Economic Stimulus Bill Simplified

UPDATE: Many of you will find my presentation on the ARRA EMR Simulus money of interest.

Today, “The American Recovery and Reinvestment Act of 2009” was signed by Obama. In this bill, $59 billion was allocated for health care with approximately $20 billion designated for EHR adoption. Of course, any doctor interested in EHR wants to know how they can get their piece of the $20 billion.

The bill was just published and can be read in it’s entirety online. I’d suggest part 2 of 5 for the health care portion of the Stimulus Bill. However, it’s not light reading so I’ll leave that to someone braver than I. It does seem like much of the bill remains intact from what was written about previously by Patricia King on NetDoc. Here’s my short layman’s summary (I’ll update this page as points are clarified):

The government is not just going to cut you a check. Instead the $17 billion will be incentives paid as increased Medicare and Medicaid payments. Incentives will start in 2011 and be paid over 5 year for a physician who can show “meaningful use” of an EHR system (we’ll be hearing about this meaningful EHR use a lot more in the future).

Physicians who do not show “meaningful use” will be penalized in the form of declining Medicare payments. Hospital physicians won’t be affected.

Those wanting the stimulus money will also have to be using a “certified EHR.” Both the terms “certified EHR” and “meaningful use” are still yet to be defined by the government.

The maximum a provider can receive is $41-$44k over the 5 years and paid in lump sum or payments as determined by HHS.

That’s the basics of the EMR stimulus package. I’ll follow up this post tomorrow with a look at what it takes to show “meaningful use” of an EHR and some thoughts on what effect this stimulus package will have on EHR adoption.

Editors Note: Please let me know if changes were made in the final bill so that I can update them on this page. Thanks.

About the author

John Lynn

John Lynn

John Lynn is the Founder of, a network of leading Healthcare IT resources. The flagship blog, Healthcare IT Today, contains over 13,000 articles with over half of the articles written by John. These EMR and Healthcare IT related articles have been viewed over 20 million times.

John manages Healthcare IT Central, the leading career Health IT job board. He also organizes the first of its kind conference and community focused on healthcare marketing, Healthcare and IT Marketing Conference, and a healthcare IT conference,, focused on practical healthcare IT innovation. John is an advisor to multiple healthcare IT companies. John is highly involved in social media, and in addition to his blogs can be found on Twitter: @techguy.


  • With such a low incentives and small penalty (1-3%) for not adopting I am not sure if this will convince enough small practices to migrate to EHR. It will definitely push some in the right direction. The question remains, which EHRs will be ONC approved?

  • @James Hart
    The Congressional Budget Office disagrees. The congressional budget office estimates that with the passage of the Health Information Technology for Economic and Clinical Health Act (HITECH) incentives in the American Recovery and Reinvestment Act, EMR adoption by physicians in medical practices is expected to exceed 90% by 2019.

    As far as ONC approval, You don’t you think they will scrap years of investment into the CCHIT and reinvent the wheel do you?

  • T.J. Tavares,
    I can’t remember where I saw the calculations, but someone calculated the number of physicians without an EHR and multiplied it by the $44k in possible stimulus money from the HITECH act. That number was much higher than the $18 billion that’s been alloted for the HITECH act.

    Also, if you read some of the other posts on this blog you’ll see some reasons why the HITECH act may actually slow the implementation of EHR. Both from people who would have implemented an EHR, but are now waiting to hear which certification will be used and how “meaningful use” will be measured and also from more failed EMR implementations if they choose to go with CCHIT as the certification (which they are likely to do).

    More to that point, I think you are right that it seems like CCHIT will become the certification criteria, although I believe and many others also believe that this is one of the worst decisions that ONC could make. I won’t rehash the arguments for why here, but suffice it to say that they should, but they probably won’t scrap CCHIT.

    Back to the idea of 90% EHR by 2019. I personally believe that’s extremely unlikely. However, I do believe that we will have much broader adoption of EHR by 2019. I have sensed recently a shift in many doctors office from the question of why should I implement an EHR to now which and how should I implement an EHR. I personally believe this shift will help EHR adoption more than any EHR stimulus package.

  • Great comments!

    I think you hit the nail on the head with regard to the stimulus $$ and adoption… I can shed some light on why the numbers don’t match up.

    The reason why the CBO believes we will get to 90% adoption by 2019 and not in 2014 (when the stimulus incentives are to end) is because of the effect of the PENALTIES that docs incur for not adopting (1-5% starting in 2015). I’ve got an easy to read chart on our website:

    As far as CCHIT is concerned… I try to stay out of the big battles being waged by the advocates and the detractors. Our company specialized in ASP solutions so a doctors investment is hedged a bit as things go through this state of flux… It doesn’t matter to us if the certification criteria is the CCHIT, or the author of this blog as long as you are doing business with a trusted partner who works with an EMR vendor capable of ensuring certification as things shake out. You also want to make sure the EMR solution that you pick is going to be around in 5 years.

