Maryland Gov. Martin O’Malley has signed into law legislation that will force insurance companies to provide incentives for doctors to use electronic medical records.

Martin O'Malley

The legislation (HB 706) was signed by O’Malley May 19 and becomes effective July 1.

It requires private insurance companies to offer doctors financial incentives to adopt the technology, according to the Baltimore Sun, with doctors not developing an electronic medical records system online by 2015 facing possible penalties.

“This is where government and private health care providers can come together to really improve not only the quality of care but also, hopefully, create some costs savings as well,” O’Malley told the Sun. “Health IT is the future of health care in our country, and we want Maryland to lead the way.”

The bill also requires the Maryland Health Care Commission to create a health information exchange, a computer network linking all of the state’s physicians, hospitals, medical laboratories and pharmacies. The group must do so by Oct. 1.

The Maryland system is seen as a link to a national network discussed at length in Washington, D.C., the Sun said.

The MHCC is also charged with reporting on the progress of the stipulations of the law to the governor and the Maryland General Assembly by Jan. 1, 2010.

As part of his economic stimulus package, President Barack Obama dedicated $17.2 billion for the adoption of electronic medical records to help streamline patient treatment and promote medical research.