Health Information Technology – A Virginia physician’s guide to HIT incentive programs

28 September 2009

The recent focus on the use of electronic health records (EHRs) as a means to improve outcomes and efficiency has many physicians wondering how to best integrate this technology into their practices and clinical workflow.  When President Barack Obama announced that the American Recovery and Reinvestment Act of 2009 (ARRA) would include $19 billion in financial incentives to encourage doctors to adopt health information technology (HIT), the news was met with mixed reaction and lots of questions from physicians throughout the commonwealth.  At the same time, this program presents a new opportunity for physicians to be rewarded for the transition to electronic records. 

While it is clear that physicians who want to receive the incentive funds through Medicare or Medicaid will need to demonstrate and document “meaningful use” of health information technology, the definition of meaningful use, what standards it may entail and how its measurement will impact the receipt of stimulus dollars is still under development.  As the government strives to define the guidelines and interoperability standards of how the systems will communicate with one another, there is still opportunity for physicians to begin preparing for these incentive programs and the Medical Society of Virginia is committed to helping members understand how these federal programs may impact their practices.  

Federal incentives programs: ARRA and H.R. 3014
The HITECH ACT of 2009 (Health Information Technology for Economic and Clinical Health Act), a component of the American Recovery and Reinvestment Act (ARRA), seeks to encourage the adoption of EHRs through incentive payments to physicians.  The Act makes available $19 billion in post-implementation financial rewards for HIT adoption through the Medicare and Medicaid programs.

In addition to these incentive programs, the federal government has made available competitive grant opportunities that are intended to improve (1) health information exchange infrastructure and interoperability; and (2) educational resources to help physicians achieve meaningful use.  MSV is taking a leadership role in securing these grant funds for the benefit of Virginia’s medical community.

Additional incentive programs have been proposed in Congress and as components of national health care reform.  One such proposal, the Small Business Health Information Act, or H.R. 3014, is currently being considered in the House of Representatives.  It would provide loan guarantees for health information technology by small business owners (i.e., physicians in small group or solo practices) and would allow for a loan repayment deferral period of one to three years.  Family physician and MSV director, Sterling Ransone, MD, testified before Congress in favor of H.R. 3014 stating that everyone benefits from health IT systems—investment in these systems is critical to improving patient care and reducing costly medical errors.    He also stressed that physicians currently bear the costs of acquiring and implementing these systems during a time when they are experiencing decreasing reimbursements and increasing operating costs.    

HITECH incentives: How do you qualify?
The HITECH Act authorizes the Centers for Medicare and Medicaid Services (CMS) to provide a reimbursement incentive for physician and hospital providers who become “meaningful users” of EHRs.  These payments begin in 2011 and will be distributed over a five year period.  Beginning in 2015, providers are expected to have adopted and be actively utilizing EHRs in compliance with the meaningful use definition or they will be subject to penalties under Medicare Part B.  The Office of the National Coordinator of Health Information Technology has been given a deadline for defining and providing guidelines for meaningful use by  December 31, 2009.  The draft proposals have included reporting  requirements on quality measures and demonstrated exchange of information with other providers.  MSV is actively following the proposals and providing comment on the proposed meaningful use guidelines, as is the American Medical Association.

Who is Eligible?
There is a misconception that these funds are available to help physicians purchase electronic health records; providers are eligible for these financial incentives only after adopting the certified technology and demonstrating meaningful use.  So, eligibility is first predicated by your organization’s installation of a certified EHR.  To overcome the difficulty some practices experience in financing these significant capital investments, many HIT vendors are offering special loan programs for providers.

Second, physicians are eligible for either Medicare OR Medicaid HIT incentives; no provider will receive incentive payments from both programs.  To qualify for the Medicaid incentives, a pediatrician’s patient volume must be comprised of, at minimum, 20 percent Medicaid patients; for other providers, this minimum is 30 percent.  For Medicare providers in rural health professional shortage areas, the incentive payment may be increased above the amounts set forth in Table A by up to 10 percent.

