Stimulus Package Provides $87 Billion for Medicaid Programs; $19 Billion for HIT
[Posted 02/23/09]

California’s Medi-Cal program is expected to receive more than $11 billion over three years as part of the $787 billion economic stimulus package signed into law by President Obama last week. This number is significantly higher than originally anticipated.

The stimulus bill increases federal funding for state Medicaid programs provided that the programs’ eligibility requirements are not more restrictive than they were on July 1, 2008. To receive the funds, California would have to reverse a recent policy change that requires parents to verify children’s eligibility for the program twice annually, rather than just once a year. The state would have to rescind the change by July 1, 2009, to maximize available matching funds.

The economic stimulus package also provides approximately $19 billion in incentives over five years, including bonus payments upwards of $40,000 for each Medicare provider who demonstrates “meaningful use” of an EHR system. Physicians with significant Medi-Cal patient loads (20 percent or more for pediatricians, 30 percent or more for other specialties) may be eligible for additional bonuses paid through state Medicaid programs. As eligibility is based on usage, even physicians who already use EHR systems will be eligible. While the bill does include Medicare payment reductions (starting at 1 percent) for physicians who do not implement HIT systems, these do not take effect until 2015 and there are exceptions for significant hardship cases.

CMA is currently analyzing the HIT provisions of the bill, and we will provide physicians with details and guidance on how to take advantage of the incentives soon.

The bill also establishes HIT Policy and Standards Committees that are comprised of public and private stakeholders (including physicians) to provide recommendations on the HIT policy framework, standards, implementation specifications, and certification criteria for electronic exchange and use of health information. The bill requires the U.S. Health and Human Services Department to adopt through the rule-making process an initial set of standards, implementation specifications, and certification criteria by December 31, 2009.

CMA continues to work closely with members of Congress and the Administration to ensure the voices of physicians and patients are heard and considered as new health care policies are developed.

Stay tuned for more details.

Contact: Elizabeth McNeil, 415/882-3376 or emcneil@cmanet.org.