How To Pay for an EHR: Resources and Tips for Financing

How Do You Finance an EHR Purchase?

Purchasing a new EHR, whether an upgrade from an existing system or a new install as part of a shift away from paper documentation, is a major, multi-year investment for a behavioral health and human services agency. For providers who have to scrutinize every expense, that often means a new or upgraded EHR feels like it’s out of reach.

Even so, an EHR is a vital component of agency success. A purchase or upgrade will eventually be unavoidable. When that time comes, funding will be an issue, because the question of how to finance the system is daunting. While many financing options are available, from federal and state grants to vendor loans, few guides or resources exist on where to begin or what to consider in making your choice. Here are a few options and resources to get you started.

Financing Your EHR via Bank Loan or Credit

Bank loans and credit lines may be the first option that come to mind when considering financing. These offer the guarantee of funding but come with their own disadvantages. A bank loan will not be tied to EHR upgrade cycles, so planning for new costs or hardware down the line is necessary.

As many EHRs have both one-time installation fees as well as fees that are recurrent based on usage, bank loans may be helpful in covering up-front fees where additional planning may be needed to address recurring expenses. You also need to consider variables like turnaround time on a loan, interest rates and whether a loan or line of credit can cover all of your costs.[i] A bank is also more used to originating loans for more standard businesses (ones that do not rely on government funding and reimbursement), and so may be wary of an agency as an applicant. For these reasons, you’ll likely want to consider other financing options rather than simply going to the bank.

Pursuing Federal Grants and Incentive Programs to Help Fund Your EHR

Federal support for EHR adoption exists in the form of many different grants and incentive programs. These include the Medicare and Medicaid Promoting Interoperability Programs (formerly the Medicare and Medicaid EHR Incentive Programs), MACRA, SAMHSA CCBHC expansion grants and COVID telehealth funding initiatives.

Many such grants and programs, like MACRA or the Promoting Interoperability Programs, require that a provider demonstrate Promoting Interoperability, formerly known as Meaningful Use, or meet specific criteria with their EHR before they can apply for incentives. In other words, they can be of great help in easing costs you once you’ve got your new EHR up and running — but won’t directly fund your initial purchase or lease.

The Medicare and Medicaid Promoting Interoperability Programs are incentive programs that provide payment to eligible professionals, hospitals and critical access hospitals. Providers must adopt ONC-certified EHR technology, maintain a minimum 90-day EHR reporting period and demonstrate various Electronic Clinical Quality Measures, among other eligibility requirements. For more information, please visit this CMS page.

CMS’s Quality Payment Program, created by and often referred to as MACRA, or the Medicare Access and CHIP Reauthorization Act of 2015, offers two tracks under which Medicare clinicians can receive payment increases:

  • Merit-based Incentive Payment System (MIPS): allows eligible providers to earn a positive payment adjustment if they submit data by the submission deadline.
  • Advanced Alternative Payment Model: allows for providers who participate in certain alternative payment models to receive a 5% Medicare incentive payment.

For more information on the Quality Payment Program, please visit this CMS page.

The Office of the National Coordinator for Health IT is another source of potential grant funding for providers adopting HIT systems. Keep an eye out for funding announcements and opportunities here.
SAMHSA’s CCBHC expansion grants can be another way for community-based behavioral health providers to implement a new EHR. If your agency is in the process of becoming a CCBHC, you may be eligible to apply for SAMHSA’s grants. Your health information technology, or HIT, plan should include “how [your] CCBHC [will support an] electronic health information exchange to improve care transitions […] using the HIT system [you] have or are developing.”[ii] Find out more about the grants on SAMHSA’s page.

Learn About State Grants, Programs, and Resources to Pay for an EHR

Many states offer funding via grant initiatives for EHR implementation, such as Massachusetts’ eQuality Incentive Program. Similar funding initiatives exist to aid providers in demonstrating Promoting Interoperability requirements for the Medicaid Promoting Interoperability Program. Your state’s alternative loan programs can also aid in financing your EHR investment, so be sure to check your state’s department of health for helpful resources.

If you are a small agency, it also is a good idea to visit a Small Business Development Center in your state to learn more about your options. Likewise, most states also offer Regional Extension Centers, which can aid in the implementation process of a new EHR.  Some also offer free or reduced-price EHR implementation support, including financial consultations and incentive payment attestation advice.

State 1135 Waivers modify the requirements for participation in certain programs and may offer agencies more flexibility in their eligibility.

Looking Elsewhere for Funding Opportunities

In addition to considering federal and state grants and resources to help fund your EHR, it’s well worth broadening the scope of your search. Nonprofit foundations, boards and local institutions can offer funding initiatives, especially to smaller community-based practices.

Talk To Your Vendor

Your EHR vendor may be able to offer special financing options or loan terms as part of the contract, so be sure to inquire. And keep in mind that if you are moving to a Software as a Service (SaaS), or cloud-based EHR platform, you’ll realize savings around no longer owning and maintaining servers and other equipment. In this scenario, the EHR software is accessed online through a secure web browser connection. This setup also has the added bonus that all upgrades and maintenance are done by the vendor. The potential for savings and little to no maintenance makes these types of online EHRs valuable options to consider.

Offsetting Costs via a Return on Investment

While initial funding for a purchase is critical, don’t forget about offsetting costs elsewhere. For instance, a SaaS platform will result in savings around IT equipment and staffing.

Similarly, consider the cost savings you will achieve as a return on investment for your new EHR. The right EHR can streamline your revenue collection, save time and energy for your clinicians and increase overall efficiency as an agency. Once implemented, it also opens you up to incentive opportunities. These will all have a direct impact on costs in the long run, so be sure to account for these factors when budgeting.

Financing your EHR is best seen as a process rather than a one-time event. If you keep your options open, consider continued sources of funding, and continue to pursue incentives down the line, your chance to successfully implement and reap a positive return on your investment grows substantially.

Qualifacts + Credible offers EHR solutions that support Behavioral Health and Human Services Agencies. If you are in the EHR search process and have questions or would like to learn more about how our solutions support agencies, contact us today.



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