Legislative Basis

The Recovery Act

On February 17, 2009, Congress passed the American Recovery and Reinvestment Act of 2009 ("the Recovery Act"). The Recovery Act was designed to create jobs and foster economic growth through a series of tax cuts, benefits working families and businesses, increases federal entitlement programs (such as unemployment insurance), and invests in long-term growth through federal contracts, grants, and loans.


Portions of the Recovery Act relating to health information technology are known as the Health Information Technology for Economic and Clinical Health Act, or HITECH Act. The HITECH Act contains provisions that encourage the advancement of information technology as a tool for improving the quality of health care, develop standards and testing procedures for the electronic exchange of health care information, and strengthen privacy protections for patients. The HITECH Act also created a new organization within the Department of Health and Human Services (HHS) called the Office of the National Coordinator for Health Information Technology (ONC) to coordinate these activities.

In order to encourage health care providers to take advantage of these advances in health information technology (HIT) and support the Recovery Act's overall goal of economic stimulus, the HITECH Act appropriated funds for a program of financial incentives to health care providers participating in Medicare and Medicaid who use certified electronic health records (EHR) technology. The Medicare EHR Incentive Program, like Medicare itself, is directly administered by the federal government - specifically, the Centers for Medicare and Medicaid Services (CMS). CMS also has authority to oversee Medicaid EHR Incentive Programs operated by the individual state and territorial Medicaid agencies. Incentive payments made through both programs are funded 100% with federal dollars. The state Medicaid EHR Incentive Programs also receive federal funds to cover 90% of the costs of running the programs.

ONC Certification of EHR Technology

The HITECH Act designated ONC as the authority governing the certification of EHR technology. Certification ensures that the technology used by individual facilities and practitioners meets a minimum standard of functionality, most importantly the ability to exchange health information electronically with other providers. Under the provisions of a final rule published on June 24, 2010, ONC established a temporary program for the certification of EHR technology. The temporary certification program will be in effect until December 31, 2011, at which point it will be replaced by a permanent certification program under the terms of a final rule published by ONC on January 7, 2011

EHR Incentive Program Final Rule

On July 28, 2010, CMS published a final rule implementing the Medicare and Medicaid EHR Incentive Programs. This rule clarified many of the eligibility criteria for the incentive programs that were established by the Recovery Act and (based on the objectives listed in the Recovery Act) created a set of measures by which a provider can demonstrate "meaningful use" of EHR technology.

Medicare and Medicaid Extenders Act

On December 8, 2010, Congress passed the Medicare and Medicaid Extenders Act of 2010, a measure designed to extend certain expiring provisions of the Medicare and Medicaid programs. Among the provisions of the act was an amendment to the HITECH act to simplify the conditions under which an eligible professional (EP) could receive funds from the Medicaid EHR Incentive Program.