ARRA’s Competitive State HIT Grants and the Small Physician Practice

Many small physician practices may be relying on health information technology (HIT) loans from their state to adopt electronic health records (EHRs) in their practices. Before a physician can seek such a loan, the state must have such loans available. The American Recovery and Reinvestment Act of 2009 (ARRA) provides grants to states to make such EHR loans available to health care providers. However, states must competitively bid for the ARRA HIT grant money to be made available for such loans.  

The U.S. Department of Health and Human Services (HHS) has posted a grants primer on its Health IT website that outlines the process for applying for an HIT grant under the ARRA. The grants primer includes a chart outlining the available ARRA HIT grants as well as information about what applicants are eligible for each grant and the commitment the grantee must make, if any, to share in the cost. For example, states applying for the competitive ARRA HIT grants to establish loan programs for health care providers must match $1 of every $5 of Federal funds provided by the grants. What happens in states who were either unable to timely budget for its HIT grant cost share or were unable to muster the public or private donations to fund the state’s cost share?

A state’s failure to either aggressively bid or its inability to qualify for the ARRA grants for EHR loan programs does not bode well for the health care providers in that state who may have been relying on their state for loan assistance in implementing EHRs. The consequences to smaller, rural Medicare providers could be devastating considering the decreased Medicare payments in 2015.

This risk to small providers in less privileged states highlights the importance of this week’s proposed legislation for small physician practices, which was proposed by House Small Business Regulations and Healthcare Subcommittee Chairwoman Kathy Dahlkemper, D-Pa.  The title of the proposed legislation is the Small Business Health Information Technology Financing Act.  It is designed to help small providers overcome the financial barriers to implementing an electronic health record under the HITECH Act. 

For more information about this legislative proposal, see the article, “Legislation seeks to help small practices with IT costs,” by Molly Merrill, for Healthcare IT News, June 26, 2009.  For an additional editorial regarding the HITECH Act’s impact on small physician practices unable to shoulder EHR costs, see the article, “Small Practices Need Big EHR Help,” by Elyas Bakhtiari, for HealthLeaders Media, June 25, 2009.

One thought on “ARRA’s Competitive State HIT Grants and the Small Physician Practice

  1. HHS has updated the grant program so that states who apply for grants will be allocated money rather awarded money on a competitive basis that would have pitted states against one other. See the updated Grant Program documentation posted to the “HIT Health IT Home” webpage under HIT Links of this blog.

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