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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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