EHR Incentive Money Congressional Authorization versus Appropriation – Will EHR Incentive Money Disappear?

I’ve been having a number of discussions online and through email with people about the future of the EHR incentive money. A number of people are quite concerned with the government funding for the EHR incentive money. You may remember that I posted about this before on multiple occasions and had some really interesting discussion.

Here’s a summary of some of the points that I’ve heard people making when it comes to the EHR incentive money being taken away:

1-There is a crucial difference between the two steps required for Congressional funding, a-authorization and b-appropriations. Congress can authorize, but cannot appropriate for 5 yrs. This applies to the EHR stimulus money. Thus the 5 year EHR payment has been authorized, but no EHR funds have been, nor can they be, appropriated for 5 years, right?

2-There is $18k this year for doctor Medicare EHR. But not the remaining $26k over 5 years has not been apropriated (same applies to hospitals funds).

3-The budget deficit and debt ceiling suggest Congress will be looking now and in the future for cutting every dime they can,
and thus the $20B or so for EHR could be part of the cut. Thus there may be reduced EHR funds, or none, appropriated by Congress after this year.

I still believe in my gut that the EHR incentive money is going to be safe and still around going forward. There’s little benefit to cutting a mere $20 billion from a program that is generally bi-partisan. Plus, no one in congress really knows the potential good or bad impacts of the HITECH act on EHR and healthcare IT. However, it’s really easy for them to quickly assume that more technology in healthcare is good and worth funding (whether the way they’re doing it is good or not…a subject for a different post).

It’s certainly not beyond the realm of possibilities that the government could make some sweeping cuts and the EHR incentive money is a casualty of those sweeping no holds bars type cuts. Point being that I don’t think there are any people in congress that are passionately for it or passionately against it. So, I think that means that it will likely either get carried forward on a whim or cast aside on a whim.

How’s that for a concrete answer? Are there points that I’m missing? Are we misunderstanding the HITECH funding process? Feel free to chime in with any knowledge you might have of the government process.

About the author

John Lynn

John Lynn

John Lynn is the Founder of the, 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.


  • John, what will kill MU is what CMS announced this week. They plan on cutting physician incomes by 29.5% in 2011. This means that:

    1) Medicare will be perceived as unstable and sinking and physicians now more than ever will opt out of any “meaningful” association with Medicare.
    2) It’ll piss off doctors so much that they will walk away en masse.

    It would have been better for Medicare to cut doctors 1% a year for 30 years- ie death by a thousand cuts method. I’m for one delighted that they chose to screw themselves…


  • Al,
    Yes, that’s a fine point. Medicare might kill itself. I’m still interested to see what insurance companies are going to do in regards to EHR.

  • Ah yes, the Medicare penalty – i.e. the way the government managed to get physician pay cuts through the back door of EHR. They’ll get that dollar one way or the other.

  • A1: No. The funds for the Medicare and Medicaid EHR Incentive Programs were authorized and appropriated in the Recovery Act for the entire period. Congress does not need to do anything further for the incentives to be fully funded for the duration of the programs, even after 5 years.

    A2: Again, this money is already appropriated. Congress can sit on its hands for the next ten years, and the money will still go out. Also, note that Medicare money comes out of the HI/SMI Trust Funds while the Medicaid money comes out of the CMS general funds.

    A3: These funds are safe from the whole annual appropriations process (while Medicaid money comes from annual appropriations, the Recovery Act has already appropriated the money- Congress can’t easily fiddle with it). To take away the funding, Congress would basically have to repeal or amend the HITECH Act itself.

    Please note that this clarification was provided the last time you posted on this same topic in the fall….

  • JPK- Don’t be so smug! Your clarification just wasn’t that meaningful then- and it’s not now, either. In HITECH terminology, your “clarification” is just… meaningless! My view of what the 30% cut will do is meaningful, though. Please take note of the following meaningful quote:

    “HR 408 — specifically Section 302 — would go after non-defense provisions of the American Recovery and Reinvestment Act (ARRA), better known as the “stimulus package,” which brought us the HITECH Act. While the entire Act is not being nixed, it does repeal sections, including the EHR Incentive Program, i.e. “meaningful use.” That means, according to Health Data Management, that $27 billion already authorized for incentive payments to physicians for implementing EHRs and proving “meaningful use” could disappear.

    Section 706 of the proposed legislation deauthorizes appropriations through the Affordable Care Act and its companion legislation, the Health Care and Education Reconciliation Act of 2010, meaning future reliance on EHRs under the reform law would also become null in void, as would several other provisions where money has yet to be allocated.

    So after years of preparation, perspiration, and getting to the bottom of “meaningful use,” it seems physicians’ practices could be left with shiny new software and hardware, but no reimbursement for their investment.”


    So as you can see, the “meaningful use” incentives, often referred to as the “low hanging [meaningless] fruit” can be defunded by HR 408 or other similar statutes. They can do that without repealing HITECH, although I personally would like the whole thing thrown out.

    What I originally mentioned, though, is that for HITECH to be successful they need physicians to be part of the process. If physicians outright reject Medicare because of the increasing bureaucracy, HITECH will be meaningless, and the extra 5% penalty would be a joke. It’s like executing someone then yelling as the IV toxins are being deployed: “I give you 2 more life sentences!” Even if the 30% cut gets recinded at the last moment (again), physicians will look at the whole process as a sham. I know- I’m one of those physicians, in the trenches, whose livelihood is being affected by all of this.

    BTW, some of my more favorite “meaningful” quotes:

    “Nothing is predestined: The obstacles… can become the gateways that lead to new beginnings.”
    – Ralph Blum

    “It’s never too late—in fiction or in life—to revise.”
    – Nancy Thayer

    “The word ‘meaningful’ when used today is nearly always meaningless.”
    – Paul Johnson


  • Dr. Borges,

    The information I provided was clarification on how the EHR incentive funds are currently authorized and appropriated. Not smug, a factual response to Jon’s question. I do not speculate on pieces of legislation that have been introduced but still have to pass both the House and Senate, nevermind the President’s pen. Nor do I care to trade quotes or barbs about Medicare reimbursement rates. Good luck to you and your patients.

  • JPK,
    It’s good to have the facts on how it’s funded, but I think it’s also worthwhile to hear speculation about the possible outcomes. The intent of this post was in fact to see 1. if any of the facts have changed since I last posted and 2. what indicators their might be that the meaningful use money could be taken off the table.

    Of course, Al has a very abrupt style (welcome to Al Borge), but the fact that Al mentions about the proposed legislation is dare I say meaningful if we’re trying to get an understanding of what could happen, no?

  • It all comes down to politics- what we wish for and then which representatives are in power. It goes beyond party lines, though.

    If you want HITECH to survive, then in 2012 vote for Obama, Gingrich, Pawlente, or Romney. If you want it to die, then go with the Tea Party candidates- Bachman, Ron Paul, and Cain.

    An earlier (Bush era) HITECH-like law was defunded back on 12/21/2007. It was called S. 2499 and at that time it was the Democrats that defunded the HIT bill. Check out this old article:

    I know it very well- one of my patients took one of my slide shows and distributed it in Congress with a sign saying that “THIS WILL INCREASE THE COST OF MEDICARE!” Good thing my office is just south of Washington, D.C.

    HR 408 is not simply a demonstration project- it can have legs if enough of the right people get voted into office. If it does go through, I hope that not too much of our tax money gets wasted on useless efforts.

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