Electronic Health Records Incentive Program: What’s in it for the Docs? Physicians News
While most of the country’s attention recently was focused on the fate of the hotly disputed healthcare reform legislation, another, less controversial set of laws affecting healthcare crossed a significant milestone. On March 15, the comment period ended for the Center for Medicare and Medicaid Services’ (“CMS”) Electronic Health Records Incentive Program Proposed Rule (“EHR Incentive Rule”)[i] and the Office of National Coordinator’s (“ONC”) Initial Set of Standards, Implementation Specifications and Certification Criteria for Electronic Health Record Technology Interim Final Rule (“EHR Technology Rule”)[ii]. CMS and the ONC will now analyze these comments and likely incorporate a fair share of them into the final regulations. This article focuses on the regulations from the physician’s perspective by setting out briefly the background of the rules, discussing the EHR incentive program as currently formulated, highlighting some of the significant provisions in the regulations, identifying potential areas of change based on the recently concluded comment period and identifying critical areas for EHR vendor contracts.
EHR Legislation-Background. The EHR Incentive Rule and EHR Technology Rule have their genesis in the American Recovery and Reinvestment Act of 2009 (“ARRA”) which, among other things, targets health information technology generally and EHR specifically as a cornerstone of healthcare reform. ARRA through the Health Information Technology for Economic and Clinical Health Act (“HITECH”) authorizes monetary incentives for the adoption, implementation and use of EHR. Two parallel tracks of regulations have developed to guide physicians on how to use EHR so as to qualify for incentives and to establish criteria for what type of technology is needed to assist physicians in this process. The first track is the EHR Incentive Rule, which sets out who is eligible for monetary incentives, what needs to be done to earn those incentives and how much money physicians can receive for the use of certified EHR technology. The second track is the EHR Technology Rule which provides criteria for how EHR technology becomes certified.
EHR Incentive Program. The EHR incentive program offers monetary incentives for achieving “meaningful use” (as defined in the EHR Incentive Rule) of “certified EHR technology” (as defined in the EHR Technology Rule) in the years 2011-2015 and monetary penalties for failing to achieve such meaningful use after 2015. Meaningful use generally requires that physicians use the technology in a way that impacts patient care; allows them to communicate with other healthcare providers; and allows them to report clinical quality measures to the Department of Health and Human Services (“HHS”). What constitutes meaningful use will be phased in over three stages: Stage 1 begins in 2011; Stage 2 begins in 2013; and Stage 3 begins in 2015. The stages are designed such that physicians who wait until 2015 to achieve meaningful use will have more difficulty than had they gotten with the program in 2011.
The Medicare EHR incentive program is open to medical doctors, osteopaths, dentists, podiatrists, optometrists and chiropractors. The Medicaid EHR incentive program is open to physicians who have 30% of all their patient encounters attributable to Medicaid (for pediatricians, the threshold is 20%). Alternatively, physicians who practice predominantly in a Federally Qualified Health Center or a Rural Health Clinic can qualify for the Medicaid EHR incentive program if 30% of their patient encounters are with “needy individuals” who include Medicaid or CHIP enrollees, patients furnished uncompensated care and patients furnished services at either no cost or on a sliding scale. Hospital-based physicians are not eligible for either the Medicare or Medicaid program. “Hospital-based physicians” are physicians who furnish 90% or more of their services in a hospital setting (inpatient, outpatient or emergency room).
Incentive payments under Medicare amount to 75% of the estimated Medicare allowed charges up to a maximum of $44,000.00 over five years. Beginning in 2015, physicians in the Medicare program who are not meaningful users will suffer an adjustment to their Medicare reimbursement of 1% in 2015, 2% in 2016 and 3% in 2017 and beyond. The program does have a hardship exception to these adjustments. The hardship exception must be renewed annually, but cannot be used for more than five years. Incentive payments under Medicaid are based on the “net average allowable costs” for purchase, implementation, operation, maintenance, and use of EHR technology up can reach up to $63,750.00 over six years.
The schedule of incentives for the Medicare program is front-loaded and provides diminishing returns over time so as to encourage early entry into the program. The maximum incentive payment for achieving meaningful use in 2011 is $18,000.00 for 2011; $12,000.00 for 2012; $8,000.00 for 2013; $4,000.00 for 2014; and $2,000.00 for 2015 for a total of $44,000.00. By contrast, a physician who waits until 2014 to achieve meaningful use may receive up to $12,000.00 in 2014; $8,000.00 in 2015; and $4,000.00 in 2016 for a total of $24,000. A physician who waits until 2015 to achieve meaningful use receives no incentive payments. Under Medicaid, the incentive payments are front-loaded with $21,250.00 available for year one and $8,500.00 available thereafter totaling $63,750.00, but do not diminish over time such that a physician who achieves Medicaid meaningful use in 2015 receives the same amount of payments as one who reaches that status in 2011.
EHR Incentive Rule. The EHR Incentive Rule sets out guidelines for achieving meaningful use for Stage 1 of the program. It provides 25 objectives and measures that eligible physicians (“EPs”) must satisfy during the applicable reporting period in order to receive incentive payments. For the first year during which an EP attempts meaningful use, the reporting period is 90 days. For each following year, the EP must show compliance for the entire year. Some objectives and measures are based on a percentage of total patients that the EP sees. For example, Stage 1 meaningful use requires that the EP use Computerized Physician Order Entry (“CPOE”) for 80% of patients. Other objectives and measures, such as implementing drug-drug, drug-allergy and drug formulary checks, simply require the EP to have instituted the process. Table 1 lists the 25 objectives and measures and the compliance thresholds.
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