Healthcare Business News

Proposed SGR overhaul would affect EHR incentive program

By Joseph Conn
Posted: February 6, 2014 - 4:15 pm ET

(This article has been updated with a correction.)

The proposed legislative overhaul of Medicare's payment formula for physicians has important implications for the use of health information technology, including significant changes to the regulatory scheme for the meaningful use of electronic health records.

The meaningful-use requirements in Medicare's incentive program for EHRs would be rolled up into a broader “Merit-based Incentive Payment System,” along with the Physician Quality Reporting System (PQRS) and the Value-Based Payment Modifier.

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Through December, the Medicare portion of the EHR program, created under the American Recovery and Reinvestment Act of 2009, has paid out nearly $4.1 billion to more than 218,000 physicians to encourage and adopt the purchase and meaningful use of EHRs.

According to a summary provided by the committees that crafted the proposal, the “payment implications” of the current incentive-payment programs would end at the end of 2017. That means Medicare would eliminate scheduled reductions in Medicare reimbursement in the form of 3% penalties for failing to comply with the meaningful-use criteria, as well as escalating penalties up to 5% in 2019. The 2% penalty for failure to report PQRS quality measures in 2017 would be dropped, too.

“Any time you can remove penalties for these programs, is a positive step forward,” said Robert Tennant, senior policy adviser for the Medical Group Management Association. But combining the reporting requirements of three programs into one program would be an even greater blessing.

“That one, obviously, is the most impressive one for an opportunity for administrative savings for practices,” Tennant said.

Another HIT-related provision would require HHS to publish a list of clinical-decision support tools by April 1, 2016, that would be used in a program promoting the appropriate use of advanced diagnostic imaging. After Jan. 1, 2017, Medicare will pay only for images ordered by a clinician who has consulted one of these qualified systems and whose order adheres to what are called applicable “Appropriate Use Criteria.”

In addition, beginning in 2017, HHS will monitor clinicians' use of AUCs, and, by Jan. 1, 2020, up to 5% of Medicare physicians could be deemed “outliers” for non-use or non-compliance with AUCs. Those outliers “shall be subject to prior authorization for applicable imaging services.”

The proposed law also would require EHRs to be “interoperable by 2017” and it also would “prohibit providers from deliberately blocking information sharing with other EHR vendor products.”

And the proposed law will permit various “qualified entities … to provide or sell non-public analyses and claims data to physicians, other professionals, providers, medical societies and hospital associations to assist them in their quality improvement activities on in developing” alternative payment models.

Note: An earlier version of this story incorrectly inferred that, in Tennant's view, the obvious, “most impressive” tech-related change in the proposed SGR fix was the elimination of penalties.

Follow Joseph Conn on Twitter: @MHJConn

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