The Stimulus Plan and likely next steps

Healthcare Initiatives in Washington The Stimulus Plan and likely next steps…

Corporate Public Affairs

MBA Intern Candidates

February 28, 2008

McKesson Technology Solutions February 17th, 2009

Stimulus Plan Update Current Status of the Legislation

House passed their version on January 28 th

Size of final bill: $819 B

Senate passed their version on February 10 th

Size of final bill: $834 B

Conference concluded late on February 11 th

House and Senate both passed the bill on February 13 th

Size of the final bill: $787 B

Vote in House: 246-183,

Senate passed legislation by a vote of 60-38,

Bill signed by President Obama—February 17th

What’s in the bill… American Recovery and Reinvestment Act—HR 1

Cost: $789 Billion Plan

Tax Cuts: $275 Billion (35 percent)

Government Stimulus Spending: $514 Billion (65 percent)

Broadband and wireless improvements for rural areas

Roads, bridges, highway and waterway funding

Modernization/improvement of public education

Energy independence initiatives

Funding for scientific research

Major Healthcare and HIT Provisions: $130 Billion

Increased Medicaid payments to states, unemployment benefit extension

COBRA assistance and food stamp expansion

$19 Billion for Healthcare Information Technology (HITECH Provisions)

What’s in the bill… Healthcare and HIT Provisions of HR 1

Health Care Benefit Funding and Relief

Additional Medicaid Funding for States--$87 B

Medicaid Coverage and COBRA Extensions/Subsidies--$24.7 B

Health Information Technology (HITECH)--$19 B

Important incentives for physicians and hospitals to adopt EHRs

Up to $44,000 per physician for “meaningful use” of EHR

From $2-8 million per hospital for qualified use of certified HIT

New entities to establish standards, HIT policy and certify technology

New (and more restrictive) privacy provisions

Funding for NHIN and health connectivity initiatives

Significant Funding to Support Preventive, Primary and Chronic Care

Prevention/Wellness Programs and Primary Care Grants/Training--$1.6 B

Healthcare Effectiveness Research--$1.1 B

Community Health Centers and Indian Health Services Improvements--$1 B

Beginning in 2011, physicians who are “meaningful users” of certified EHRs are entitled to receive up to $44,000 of total incentive payments over five years:

Year One Customer Qualification: $15,000 ($18,000 if Year One is 2011 or 2012)

Year Two Customer Qualification: $12,000

Year Three Customer Qualification: $ 8,000

Year Four Customer Qualification: $ 4,000

Year Five Customer Qualification: $ 2,000

You must qualify by 2013 in order to receive the full incentive ($39,000)

For those who qualify in 2014, the maximum incentive will be $24,000

No payments to any providers after 2016, or for those who qualify in 2015 or later

For physicians who do not adopt such technology by 2015, Medicare payments will be reduced by the following factors in the years specified:

2015: One percent

2016: Two percent

2017 and beyond: Three percent

2018 and beyond: Plus one additional percent/year (max of 5%) if 75% not automated

HIT Incentive Constructs “HITECH” Medicare provisions of HR 1

HIT Incentive Constructs “HITECH” provisions of HR 1

Beginning in Fiscal 2011, hospitals who are “meaningful users” of certified EHRs are entitled to incentive payments according to the following formula:

Initial Amount x Medicare Share x Transition Factor, where

Source: House Rules Committee (www.rules.house.gov) Inpatient Incentive Payment Summary Incentive Payment = (Base Amount + Discharge Related Amount) X Medicare Share x Transition Factor Base Amount $2 Million Discharge Range $ per Discharge Discharge Related Amount 0--1,149 1,150 – 23,000 $ 0 $200 $0 $0.23 - $4.37 mil Above 23,000 $ 0 $0 Medicare Share Inpatient bed day attributable to Medicare patients / Total number of inpatient bed days Transition Factor First payment year 100% Second payment year 75% Third payment year 50% Fourth payment year 25% Fifth payment year 0%