Among many looming health care compliance benchmarks is the requirement that providers demonstrate meaningful use of electronic health records throughout the entirety of 2015.

Health care providers have been scrambling to migrate from paper to electronic records, also known as EHRs, to avoid getting slapped with reimbursement penalties from Medicare and Medicaid. To avoid the penalties and qualify for incentive payments, providers must show they use technology that improves the quality, safety, transparency, efficiency and coordination of clinical care while maintaining the privacy of patient information.

A tall order indeed, but so far about 450,000 hospitals and other providers have fulfilled the first stage of requirements, eliciting a total $20.5 billion in incentive payments from Medicare and Medicaid since the program started in 2011. Regionally, the government’s challenge has been tackled internally by large medical organizations as well as by private IT companies, who have been able to expand their business thanks to the specialized demand emerging from the health care sector.

Earlier this month, TekTegrity — the largest IT service provider in San Luis Obispo County — acquired Innovative I.T., a firm out of Fresno that specializes in health care services.

“The two companies are very complimentary in the services we provide,” TekTegrity CEO Russ Levanway said. “Our acquisitions are about being able to build out that expertise on a higher level. TekTegrity provides more long-term, proactive solutions, while Innovative I.T. does a lot of work that’s project-specific and infrastructure-based, especially with health care.”

With the merger, TekTegrity gains much more than expertise in electronic records and HIPPA compliance. Levanway said he was especially impressed by Innovative I.T.’s consulting services, through which it designs custom networks and platforms for clients with complex needs such as a medical organization.

“For most companies, the need is in the processes and the solutions,” Levanway said. “That’s the consulting level and it’s about people. It’s about high-level engagement and providing solutions, not just about fixing hardware and fixing systems.”

The deal also raised TekTegrity’s client count from 200 to 300. While the firm provides IT services to all types of businesses, professional services and health care firms make up the vast majority of its client base, Levanway said, so the company is aiming to continue building value in those sectors.

“There’s a lack of really skilled companies that can make [a network] for health care providers,” Levanway said. “We’re trying to give them that and peace of mind.”

But as the ACA moves further into practice, health care IT startups are beginning to attract a lot of funding, especially from insurance firms seeking an alternative way to grow investment returns now that the law requires at least 80 percent of their premium revenue be spent on patient care.

According to a report compiled by Mercom Capital Group, venture capital funding in the health care IT sector more than doubled in 2014, coming in at $4.7 billion across 670 deals. That number compares to $2.2 billion across 571 deals for 2013. The sector also produced six IPOs and raised $2.1 billion in debt financing, bringing its corporate funding total to $7 billion for 2014.

“The health care IT sector, in the five years since we started tracking funding data, raised $8.8 billion in VC funding and another $3.6 billion in public market and debt financings bringing the total to $12.4 billion — largely driven by the [Health Information Technology for Economic and Clinical Health Act] and Affordable Care Act,” Raj Prabhu, CEO and co-founder of Mercom Capital Group, said in a news release that detailed the findings.

California led all states in health care IT fundraising last year with 174 deals, followed by New York with 50 and Massachusetts with 33.

The trend is beginning to pop up in the Tri-Counties. On Jan. 22, real estate software developer Yardi announced the launch of Yardi EHR, a browser-based electronic health records platform for the senior living industry. The Goleta company’s product is the first that allows users to manage health care services, finances and community operations on one platform.

Yardi EHR’s medical functions include resident assessments, care planning, staff assignment oversight, medication administration, incident tracking, wound care and behavior management, which Vice President of Senior Living Eric Kolber said will reduce clients’ risk exposure and provide enhanced oversight to clinical leadership.

“First-generation electronic health records were simply electronic versions of their paper-based predecessors,” Kolber said in a press release. “Our extensive team of senior living industry experts and engineers, in partnership with a number of our clients, focused on improving upon those old workflows.”