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January 11, 2010

Washington Health Policy Week in Review Archive 44210864-95ba-44b6-9419-3226acef4db3

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Advocates Charge That Senate Overhaul Penalizes Workers with Chronic Conditions

By Jane Norman, CQ HealthBeat Associate Editor

January 7, 2009 -- Health care advocates on Thursday slammed a wellness provision in the Senate health care bill that would allow insurers to greatly increase penalties on workers who fail to meet health standards for conditions such as obesity or high cholesterol.

Richard Kirsch of the liberal-leaning Health Care for America Now said a major goal for change in the health care system is to wipe out discrimination by insurance companies on the basis of patients' pre-existing conditions. Both the Senate bill (HR 3590) and the House bill (HR 3962) aim to do so, but Kirsch said a "loophole" in the Senate bill would allow insurers to charge thousands of dollars more to people with chronic conditions.

"We fear this could really become medical underwriting by another name," he said in a conference call with reporters.

The provision would apply to the 150 million U.S. employees enrolled in employers' group health insurance plans and would launch pilot programs in the individual market in 10 states.

Current law permits employers to provide rewards or penalties to workers who take part in wellness programs. Those who decline to participate can be charged up to 20 percent more for their coverage; those who do take part can be charged up to 20 percent less. The Senate would allow that to rise to 30 percent, and as high as 50 percent with government approval.

The penalty or reward would apply to the total cost of coverage paid for by both employers and employees. That means for a policy with a total cost of $13,375 for a family, the average in 2009, a 30 percent penalty or discount would carry a variation of $4,013 at 30 percent and $6,688 at 50 percent.

American Heart Association Vice President Sue Nelson said that essentially, the provision allows insurers to raise premiums across the board and then lower them selectively for workers who meet certain targets in wellness programs.

Yet medical experts say the causes of obesity, hypertension and other conditions are sometimes genetic and can't be controlled by individuals, or can be difficult for low-income people or working parents to control, Nelson said. Sicker workers also may be burdened with higher costs, making coverage less affordable and thwarting the intent of the overhaul, she said.

She said 67 percent of Americans are obese or overweight, 45 percent have high or borderline cholesterol, 32 percent have high blood pressure and 21 percent smoke, so many people could see their premiums rise if the provision becomes law.

Harald Schmidt, a Commonwealth Fund Harkness Fellow at the Harvard School of Public Health, said proponents of the wellness proposal argue that the initiatives implement a reasonable policy of personal responsibility. For example, in car insurance, the idea is that premiums paid by good drivers shouldn't support bad drivers, he said.

But it's different with health care. "People don't just choose to be unhealthy," he said. "Moreover . . . generally the poorer you are, the more likely you are to be unhealthy."

Schmidt co-wrote an article for the New England Journal of Medicine that provided some examples. A law school graduate from a wealthy family who owns a condo with a gym in the building is more likely to succeed in losing weight than a teen mother who works in a poor neighborhood with little access to healthy food or opportunities for exercise, the article said.

"Although alternative standards must be offered to employees for whom specific standards are medically inappropriate, disadvantaged people with multiple co-existing conditions may refrain from making such petitions, seeing them as degrading or humiliating," the article said. Advocates said workers forced to define their "medical conditions" by supplying personal medical records could suffer an invasion of privacy.

Senate health aides said the provision arose out of an attempt to promote employer wellness in a way that doesn't discriminate, and they are confident the final version of the bill will meet that goal. They noted the provision is separate from a wellness title championed by Senate Health, Education, Labor and Pensions Committee Chairman Tom Harkin, D-Iowa.

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CMS Report Totals Health Care Spending at $2.3 Trillion in 2008

By Alex Wayne, CQ Staff

January 5, 2009 -- National spending on health care grew in 2008 at the slowest rate in decades, according to new government figures, but it still greatly outpaced the growth of the overall economy.

