NOTICE IS HEREBY GIVEN that, pursuant to sections
73.15 (3) and
227.11 (2) (a), Stats., the Department of Revenue will hold a public hearing to consider permanent rules creating section
Tax 2.985, relating to the electronic medical records credit.
Hearing Information
The hearing will be held:
Date: Monday, February 27, 2012
Time: 12:30 P.M.
Location: State Revenue Building
Events Room
2135 Rimrock Road
Madison, WI 53713
Handicap access is available at the hearing location.
Appearances at the Hearing and Submittal of Written Comments
Interested persons are invited to appear at the hearing and may make an oral presentation. It is requested that written comments reflecting the oral presentation be given to the department at the hearing. Written comments may also be submitted to the contact person listed below no later than February 27, 2012, and will be given the same consideration as testimony presented at the hearing.
Dale Kleven
Department of Revenue
Mail Stop 6-40
2135 Rimrock Road
P.O. Box 8933
Madison, WI 53708-8933
Telephone: (608) 266-8253
Analysis Prepared by the Department of Revenue
Statutes interpreted
Statutory authority
Explanation of agency authority
The department is authorized by s.
73.15 (3), Stats., to promulgate rules to comply with the provisions under ss.
73.15 (1) and
(2), Stats., which provide:
73.15 (1) The department of revenue shall implement a program to certify health care providers as eligible for the electronic medical records credit under ss.
71.07 (5i),
71.28 (5i), and
71.47 (5i).
(2) If the department of revenue certifies a health care provider under sub. (1), the department shall determine the amount of credits to allocate to the health care provider. The total amount of electronic medical records credits allocated to health care providers in any calendar year may not exceed $10,000,000.
(3) The department of revenue shall promulgate rules to administer this section.
The department is further authorized by s.
227.11 (2) (a), Stats., to promulgate rules interpreting the provisions of any statute enforced or administered by the agency if the agency believes it necessary to effectuate the purpose of the statutes enforced or administered by the agency. Section
227.11 (2) (a), Stats., provides:
227.11 (2) Rule-making authority is expressly conferred as follows:
(a) Each agency may promulgate rules interpreting the provisions of any statute enforced or administered by the agency, if the agency considers it necessary to effectuate the purpose of the statute, but a rule is not valid if the rule exceeds the bounds of correct interpretation. All of the following apply to the promulgation of a rule interpreting the provisions of a statute enforced or administered by an agency:
1. A statutory or nonstatutory provision containing a statement or declaration of legislative intent, purpose, findings, or policy does not confer rule-making authority on the agency or augment the agency's rule-making authority beyond the rule-making authority that is explicitly conferred on the agency by the legislature.
2. A statutory provision describing the agency's general powers or duties does not confer rule-making authority on the agency or augment the agency's rule-making authority beyond the rule-making authority that is explicitly conferred on the agency by the legislature.
3. A statutory provision containing a specific standard, requirement, or threshold does not confer on the agency the authority to promulgate, enforce, or administer a rule that contains a standard, requirement, or threshold that is more restrictive than the standard, requirement, or threshold contained in the statutory provision.
Related statute or rule
There are no other applicable statutes or rules.
Plain language analysis
This proposed rule establishes procedures for:
• filing a claim for the electronic medical records tax credit under ss.
71.07 (5i),
71.28 (5i) and
71.47 (5i), Stats., including the method of application and information required; and
• allocating the electronic medical records tax credit to certified health care providers.
Summary of, and comparison with, existing or proposed federal regulation
The federal Office of the National Coordinator (ONC) for Health IT promulgated
45 CFR 170 relating to health information technology (HIT) standards, implementation specifications, and certification criteria and certification programs for HIT. These rules, in addition to the rules for meaningful use of certified electronic health records (EHR) technology under
42 CFR 495, are being used by the Centers for Medicare and Medicaid (CMS) to administer an electronic health record incentive payment program. CMS will require health care providers participating in Medicare to adopt and use certified EHR technology or face penalties beginning in 2016.
Comparison with rules in adjacent states
The department is not aware of a similar rule in an adjacent state.
Summary of factual data and analytical methodologies
The department has created this proposed rule order to comply with the statutory requirement to administer the implementation of the electronic medical records credit. No other data was used in the preparation of this proposed rule order or this analysis.
Analysis and supporting documents used to determine effect on small business
As explained above, this proposed rule is created to administer Wisconsin's income and franchise tax laws. As the rule itself does not impose any significant financial or other compliance burden, the department has determined that it does not have a significant effect on small business.
Anticipated costs incurred by private sector
This proposed rule does not have a significant fiscal effect on the private sector.
Effect on Small Business
This proposed rule does not have a significant effect on small business.
Initial Regulatory Flexibility Analysis
This proposed rule order does not have a significant economic impact on a substantial number of small businesses.
Agency Contact Person
Please contact Dale Kleven at (608) 266-8253 or
dale.kleven@revenue.wi.gov, if you have any questions regarding this proposed rule.
Text of Rule
SECTION 1. Tax 2.985 is created to read:
Tax 2.985 Electronic medical records credit. (1) Purpose and scope. The purpose and scope of this section is to establish procedures for all of the following:
(b) Filing an application for the electronic medical records credit under ss.
71.07 (5i),
71.28 (5i), and
71.47 (5i), Stats., including the method of application and information required.
(c) Allocating the electronic medical records tax credit to health care providers certified under this section.
(2) Definitions. In this section:
(b) “Electronic medical record" means an electronic record of health-related information that includes patient demographic and clinical health information and has the capacity to provide clinical decision support; to support physician order entry; to capture and query information relevant to health care quality; and to exchange and integrate electronic health information with and from other sources.
