Demonstrating Meaningful Use for the EHR Incentive Programs

Demonstrating Meaningful Use for the EHR Incentive Programs

1. Introduction

Under the Health Information Technology for Economic and Clinical Health ("HITECH") Act of 2009, which is part of the American Recovery and Reinvestment Act of 2009 ("ARRA"),1 eligible health care professionals ("EPs") can qualify for valuable Medicare and Medicaid incentive programs by adopting and demonstrating meaningful use of certified electronic health record ("EHR") technology. On July 13, 2010, the Centers for Medicare and Medicaid Services ("CMS") announced the long-awaited final rule defining how EPs can demonstrate meaningful use to participate in these programs ("Meaningful Use Rule"). The Meaningful Use Rule became effective September 28, 2010. While the incentive programs do not require EPs to use EHR technology, the programs do offer a carrot in the form of substantial incentive payments per EP to encourage EPs to adopt and use certified EHR technology.2 _{The Medicare incentive} program also includes a stick in the form of Medicare payment reductions beginning in 2015 for those EPs who do not adopt and use certified EHR technology.

The use of EHR technology, including the electronic exchange of health information, offers the potential to improve the quality and safety of healthcare. EHR technology promises to give health care professionals access to more information about patients and conditions, result in more accurate data and fewer errors, and support the electronic exchange of health information.3 _{However, EHR technology will require a large initial investment of both time and} money. While the EHR incentive payments may reduce these costs, it should be noted that the payments will be made only after the EP has invested in the technology and will be spread out over a period of several years.

This paper provides an overview of the Medicare and Medicaid EHR incentive programs, including who is eligible to participate, the amount of the incentive payments, the requirements to participate, and a timeline for each program.

2. Eligible Professionals

To participate in either the Medicare or Medicaid incentive program, a health care professional must qualify as an EP for the applicable program. Under the Medicare incentive program, an EP is defined as one of the following professionals: (1) a doctor of medicine or osteopathy; (2) a doctor of dental surgery or medicine; (3) a doctor of podiatric medicine; (4) a doctor of optometry, or (5) a chiropractor. Medicare EPs may not be hospital-based (i.e., they cannot perform more than 90 percent of their professional services in a hospital inpatient or emergency department setting).4

Under the Medicaid program, an EP is defined as one of the following professionals: (1)

1_{Pub. L. No. 111-5.}

2 _{Press Release, Centers for Medicare and Medicaid Services, Secretary Sebelius Announces Final} Rules to Support Meaningful Use of Electronic Health Records (July 13, 2010).

3 _{Press Release, Centers for Medicare and Medicaid Services, Electronic Health Records at a Glance} (July 13, 2010).

a physician; (2) a dentist; (3) a certified nurse-midwife; (4) a nurse practitioner, or (5) a physician assistant practicing in a federally qualified health center ("FQHC") or a rural health clinic ("RHC"), either of which is led by a physician assistant.5 _{Additionally, a Medicaid EP must,} for each year for which the EP seeks an EHR incentive payment, not be hospital-based (as defined above),6 _{and must meet one of the following criteria: (1) have a minimum 30 percent} patient volume attributable to individuals receiving Medicaid; (2) if the EP is a pediatrician, have a minimum 20 percent patient volume attributable to individuals receiving Medicaid; or (3) if the EP practices predominantly in a FQHC or RHC, have a minimum 30 percent patient volume attributable to needy individuals.7

3. Incentives

The Medicare and Medicaid incentive programs are separate programs, but they contain many of the same requirements, and provide similar benefits, for demonstrating the meaningful use of EHR technology.8 _{By demonstrating meaningful use, an EP}9 _{can receive incentive} payments totaling as much as $44,000 spread out over a five-year period from the Medicare incentive program or as much as $63,750 spread out over a six-year period from the Medicaid incentive program.10 _{The payment terms are discussed in more detail later in this section. An} EP may participate in only one incentive program (i.e., Medicare or Medicaid), but is allowed to switch programs once before 2015.11 _{Under both programs, the incentive payments will be} made, on a rolling basis, but only after an EP demonstrates meaningful use for the applicable reporting period.12