Total health care spending in 2008 was $2.3 trillion, the Centers for Medicare and Medicaid Services (CMS) said in its annual spending report. That represents a 4.4 percent increase over 2007 spending—the lowest growth rate the agency has recorded since it started tracking the statistic in 1960.

But the rate of health care spending grew almost 70 percent faster in 2008 than the growth rate of the gross domestic product (GDP), which increased 2.6 percent.

The Obama administration pointed to the figures as justification for its ongoing efforts to overhaul the U.S. health care system.

"Health care spending as a percentage of GDP is rising at an unsustainable rate," said Jonathan Blum, director of CMS' Center for Medicare Management. "It is clear that we need health insurance reform now."

The government's estimate of national health care spending captures all U.S. expenditures on such services, including by the government and by private entities and individuals. On a per-capita basis, the country spent about $7,681 per person for health care in 2008. The United States spends far more per person for health care than any other industrialized nation, according to the Organization for Economic Co-operation and Development.

Health care spending has been a much-discussed issue throughout the congressional debate on an overhaul of the system. Democrats and Republicans agree that the growth of the nation's health care spending is dangerously uncontrolled and should be slowed, but they disagree sharply on how—and on whether legislation passed in the Senate (HR 3590) and the House (HR 3962) would have much impact.

Democrats have pointed to Congressional Budget Office estimates that their legislation would reduce the budget deficit as evidence that the bills would broadly reduce overall spending as well. But CMS' own actuary has said otherwise, estimating that either bill would lead to a more rapid increase in spending, largely because each would increase demand for services by greatly expanding insurance coverage.

The Senate bill, according to actuary Richard S. Foster, would increase spending by about 0.7 percent over what is expected under current law from 2010 to 2019, while the House bill would increase it by 0.8 percent.

In a Dec. 10 report on the Senate bill, Foster said that some of the measure's provisions "would have a significant downward impact on future health care cost growth rates," but he added that they would be "outweighed" by the bill's expansion of health insurance coverage. In a Nov. 12 report on the House bill, he said that most of its attempts at cost controls "would not have a significant impact on future health care cost growth rates."

The senior Republican on the House Ways and Means Committee, Dave Camp of Michigan, was the first member of Congress to ask Foster to study the bills.

"I agree we need reform, but both the House and Senate Democrat bills make the problem worse by increasing the cost of health care," Camp said in a statement Monday.

"They spend $1 trillion we don't have and bend the curve the wrong way," he added, referring to the bills' effects on the trajectory of spending.

The growth in health care expenditures in 2008 was largely driven by government spending, according to the CMS. Medicare and Medicaid, the health care entitlement programs for the elderly and the poor, spent 6.5 percent more in 2008 than in 2007. By comparison, health care spending by the private sector grew only about 2.6 percent.

The recession weighed heavily on spending, according to the CMS. Private health insurance premiums, for example, increased only 3.1 percent in 2008, down from a 4.4 percent increase in 2007. But CMS officials attributed the decrease in premiums to a decrease in enrollment: About 1 million people lost their private coverage, the agency estimated.

At the same time, enrollment in public programs—particularly Medicaid—swelled. According to the Kaiser Family Foundation, a health policy research center, Medicaid grew by 3 percent—adding about 1.3 million people to its rolls—between June 2007 and June 2008, compared with a 0.6 percent decline in Medicaid enrollment the previous year.

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Cover More People Or Shrink Our Cuts, Hospitals Tell Capitol Hill

By John Reichard, CQ HealthBeat Editor

January 8, 2009 --Congressional negotiators should adopt House-passed provisions to cover the uninsured or else reduce the cuts in Medicare hospital payments planned by lawmakers to help pay for expanded coverage, the American Hospital Association said Friday in a 27-page letter to House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev.

The House bill would cover five million more uninsured Americans than the Senate bill and begin coverage a year earlier—in 2013 rather than in 2014, said the letter signed by AHA Executive Vice President Rick Pollack. The House bill would result in coverage of 96 percent of all those legally residing in the United States while the Senate bill would only cover 94 percent, the letter added. Hospitals want more insured customers to offset the impact of lower Medicare reimbursement.