For those physicians participating in Medicare’s e-prescribing incentive program, they will no longer be eligible for the e-prescribing bonuses if they are taking advantage of the Medicare Part B HIT incentives.  E-prescribing penalties sunset after 2014 so that no physician will be subject to penalties for failing to both e-prescribe and use an EHR.

MEDICARE PART B INCENTIVES
ARRA provides financial incentives through the Medicare Part B program for physicians to adopt and use qualifying EHRs in a meaningful way.  In addition, ARRA  authorizes Health and Human Services to provide competitive grants to states to make loans available to health care providers to assist them with HIT acquisition and implementation.  Incentive payments will be reduced in subsequent years, phasing out in 2016.

Medicare hospital incentives begin in 2011. The hospital compensation formula starts at $2 million and then derives from the number of patient discharges in the hospital, Medicare Share, and a transition factor. Beginning in fiscal year 2015, the reduction in the Medicare Fee Schedule for non-adoption is -33.33 percent; -66.66 percent in fiscal year 2016; and -100 percent in fiscal year 2017 and thereafter. 

MEDICAID INCENTIVES
Incentives under the Medicaid program are also available for physicians, hospitals, federally-qualified health centers, rural health clinics, and other providers; however, physicians cannot take advantage of the incentive payment programs under both the Medicare and Medicaid programs. Eligible pediatricians (non-hospital based) with at least 20 percent Medicaid patient volume could receive up to $42,500.  Other specialties (non-hospital based), with at least 30 percent Medicaid patient volume could receive up to $63,750 over a six year period.

In the event that the Secretary of Health and Human Services (HHS) finds that the proportion of health care providers who are meaningful users of EHRs is less than 75 percent, the Secretary is authorized to increase penalties beginning in 2018, but penalties cannot exceed -5 percent of the Medicare fee schedule.

MEDICARE PART B INCENTIVES: NON-HOSPITAL BASED PROVIDERS
Table A

First Payment Year	First Payment Year Amount and Subsequent Payment Amounts in Following Years	Reduction Schedule for Non-Adoption/Use
2011	$18k,  $12k,  $8k,  $4k, and $2K	$0
2012	$18k,  $12k,  $8k,  $4k, and $2K	$0
2013	$12k,  $8k, and $4K	$0
2014	$0	$0
2015	$0	-1% of Medicare fee schedule
2016	$0	-2% of Medicare fee schedule
2017 and thereafter	$0	-3% of Medicare fee schedule

What is Virginia doing to prepare for these programs?
MSV is partnering with key players and other statewide organizations to take action, initiate change, and answer some of the many questions pressing on the minds of physicians across the state.  In May 2009, MSV joined with Sen. Mark Warner and Virginia Commonwealth University to host a health information technology (HIT) summit to discuss how the federal stimulus dollars could be used to advance the use of EHR in Virginia.   Sen. Warner hopes Virginia will lead the way and serve as a beta site for other states to follow.  He outlined his plan to implement meaningful use of health care technology, which he labels as the three “i’s”:  infrastructure, information, and incentives. 

The conference also featured David Blumenthal, MD, a physician serving as national coordinator for health information technology.  Dr. Blumenthal is responsible for leading the implementation of a nationwide interoperable, privacy protected HIT infrastructure.  According to Dr. Blumenthal, there are many advantages to integrated health care records, but changing to an electronic system has its challenges.  Dr. Blumenthal said EHRs are essential to containing costs and improving the quality of health care. He adds that they can advance the patient's health, make the system more efficient, and reduce premiums over time. In addition to preventing duplicate tests, health IT can reduce costs by reminding doctors about preventive services. Dr. Blumenthal mentioned that problems can arise from trying to install systems too quickly and without proper support. He called technical assistance a "critical factor" in reducing risks.