The Medicare incentive program starts in 2011, and EPs must begin participating in the program in either 2011 or 2012 to be eligible to receive the full amount of the incentive payments.13 _{Under the Medicare program, an EP will be paid an amount equal to 75 percent of} the estimated allowed charges for covered professional services furnished by the EP during the payment year,14 _{subject to an annual limit that is based on the first year the EP receives a} payment.15 _{The annual limits are set forth in the following chart:}

5_{Id. at 44,578 (codified at 42 C.F.R. § 495.304(b)).}

6 _{The hospital-based exclusion does not apply to the Medicaid EP who qualifies based on practicing} predominantly in a FQHC or RHC. Id. (codified at 42 C.F.R. § 495.304(d)).

7_{Id. (codified at 42 C.F.R. § 495.304(c)).}

8_{Electronic Health Record Incentive Program for Medicare and Medicaid Programs, 75 Fed. Reg. 44,314} (July 28, 2010) (codified at 42 C.F.R. part 495).

9_{Which health care professionals qualify as EPs is discussed below in Section 3.} 10_{75 Fed. Reg. at 44,572, 44,579 (codified at 42 C.F.R. §§ 495.102, 495.310).}

11_{Id. at 44,572 (codified at 42 C.F.R. § 495.10(e)). If the EP switches, the EP is limited to receiving, in} total, the maximum payments the EP would receive under the Medicaid incentive program. The EP is placed in the payment year the EP would have been in had the EP begun in and remained in the program to which he or she has switched. Id.

12_{Id. at 44,580 (codified at 42 C.F.R. § 495.312). The “reporting period” for the first payment year is “any} continuous 90-day period within a calendar year” and for the later payment years is “the calendar year.”

Id. at 44,565 (codified at 42 C.F.R. § 495.4).

Fist year EP receives a payment  2011 2012 2013 2014 2015 2011 $18,000 2012 $12,000 $18,000 2013 $8,000 $12,000 $15,000 2014 $4,000 $8,000 $12,000 $12,000 2015 $2,000 $4,000 $8,000 $8,000 $0 2016 - $2,000 $4,000 $4,000 $0 Total $44,000 $44,000 $39,000 $24,000 $0

For Medicare EPs, the payment years must be consecutive.16 _{Additionally, for Medicare EPs} who furnish more than 50 percent of their covered professional services in a geographic Health Professional Shortage Area ("HPSA"), the incentive payment annual limits will be increased by 10 percent, allowing for larger available incentive payments each year.17

The Medicaid incentive programs may start in 2011, depending on when each state chooses to offer a Medicaid incentive program. Nebraska has indicated that it will start its Medicaid incentive program in 2011, but has not yet announced any dates. For the Medicaid incentive programs, EPs must begin participating in 2016 (or earlier) to be eligible to receive the full amount of the incentive payments.18 _{Under the Medicaid incentive programs, an EP can} receive up to $21,250 in the first year of payment. This first payment is intended to offset the costs of the initial adoption, implementation, or upgrade of certified EHR technology. In later years, the payment maximum is $8,500 and is meant to offset the maintenance and operation of certified EHR technology.19 _{Medicaid EPs may receive payments on a non-consecutive, annual} basis for up to a total of six years.20 _{Unlike the Medicare incentive program, the decision to} delay participation does not reduce the full amount payable as long as the Medicaid EP begins participation on or before 2016. The following table summarizes the Medicaid incentive payments: Fist year EP receives a payment  2011 2012 2013 2014 2015 2016 2011 $21,250 2012 $8,500 $21,250 2013 $8,500 $8,500 $21,250 2014 $8,500 $8,500 $8,500 $21,250 2015 $8,500 $8,500 $8,500 $8,500 $21,250 2016 $8,500 $8,500 $8,500 $8,500 $8,500 $21,250 2017 $8,500 $8,500 $8,500 $8,500 $8,500 2018 $8,500 $8,500 $8,500 $8,500 2019 $8,500 $8,500 $8,500 2020 $8,500 $8,500 2021 $8,500 Total $63,750 $63,750 $63,750 $63,750 $63,750 $63,750