The White House has stopped short of promising hospitals that overhaul legislation will lead to coverage levels that AHA said the Obama administration agreed to earlier this year in return for $155 billion in Medicare cuts over 10 years. Hospitals have said the Obama administration agreed to a coverage level of 97 percent.

Even getting to 96 percent seems iffy given the desire of Obama to keep the price tag for the overhaul bill at around $900 billion over ten years. But few observers expect hospitals to unleash an all-out attack on overhaul legislation if they don't get the coverage levels they want, predicting they'll unleash their lobbyists instead in coming years to reduce the Medicare cuts in overhaul legislation.

The $900 billion target is closer to the price tag of the Senate bill. To the extent lawmakers decide to spend more on coverage, they are under pressure to do so by beefing up the levels of subsidies in the Senate bill to help individuals comply with the mandate that they carry health insurance.

An analysis released Friday by the liberal-leaning Center on Budget and Policy Priorities said subsidies in the Senate bill are too low.

"For those who make less than 250 percent of the poverty line—about $55,000 for a family of four—the House bill does a better job than the Senate bill in ensuring that people can afford to purchase coverage," the analysis said. "The House bill also would ensure that individuals and families could seek the care they need without being deterred by overly burdensome deductibles and cost-sharing."

Center analysts said that if the Senate bill "forces people with modest incomes to spend substantial amounts to buy a health policy and those people then find that the policy does not cover much of their health care costs due to its high deductibles, it could prompt a voter backlash that adds fuel to expected efforts by opponents to repeal this historic health reform legislation in the years after it is enacted."

House Democratic leaders said this week that one of their top priorities in negotiations with their Senate counterparts is assuring sufficient subsidies.

AHA's take on insurance exchanges also is in sync with that of the House in so far as it supports a national exchange rather than a state-based approach.

"To ensure that an individual coverage mandate is meaningful, it will be important that insurance market reforms are not only thorough but also implemented rapidly," the AHA letter says. "Such a mandate would be greatly enhanced by a robust national health insurance exchange with a broad scope of authority that includes regulating health plans."

To no one's surprise, the letter strongly opposes the adoption of a new government-run insurance plan as an option in the exchange. "The creation of a public option to compete in the exchange, potentially open to all individuals, as well as small and large businesses, would put tremendous pressure on provider payment rates," the letter says.

AHA calls for an end to the Children's Health Insurance Program in 2013, arguing that "this population will be better served in a robust exchange as long as there are adequate subsidies" to buy coverage.

The letter devotes much attention to the bread-and-butter issue of "market basket updates," the yearly Medicare payment increases meant to compensate hospitals for changes in the cost of delivering care. Overhaul legislation reduces these updates, in large measure through a "productivity" adjustment that assumes that hospitals are becoming more productive in line with efficiency gains in the economy at large.

Market basket reductions should be minimized in years in which coverage is not expanded. Expansion doesn't occur until 2013 in the House bill and 2014 in the Senate bill. The letter protests that the House bill "applies a full productivity reduction in calendar years 2010 through 2012" and that the Senate bill "applies a full productivity reduction and adds a 0.1 percentage point reduction to productivity in both 2012 and 2013."

But AHA "strongly supports the Senate approach to market basket update reductions for 2010 and 2011, which would reduce the updates by 0.25 percentage points in each year."

The letter objects, however, that both the House and Senate bill would permanently reduce the annual market basket update by a measure of productivity growth after 2011. It strongly urges that negotiators "sunset the productivity adjustments after 2019, the end of the 10-year budget period" used to estimate the cost of overhaul legislation.

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Democrats Explore Compromise on Health Care Taxes

By Drew Armstrong and Joseph J. Schatz, CQ Staff

January 7, 2009 -- House and Senate Democrats appear headed toward a compromise over the very different revenue-raising provisions in their health care bills.