    Thanks for the comments!

  • Not sure where my last post went… but let me try a more succinct version here.

    The 90% adoption estimate not only takes into account the stimulus incentives, but the penalties as well…

    In effect, you will have people adopting from now until 2014 to make sure they pocket the extra incentive $$. Then when the penalties start hitting (1-5% starting in 2015) you will see the adoption pushed closer to the 90% number.

    Our company specializes in ASP EMR solutions. This allows a physicians investment to be “hedged” a bit. As “certification” and “meaningful adoption” become more clear, utilizing an ASP solution ensures the EMR solution you purchase stays up to snuff without the painful software updates (or entire software re-engineering in some cases) with an on premise “hard wired” system.

    With regard to the CCHIT detractors, etc… In my humble opinion, a physicians energy would be better served by partnering with a trusted vendor and an organization that can support the implementation.

  • I’ve been speaking with quite a few of my clients and directing them to your site. The one questions that I can’t seem to fina an answer for is this: What incentives/penalties are there for physicians who do not accept medicare/medicaid?

  • T.J. Tavares,
    90% adoption is one alternative. The other alternative is that the penalties will drive many doctors to stop taking medicare and medicaid and leave those programs without enough doctors that want to take those patients. Just another possible option.

    As the author of this blog, I should clarify something about CCHIT. All of the doctors offices I work with either: don’t take Medicare and Medicaid or are really happy with their investment in EHR regardless of any government stimulus or not.

    So, whether CCHIT is chosen as the certification or not won’t affect my life at all. Although, I guess if they do choose CCHIT as the certification criteria, I’ll have plenty to write about on my blog for a long while to come. I’m just not sure how long I’ll enjoy writing about failures and empty promises from CCHIT certified EHR that can’t deliver the government money like they wish they could.

  • Ashley,
    I want to thank you for sending your clients to my site. Hopefully they and you have both found the information interesting, useful and thought provoking.

    From my somewhat limited understanding of Medicare/Medicaid, there are no hard penalties/incentives to taking or not taking incentives. It’s just a question of whether you can get enough patients without taking them. If you can’t, then I guess that’s an incentive to take them. Also, if your current reimbursement is lower than Medicare/Medicaid, then I guess that would be a penalty for not taking Medicare/Medicaid. I’ve also heard about some of the pains of taking Medicare/Medicaid. I guess not having to deal with those pains is an incentive for not taking it. However, I’m guessing that some people find it easier than taking other insurances (although I’ve never met anyone like this). This would make it an incentive to take it.

    I’ve seen the beginnings of a movement to not take it. We’ll see if this grows or not.

  • Hello John,
    I am a Grad student in Texas A&M and working on my Capstone research about the EHR implementation. I was wondering if I can correspond with you to clarify some information that I have gathered and numerous questions that I have.

    Thank you and hope you would consider helping me.

  • Kris,
    I’d love to chat. I sent you an email. I’m really interested in people researching EHR related topics since I might start doing scholarly EHR research in the near future.

  • […] Electronic health records (EHRs) are touted as making healthcare more affordable and efficient. It also assists care providers – you doctor – in making less mistakes such as prescribing a drug that reacts with other drugs you are taking, but he doesn’t know about. The 2009 economic stimulus package aims at encouraging physicians to adopt EHRs, eventually reducing the Medicare payments to those who do not adopt EHRs. […]

  • I bill to medicare but also medicare supplementinsurances like Highmark Security Blue and UPMC for Life and Health Assurance Advantra. Do these Insurances count towards the amount eligible for stiumlus reimbursement?. I would also predict a 100% increase in medicare claims over the next few years for providers trying to get that money.

  • Michael,
    I’m far from an expert on Medicare. In fact, I know a lot less than I should know. Are those 3 plans considered Medicare Advantage? If so, then here’s information from the All scripts FAQ about that:

    Are groups that do Medicare Advantage also eligible for the stimulus dollars?
    Yes, there are provisions of the legislation related to groups accepting Medicare Advantage. Those organizations and their providers are eligible for the incentives as long as the provider delivers a minimum of twenty hours a week of patient care services and the organization furnishes at least 80 percent of the services of the individual professional to clients of their organization.
    Additionally, it’s important to note that amounts paid by Medicare Advantage Organizations (MAOs) will be close to the amounts paid under Medicare Fee for Service (FFS), but they likely will not be identical. The HITECH Act requires that MAOs make incentive payments “in a similar manner” as under Medicare FFS, but the Act also gives CMS some flexibility in establishing payment formulas.

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