Latest health IT regulations from the federal government for practices and health care facilities

"As the web continues its torrid growth, we simply have too many web sites to sort through, too many places to buy products from, too many software providers to pick from." - Anonymous Blogger

Health Care Information Technology Update

The health care industry is not immune to the vast array of information technology (IT) choices to sort through in the "Web 2.0" era. The following is an attempt by CAB Strategies to sort through the latest health IT laws and regulations that will impact Texas medical practices and health facilities in the near future. Please note that the following is for information purposes only and does not serve as legal advice.

American Recovery and Reinvestment Act of 2009 (HR 1/P.L. 111-5)

Signed into law by the president in February 2009 (also known as the Stimulus Act), this law incorporated the Health Information Technology for Economic and Clinical Health (HITECH) Act.

What does HR 1 do?

Beginning in January 2011, HR 1 provides Medicare reimbursements incentives to physicians (eligible professionals) and hospitals who are "meaningful users" of electronic health records (EHRs). (More about meaningful users down below.) Beginning in 2015, payment penalties will begin for physicians and facilities who are not meaningful users of EHRs.

Medicare incentive payments for hospitals

Incentive payments for eligible hospitals that are meaningful EHR users will begin in October 2010. Reduced payments for hospital that fail to become meaningful EHR users will begin in FY 2015.

The incentive process for determining hospital incentive payments is a little complicated. According to CMS, the incentive payment for each eligible hospital would be based on the product of (1) an initial amount, (2) the Medicare share, and (3) a transition factor.

The initial amount

It is the sum of a $2 million base year amount plus a dollar amount based on the number of discharges for each eligible hospital.

The Medicare share

It is a fraction based on estimated Medicare fee-for-service and managed care inpatient bed-days and modified by charges for charity care.

The transition factor

It phases down the incentive payments over the four-year period. The factor equals 1 for the first year, ¾ for the second payment year, ½ for the third payment year, and ¼ for the fourth payment year. The transition factor is modified for hospitals that wait until 2014 to become a meaningful EHR user (their first year transition factor would be ¾ instead of 1).

What does this mean for ASCs?

The law does not provide incentives for ASCs to adopt EHRs. Only eligible professionals (physicians) and hospitals can take advantage of the incentives. However, many ASCs will want to adopt the EHRs in order to connect to the medical office.

Payments for eligible professionals

The incentives for eligible professionals, such as physicians, will begin in January 2011. Hospital-based physicians who furnish their services in a hospital setting will not be eligible. Eligible providers who furnish most of their services in a health professional shortage area would see their incentive payments increased by 10 percent.

The incentive payment formula is a little complicated. Key highlights of the payment formula:

· You must take advantage of the incentive payments during the time window of 2011 - 2016 (penalties set in after that).

· The payment is equal to 75 percent of Medicare allowable charges for the covered services (or maximum amounts on the sliding scale). We'll focus on the maximum amounts.

· Note that eligible professionals who utilize EHRs in 2011 or 2012 will have a maximum payment of $18,000 for the first year (instead of $15,000).

Incentive disbursements (top row is the year that the EHR is implemented):

	2011	2012	2013	2014	2015
2011	$18,000	$0	$0	$0	$0
2012	$12,000	$18,000	$0	$0	$0
2013	$8,000	$12,000	$15,000	$0	$0
2014	$4,000	$8,000	$12,000	$12,000	$0
2015	$2,000	$4,000	$8,000	$8,000	$0
2016	$0	$2,000	$4,000	$4,000	$0

Payment penalties for eligible professionals

A physician who does not utilize a meaningful EHR by 2015 would start seeing Medicare payment reductions in 2015. They include:

· 1 percent reduction in 2015

· 2 percent reduction in 2016

· 3 percent reduction in 2017

· 3 to 5 percent reduction in subsequent years.

The Secretary of Heath & Human Services would then re-visit the issue in 2018.

What must the EHR look like and what is a meaningful user?