(3)
Applying for certification and allocation. (a) The department shall provide an official form to apply for certification and allocation of the electronic medical records credit under ss.
71.07 (5i),
71.28 (5i), and
71.47 (5i), Stats. The form shall require an applicant to provide the following information:
1. The type of health care provider license or certification held and the license or certification number.
2. The amount paid in the taxable year for information technology hardware and software used to maintain electronic medical records.
3. A description of the information technology hardware and software, including the federal certification number issued pursuant to
45 CFR 170.
4. An explanation of how the information technology hardware and software is used to maintain electronic medical records.
5. Any other information, as determined by the department, necessary to certify a health care provider or allocate the credit under sub. (4).
(b) Each application shall be completed and submitted to the department, no sooner than upon completion of the calendar year in which the amount under par. (a) 2. was paid, and no later than January 31 of the subsequent calendar year.
Note:
An application for the electronic medical records credit may be filed beginning January 1, 2013. The application form will be available on the department's web site at
www.revenue.wi.gov by December 2012.
(4)
Certification of applicants and allocation of credits. (a) Based on the information provided in sub. (3) (a) 1. to 5., the department shall certify health care providers as eligible for the electronic medical records credit under s.
71.07 (5i),
71.28 (5i), or
71.47 (5i), Stats.
(b) In conjunction with issuing a certification for an applicant, the department shall determine the amount of credit that the applicant may claim or distribute to its partners, members, or shareholders as follows:
1. If 50 percent of the total of the amounts under sub. (3) (a) 2. for all certified applicants does not exceed the $10,000,000 maximum total established in s.
73.15 (2), Stats., for allocations in each calendar year, the credit shall be equal to 50 percent of the amount the applicant paid during the calendar year for health information technology software certified pursuant to
45 CFR 170 and hardware used to run and access certified software.
2. If 50 percent of the total of the amounts under sub. (3) (a) 2. for all certified applicants exceeds the $10,000,000 maximum total established in s.
73.15 (2), Stats., for allocations in each calendar year, the $10,000,000 of credits shall be allocated to each certified applicant in proportion to the amount paid during the calendar year for health information technology software certified pursuant to
45 CFR 170 and hardware used to run and access certified software.
Example: Health Care Providers A, B, and C are certified to claim the electronic medical records credit for the following amounts paid in 2012 for certified software and related hardware:
A $8,000,000
B $12,000,000
C $4,000,000
The $10,000,000 of credits available for 2012 are allocated to A, B, and C, based on their proportionate share of the $24,000,000. A is allocated a credit of $3,333,333 (= [8,000,000 ÷ 24,000,000] x $10,000,000), B is allocated a credit of $5,000,000 (= [12,000,000 ÷ 24,000,000] x $10,000,000), and C is allocated a credit of $1,666,667 (= [4,000,000 ÷ 24,000,000] x $10,000,000).
(c) Following completion of the certifications and allocations under pars. (a) and (b), the department shall notify each applicant of the outcome of their application, including the amount of credit allocated to the applicant.
ADMINISTRATIVE RULES
FISCAL ESTIMATE
AND ECONOMIC IMPACT ANALYSIS
|
Type of Estimate and Analysis
|
X Original Updated Corrected
|
Administrative Rule Chapter, Title and Number
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Section Tax 2.985 - Electronic medical records credit
|
Subject
|
Electronic medical records credit under ss. 71.07(5i), 71.28(5i), and 71.47(5i), Stats.
|
Fund Sources Affected
|
Chapter 20 , Stats. Appropriations Affected
|
GPR FED PRO PRS SEG SEG-S
|
|
Fiscal Effect of Implementing the Rule
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X No Fiscal Effect
Indeterminate
|
Increase Existing Revenues
Decrease Existing Revenues
|
Increase Costs
Could Absorb Within Agency's Budget
Decrease Costs
|
The Rule Will Impact the Following (Check All That Apply)
|
State's Economy
Local Government Units
|
Specific Businesses/Sectors
Public Utility Rate Payers
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Would Implementation and Compliance Costs Be Greater Than $20 million?
Yes X No
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Policy Problem Addressed by the Rule
|
The rule does not create or revise policy, other than to reflect a statutory change.
|
Summary of Rule's Economic and Fiscal Impact on Specific Businesses, Business Sectors, Public Utility Rate Payers, Local Governmental Units and the State's Economy as a Whole (Include Implementation and Compliance Costs Expected to be Incurred)
|
The rule does not create any further impact or implementation and compliance costs beyond the statutes it interprets, except that, by providing clarifications and examples, may reduce the costs that businesses and individuals would otherwise incur to comply with the statutes.
No comments concerning the economic effect of the rule were submitted in response to the department's solicitation.
|
Benefits of Implementing the Rule and Alternative(s) to Implementing the Rule
|
Clarifications and guidance provided by administrative rules may lower the compliance costs for businesses, local governmental units, and individuals.
If the rule is not implemented, Chapter Tax 2 will be incomplete in that it will not reflect current law.
|
Long Range Implications of Implementing the Rule
|
No long-range implications are anticipated.
|
Compare With Approaches Being Used by Federal Government
|
N/A
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Compare With Approaches Being Used by Neighboring States (Illinois, Iowa, Michigan and Minnesota)
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N/A
|
Assumptions used in arriving at fiscal estimate
The proposed rule order implements the electronic medical records credit under ss.
71.07 (5i). 71.28 (5i), 71.47 (5i), and 73.15 (1) and (2), Wis. Stats., as created in
2007 Act 20 and amended in
2011 Act 32.
Any fiscal effect resulting from the credit was included in previously issued fiscal estimates for
2007 Act 20 and
2011 Act 32. The proposed rule merely implements the credit, and as such the rule itself has no fiscal effect.
Notice of Hearing
