U.S. Representative Kathy Dahlkemper (D-Pa.) has introduced a bill that would create the “Small Business Health Information Technology Financing Act,” designed to provide financing to solo doc’s and small physician practice groups for their acquisition of an EHR system. The text of the current draft of the bill appears below.

In addition to the reimbursements already available under the American Reinvestment and Recovery Act (ARRA) to physicians and hospitals, if this bill becomes law, physicians and small practice groups will have an attractive means of funding their ERH system investment on the front end. “Buy now and get reimbursed later” might not work for many smaller healthcare providers who lack the cash for their initial investement, and so this financing option could produce greater EHR adoption rates among smaller healthcare shops.

A BILL
To amend the Small Business Act to provide loan guarantees for the acquisition of health information technology by eligible professionals in solo and small group practices, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ` Small Business Health Information Technology Financing Act’.

SEC. 2. AMENDMENT OF SMALL BUSINESS ACT.

The Small Business Act is amended by redesignating section 44 as section 45 and by inserting the following new section after section 43:

`SEC. 44. LOAN GUARANTEES FOR HEALTH INFORMATION TECHNOLOGY.

`(a) Definitions- As used in this section:

`(1) The term `health information technology’ means computer hardware, software, and related technology that supports the meaningful EHR use requirements set forth in section 1848(o)(2)(A) of the Social Security Act (42 U.S.C. 1395w-4(o)(2)(A)) and is purchased by an eligible professional to aid in the provision of health care in a health care setting, including, but not limited to, electronic medical records, and that provides for–

`(A) enhancement of continuity of care for patients through electronic storage, transmission, and exchange of relevant personal health data and information, such that this information is accessible at the times and places where clinical decisions will be or are likely to be made;

`(B) enhancement of communication between patients and health care providers;

`(C) improvement of quality measurement by eligible professionals enabling them to collect, store, measure, and report on the processes and outcomes of individual and population performance and quality of care;

`(D) improvement of evidence-based decision support; or

`(E) enhancement of consumer and patient empowerment.

Such term shall not include information technology whose sole use is financial management, maintenance of inventory of basic supplies, or appointment scheduling.

`(2) The term `eligible professional’ means any of the following:

`(A) A physician (as defined in section 1861(r) of the Social Security Act (42 U.S.C. 1395x(r))

`(B) A practitioner described in section 1842(b)(18)(C) of that Act.

`(C) A physical or occupational therapist or a qualified speech-language pathologist.

`(D) A qualified audiologist (as defined in section 1861(ll)(3)(B)) of that Act.

`(3) The term `qualified eligible professional’ means an eligible professional whose office can be classified as a small business concern by the Administrator Small Business Administration for purposes of this Act under size standards established under section 3 of this Act.

`(b) Loan Guarantees for Qualified Eligible Professionals-

`(1) IN GENERAL- Subject to paragraph (2), the Administrator may guarantee up to 90 percent of the amount of a loan made to a qualified eligible professional to be used for the acquisition of health information technology for use in such eligible professional’s medical practice and for the costs associated with the installation of such technology. Except as otherwise provided in this section, the terms and conditions that apply to loans made under section 7(a) of the Small Business Act shall apply to loan guarantees made under this section.

`(2) LIMITATIONS ON GUARANTEE AMOUNTS- The maximum amount of loan principal guaranteed under this subsection may not exceed–

`(A) $350,000 with respect to any single qualified eligible professional, and

`(B) $2,000,000 with respect to a singled group of affiliated qualified eligible professionals.

`(c) Fees- (1) The Administrator may impose a guarantee fee on the borrower for the purpose of reducing the cost (as defined in section 502(5) of the Federal Credit Reform Act of 1990) of the guarantee to zero in an amount not to exceed 2 percent of the total guaranteed portion of any loan guaranteed under this section. The Administrator may also impose annual servicing fees on lenders not to exceed 0.5 percent of the outstanding balance of the guarantees on lenders’ books.

`(2) No service fees, processing fees, origination fees, application fees, points, brokerage fees, bonus points, or other fees may be charged to a loan applicant or recipient by a lender in the case of a loan guaranteed under this section.

`(d) Deferral Period- Loans guaranteed under this section shall carry a deferral period of not less than 1 year and not more than 3 years. The Administrator shall have the authority to subsidize interest during the deferral period.

`(e) Effective Date- No loan may be guaranteed under this section until the meaningful EHR use requirements have been determined by the Secretary of Health and Human Services.

`(f) Sunset- No loan may be guaranteed under this section after 5 years after meaningful EHR use requirements have been determined by the Secretary of Health and Human Services.

`(g) Authorization of Appropriations- There are authorized to be appropriated for the cost (as defined in section 502(5) of the Federal Credit Reform Act of 1990) of guaranteeing $10,000,000,000 in loans under this section. The Administrator shall determine such program cost separately and distinctly from other programs operated by the Administrator.’.