U.S. Health and Human Services Secretary Mike Leavitt is calling on community leaders nationwide to apply for a new demonstration project that provides Medicare incentive payments to physicians for the use of certified electronic health records to improve patient care.

The project, open to small- and medium-sized primary care physician practices, is expected to reduce medical errors and improve the quality of care for an estimated 3.6 million Americans.

Over a five-year period, financial incentives will be provided to as many as 1,200 physician practices that use certified EHRs to improve quality as measured by their performance on specific clinical quality measures. In addition to the incentive payments, bonus payments may be awarded based on how many electronic record functions a physician group has incorporated into its practice. Total payments under the demonstration for all five years may be up to $58,000 per physician or $290,000 per practice.

The application period is open now through mid-May for communities interested in becoming one of the 12 sites. CMS expects that the demonstration will start with four communities in 2008, with the remainder beginning in 2009. Once communities have been selected, CMS will begin working with the communities to recruit physician practices for participation in the demonstration.

For more information about the demonstration project, visit www.cms.hhs.gov/DemoProjectsEvalRpts/downloads/2008_Electronic_Health_Records_Demonstration.pdf.