Impacts of Health Information Technology for Economics and Clinical Health (HITECH)

Prior to HITECT act , the Congressional Budget Office (CBO) estimated that 40 percent of the hospitals and 75 percent of physicians would have adopted a qualifying electronic health records (EHR) by 2019.  Now, it estimates that the incentive mechanism under HITECH act will boost EHR adoption to about 70 percent for hospitals and 90 percent for physicians by 2019.  The health and human services (HHS) would like 75 percent of physicians to adopt a qualifying EHR by 2015.  If not, HHS can increase the Medicare penalties by up to 5 percent.

The Centers for Medicare and Medicaid (CMS) released an advance copy of the meaningful use criteria in December 2009.  It is  substantially same as the criteria approved by the Office of National Coordinator (ONC) in July 2009.  This criteria is now divided into 3 stages - Stage 1, 2 and 3 (please refer my other posting titled "Meaningful Use" for more information on these different stages).  The criteria is still broad and complex, and mandates physicians to perform certain tasks personally including entering orders into computer physician order entry (CPOE) system.

Overall, the clarity of the criteria has been improved since the July 2009 release.  However, majority of the criteria for physicians has not changed.  A few stage 1 requirements include:

• Use CPOE for 80 percent of the orders.
• Implement drug interaction and formaulary checks.
• Transmit prescriptions electronically.
• Provide patients with an electronic copy of their health information.
• Provide patients timely access to their information including lab results, problems list, prescriptions etc.
• Develop capabilities to exchange clinical data electronically (problems list, medications etc)
• Capabilities to submit immunization data electronically to required state and county agencies.
• Perform medication recouncialiation at each transition of care. 
• Provide electronic surveillance data to public agencies when required.

The stage 2 ad 3 requirements will build on top of above stage 1 requirements. 

Given the complexity of above requirements, how many practices can realistically achieve the meaningful criteria?

Definitely, HITECH act has created quite a bit of rush in the ambulatory market space.  Physicians are on look out for a system that meets their practice needs and achieves the meaningful use criteria.  A number of hospitals and medical groups have been donating EHR systems under Stark/Anti Kickbak (AKS) statue to eligible physicians. Now, physicians are paying great attention to those as well as other offers in the market space.  After HITECT act, hospitals are adopting different models to cover their start up costs - writing an agreement with physicians to collect Medicare incentives  upon physicians receiving them, donating only operating costs and  guaranteeing loans from local banks to practices to cover capital costs, donating capital and operating costs fully allowed by Stark/AKS law etc.  In any case, it is very likely that 70 to 75 percent of physicians adopt an EHR system.

However, All physicians may not use  EHR in the meaningful way as described by the meaningful use criteria, especially specialists.  Currently, many specialists dictate their notes and they intent to continue the dictation.  They feel that the meaningful criteria is very complex and adopting an EHR system based on it, will reduce their productivity and hence their revenue.  They are fine with foregoing HITECH incentives and they feel that $44,000 in four years is not a big enough incentive to cover the lost revenues.  Even the penalty is not high enough to impact their annual revenues.  However, this is not the case with primary care physicians, pediatricians, and OB/GYN physicians.   These group of physicians are at the low end of national physician compensation averages, and are willing to adopt based on the criteria to receive maximum Medicare incentives and avoid any penalties.  Many of these physician groups have been planning to purchase an electronic system and the HITECT act provides a great opportunity to offset some of the capital and operating costs.  This is a great news for HHS because these physician groups are required to document the chart comprehensively.   Additionally, recent college graduates are very enthusiastic about using computers for practice  and they have the expertise and willingness to use the electronic applications effectively.

In conclusion, this is a great first step to reduce health care costs and increase the quality of care.  It is the first step in the process and a long way to go before we achieve a well connected, well documented and integrated health care delivery system.

Meaningful Use

The Office of the National Coordinator (ONC) has published the meaningful use criteria, implementation standards and technology in the federal register on February 13, 2010.  It was a long read.  For many physicians, this  meaningful use criteria and the process to become eligible for Medicare incentives are very confusing.  I will try to explain different stages of meaningful use criteria and the number of stages that each practice must adopt in each year.  In the next article, i will discuss electronic health records (EHR) certification criteria, fears and apprehensions in adopting an electronic medical record (EMR) system. 

