Joint Legislative Council prefatory note: This bill was prepared for the
Joint Legislative Council's Special Committee on Performance-Based Disease
Management Programs for Large Populations. Subsequent to the committee's approval
of preliminary drafts upon which this bill is based, the 2009-11 biennial budget bill (2009
Wisconsin Act 28) was enacted. This bill reconciles the provisions of the committee's bill
drafts with current law affected by the biennial budget.

A state tax credit for electronic medical records (EMRs) will go into effect in 2012.
The tax credit available will be equal to 50% of the amount paid by a health care provider
in a tax year for information technology hardware or software that is used to maintain
medical records in an electronic form. The Department of Commerce (Commerce) must

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implement a program to certify health care providers as eligible for the credit. If
Commerce certifies a health care provider, Commerce must determine the amount of
credits to allocate to that provider. No more than $10 million in credits may be allocated
each year.

There are currently no standards in state law pertaining to the interoperability of
health care information technology. The American Recovery and Reinvestment Act of
2009 (the ARRA) provides funding to assist health care providers in adopting and using
EMR systems. The ARRA contains a framework for the development of standards for
certifying EMR systems as eligible for funding. One goal of implementing national
standards is to facilitate interoperability of EMR systems, to enable the electronic
exchange and use of health information among providers.

This bill makes the following changes to the EMR tax credit program:

(1) Specifies that tax credits may be provided only for costs related to EMR systems
that are certified or are being upgraded to become certified as specified in the ARRA.

(2) Specifies that when allocating credits, Commerce must grant priority to
claimants that provide health care to underserved or low-income populations and to
claimants have the greatest need for financial assistance.

(3) Specifies that the credit may be claimed for amounts paid by a health care
provider to a 3rd party to provide EMR services to the health care provider.

(4) Requires Commerce to establish penalties that apply to a credit recipient that
commits a breach of privacy as defined in the ARRA.

The American Recovery and Reinvestment Act of 2009 defines "breach" as follows:

"(1) BREACH.--(A) IN GENERAL.--The term "breach'' means the unauthorized
acquisition, access, use, or disclosure of protected health information which compromises
the security or privacy of such information, except where an unauthorized person to
whom such information is disclosed would not reasonably have been able to retain such
information.

(B) EXCEPTIONS.--The term "breach'' does not include:

(i) any unintentional acquisition, access, or use of protected health information by
an employee or individual acting under the authority of a covered entity or business
associate if:

(I) such acquisition, access, or use was made in good faith and within the course
and scope of the employment or other professional relationship of such employee or
individual, respectively, with the covered entity or business associate; and

(II) such information is not further acquired, accessed, used, or disclosed by any
person; or

(ii) any inadvertent disclosure from an individual who is otherwise authorized to
access protected health information at a facility operated by a covered entity or business
associate to another similarly situated individual at same facility; and

(iii) any such information received as a result of such disclosure is not further
acquired, accessed, used, or disclosed without authorization by any person.".