Healthcare Business News
Four Doctors

Taking the EHR penalty: More doc offices may opt out

By Joseph Conn
Posted: December 21, 2013 - 12:01 am ET

Despite the federal government giving extra time to healthcare providers to stay at the next stage of electronic health record meaningful use, health information technology leaders worry the number of physician offices opting to bag the whole program will continue to grow.

The concern comes from two fronts: cost and clinical. The penalties for failing to meet Stage 2 of the meaningful-use requirements that were attached to taking federal incentive payments for adopting EHRs are minimal. Moreover, most of the incentive payment money was linked to achieving Stage 1 meaningful use, which, for a majority of providers, is already in the rearview mirror. There's not much financial upside from continuing to participate in the program.

Advertisement | View Media Kit


On the clinical side, there's growing belief among some physicians that meeting the government's meaningful-use standards won't yield patient benefits commensurate with the cost and effort required to achieve the targets.

Ironically, many of the dissidents come from the ranks of physicians who were early adopters of EHR systems and first in line for federal payments starting in 2011, according to Dr. Jason Mitchell, director of the Center for Health Information Technology of the American Academy of Family Physicians.

“We're at a significant risk of people bailing out,” Mitchell said. “Once they leave, I think it's going to be really difficult to get them back on the bus.”

The average family physician receives only about $100,000 a year in Medicare reimbursements, Mitchell said, so a 1% penalty for failing to achieve meaningful use Stage 2 in 2014 will cost about $1,000 starting in 2015. Those penalties escalate to 2% in 2016 and 3% in 2017—a combined three-year total of just $6,000.

That is far less than the $38,000 out of the maximum incentive payment of $44,000 that a now-wavering physician who achieved Stage 1 meaningful use collected between 2011 and 2013. Add that $6,000 in Medicare penalties to the additional incentive payments they won't receive by failing to achieve Stage 2 ($4,000 in 2014 and $2,000 in 2015), and it doesn't represent a catastrophic loss of income.

Indeed, those losses may be significantly less than what the office would have to invest to meet the next level of standards. “We saw a 17% drop off of meaningful users that engaged in 2011 but didn't in 2012,” Mitchell said. “I think it's going to be more for 2013.”

Dr. Scott Macleod is one of those early health IT adopters now on the cusp. A solo family practitioner in the 5,000-population Shenandoah Valley town of Woodstock Va., Macleod sees 15 to 18 patients a day and has used an EHR since 2010, the year before billions of federal dollars began supercharging physician health IT adoption. He's been a meaningful user for all three years of the program, but began having second thoughts in the middle of this year.

MH Takeaways

With most federal payments for adopting electronic health records already in hand, some physicians may opt to pay penalties and forego remaining payments rather than make the investments needed to meet the Stage 2 interoperability standards.
Stage 2 “is actually getting in the way to do good quality medicine” or even “using your EHR full-fledged, with all the clicks,” he said. Moreover, Macleod's EHR vendor only recently had its software tested and certified to the standards used in Stage 2, and he has yet to receive his copy. “I'm going ahead as best I can, but I'm not sure I'm going to make it,” he said.

Macleod said he's sympathetic to the government's aims, it's just that the program is “shoved too fast, too furious. ... I think you're going to see a lot of dropouts,” he said.

However, many other practices, particularly those earlier into the incentive program, are still gung ho even as they struggle to meet the new requirements. “The biggest issue for us with meaningful use is the patient portal for Stage 2,” said Dr. Grace Terrell, CEO of Cornerstone Health Care, a 375-physician multispecialty group in High Point, N.C. “We have a (patient) portal in place, (but) we have a high elderly population, and getting people to use it to meet the meaningful-use requirements is a little tough.”

One of the Stage 2 criteria requires that more than 50% of an office's patients have timely online access to their health information. The standards also require more than 5% of patients “view, download or transmit to a third party” their health information. Web-based patient portals are a means to achieve both ends.

Navigating the Stage 2 meaningful-use requirements and ICD-10 conversion will be the two gnarliest challenges confronting office-based physicians in 2014. Terrell said she's confident they'll make Stage 2 in 2014 and the October ICD-10 conversion, too.

Terrell said the group, with 90 practice sites, plans to centralize charting and coding for ICD-10. A physician champion is already at work explaining the changes in documentation clinicians need to make ICD-10 work smoothly. “It will be a real heavy lift for some of the specialties,” she said. “If you're an orthopedic surgeon, it's a catastrophe.”

“We're tackling both, and we believe we'll be ready, but we're going to place a lot of stress on the physicians,” she said. “Our organization has put a lot of investment into HIT over the last few years to really move into population health management. We're just in that God-awful stage right now to make it function.”

For most providers, the period for determining whether an organization has achieved the Stage 2 meaningful-use requirement to avoid penalties from the EHR incentive payment program starts Jan. 1. The penalties don't go into effect until 2015. Meanwhile, a recently announced HHS extension of Stage 2 and pushback of Stage 3 leaves the Medicare payment penalty schedule unchanged.

In addition to stepping up to Stage 2, the other big change of 2014 comes Oct. 1 with the nationwide conversion to the ICD-10 family of diagnostic codes and procedural codes. This enormous changeover has been likened to the Y2K upgrades of 1999—one that, if botched, will undermine a healthcare organization's cash flow.

Of course, those are far from the only IT troubles on the healthcare horizon. Adapting to the Patient Protection and Affordable Care Act and complying with more-stringent federal privacy and security rules from amendments to the Health Insurance Portability and Accountability Act will impact doctors and hospitals in the year ahead. Many folks are already feeling the strain of such high-stakes multitasking.

“There was one dark side of 2013,” said Dr. John Halamka, chief information officer of Beth Israel Deaconess Medical Center in Boston. “IT strategic plans were entirely co-opted by regulatory mandates. Local priorities, innovations, and good-to-have quality improvement projects were overshadowed by must-do compliance requirements.”

On Dec. 6, the CMS and the Office of the National Coordinator for Health Information Technology at HHS announced their intention to expand the Stage 2 reporting period from two years to three, thus delaying the start of Stage 3 until Jan. 1, 2017, for physicians and other “eligible professionals.”

The Electronic Health Records Association, a trade group of about 40 developers affiliated with the Healthcare Information and Management Systems Society, said in a statement it was “pleased” the CMS moved back the start of Stage 3.

The American Medical Association's Dr. Steven Stack, it's immediate past chairman, said, however, “We remain deeply concerned about the program's current pass/fail approach to demonstrating meaningful use,” and asked for “greater flexibility” in program requirements.

The Texas Medical Association, in a letter to HHS Secretary Kathleen Sebelius, said the Stage 2 extension “will allow for a much better understanding of what works and what doesn't” before moving to Stage 3. But its author, Dr. Joseph Schneider, chairman of the 47,000-member group's ad hoc health IT committee, added that the TMA was “deeply disappointed that the CMS has not recognized the importance of extending the 2014 meaningful-use requirements and the penalty measurement deadline” and “does not indicate an appreciation of patient safety.”

Follow Joseph Conn on Twitter: @MHJConn

What do you think?

Share your opinion. Send a letter to the Editor or Post a comment below.

Post a comment

Loading Comments Loading comments...



Switch to the new Modern Healthcare Daily News app

For the best experience of on your iPad, switch to the new Modern Healthcare app — it's optimized for your device but there is no need to download.