Eligibility Reporting Period:

In order to qualify for an incentive payment under the Medicare incentive payment program for a payment year, a practice or eligible hospital must meaningfully use certified EHR technology for the full reporting period of the relevant payment year.  The proposed reporting period requirements are as follows:

• Continuous 90 day period within the first year of payment - If a physician adopts an EHR in 2011, the practice needs adopt and report required quality measures based on the data collected for a continuous 90 days period.
• For all subsequent payments (second, third, fourth and fifth), the reporting period is the full year.  If a  physician adopts an EHR in 2011 and receives the first payment then that physician must report required data to ONC based on full year's data to receive subsequent payments in years 2012, 2013, 2014 and 2015. 

ONC is seeking public comment on above reporting periods and the earliest start date to demonstrate the meaningful use criteria.  For example,  allowing an EHR reporting period to begin as early as July 3, 2010 would allow an eligible hospital to successfully demonstrate meaningful use on October 1, 2010, the first day of FY 2011.

Three stages:

In its final bill, the Congress specified the following three types of requirements for meaningful use.  

• Use a certified EHR technology in a meaningful manner (for example, electronic prescribing);
• The certified EHR technology is connected to provide electronic exchange of health information to improve the quality of care.
• The physician submits to the Secretary information on clinical quality measures and such other measures selected by the Secretary.

To accurately validate the meaningful use of each EHR adoption, the health information technology (IT) policy and standards committees defined three stages of meaningful use.  Physicians must adopt these three stages no later than 2016 to qualify for the full payment of $44,000 over 5 years (see the table in the section below for adoption requirement of each year to receive full payment in that year).

• The Stage 1 meaningful use criteria focuses on capturing health information in electronically  coded format; using that information to track key clinical conditions and communicating that information for care coordination purposes (whether that information is structured or unstructured, but in structured format whenever feasible); implementing clinical decision support tools to facilitate disease and medication management; and reporting clinical quality measures and public health information.

•  The Stage 2 meaningful use criteria expands upon the Stage 1 criteria to encourage the use of health IT for continuous quality improvement at the point of care and the exchange of information in the most structured format possible (E.g. electronic transmission of orders entered using computerized provider order entry (CPOE) and the electronic transmission of diagnostic test results). 

• The Stage 3 focuses on promoting improvements in quality, safety and efficiency.  It focuses on decision support for national high priority conditions, patient access to self management tools, access to comprehensive patient data and improving population health.

The proposed ruling requires practices and eligible hospitals adopt each stage in the following way to receive Medicare incentive payments in each year:

Year of Adoption	Payment Year
	2011	2012	2013	2014	2015
2011	Stage 1	Stage 1	Stage 2	Stage 2	Stage 3
2012		Stage 1	Stage 1	Stage 2	Stage 3
2013			Stage 1	Stage 2	Stage 3
2014				Stage 1	Stage 3
2015					Stage 3

 

If a physician adopts an EHR in 2013 and fulfills stage 1 requirements then the physician receives the first eligible payment of $15,000.  To receive further payments, the physician must adopt stage 2 and stage 3 requirements in the respective two years.

Please see the post below for stage 1 requirements.

Health Information Technology for Economics and Clinical Health (HITECH) Act of ARRA

The HITECH act includes two major components - Medicare and Medicaid incentives for all eligible providers and hospitals and discretionary funds by the Office of National Coordinator (ONC) for technical assistance, training and standards development for electronic health record (EHR) adoption, research and development and India health services.

• $17.2 billion has been allocated towards Medicare and Medicaid incentives for eligible providers and hospitals.
• $2 billion has been allocated for discretionary funding.
  

Medicare Incentives:

To become eligible for Medicare payments provided by the HITECH act (a maximum benefit of $44,000 per physician), physicians must adopt a certified EHR in a meaningful way. The meaningful criteria was defined by ONC' health care information policy and standard committees, and later adopted by ONC. The interim ruling of this effect was issued on December 30th, 2009. All physicians including employed providers are eligible to receive these incentives. However, hospitalists are not eligible.

Practices need to adopt an EHR by the end of 2011 to gain the maximum benefit of $44,000. If not, these benefits will reduce over time and end by 2015. The following table describes the maximum eligible amount by each physician per year based on the year of EHR adoption.

