Medicare Pays $8.6 Billion to Doctors, Hospitals for Electronic Health Records Switch

    The Obamacare website Healthcare.gov has been grabbing all the headlines lately, but another aspect of the Affordable Care Act (ACA) may come under increased scrutiny in the weeks and months ahead: Electronic Health Records (EHR).  The ACA requires medical providers to transition to electronic record keeping by 2015.  In addition to increasing privacy concerns over the systems, the financial benefits of EHR are less clear after reports in January that the RAND Corporation had backed off from an optimistic $81 billion annual savings predicted in a 2005 report.  The New York Times reported that:

...evidence of significant savings is scant, and there is increasing concern that electronic records have actually added to costs by making it easier to bill more for some services. Health care spending has risen $800 billion since the first report was issued, according to federal figures...

     With savings from EHR in question, a recent report by the Government Accountability Office (GAO) may raise concerns about incentive payments through Medicare to medical providers for the EHR transition.  Healthcare providers and hospitals were paid $6.3 billion in 2012 alone, up from $2.3 billion in 2011.  Participation in the program by eligible providers approximately tripled from 2011 to 2012 matching the increase in incentive payments.  However, the GAO reports that not quite "half of eligible hospitals and less than a third of eligible professionals received Medicare EHR incentive payments for 2012," so participation is far from universal.
    While the maximum incentive payment to a hospital in 2012 was $4.7 million, the median amount was $1.4 million.  The median payment to individual health care professionals was $18,000.


Note: A version of this article first appeared at The Weekly Standard.