Medicare officials on Wednesday detailed plans to distribute billions of dollars in stimulus to upgrade the nation's paper medical records to electronic files.
Under the proposal, doctors and hospitals that keep updated electronic medical records of their patients could receive bonus payments for using the software.
Officials for the Centers for Medicare and Medicaid Services stressed to reporters on a conference call that the proposal is preliminary and won't be finalized until next spring. The proposal was posted to the agency's Web site.
Using electronic records could reduce costly medical errors and duplicative testing, according to Obama administration officials.
"Widespread adoption of electronic health records holds great promise for improving health care quality, efficiency, and patient safety," said David Blumenthal, National Coordinator for Health Information Technology.
Health care providers have been waiting for clarity on who will be eligible for stimulus payments because the law, signed early this year, says only that health care providers must show "meaningful use" of health information technology.
Under the proposed rule, health care professionals who use electronic records for 80 percent of their medical instructions could receive bonus payments. They also would have to provide patients with printouts of their medical history and use computers to check for potential drug interactions. Hospitals would have to complete 10 percent of their orders electronically.
The payments will be administered through Medicare and Medicaid, the government health care plans for the elderly, poor and disabled.
The agency will take comments on Wednesday's proposal for 60 days before beginning work on final guidelines. It separately laid out technology standards that medical software should meet.
Improving the nation's health information technology has been a rallying cry in Washington for years, with little to show. Fewer than 20 percent of U.S. physicians have digitized their records, and many complain about the cost.
The $17 billion in the stimulus package aims to ease that burden by paying doctors incentives for using the technology beginning in fiscal 2011. The payments will gradually taper off through 2015. Eventually, those not using the technology will be penalized.
Investor expectations for the plan have lifted shares of companies like Cerner Corp., the leader in hospital-installed electronic records, in recent months.
Other companies poised to benefit include McKesson Eclipsys Corp. and Allscripts-Misys Healthcare Solutions Inc.
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