Among the provisions included in the “stimulus bill” rapidly making its way through Congress at the time of this writing are $19 billion directed toward health information technology. Of this amount, $17 billion are allotted to incentives and $2 billion to jump-start healthcare IT adoption. By the time this article reaches press, the details of the provisions may have changed. However, The Health Information Technology for Economic and Clinical Health Act (HITECH) is a significant part of the $789 billion American Recovery and Reinvestment Act.  The first component of HITECH to hit the streets is a $2 billion project which includes measures to establish an open and transparent process, led by the Office of the National Coordinator for Health Information Technology (ONC), to develop standards that allow for “secure nationwide electronic exchange of health information.” This aspect is often called the National Health Information Network (NHIN) and the goal is to have this ready by 2010.

Nationwide exchange of electronic information will likely be the target of strong opposition from the privacy lobby. In a pre-emptive strike against likely opposition, the bill improves and expands current federal privacy and security protections for health information, commonly known as HIPAA, such as requiring that an individual be notified if there is an unauthorized disclosure or use of his or her health information and requiring a patient's permission to use his or her personal health information for marketing purposes.  The largest change implemented by this bill is the practical abolition of the Business Associate Agreement, or BAA.  In making this step, contractors and vendors who have in the past been seen as Business Associates are now going to be considered, and held accountable to the standards of, Covered Entities.

The second part of this legislation is the allocation of $17 billion in incentives to support health information technology (HIT) through Medicare and Medicaid, beginning in 2011. CMS will be offering reimbursement incentives to eligible professionals and hospitals that exhibit a “meaningful use” of certified electronic health records (EHR). Most notable is the provision of temporary bonus payments ranging from $44,000 to $64,000 for physicians and up to $11 million for hospitals.  The goal is a 90% HIT adoption rate for physicians and a 70% adoption rate for hospitals. The bill’s authors hope to generate savings of more than $12 billion through improvements in quality and coordination of care and reductions in both medical errors and duplicative care.  If the carrot doesn't work, the bill phases in Medicare payment penalties for physicians and hospitals not using electronic health records starting in 2014.