Health

New ONC fee proposal scares health IT sector

The Office of the National Coordinator for Health IT just released its budget plan for 2014, which would increase its $61 million budget to $78 million, a 28 percent jump. But it’s a little-reported line item that’s causing a stir among entrepreneurs — a proposal to boost fees for electronic health record vendors.

The ONC is the division within the U.S. Department of Health and Human Services that leads many initiatives laid out in the Affordable Care Act.

The funding boost in the Obama administration’s proposed budget is a response to the expanding marketplace for health IT. The ONC reports that a new “revenue source” is needed to help it handle the “increasing workload.”

A little-reported line item proposes amped up fees for electronic health record vendors and is a cause for concern for entrepreneurs.

The $1 million user fee “would provide ONC with the necessary resources to meet the increasing demands of health IT vendors,” the plan stipulates. Sources tell me it has a 50 percent chance of being authorized by Congress.

It’s unclear at this point how the ONC would levy the user fee, but it’s plausible that it would be passed down to doctors.

Lauren Fifield, a senior strategist for the free electronic medical record startup Practice Fusion, said the user fee would not be a strain on the industry. The bigger concern is the “high likelihood” that the ONC will use these funds to take on more projects and soon require higher user fee revenues.

Already, EHR vendors are speculating that a user fee charge is the ONC’s way of assuming regulatory authority. “This would be agency creep,” said Fifield, and urged the FDA, FCC and ONC to come together to clarify their roles.

Health IT startups may eventually face charges on revenues akin to the maligned 2.3 percent excise tax on medical devices.

Fifled said this might also create confusion and overregulation for electronic health record developers and entrepreneurs. “The user fee is a slippery slope that could create an even more dysfunctional health IT market,” she said.

Also featured in the 126 pages of program descriptions are several health IT initiatives, including a commitment to examining patient safety, and data security. We’ll be discussing these topics and more at our upcoming HealthBeat conference.

Doctor with electronic health record // Shutterstock

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