New Maryland law requires insurers to provide incentives for EHR adoption

Maryland Gov. Martin O'Malley (D) on Tuesday signed a bill making the state the first to require private insurance companies to offer physicians financial incentives for adopting electronic health records, the Baltimore Sun reports.

Starting in 2011, insurers will have to provide physicians who adopt EHRs with increased reimbursements, a single sum payment or in-kind services that have monetary value. According to the Sun, physicians who do not adopt EHR systems by 2015 could face penalties. The bill also requires Maryland to establish a health information exchange that eventually will link all the state's physicians, hospitals, medical laboratories and pharmacies.

Last summer, the Maryland Health Care Commission asked two state physician groups to develop and launch pilot health information exchange programs in an effort to see how a state system should work. Groups wanting to design the statewide system have until June 12 to submit applications to the commission, which will award the contract in August. The seed money for the system will come in part from stimulus funds and from hospitals fees. According to state Health Secretary John Colmers, the network is likely to be gradually phased in with the first elements coming online as early as fall.

Colmers said that he expects "fairly rapid adoption" of the information exchange system, adding that "with the incentives in the stimulus package and in this bill beginning to go into effect in 2011, it will be important for it to be certainly ramped up and ready to operate by then."

O'Malley said, "This is where government and private health care providers can come together to really improve not only the quality of care but also, hopefully, create some cost savings as well." Colmers said, "The goal here in Maryland was to assure that all of the payers pull their oars in the same direction," adding that the promise of EHRs "comes when it's done in a coordinated fashion, across all payers" (Brown/Brewington, Baltimore Sun, 5/19).