ONC's budget includes new tax on IT vendors

The proposed 2014 budget for the Office of the National Coordinator for Health Information Technology (ONC) includes $1 million from a new tax on health IT vendors, but the plan calls for increasing revenue from the tax in coming years if the tax is enacted.

“Due to ONC’s increasing workload, this request includes a proposal for a new health IT user fee that would provide ONC with the necessary resources to meet the increasing demands of health IT vendors and sustain the impact of its certification and standards work on the health IT marketplace and the healthcare system,” according to the office’s budget document. “An initial fee level of $1.0 million is suggested in FY 2014, reflecting the fact that collections would likely begin late in the fiscal year and would be phased in gradually.”

Imposition of the fee is necessary as funds from the Recovery Act of 2009, which included the HITECH Act, run out at the end of fiscal 2013, ONC notes in the budget document. The agency also says the fee would improve the efficiency of both ONC and EHR vendors and permit those vendors to bring products to market more quickly.

“Consequently, a new revenue source is necessary to ensure that ONC can continue to fully administer the certification program as well as invest resources to improve its efficiency,” the budget document reads. “Such improvements are envisioned to include, among other improvements, additional testing tools and resources, less time between revisions to testing tools, and other forms of technical assistance.”

In particular, the fee could fund ONC’s health IT certification program and maintenance of the online list of certified products, development of implementation guides and other technical assistance for incorporating standards and specifications into products, development of health IT testing tools used by developers, testing laboratories and certification bodies; and development of consensus standards, specifications and policy documents related to certification criteria, according to the proposed budget. “Such fees shall be collected and available only to the extent and in such amounts as provided in advance in appropriations acts.”