As a result of this conference, Virginia Health and Human Resources Secretary Marilyn Tavenner formed the Health Information Technology Interoperability Advisory Council (HITIAC).  This council is an inter-disciplinary team of stakeholders with a goal of Virginia setting the national standard in health information technology.  William A. Hazel Jr., MD, MSV past president and AMA Trustee, serves as MSV’s representative on the council. 

In August, the federal government announced plans and timelines for two major HIT grant programs: one to support state efforts that advance health care information exchange and the other to fund state or regional extension centers that assist primary care providers in adoption and “meaningful use” of electronic health records.  Working under the auspices of HITIAC, two teams of stakeholders are developing applications for each grant.   The MSV and the Virginia Hospital & Healthcare Association (VHHA) are co-chairing the work group putting together Virginia’s preliminary grant application for a Regional Extension Center in Virginia.  As envisioned, this statewide extension center will deliver efficient and effective outreach, education and technical assistance that will help providers select and make meaningful use of certified EHR technology.  The goal of the extension center effort is to have 20 percent of targeted primary care providers making meaningful use of EHR systems by 2015.

MSV is also participating in the work group applying for the state information exchange grant that supports state and/or state-designated entities in fostering health information exchange among hospitals and providers. 

MSV will continue to keep members up-to-date on these program developments.

Transition stories
MSV president-elect Daniel Carey, MD has been working with EHRs for the past three years.  He joined the American College of Cardiology's national quality improvement network, the IC3 Program (Improving Continuous Cardiac Care), and is committed to using HIT to advance quality care for his patients.  The road has not been an easy one, however, due to expensive start up costs and decreased productivity.  Despite all of this, he is very proud of his practice’s system, stating, “I would rather be on the leading edge of technology, than behind it.”  He is part of a large practice, consisting of 18 cardiologists who bought the system three years ago.  They are utilizing GE Centricity technology.

Dr. Carey notes, “This was a huge transition and an expensive one, but it is necessary—we don’t have a choice, we have to move forward.”  According to Dr. Carey, the new system is not as efficient as the paper system because it takes longer to enter data as his notes are very thorough and word intensive. He describes the new system as cumbersome, but necessary as a tool to improve patient care.  “We can’t work on quality without EHRs. There is no way to get the statistical data without it. Our greatest power is the ability to biopsy our own data,” said Dr. Carey.

Proponents say the systems reduce wasteful spending, for example by reducing redundant tests, and generate information on how doctors and hospitals fare on quality measures. Many doctors and hospitals have yet to adopt the systems, which can cost tens of thousands of dollars for a single physician and millions of dollars for a hospital. However, these government initiatives offered through the HITECH Act are designed to reward the adoption of EHR systems.

Bert Wilson, administrator of Dermatology Associates of Virginia, says, “EHRs made us rethink the clinical process. “  Wilson said the practice has added two nurses to work with each physician in the office. “The nurse is doing a lot of the preliminary work in the EHR for the physician before they see the patient, as well as education and answering follow up questions and updating the EHR after the physician has examined the patient” says Wilson.  He adds, “the software is very flexible and templates are built and structured around how the visit is documented, immediately alerting the physician to possible drug interactions and allergies.”  The EHR works in tandem with e-prescribing software. Says Wilson,  “We’ve increased our number of clinical nurses as part of the treatment process.  This has increased the efficiency of the overall process.”  He adds, “If you try to implement EHRs without increasing clinical personnel, it will be very difficult to increase office productivity.” 

Given the many benefits of using health IT, including reduced administrative cost and medical errors, the MSV encourages members to take advantage of the federal funding available. MSV will continue to provide updates on the program as they become available.

Adoption rates

Setting	2006	2007	2008
Physicians offices (basic)	11%	13%	17%
Physicians offices (full)	3%	4%	4%
Hospitals (basic)	N/A	N/A	8%
Hospitals (full)	N/A	N/A	2%

Source: US Department of Health and Human Services Health Information Technology Web site (http://healthit.hhs.gov/)