EMR System Purchase Financing Information | MedicalRecords.com

EMR System Purchase Financing Information

Medical, EMR & EHR software Pricing Guide
Don’t let price confusion keep you from selecting the best software!

EMR System Purchase Financing Information

Purchasing an electronic medical record (EMR)/electronic health record (EHR) system can be a significant investment decision for any health care provider, whether working as a sole provider or as part of a group practice. With typical in-office EMR pricing ranging from $50,000 to $100,000 and more per physician, purchasing and financing an EMR system can represent a significant financial burden for health care providers. However, there are some EMR financing options available to you.

Title IV of the Health Information Technology for Economic and Clinical Health Act of 2009 (the HITECH Act) provides financial incentives up to $63,500 per health care provider who implement an EMR system that is certified by an Office of the National Coordinator for Health IT (ONC) Authorized Certification Body (ONC-ATCB). While these EMR federal grants can in fact cover a substantial portion of EMR system costs, payments are made only once there is “meaningful use” of the system, and are staged over the course of several years, all of which obviously occurs well after the systems must be paid for.

In addition to simply financing and paying for an EMR system from the cash flow of a health care providers’ practice, deferred payment or leasing programs programs are available from many EMR vendors, large corporate partners of these EMR vendors, and specialty finance companies with help with financing. There are many varieties of leases from EMR vendors, and if structured appropriately, the full purchase price of the system may still be deductible in the first year while spreading payments over three or more years, generating significant cash flow over the first half of the lease.

There are various provisions of the US Tax Code, including Section 179 and the related Bonus Depreciation provisions, which can allow health care providers to deduct the full purchase price of an EMR system immediately on their business tax returns, which can help with EMR financing. This deductibility of a major capital purchase can substantially improve near term cash flow for most health care providers. However, this is a complex area of the tax code, made even more complex by the uncertain status of Section 179 deductibility for purchases made after Dec 31, 2011, since final Congressional approval of extending this deduction had not occurred as of January, 2012.

In addition, some EMR vendors offer “cloud-based” EMR or Software-as-a-Service (SaaS) systems, which provide EMR functionality through a web based application accessed over the internet. Most EMR vendors price their systems on a monthly per-user basis, substantially reducing upfront capital expenditures, making an EMR system more affordable. Some vendors even offer free EHR or free EMR software.

While it’s always important to make sure that contract provisions set execution standards which align with your business needs, installment purchases or leases can give vendors leverage if there are installation or usability problems, so be sure to make sure that payment terms are tied to key milestone achievements. An excellent summary guideline can be found here.

Do NOT follow this link or you will be banned from the site!