Announced in a release, the U.S. Department of Health and Human Services (HHS) is planning a new demonstration project that will offer Medicare incentive payments to physicians that adopt certified electronic health records (EHRs) systems to boost patient care. Designed to involve small- and medium-sized primary care physician practices, the project will include 12 community sites across the nation. Under the plan, HHS will award incentive payments across five years to as many as 1,200 physician practices that demonstrate improved care quality using specific clinical quality measures linked to EHR use. HHS also may award bonus payments based on data from a standardized survey measuring the number of EHR functionalities incorporated at each physician practice. In total, the demonstration project may provide up to $58,000 per physician or $290,000 per practice. According to the release, the initiative will launch in 2008 in four communities and the final eight will join in 2009. The project also will specifically target locations where the project would enhance existing or planned private sector efforts to advance health information technology and care quality data reporting. To be eligible, communities must demonstrate active involvement from stakeholders such as providers, consumers, health plans and employers and be geographically large enough to recruit 200 physician practices to participate. In addition, communities cannot already be part of similar demonstration projects managed by the federal Centers for Medicare and Medicaid Services. HHS will accept applications from eligible communities through mid-May (HHS release, 2/20/08).