The final version is likely to include a modified version of the Senate's tax on high-cost insurance plans that union groups would like to kill. But it also may reflect the House's preference for boosting taxes on the wealthy to finance a big expansion of health coverage to uninsured Americans.

Siding with the labor groups, House Democrats have, by and large, vehemently opposed the Senate's proposed excise tax on "Cadillac" plans, a levy that many economists, some senators and the White House have said is necessary to help drive down insurance costs.

But there is a continuing push from the White House to include the tax, as well as a growing acceptance among House Democrats that it will have to be in the final bill in some form or another.

In the legislation (HR 3590) passed by the Senate on Dec. 24, insurers that offer health plans that cost more than $8,500 for individuals and $23,000 for families would face a 40 percent excise tax on those plans. The tax would raise $148.9 billion over a decade, according to the Congressional Budget Office (CBO).

Over the years, the plan costs that would trigger the tax would grow by the rate of inflation plus 1 percentage point. But because health care costs have long risen faster than the Consumer Price Index, the inflation benchmark, the excise tax is expected to hit more and more plans over time. That would make it a far more significant source of revenue in later years and would increase pressure on insurers to keep down costs. The CBO expects employers to restructure insurance plans to avoid the tax in most cases.

According to the Joint Tax Committee, the excise tax would bring in $35 billion in 2019, and 10 to 15 percent more revenue each year for the decade after that.

The House bill (HR 3962), meanwhile, relies on a 5.4 percent surtax on the adjusted gross incomes of individuals making more than $500,000 and married couples making more than $1 million to pay for most of its costs. The tax would raise $460.5 billion over a decade, according to the CBO.

On Jan. 5, Obama said he supports the Senate proposal. And Senate Democratic leaders are holding fast as well, insisting that major changes would lose the support of one or more of the 60 senators they need to overcome a Republican filibuster.

As a result, labor groups and their allies in Congress are looking at ways to modify the excise tax if they can't kill it outright.

"Well, I personally . . . think the House pay-for is much better," said Frank Pallone Jr., D-N.J., chairman of the House Energy and Commerce Health Subcommittee. "First of all it raises a lot more money, it doesn't hit middle-class Americans. But it, you know, it may very well be that we have a combination of the two . . . some combination of the insurance tax and the surcharge on the millionaires."

House Rules Committee Chairwoman Louise M. Slaughter, D-N.Y., said raising the threshold that triggers the excise tax was under discussion. "That will be part of the negotiations between the two houses and the president," she said.

Lobbyists and others tracking the negotiations do not believe the Cadillac tax is going to disappear, nor do they believe that Obama or anybody else is engaging in a bit of theater by holding fast to the tax so that House Democrats can successfully kill it in the end and claim a political victory for their labor supporters.

"I don't think it's a setup for Pelosi to get a win," said one representative from a labor lobby group. "I think they genuinely see it as a viable way to finance health care, and they unfortunately have talked about it for several months."

House Speaker Nancy Pelosi, D-Calif., is standing by the House position at this point, but has indicated that if an excise tax must remain to win Senate approval, the value of plans subject to the levy – currently $23,000 for a family — must be raised, according to a congressional aide.

Ken Bowler, a lobbyist with Dow Lohnes Government Strategies and a former top aide to the Ways and Means Committee, suggested the final revenue package will be a blend of proposals from the two bills.

"I think the tax-financing provisions will be a combination of the three major proposals: Cadillac plan tax, Medicare payroll tax increase and income tax increase for high income," Bowler said.

The Senate bill includes, in addition to the excise tax on costly insurance plans, a 0.9 percent increase in the current 1.45 percent Medicare payroll tax for individual wage earners of more than $200,000 and couples earning more than $250,000.

Still Arguing
Even if they are fighting a losing battle, labor lobbyists and their allies continue to argue against the excise tax.

"We think it's wrong to ask struggling middle-class families to bear the burden of paying for health care reform," said Amaya Tune, spokeswoman for the powerful labor lobby AFL-CIO.

