely,” noted Dr. Leighton Ku, professor at GWU. “Successful implementation will depend on comprehensive guidance from HHS as well as ongoing technical assistance to both states and providers.”

“Health centers have historically faced many challenges in acquiring and implementing HIT,” said Mr. Julio Bellber, president and CEO of the RCHN Community Health Foundation. “The opportunity provided by the ARRA incentives is significant and ongoing support is crucial if health centers and their patients are to derive the full benefits promised by HIT adoption.”

“Boosting Health Information Technology in Medicaid: The Potential Effect of the American Recovery and Reinvestment Act” can be viewed online here.