The American Recovery and Reinvestment Act of 2009, signed into law on February 17th, allocates $44,000 in payments to medical practices that adopt a certified Electronic Medical Record (EMR) system. This legislation is supposed to provide an incentive for physicians to switch from paper records. Although the promise of free money is alluring, is the $44,000 actually an efficient way to promote EMR adoption?

First, let’s take a closer look at the expected revenues. Physicians will need to implement and use a certified EMR in a meaningful way before January 1, 2011. Assuming they qualify, payments will arrive over five years. The first-year payment is $18,000, followed by $12,000, $8,000, $4,000, and finally $2000.

On the other hand, physicians that do not adopt certified EMR systems will be penalized. CMS will reduce Medicare payments by a one-percent for the first year, followed by two and three percent reductions in subsequent years. Since penalties are based on a percentage, it’s hard to say how much this would affect any given practice.

Is the $44,000 incentive payment worthwhile? The answer depends largely on the total cost of “certified” systems. While not explicitly stated in the act, “certified” is understood to mean CCHIT certified. The problem with CCHIT systems is that they are often quite expensive. The certification process costs vendors $34,000 just to get started, not to mention maintenance and development costs. These costs are passed onto consumers, resulting in very expensive EMRs, some of which cost as much as $100,000.

In addition to the purchase price, there are other hidden costs, such as maintenance fees from the EMR vendor. These are usually about 20% of the purchase price and are due annually. Training and implementation may also cost money, either through vendor charges or lost revenue because your staff is busy training instead of seeing patients. Certified systems are notorious for being complex and confusing, so training time is usually substantial. If you don’t currently have computers or networking gear at your office, you will have to figure that in as well.

Considering the total cost of owning a CCHIT-certified systems, your practice would probably be better off forgoing the stimulus. $44,000 probably will not cover the costs associated with implementing a CCHIT-certified EMR, especially since the payment is spread out over five years. There are many less-expensive, less-complicated EMR systems that offer the functionality you need without the drawbacks of CCHIT-certified systems.

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Ryan RicksSecurity Officer