Unfortunately, the federal government often waits until the last minute to release necessary regulations for implementing a law (it will be late 2009 when HHS releases the final EHR guidelines). However, there are three key factors to look for when determining if your system could qualify for the EHR incentives: meaningful user, qualifying EHR technology and certified EHR technology.

Meaningful user

The law sets out three basic standards for defining a meaningful user of EHR technology for purposes of meeting the incentive requirements:

· Certified or qualified EHR technology use.

· Electronic exchange of health information.

· Using the EHR to report clinical data and other quality measures.

HHS will release the final meaningful user guidelines in late 2009.

Qualifying EHR technology

You must have qualifying EHR technology in place in order to receive the incentive payments. In addition, qualifying technology is the first step to take in order to reach certification.

HR 1 provides an outline of what functionality will be required for qualifying EHR technology:

· Provide clinical decision support.

· Support provider order entry.

· Capture and query information relevant to health care quality.

· Exchange electronic health information with and integrate it with other sources.

All EHR systems must meet the qualifying standards.

Certified EHR technology

Certified EHR technology will be a qualified health record that is certified as meeting the standards adopted by the Office of the National Coordinator for Health Information Technology (ONCHIT). The Certification Commission for Health Information Technology (CCHIT) will certify products. There is a possibility that EHRs currently certified by CCHIT may not meet the new incentive standards. However, that remains to be seen and will be addressed in late 2009.

Currently, CCHIT does not certify products specific to ASCs. It is mostly focused on the physician practice environment.

Medicaid programs will determine their own requirements (closely following the Medicaid measures set out in HR 1).

What grants are available?

HR 1 authorizes $19 billion grants and incentives to help providers purchase health IT systems. Much of the money will likely flow to the state agencies and provide them with the ability to provide the grants. Of the $19 billion, $2 billion will be used to develop infrastructure to increase health IT adoption (ASCs will be eligible for these funds). The other $17 billion will be used for low-cost loans for the meaningful use of certified EHRs (ASCs will not eligible for this).

Keep in mind that it is very difficult to obtain a state or federal grant. It is a very long process in which you compete with a large number of sophisticated competitors for a relatively small pot of money. It is not like a congressional earmark in which a member of Congress directs the money to a certain entity.

Does it create health care "best practices" endorsed by the federal government?

HR 1 gives the Office of the National Coordinator for Health Information Technology (ONCHIT) within the U.S. Department of Health and Human Services more authority.

This new authority includes:

· Developing vocabulary, messaging and functional standards for interoperability.

· Criteria to make sure that the IT systems meet those needs.

· Privacy and safety criteria.

· "Helping facilitate the creation of prototype health information networks."

E-Prescribing (As Part of the Medicare Modernization Act of 2003)

The Medicare Modernization Act of 2003 required the Centers for Medicare and Medicaid Services (CMS) to develop a set of standards for electronic-prescribing (e-prescribing). The Medicare Improvement for Patients and Providers Act of 2008 took e-prescribing one step further by authorizing incentive bonus payments (and eventual penalties for failing to do so) under Medicare.

What are the bonuses and penalties?

Physicians who use e-prescribing will be provided Medicare bonuses between the years 2009 and 2013. Physicians who fail to do so (beginning in 2012) would witness reductions in the Medicare payments.

The e-prescribing incentives:

· 2 percent bonus in 2009 and 2010

· 1 percent bonus in 2011 and 2012

The e-prescribing penalties:

· 1 percent reduction in 2012

· 1.5 percent reduction in 2013

· 2 percent reduction in 2014

Physician Quality Reporting Initiative (PQRI)

A 2006 law established the first physician quality reporting system for CMS (including an incentive payment). A 2008 law made the PQRI permanent. However, Congress only authorized incentive payments through 2010. (Congress will likely add new incentive payments in the future.)

Eligible providers who meet the requirements and submit the necessary information will receive a 2.0 percent bonus from CMS for the reporting period of January 1, 2009 through December 31, 2009.