“This is their first investment in healthcare reform, and I think it will make a huge difference,” said Darlene Burgess, vice president of corporate government affairs for Detroit's Henry Ford Health System, in describing the federal spending spree. “We're quite happy.”
“A drop in the bucket” was how Burgess described the $3 million to $4 million subsidy large hospitals can earn through a $2 million “bonus,” plus more, depending on a formula involving Medicare patient share and the hospital's number of Medicare discharges. “But it's a drop in the bucket we welcome,” she said.
The starting gun was fired with the CMS release of the final rules on meaningful use of health IT. The rules explain not only how the largest reality game show of all time will be played, but also what contestants must do to claim their prizes.
In preliminary events, Donald Berwick was sworn in as the new CMS administrator in Boston on July 12, a day before the regulations were released. Berwick will referee the proceedings, enforcing newly released rules, including one that strengthens rarely enforced privacy laws and another that spells out how products that don't exist yet will be judged or “certified.”
“We are actually attempting, through these rules and our other programs, to comprehensively address the barriers that have been identified to the widespread adoption and use of electronic health systems for effective improvement in quality and efficiency,” David Blumenthal, national coordinator for health IT, said during a July 13 news conference.
To make matters more interesting, the meaningful-use obstacle course is still being assembled, even though several players are already running on the track unaware of where the first hurdle will be placed.
This is because, to qualify as a meaningful user, a physician must be using a “certified” electronic health record, but—until last week—no one knew what the certification criteria would be. Those criteria were released July 13 in 228 pages of companion rules to the meaningful-use requirements and the final rules on a temporary program released June 18, which established a process for an organization to become an Office of the National Coordinator-authorized testing and certification body. At least one organization—namely the Certification Commission for Health Information Technology—had sought the ONC's blessing to become an authorized testing body.
Vendors can now start developing products to certification standards even if there is still no one to certify them (See story, below).
The ONC has promised to move these applications through as quickly as possible, said Patricia Wise, vice president for healthcare information systems at the Healthcare Information and Management Systems Society. But she added that, even if an organization receives authorization on Aug. 1, it may not be ready to set up shop as an EHR-certification business on Aug. 2, as it will need to establish its testing process and then promote its services to the IT market.
Wise also noted that vendors may wait to see how many authorized testing and certification bodies emerge, so they can gauge their options as far as price and location.
“I think, consequently, it will be fall of 2010 before we start seeing certification of EHR technology,” Wise said.
Providers face a tight schedule in the next year. To meet deadlines included in the first phase of the meaningful-use program, they will need to make sure their EHRs are up and running by July 1, 2011. But first, there are a few hurdles to clear: They need to purchase and install a “certified” EHR, but they can't do that yet because none exist. And there is growing concern among providers about being in the back of a slow-moving line as vendors install the EHRs purchased by those providers who moved a little bit faster over those hurdles than they did.
“I understand those concerns,” Wise said. “I think there's concern about a funnel being created, but the window is still wide enough that we shouldn't get in a panic yet.”
The final rules released last week differed significantly than the proposed rules released Dec. 30, 2009, especially in the first stage of the program (See chart, above). In particular, thresholds for the use of computerized provider order-entry, electronic prescribing, and the use of clinical quality measures were reduced, while measures for using IT to simplify administrative functions were deferred until later stages.
Also removed was an all-or-nothing approach that mandated physicians meet 25 requirements, and hospitals had to meet a list of 23. These were changed to a list of 15 mandatory criteria for doctors and 14 for hospitals, with both being able to choose five items from a “menu” of 10 other requirements. While the short time frame is still cause for concern, many on the provider side said they felt relief when they saw the final rules.
“When we looked at the 25 or so criteria, we practically had a heart attack,” said Henry Ford Health System's Burgess.
The lowering of the requirements was good news, but what was even better was a change in definitions, Burgess said. She explained that the CMS, in an effort to avoid making duplicate payments to a hospital and its “hospital-based” physicians, had incorrectly defined a system's ambulatory doctors as “hospital-based.”
After much lobbying, this definition was changed and systems will be able to collect subsidies for the IT used by their outpatient physicians. Burgess said this change could result in another $29 million for Henry Ford Health System. She said the money is needed for maintenance of the system's own CarePlus EHR and continued integration of that system at the former St. Joseph's Medical Center (now Henry Ford Macomb Hospital) it acquired in 2007 from Trinity Health.
The American Hospital Association issued a statement on the new rules that noted how “some important improvements” have been made but also that there were still many hurdles to clear. “Unfortunately, CMS continues to place some barriers in the way of achieving widespread IT adoption by our nation's hospitals and physicians,” read the statement from Richard Umbdenstock, AHA president and CEO, adding that the new rules exacerbated healthcare's digital divide and penalizes early adopters.
“We continue to be concerned that, given limited vendor capacity and workforce shortages, many hospitals will not have timely access to certified products, since no certified EHR systems are available today,” Umbdenstock said.
Don May, AHA vice president for policy, said the biggest hurdle may be the traffic jam that the timing of the rules create. “Everyone is going to vendors at the exact same time,” he said. “They created a market that looks like the Capitol Beltway at rush hour.”
Among the AHA's biggest problems with the rules include how some multicampus hospitals will receive smaller subsidies because they share a single Medicare provider number. Another concern is that they won't receive incentives at all because, while a new campus may have the latest gadgets, the old one is still chugging along on paper. In other words, this is no Cash for Clunkers program.
At Henry Ford, Burgess said this policy could result in the loss of about $3.5 million in subsidies. At New York's three-campus Montefiore Medical Center, however, CEO Steven Safyer said that figure is significantly higher. “It's about a $25 million hit to Montefiore,” he said, explaining that the CMS views Montefiore's three facilities, each with roughly 500 beds, as one 1,500-bed hospital for most uses—but, under meaningful use, it will receive the same subsidy as a single 500-bed hospital.
That's if it gets any money at all, Safyer said, given that even though two of its campuses have had CPOE fully implemented since 1999, its third campus—the former Our Lady of Mercy Medical Center (now Montefiore Medical Center, north division)—is behind the IT curve.
“We're being penalized for saving a hospital,” Safyer said of the then-bankrupt Our Lady of Mercy, which Montefiore bought in July 2008.
At a July 13 news conference, Tony Trenkle, director of the CMS office of e-health standards and services, said the agency reviewed the issue and decided that treating the different facilities within a multicampus hospital as separate entities might cause problems elsewhere.
“The point is to maintain consistency across various programs,” Trenkle said.
Safyer said Montefiore shares a provider number with the former Our Lady of Mercy facility because that was the “best advice from CMS” on how to manage the hospital after its purchase. Both Safyer and May expressed optimism that they could generate bipartisan support in Congress for overturning that rule. For the most part, however, Safyer said he thought the new rules could be a positive force in pushing wider adoption of health IT.
“I'm pleased with the response of CMS—that doesn't mean I think it's perfect, but what's best for the patient is to get everybody up to the same level,” Safyer said.
Robert Tennant, senior policy adviser for the Medical Group Management Association, took a similar approach, saying that he was generally pleased with the final rules. But he warned practices that, regardless of the subsidies, it will still require sacrifice to implement an EHR.
He also cautioned physicians to beware of rogue consultants. “There's a lot of money on the line and it's not the practices that will get this money,” he said. “It's the vendors.”
—with Matthew DoBias