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HHS Launches Medicare Electronic Health Record Demonstration Project

By CQ Staff

February 22, 2008 -- Medicare is launching a demonstration project that would provide payment incentives to physicians who use certified electronic health records to improve patient care.

The project, open to small- and medium-sized primary care physician practices, is expected to reduce medical errors and improve the quality of care for an estimated 3.6 million Americans, according to the Department of Health and Human Services (HHS).

"Broad adoption of interoperable electronic health records has the potential not only to improve the quality of care provided but also to change the way medicine is practiced and delivered," HHS Secretary Michael O. Leavitt said in a statement.

Over a five-year period, financial incentives will be provided to as many as 1,200 physician practices that use certified electronic health records (EHRs) to improve quality as measured by their performance on specific quality measures. In addition to the incentive payments, bonus payments may be awarded based on a standardized survey measuring to what extend EHRs have been incorporated into a physician group practice. Total payments under the demonstration for all five years may be up to $58,000 per physician or $290,000 per practice, according to HHS.

Communities interested in becoming one of the 12 sites for the demonstration may submit applications through mid-May. The Centers for Medicare and Medicaid Services (CMS) expects that the demonstration will start with four communities in 2008, with the remainder beginning in 2009. Once communities have been selected, CMS will begin working with communities to recruit physician practices for participation in the demonstration.

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