Note: Certain pediatricians who qualify as Medicaid EPs under a reduced 20 percent Medicaid

16_{Id. at 44,565 (codified at 42 C.F.R. § 495.4).} 17_{Id. at 44,572 (codified at 42 C.F.R. § 495.102(c)).} 18_{Id. (codified at 42 C.F.R. § 495.10(e)).}

patient volume threshold21 _{are subject to a reduced incentive schedule. In their first payment} year, such pediatricians can receive up to $14,167. In later years, they can receive up to $5,667. In total, they can receive up to $42,500.22

Incentive payments are tied to an individual EP and not to the EP’s place of practice.23 For example, if a practice has four physicians and each physician demonstrates meaningful use of EHR technology, the total payments made to those four physicians could be as much as four times the $44,000 available under the Medicare incentive program, four times the $63,700 available under the Medicaid incentive program, or some mix of the two programs. While the payments are to be made to the EP, the EP may reassign the incentive payment to his or her employer (but may not split the reassignment across multiple employers for a particular payment year).24 _{Before the incentive programs begin, practices should discuss whether to} require reassignment by EPs that participate in an incentive program, how the incentive payments are to be handled once received, and what happens in the event an EP transitions out of the practice during a payment year (e.g., relocates, retires). Such a discussion should also include a review of current employment agreements and compensation structures.

It should be noted that in addition to missing out on the incentives discussed above, physicians who fail or refuse to become meaningful users of EHR technology by 2015 will see a reduction in the Medicare physician fee schedule amount for covered professional services furnished by the physician. In 2015, the reduction will be 1 percent of the fee schedule. In 2016, the reduction will be 2 percent. In 2017 and subsequent years, the reduction will be 3 percent.25

4. Requirements

Under both incentive programs, the requirements for meaningful use are being phased in over three stages that span several years.26 _{The Meaningful Use Rule establishes the criteria} for meaningful use of EHR for only Stage 1, which begins in 2011.27 _{CMS expects to release} Stage 2 criteria by the end of 2011 and Stage 3 criteria by the end of 2012.28 _{CMS states that} the goal of this three-stage approach is to gradually develop the standards for meaningful use so that future standards will be more targeted and effective.29 _{Not knowing the exact criteria,} however, makes the selection of an EHR system much more difficult at the outset.

a. Initial Payment Year

Although generally similar, the Medicare and Medicaid incentive programs do have different requirements for the EP’s initial payment year. Under the Medicare incentive program, an EP must meet the Stage 1 criteria for a continuous 90-day period during the EP’s initial

21_{See Section 3 below for more information on which health care professionals qualify as EPs.} 22_{75 Fed. Reg. at 44,579 (codified at 42 C.F.R. § 495.310(b)).}

23_{Id. at 44,572 (codified at 42 C.F.R. § 495.10(f)).}

24 _{Id. Additionally, “each EP may reassign the entire amount of the incentive payment to only one} employer or entity.” Id.

25_{Id. at 44,572 (codified at 42 C.F.R. § 495.102(d)).} 26_{Id. at 44,321.}

27_{Id. at 44,566 (codified at 42 C.F.R. §§ 495.4, 495.6).} 28_{Id. at 44,321.}

payment year to qualify for an incentive payment for that year. In subsequent years, the EP must meet the applicable criteria for the entire calendar year.30