	Incentives (for eligible physicians that adopt an EHR in a meaningful way)
Year Adopted an EHR	2011	2012	2013	2014	2015	2016	2017	Total
2011	$18,000	$12,000	$8,000	$4,000	$2,000	$0	$0	$44,000
2012	$0	$18,000	$12,000	$8,000	$4,000	$2,000	$0	$44,000
2013	$0	$0	$15,000	$12,000	$8,000	$4,000	$0	$39,000
2014	$0	$0	$0	$12,000	$8,000	$4,000	$0	$24,000
2015 and After (penalty up to a maximum of 3%)	$0	$0	$0	$0	(1%)	(2%)	(3%)	N/A

Penalties:
The penalties for not adopting an EHR are as follows:

• If physicians do not adopt an EHR by 2015, their medicare reimbursements will reduce by 1 percent each year up to a maximum of 3 percent.
  
• If the EHR adoption does not exceed 75 percent then the Secretary of HHS can further reduce medicare reimbursements up to 5 percent with increments of 1 percent each year after 2015.

Medicaid Incentives:

States may make payments to Medicaid providers to encourage a meaningful EHR adoption up to a maximum of $65,000 per physician. These providers must meet the following criteria.

• Must demonstrate a meaningful use of EHR. States can develop their own meaningful use criteria or follow the criteria adopted by ONC.
• All non-pediatric physicians must contain at least 30 percent of their patients covered by Medicaid.
  
• Pediatricians are eligible with 20 percent of their patients covered under Medicaid.

Medicaid payments will be paid as displayed in the following table. Unlike Medicare penalties, Medicaid will not penalize providers for not adopting EHRs.

Year Physicians First File	First Year	Second Year	Third Year	Fourth Year	Fifth Year	Total Payments
2011 till 2016	$25,000	$10,000	$10,000	$10,000	$10,000	$65,000

Physicians can file for Medicaid payments till 2016 to receive maximum benefits. First year costs must occur by 2016 and no payments will be made after 2021. Additionally, physicians are not eligible for duplicate Medicare and Medicaid payments.

To be eligible for both of these incentives, physicians must demonstrate a meaningful use. Now, is that financially viable for all physicians even with above incentives?

American Recovery and Reinvestment Act - the health care prospective....

On February 17 2009, President Obama signed the American Recovery and Reinvestment Act (ARRA) into law with a staggering total spending of $787 billion. The goals of this act are two folds:

• Save existing jobs and create new jobs.
• Stimulate the economy and invest in the long term needs of the country.

To achieve these goals, ARRA funds are allocated as follows:

• $288 billion for tax cuts and benefits. A few include:

o Extended unemployment benefits.

o COBRA benefits - Covers 65 percent of the premium for unemployed Americans.

• $224 billion in federal funds for education, health care and other entitlement programs.
• $275 billion for federal contracts, grants and loans.

Approximately, $30 billion of $224 billion, allocated for education, health care and entitlement programs, has been set aside for health care initiatives. These initiatives will promote:

• Information technology (IT) adoption.
• Health information exchange (HIE).
• Research and development.
• Standards development and
• Education and outreach.

These health care funds are further allocated to different programs as displayed in the following table. Some of these initiatives are managed by the states and others are managed directly by the federal government (health and human services).

Program Name	Available Fund
Medicare payment incentives and penalties (Managed by: Office of the National Coordinator (ONC))	$17.2 Billion
National Telecom & Information Administration’s broadband technology opportunities program (Managed by: National Telecommunications and Information Administration)	$4.7 Billion
U.S. Department of Agriculture’s distance learning, telemedicine, and broadband Program (Managed by: U.S. Department of Agriculture)	$2.5 Billion
Discretionary funding through ONC (Managed by: ONC)	$2 Billion
Grants toward construction of, renovation of, and equipment for health centers. (Managed by: HHS)	$1.5 Billion
Comparative Effectiveness Research & Healthcare Research and Quality. (Managed by: National Institutes of Health and HHS)	$1.1 Billion
Social Security Administration: health technology research and activities related to the adoption of technologies for disability claims.	$500 Million
Indian Health Services: HIT, telehealth services and related infrastructure. (Managed by: Indian Health Services [Part of HHS])	$85 Million
Healthcare IT adoption for Veterans Affairs hospitals. (Managed by: Veterans Benefits Administration)	$50 Million

Of these programs, the Health Information Technology for Economics and Clinical Health (HITECH) act consists $19.2 billion of total spending and includes the following programs - Medicare payment incentives and penalties and discretionary funding through ONC.

Due to HITECH act, some suggests that approximately 90 percent of the physicians adopt a comprehensive electronic health records (EHR) though it is questionable.

Await for more information on HITECH act and if it make sense operationally and financially for practices to adopt a EHR in a meaningful way.

P:S: The information provided here is collected to best of my knowledge. Programs and funding amounts may vary.