Obama budget includes new fee for EHR vendors

Once again, the federal electronic health-record incentive payment program could take a financial hit due to government budget cutting. This time, EHR developers are being asked to take one for the team.

The Office of the National Coordinator for Health Information Technology at HHS, as part of President Barack Obama's budget proposal, wants health IT vendors to pay an estimated $1 million in fees to help offset the cost of ONC's certification and standards activities.

The fee plan is tucked into the last two pages of the ONC's 59-page portion of the budget proposal released Wednesday. The president's overall budget called for $5.6 billion in Medicare payment cuts for fiscal 2014.

Last month, funds for providers were put on the chopping block as federal officials announced that hospitals, physicians and other professionals would see their EHR incentive payments under the American Recovery and Reinvestment Act trimmed by 2% under the sequester after federal government went over the “fiscal cliff.”

Because much of ONC's work to date has been funded through a $2 billion appropriation from 2009 ARRA, and those funds are scheduled to expire at the end of fiscal 2013, “a new revenue source is necessary,” the ONC budget statement said. The new money will “ensure that ONC can continue to fully administer the (EHR) certification program as well as invest resources to improve its efficiency.” Because the benefits of improved testing programs should enable EHR vendors to save time and money in the certification process, the proposed fee will be applied to them.

The new funding also would help maintain ONC's Certified Health IT Product List, and its development work around standards and implementation specifications for health IT interoperability as well as policy documents related to health IT certification criteria.

Collection of the fee “would likely begin late in the fiscal year,” the ONC budget statement said, and it would be conducted on the ONC's behalf by ONC-Authorized Certification Bodies, the independent entities that certify EHR systems as eligible for use by providers in the ARRA incentive payment program.

Fees for less complex EHR components, such as an electronic prescribing module, could be lower than those for a complete EHR, the statement said. A fee schedule is to be set by HHS later, it said.

The proposed fee scheme immediately drew fire from the Electronic Health Record Association, an affiliate of the Chicago-based Healthcare Information and Management Systems Society, a health IT industry trade group.

EHR developers “are already devoting extensive resources to successful implementation of the EHR Meaningful Use Incentive Program and other healthcare delivery reform efforts, including the significant fees associated with EHR product certification,” the EHRA said in a prepared statement. “Adding costs to the healthcare system at a time when providers already feel significant effects from several new legislative and regulatory programs, including payment cuts, is not an approach consistent with the government's larger goals of fostering broad health information technology adoption to support healthcare delivery system reform.

The association asked the ONC to evaluate and streamline all of its incentive program work while it asked members of Congress “to ensure that they are appropriating sufficient funds” to cover all of the ONC's critical programs.

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