Under the Medicaid incentive program, in the EP’s initial payment year, the EP has the option to adopt, implement, or upgrade certified EHR technology to receive an incentive payment. Alternatively, the EP can choose to demonstrate meaningful use of certified EHR technology for a continuous 90-day period. If the EP adopts, implements, or upgrades in the first year of payment and demonstrates meaningful use in the second year of payment, then the reporting period in the second year is a continuous 90-day period. In subsequent years, as with the Medicare incentive program, the EP must demonstrate meaningful use for the entire calendar year.31

b. Demonstrating Meaningful Use

The HITECH Act defines meaningful use for both incentive programs as meeting the following three broad conditions during a reporting period: (1) demonstrating the use of certified EHR technology in a meaningful manner; (2) demonstrating that the certified EHR technology is used for the electronic exchange of health information; and (3) using certified EHR technology to submit information to CMS on specified clinical quality and other measures.32 _{For 2011, CMS} is requiring that EPs attest that they used certified EHR technology, satisfied the meaningful use requirements, and provided the results of the clinical quality measures for all patients seen during the applicable reporting period. In 2012, CMS will continue to allow attestations for most of the meaningful use requirements, but will likely require electronic submission of the results of the clinical quality measures.33

To meet the first two conditions of demonstrating meaningful use for both incentive programs, the Meaningful Use Rule sets forth objectives and associated measures for EPs to achieve. For Stage 1, the Meaningful Use Rule divides the meaningful use objectives into a core group of fifteen required objectives (e.g., use computerized provider order entry for medications, maintain an up-to-date problem list of current and active diagnosis, or provide patients with an electronic copy of their health information upon request) and a menu of ten optional objectives (e.g., enable drug-formulary checks, generate lists of patients by specific conditions to use for quality improvement, or send reminders to patients per patient preference for preventive/follow-up care) from which EPs can choose to defer up to five during the 2011 and 2012 reporting periods.34 _{This approach builds in some flexibility for EPs by allowing the} deferral of some objectives to later reporting periods.

Additionally, to meet the third condition of meaningful use, the Meaningful Use Rule details the submission to CMS of clinical quality measures. For both incentive programs, most EPs will have to report data on the following three core quality measures in 2011 and 2012: (1) blood-pressure level; (2) tobacco use status; and (3) adult weight screening and follow-up.35

30_{Id. at 44,566 (codified at 42 C.F.R. §§ 495.4, 495.6).}

31_{Id. at 44,566, 44,581 (codified at 42 C.F.R. §§ 495.4, 495.6, 495.314).} 32_{Id. at 44,324.}

33_{Id. at 44,570 (codified at 42 C.F.R. § 495.8). Additionally, to be considered a “meaningful EHR user, at} least 50 percent of an EP’s patient encounters during the payment year must occur at a practice/location or practices/locations equipped with certified EHR technology.” Id. at 44,565 (codified at 42 C.F.R. § 495.4).

34_{Id. at 44,566 (codified at 42 C.F.R. § 495.6).}

EPs must also report on three other measures that they can select from a list.36 c. Data Entry

The Meaningful Use Rule generally does not require the EP to enter the data into the EHR system. Only one of the meaningful use objectives specifies who must enter the data.37 The objective for computerized provider order entry for medication orders specifies that a licensed health care professional must enter the orders into the medical record as required by state, local, and professional guidelines.38 _{Besides this objective, the EP can delegate the data} entry, assuming such delegation complies with any other applicable laws.

5. The Certification Criteria of EHR Technology

The Office of the National Coordinator for Health Information Technology ("ONC") has announced a companion rule addressing EHR technology certification ("Technology Rule").39 The Technology Rule provides the standards for the certification of EHR technology that complies with the Meaningful Use Rule. This certification is meant to provide assurances to purchasers and other users that the EHR system has the necessary functionality to help them comply with the incentive programs and to maintain the security and confidentiality of the data.40 Under the Technology Rule, the EHR technology can be certified as either a complete EHR or an EHR module.41 _{This means that EPs can either buy one system that does everything} required by the Meaningful Use Rule or buy several modules (even from different vendors) that together do everything required by the Meaningful Use Rule.

