Karen Thomas fully expects Main Line Health to be in compliance with Stage 1 requirements for meaningful use of health information technology this year. But Thomas, vice president and chief information officer of the Berwyn, Pa., health system, won't be rushing to Washington, D.C., to claim federal incentive dollars just yet.

"We took our foot off the gas," Thomas says, referring to the health system's original plan to seek funds this year under the American Recovery and Reinvestment Act.

Thomas isn't alone. CIOs across the country are trying to gauge the best time to apply for incentive money and the decision is not as easy as one might think.

Main Line spent five years assembling key electronic health record components, including computerized provider order entry, one of the most complex requirements under the first round of meaningful use rules. Still, Main Line will wait until 2012 to apply for funding because of the still-evolving Stage 2 requirements. "We looked at the timelines and felt that without some change to the timing, we would be at risk for Stage 2," Thomas says.

There's growing concern that final rules for Stage 2 won't be released in time to allow for full implementation, which could reduce payouts significantly. For example, hospitals filing for Stage 1 funding by this September need full Stage 2 certification by Oct. 1, 2012. But the Office of the National Coordinator may not issue final Stage 2 regulations until the summer of 2012, leaving hospitals scrambling.

"If you start in 2011 and you are not a meaningful user in 2012, you lose a year of payment," notes Chantal Worzala, director of policy at the American Hospital Association. "You can come back and get Year 3 and 4 funding, but Year 2 is gone."

Holding off on applying for funds may buy some time to assess Stage 2 requirements, but it also means CIOs must convince senior managers and boards of trustees that it's a sound strategic—and financial—decision.

Main Line made a calculated decision to wait because even after Stage 2 is finalized, EHR vendors need to update their applications, which further shrinks hospital-implementation windows. "It's just too uncertain," Thomas says.

Even so, she's maintaining momentum. Main Line will finish Stage 1 implementation this year and conduct an internal three-month validation, all with an eye to formal certification by March 2012. To help manage expectations, Main Line created electronic dashboards that track ARRA timelines and show what internal steps are complete or need extra attention. "We are focused tactically on the first phase, but strategically on all of the stages," Thomas explains.

That's the same approach at Hennepin County Medical Center in Minneapolis, but unlike Main Line, the hospital is pressing ahead to receive ARRA funds for its 5-year-old EHR system this fiscal year. Although he's also concerned about tight Stage 2 timing, Chief Medical Information Officer and Associate Medical Director Kevin Larsen, M.D., is hoping the government will revise the deadlines. "We'll continue to tell the ONC that we think that there's a big problem," he says.

Once they map out an internal game plan, hospitals may need to factor in one additional variable—the budget-cutting mood on Capitol Hill. "There's some hesitancy to wait because of fears that the money is going to run out," says Charlene Underwood, senior director of government and industry affairs at Siemens Medical Solutions.