The Health Information Technology for Economic and Clinical Health Act (the HITECH Act) which was passed as part of the American Recovery and Reinvestment Act of 2009 contains both incentives and penalties to encourage hospitals and physicians to implement technology with the goal of creating and using electronic health records (EHRs) for each person in the US by 2014.   Since part of the act requires that these records kept protected, and the Secretary of the Health and Human Services has provided guidance that this includes data encryption as well as ensuring data destruction, the incentives are important for helping hospitals and physicians achieve compliance.

The incentives work this way.  The sooner after 2011 that hospitals and physicians implement EHRs, the more money they qualify for, with phaseouts for the incentives starting for implementations that start after 2013.   The incentive payments continue for a number of years to help with the support required for EHRs.    On the reverse side of the coin is the penalties that start kicking in for physicians and hospitals  that have not adopted EHR by 2015.  These penalties reduce Medicare payments that otherwise would have been received by percentages that have an increasing scale for each year that implementation is delayed. 

The important thing to note about these dates is that the act requires that physicians and hospitals be “meaningful EHR users” during a payment year to qualify for the incentive payments.  So even though the payments will not start until 2011, it’s important that preparations for converting to EHRs starts right away.  That’s because converting to electronic records and ensuring that they are protected is not an overnight process.  Hospitals and physicians will need to evaluate the best technology for their use, map out a plan for the conversion of their most important paper records and arrange for the training fo their staff.