6. Initial Critical Dates

The details of the incentive programs are significant, but it’s just as important to not lose sight of the big picture. With that in mind, the following timeline provides the initial critical dates of the incentive programs:

 2010

o Late Fall: Certified EHR technology is available.42 To receive incentive payments, EPs can only use EHR systems that are certified specifically for the EHR incentive programs.43

patients 50 years of age or older; (2) weight assessment and counseling for children and adolescents; and (3) childhood immunization status. Id. at 44,409-44,410.

36_Id.

37_{Id. at 44,566 (codified at 42 C.F.R. § 495.6).} 38_Id.

39_{Id. at 44,650 (codified at 45 C.F.R. part 170).} 40_Id.

41_{Id. at 44,596.}

42_{EHR Incentive Programs Timeline,}

 2011

o The Medicare incentive program begins.44 The Medicaid incentive programs may begin in 2011 (states can choose whether to launch programs for Medicaid providers).45 _{Nebraska has indicated that it will} start its Medicaid incentive program in 2011, but has not yet announced any dates.

o January 3: Registration for the Medicare incentive program begins. Registration for the Medicaid incentive program may also begin (states can choose whether to launch programs for Medicaid providers). Nebraska has indicated that it will start its Medicaid incentive program in 2011, but has not yet announced any dates. EPs must register to participate in the incentive programs.46

o April: Attestation for the Medicare incentive program begins.47 Attestations for Medicaid will vary by state.48

o May: Incentive payments for Medicare are expected to begin.49 Medicaid incentive payments will vary by state.50

o October 1: Last day EPs can begin their 90-day reporting period for calendar year 2011 for the Medicare incentive program.51

 2012

o February 29: Last day for EPs to register and attest for the 2011 reporting period for the Medicare incentive program.52

 2014

o Under the Medicare incentive program, EPs who become meaningful users of EHR after 2014 will not be eligible to receive incentive payments.53

44_{Id. at 44,572 (codified at 42 C.F.R. § 495.102).} 45_{Id. at 44,577 (codified at 42 C.F.R. § 495.302).}

46 _{Id. at 44,571 (codified at 42 C.F.R. § 495.10); see also EHR Incentive Programs Overview,}

http://www.cms.gov/EHRIncentivePrograms/. 47_{EHR Incentive Programs Timeline,}

https://www.cms.gov/EHRIncentivePrograms/Downloads/EHRIncentProgtimeline508.pdf. 48_{75 Fed. Reg. at 44,580 (codified at 42 C.F.R. § 495.312).}

49_{EHR Incentive Programs Timeline,}

https://www.cms.gov/EHRIncentivePrograms/Downloads/EHRIncentProgtimeline508.pdf. 50_{75 Fed. Reg. at 44,580 (codified at 42 C.F.R. § 495.312).}

51_{EHR Incentive Programs Overview, http://www.cms.gov/EHRIncentivePrograms.} 52_{EHR Incentive Programs Timeline,}

 2015

o Medicare physician fee schedule payment adjustments will begin for non-meaningful users of EHR.54

 2016

o Under the Medicaid incentive program, EPs who become meaningful users of EHR after 2016 will not be eligible to receive incentive payments.55

7. Conclusion

Ultimately, whether and when an EP chooses to demonstrate meaningful use of EHR technology depends on the unique needs of the EP’s practice. EPs will likely find it beneficial to adopt and use certified EHR technology sooner rather than later because the amount of Medicare incentive payments available will decrease each year, Medicare payments will be reduced for non-meaningful users beginning in 2015, compliance will be easier earlier in the program when there are fewer objectives and less stringent measures, and earlier adoption will give EPs more time to work out the "bugs" in the system and in the practice’s operations. On the other hand, because the criteria for meaningful use for Stages 2 and 3 are not yet known, additional investments in EHR technology may be required for those who adopt EHR technology early. On this point, though, it is important to note that CMS does not expect the criteria for Stages 2 and 3 to be radically different from Stage 1 and has already provided some general guidance on Stages 2 and 3 criteria for technology vendors to follow.56

54_Id.