The Internal Revenue Service may soon rule that not-for-profit hospitals can subsidize the cost of e-prescribing and electronic medical records systems for their affiliated physicians without jeopardizing the hospitals' tax-exempt status, an HHS official told several hundred physician informaticists Sunday during a pre-conference session at the Healthcare Information and Management Systems Society trade show in New Orleans.
Back in 2004, David Brailer, then the national coordinator for health information technology at HHS, began calling for Stark exemptions and anti-kickback safe harbors for hospitals willing to extend IT systems and services to their local physicians. Brailer saw it as a way to boost EMR adoption by physicians in solo and small group practices where EMR adoption has remained low because of their high cost and technical challenges.
Last August, HHS and the CMS came through with rules granting relief from Stark and anti-kickback laws for IT subsidies, but a number of not-for-profit hospitals are still holding back over the IRS issue.
Despite encouragement by HHS, fear of the IRS taking action against hospitals tax-exempt status for gifts to for-profit physician groups have constrained some hospitals from launching IT subsidy schemes, thus one arm of the government thwarts the efforts of another.
In November 2006 and again in early February, representatives from the American Hospital Association met with IRS officials seeking a ruling that would give comfort to hospitals wanting to help pay for IT systems and provide technical assistance to physicians.
Physician Karen Bell, director of healthcare information technology adoption at the Office of the National Coordinator for Health Information Technology at HHS, told attendees at a HIMSS panel discussion organized by the Association of Medical Directors of Information Systems that help is on the way.
Bell said ONCHIT officials believe they have reached a resolution with the IRS on breaking the logjam, but the proposal still must be reviewed and cleared by others in the tax agency.
"There has been a lot of discussion," Bell said. "They (the IRS) are aware of it and were pushing real hard on them as well." Bell said she believes the IRS will release its ruling by spring.
Her update came in response to discussions about barriers to IT adoption.
One of the panelists, Dick Gibson, chief medical information officer of regional information services at Seattle-based Providence Health System, said Providence is ready to offer "a large bank of licenses" for GE Centricity EMR software, which along with training and other services represents about a $60,000 donation per physician.
"Were going to do 50 doctors a year," Gibson said, but "our lawyers told us there are some places in the east (that) held back because it hasnt cleared (the IRS). All we need is a nod that, yeah, its likely (the IRS) will accept this, and well go forward."
Michael Zaroukian, chief medical information officer and associate professor of medicine at Michigan State University, said an informatics leader has to "know your customers," meaning the clinicians he or she is trying to get to buy into an IT adoption program.
"Know the top 10 challenges they face and know how the technologies as a tool, not a panacea, can help solve those problems," Zaroukian said.
Fellow panelist Stephanie Mills, chief medical information officer at Our Lady of the Lake Regional Medical Center in Baton Rouge, La., said physician IT leaders need to be students of change management. Preparation for change on the front end, in particular, is a key element to successful IT system adoption.
"I think it is important that you do take the time to assess your environment," Mills said. "As it comes to adoption, this is not rocket science, but it is something we dont do consistently."
Mills said the leader needs to build "sweat equity" into the project by spending time with the people involved.
"Youre not going to get adoption without those personal relationships," she said. "This is the hand were dealt. Its not a pretty picture always. You have to be somewhat of a salesperson."
Mills warned that physicians need to get and maintain control of healthcare information technologies. "If we dont do this, it will be done by the insurance companies."
During a Q&A session, George Margelis, an Australian physician who is industry development manager of the digital health group, at Intel Australia, said that roughly 95% of primary-care physicians in Australia have adopted EMRs.
The impetus was a government incentive program beginning in 1999, in which physicians were paid about $5,000 each, or roughly half the start-up expense of installing a low-cost system, he said.
"It comes down to leadership," Margelis said. "It was a matter of making that first step a little easier. Most doctors are (now) on their third-generation product and theyre paying for it out of their pocket. I think it is a model that the rest of the world should take a look at."
While the federal government in the U.S. is not supplying money to doctors for the purchase of EMRs, it is helping in other ways and that is making an impact on adoption rates, according to Chuck Parker, vice president and chief technology officer for Masspro, Waltham, Mass. Masspro is a Medicare quality improvement organization and one of the initial contractors in the HHS-funded Doctor's Office Quality-Information Technology project.
Launched in April 2004 as a pilot program in four states, DOQ-IT is now available in all states and has 133,000 physicians in more than 4,000 practices enrolled, Parker said, during another session in the daylong symposium for physicians. DOQ-IT aims to increase physician adoption of EMRs and targets primary-care physicians in offices of nine doctors or fewer.
Parker told physicians interested in EMR adoption strategies that practice leaders need to both talk and watch what they say at the outset of an implementation project.
"This is probably the single largest factor in implementations that fail, there was not adequate communication among the staff, all of the staff," Parker said.
One huge mistakealmost an invitation to sabotageis to try to sell it to members of the office staff as a cost-saving venture, according to Parker.
"This is a horrible way to start your process, that youre going to reduce staff," he said. "You get a lot of passive-aggressive behavior."
Parker said changing workflow often creates short-term productivity losses, so IT conversions place financial stresses on a small group or solo practice beyond the cost of the IT systems alone. Physicians shouldnt look to IT to rescue a financially troubled practice.
"Weve actually seen failures that have caused the practice to break up or go bankrupt," Parker said. "You have to make sure the practice is financially healthy enough to be able to stand that, at least on a 90-day implementation schedule."What do you think? Write us with your comments at [email protected]. Please include your name, title and hometown.