Critics of the plan say that the tax would fall heavily on hard-won health care plans that many unions have negotiated in lieu of higher wages, as well as insurance plans in regions where health care costs are higher.

They also say that the excise tax would violate a key promise Obama made during the campaign – not to raise taxes on families making less than $250,000 a year. "We're working with the president to stick to what he said when he was campaigning," said Rep. Xavier Becerra, D-Calif. "We're trying to make sure that this does not affect middle-class Americans."

White House spokesman Robert Gibbs argued Wednesday that the excise tax would fall on insurance companies, not on individuals.

Rep. Joe Courtney, D-Conn., a leading House Democratic opponent of the Senate excise tax proposal, said Wednesday in a conference call, "I believe very strongly that the American people are on the side of the House" on the issue.

Not all Senate Democrats like the excise tax. Indeed, before the Senate bill hit the floor, key critics such as Charles E. Schumer, D-N.Y., won changes to the original Finance Committee excise tax proposal designed to protect retirees and workers in specific high-risk occupations.

Still, White House officials see the excise tax as a key cost containment mechanism. And House Democratic leaders know that the House's proposed 5.4 percent surtax on the adjusted gross income of top earners faces stiff opposition in the Senate. To win 60 votes in that chamber, the excise tax will almost certainly have to be a large part of the revenue-raising equation in the final bill.

Alex Wayne and Richard Rubin contributed to this story.

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House Democrats Conference by Phone to Plan for Health Care Negotiations

By Drew Armstrong, CQ Staff

January 7, 2009 --House Speaker Nancy Pelosi told rank-and-file members on Thursday that congressional negotiators do not plan to accept the Senate's health care overhaul in its entirety, and that she will fight for key provisions that are in a House overhaul plan.

"What they said is, they were standing up for the House position," Rep. Diana DeGette, D-Colo., said after a telephone caucus meeting of House Democrats to discuss the state of negotiations between the House and Senate on their health care bills (HR 3962, HR 3590).

House Democratic leaders said they spoke to roughly 175 members during a mass conference call, which lasted over an hour. According to multiple lawmakers on the call, the session was a chance for members to ask questions about the state of negotiations with the Senate and the White House, and also to voice concerns about specific parts of the bill.

During the call, almost every major area of disagreement with the Senate came up for discussion: a proposed tax on high-cost "Cadillac" insurance plans in the Senate bill, restrictions on abortion services, the timetable under which changes in the health insurance market would take effect and whether to include the government-run "public option" that is in the House bill.

House Education and Labor Chairman George Miller, D-Calif., said much of the time was devoted to a question-and-answer session. "Members were asking us about the specifics of the bill, things they were interested in, things their constituents have asked them about," said Miller. "Obviously, no decisions have been made on any of this."

Negotiations will continue when the House returns from its recess, on Jan. 12.

According to a Democratic aide on the call, one area of specific concern from several members is how the tax on high-cost insurance plans would affect individuals in their districts. According to the aide, several members complained their constituents would be adversely affected, because their local insurance markets feature unusually high premiums. The lawmakers noted that even individuals who do not have the type of "Cadillac" plans that the tax is meant to target could still wind up penalized under the Senate's overhaul plan.

House Democrats are scheduled to meet again, this time in person, on Jan. 12, when they will hear more from leaders and begin working through the many issues that divide the two chambers.

One area where House negotiators hope to prevail is in the use of a national "exchange" to sell private insurance to uninsured people, instead of the state-by-state system envisioned in the Senate bill.

"That's a major bone of contention for myself and for a lot of House members, that we want a national exchange," said Frank Pallone Jr., D-N.J., chairman of the House Energy and Commerce Committee's Health Subcommittee. Pallone expressed concern that a state-based system would leave many regulatory gaps and allow some states to avoid creating robust marketplaces, leaving consumers vulnerable to high coverage costs.

