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May 07, 2013

Health Information Technology: Office of the National Coordinator to Charge User Fees to HIT Vendors

Health IT
We previously wrote about President Obama’s FY 2014 budget for the U.S. Department of Health and Human Services (HHS).  Given the large size of the budget and the vast array of agencies it covers, we are devoting a separate story on the budget for the Office of the National Coordinator for Health IT (ONC), which received a big financial boost, jumping 28 percent to $78 million, reported FierceHealthIT

“With HITECH funding ending in FY 2013, the proposed funding is needed to ensure that progress towards secure, interoperable health IT systems is continued,” National Coordinator for Health IT Farzad Mostashari said.  “ONC’s budget will ensure that investments such as the EHR Incentive Programs continue to yield meaningful results, and that health IT fulfills its important role in modernizing and transforming the nation's healthcare system.” 

What is unique about ONC’s budget is that it imposes a new "user fee" on electronic health record (EHR) vendors and developers to support ONC's certification and standardization activities, reported FierceEMR.  “The fee would be assessed on vendors who certify their products through the ONC health IT certification program.  The estimated $1 million fee is part of ONC’s $26.3 million request to support standards, interoperability and certification,” the article noted.  “The fee will be imposed on vendors and developers because they are the primary beneficiaries of the certification program.  Providers must use a certified product to qualify for Meaningful Use incentive payments.” 

The user fees were justified by ONC because of their increasing workload, and the funds for certification activities from the American Recovery and Reinvestment Act (ARRA), which created the Meaningful Use incentive program, are scheduled to expire in 2013.  “Consequently, a new revenue source is necessary to ensure that ONC can continue to fully administer the certification program, as well as invest resources to improve its efficiency,” the proposed budget notes.   Some of the improvements contemplated include additional tools and resources and technical assistance, FierceEMR writes.  

The HIMSS EHR Association, in a statement released late last week, said it did not support the fee and suggested that HHS evaluate the necessity and value of “all requirements in the Meaningful Use program and the associated certification activities.”  As of March 2013, the Certified Health IT Product List on ONC’s website included over 1,750 unique certified EHR products from 945 vendors and developers.  

FierceHealthIT reported that “Approximately $16 million of the $78 million would go toward policy development and coordination, according to the ONC's budget.  The funding will help implement the much anticipated Health IT Patient Safety Action and Surveillance Plan, expected to be finalized in early summer, as well as support health IT governance efforts.  The latter, according to the budget, will be achieved by ‘funding emerging private-sector governance collaboratives, publishing a series of governance guides and launching a monitoring program to ensure that governance goals are being addressed.’”

Another $26 million will be allocated to both maintain and develop standards supporting an “interoperable and secure health IT infrastructure,” the article reported. The funding will also go toward sustaining health information exchange, as well as continued operation of the ONC Health IT Certification Program.  Finally, more than $14 million will go toward supporting the Meaningful Use Incentive Program, as well as monitoring its results.  According to the budget: “As adoption rates accelerate, ONC will begin focusing on developing and distributing best practices to providers and consumers in order to help them make the most of their health IT investments to improve patient care, population health and increase the value of every health dollar.” 

HHS’ Office of Civil Rights, will receive a $1 million increase in funding to $42 million in FY 2014 to go towards enforcing the updated HIPAA Security Rule, which took effect in March 2013.  

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