Some members also are pressing negotiators to maintain the House health bill's position and make the overhaul's major changes go into effect in 2013, a year earlier in the Senate. Aides said there is concern from leadership that doing so would increase the cost of the bill substantially beyond the president's $900 billion target.

In spite of the House leaders' assurances that they will not simply accept the Senate bill, Pelosi and other top Democrats have already indicated several areas where they likely will end up making serious concessions to the Senate. These include eliminating the public plan and including some aspect of the Senate tax on high-cost plans in order to raise revenue and pay for the overhaul.

"I think the House is concerned about that, and the leadership is concerned about it," DeGette said of the tax on high-cost plans. "But they feel people need to let the White House know about their concerns."

Obama supports the Senate position on taxing high-cost plans and reiterated his position this week.

The House and Senate have yet to figure out how to bridge the gap between how the two bills raise revenue. Democratic leaders and top committee members say they are looking at raising the threshold at which plans would be hit by the tax, or altering the rate at which the threshold is allowed to grow.

Currently, plans costing $8,500 or more for individuals, or $23,000 or more for a family, would be subject to the tax. That rate is allowed to grow at inflation plus 1 percent.

Pallone said that there was discussion about changing the Senate tax and replacing some of the $148.9 billion in revenue it's expected to raise over a decade with the House health care bill's surtax on people making more than $500,000.

Pallone said the Senate tax proposal could be "pared down and replaced with some of those House pay-fors. . . . It's one of the major sticking points, but there are other issues."

The Senate, so far, appears to be holding fast to its position that the tax must be retained in any final agreement. Sen. John Kerry, D-Mass., has been a proponent of a higher threshold, but made clear in an op-ed Thursday that he opposes eliminating it during House-Senate negotiations.

"Let's fix it, not nix it," Kerry said in a column on the liberal blog The Huffington Post.

Alex Wayne contributed to this story.

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Rulemaking Launches New Era in Health Information Technology

By John Reichard, CQ HealthBeat Editor

January 5, 2009 -- As 2009 turned into 2010, the Medicare and Medicaid programs took a key step toward bringing health information technology into the mainstream of American medicine, issuing regulations to boost payments by tens of thousands of dollars to doctors and by millions of dollars to hospitals using the technology.

But despite the milestone, hospitals say federal officials risk slowing rather than speeding the adoption of "health IT" because they are making it too hard to qualify for the higher payments in the limited period they will be offered. Hospital lobbyists say that unless the regulations are changed, too few hospitals will qualify—and then adopting IT will become even more difficult because Medicare will penalize the laggards by reducing payments for hospital care.

Passage of economic stimulus legislation a year ago gave IT an unexpected boost, creating a pot of money awarding doctors and hospitals higher Medicare and Medicaid payments if they made "meaningful use" of the technology. But the particular definition of meaningful use proposed by the Centers for Medicare and Medicaid Services "should be a destination point, not a starting point," complained Rich Pollack, executive vice president of the American Hospital Association.

The federal Health and Human Services Department moved on two rulemaking fronts last week to launch the new era. A rule proposed by CMS laid out the terms for health IT incentive programs in Medicare and Medicaid. An interim final rule prepared by the HHS Office of the National Coordinator for Health Information Technology establishes standards for systems using electronic health records (EHRs).

"This initial set of standards begins to define a common language to ensure accurate and secure health information exchange across different EHR system," CMS said in a news release Dec. 30. The regulation "describes standard formats for clinical summaries and prescriptions; standard terms to describe clinical problems, procedures, laboratory tests, medications and allergies; and standards for the secure transportation of this information using the Internet."

The interim rule on EHR standards takes effect in early 2010 but it is subject to a 60-day comment period that may lead to modifications in a final rule to be issued in 2010.

The Medicare incentive program spells out payment for "eligible professionals"—such as doctors, dental surgeons, podiatrists and chiropractors—and also for hospitals.

Eligible professionals, dubbed "EPs," can receive incentive payments for up to five years starting as soon as 2011. "In general, the maximum amount of total incentive payments that an EP can receive under the Medicare program is $44,000," the news release notes. A qualifying EP could get up to $18,000 in 2011, and $12,000, $8.000, $4,000 and $2,000 in subsequent years. EPs could sign up either for the Medicare or Medicaid incentive program, but not both.

"EPs who are not meaningful EHR users will be subject to lower payment updates for their covered professional services beginning in 2015," CMS said.

Eligible hospitals could receive incentive payments for up to four years starting in the fiscal year that begins in October 2010. The sums would start with a base payment of $2 million with additional amounts depending on the number of patients treated. Hospitals could receive payments from both the Medicare and Medicaid incentive programs.

Under the Medicaid incentive program, EPs could get up to $63,750 over six years. CMS says that Medicaid EPs are "physicians, dentists, nurse practitioners, certified nurse midwives, and physician assistants practicing predominantly" in a federally qualified community health center or rural health clinic.

The federal government foots the entire bill for the Medicaid incentive payments and 90 percent of the cost to states of administering the payments. To qualify for the payments, at least 30 percent of the patients treated by EPs would have to be Medicaid enrollees, or 20 percent in the case of pediatricians.

Hospital-based EPs would not qualify for either the Medicare or Medicaid incentive payments. In the first year of the Medicaid program, providers could qualify by demonstrating any of the following: that they have acquired and installed an electronic health record system; implemented the system by training staff and exchanging data; or upgraded an existing certified EHR system.

Meaningful use is determined by seeing how a provider stacks up on measures to assess whether certified EHR technology is used in a manner "that improves quality, safety, and efficiency of health care delivery, reduces health care disparities, engages patients and families, improves care coordination, improves population and public health, and ensures adequate privacy and security protections for personal health information," CMS said.

The proposed rule would phase in tougher criteria for meaningful use in three stages. The proposed stage one criteria, which starts in 2011, lists 25 "objectives and measures" for EPs and 23 for eligible hospitals. Providers would have to attest they had reported all of the results for those objectives and measures, including measures of clinical quality, to CMS.

Stage two would mean reporting on an expanded set of measures and stage three on achieving actual improvements in safety, quality, and efficiency through EHR technology in order for there to be meaningful use.

But according to the American Hospital Association, the proposed definition doesn't sufficiently recognize steps hospitals have taken to reduce medication errors, track quality and collect basic patient health information using computer technology.

Don May, AHA's vice president for policy, said that fewer than 5 percent of hospitals currently have the ability to qualify as meaningful users of health IT. May also decried the proposal as an "all or nothing" standard that would require hospitals to have 23 IT functions up and running next year with reporting on 35 clinical measures in order to receive the higher payments. Failure to do all of those things would mean no additional payment, he said.

Based on CMS figures, hospitals should receive between $11.2 billion and $15.3 billion in bonus payments from 2011 to 2019, minus penalties for failing to adopt the technology by 2016, AHA said. This is based on an assumption that between 30 percent and 43 percent of hospitals will be meaningful users in fiscal 2011, but May said that without changes in the regulation, that won't be possible.

Congress doesn't usually step in to block rules until they are final, he noted, downplaying the notion of near-term congressional intervention. CMS has said it will consider comments in refining the regulation and AHA is very hopeful that needed revisions will be made, May said. But he said that many AHA members will be talking to members of Congress about their concerns and that he expects many lawmakers will be expressing their concerns about the proposal with CMS as well.

The American Medical Association issued a milder statement in response to the proposals.

"We have provided ongoing input this year on standards for the use of EHRs, and have stressed the importance of realistic timeframes for adoption, the removal of extraneous requirements that would delay successful adoption and reasonable reporting requirements," said AMA Board member Steven J. Stack. "We want physicians in all practice sizes and specialties to be able to take advantage of the stimulus incentives and adopt new technologies that can improve patient care and physician workflow."

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