To wait or not to wait ...

Hospital leaders with advanced health information technology systems will be approaching a decision deadline in the coming weeks: whether to reach now for the golden ring of federal IT incentive payments under the American Recovery and Reinvestment Act, or wait one more year.

At stake are first-round payments in what eventually could be a multibillion-dollar Medicare electronic health-record incentive program.

But what sounds like a no-brainer at first pass—to go for the money now—is a decision that's a lot more weighty and complex, with both risks and rewards even for those well-equipped organizations that have sufficient IT capabilities in place to qualify now for payments under Medicare's meaningful-use criteria.

The first year of Stage 1 of the Medicare EHR incentive program ends Sept. 30 for hospitals and at year's end for physicians and other “eligible professionals.” Organizations will have up to 60 days after those deadlines to submit needed data and attest to the CMS that they had been meaningful users of their certified EHRs for at least 90 consecutive days during the past year.

Several factors might entice providers to jump now: the time value of money received now versus a year from now; the risk that political change will lead to

depleted funding for the program; organizational budgets that figured in first-year money; and the year's worth of bragging and marketing rights as leaders in the use of health IT.

The risks, however, could give providers pause about attesting to meaningful use in 2011. If they do, they commit to being meaningful users for a full 365 days in the second year of Stage 1. An extra year gives them more time to make everything bulletproof.

Perhaps the biggest potential drawback is that Stage 2 rules and criteria are a work in progress and may not be in final form until summer 2012. Providers who start the clock now could lock themselves into meeting first-year Stage 2 requirements beginning Oct. 1, 2012. That's even though there is no guarantee EHR vendors will have their systems tested and certified as Stage 2-compliant in time for providers to implement the upgrades and train their staffs to use them in time to meet that tight deadline.

In June, the federally chartered Health IT Policy Committee, aware of this time crunch, recommended to the Office of the National Coordinator for Health Information Technology and through it to the CMS that providers who start now and seek meaningful-use status in 2011 be given an extra, or third, year using Stage 1 criteria. The CMS, which has the final say, has yet to announce whether they'll accept the recommendation.

In February, the Advisory Board Co., a management and IT consulting firm, issued a three-page guidance urging its clients to wait until fiscal 2012 before starting their climb up the meaningful-use staircase.

The consultants said the money will be the same—roughly $7.2 million for a “typical” 200-bed hospital with 20,000 discharges and a 40%/20% Medicare/Medicaid patient mix—whether they go now or wait until next year.

Protima Advani, the Advisory Board's strategic research director, says her advice remains the same today.

“I am sticking with my guns for a couple of reasons,” she said.

The CMS was “very vocal” during a recent webinar that the timetable in the current rule remains unchanged. “If you were to hold to the letter of the law, you must accept you're going to have to be there (at Stage 2) by October 2012.”

Even for those leaders of hospitals that are able to attest they've been meaningful users, Advani said, “Run your data, but if you don't see something solid before Nov. 30, by all means don't push your ‘submit' button.” Providers have 60 days after the end of the first “payment year” on Sept. 30 to submit required data and their attestations to the CMS, she said.

Advani recommends, instead, that providers apply for Medicaid incentives, since Medicaid initially requires only that providers “adopt, implement or upgrade (to)” a certified EHR, but not demonstrate meaningful use.

Through Aug. 31, there are 2,054 hospitals registered with the CMS to receive incentive payments either under the Medicare portion of the program, or under both Medicare and Medicaid, which means they would still need to attest to having met Medicare meaningful-use criteria to receive a Medicare incentive payment. But only 114 of these registered hospitals—fewer than 6% of those registered—have attested to being meaningful users so far this year. They've split about $226 million in Medicare EHR incentive payments.

Similarly, for the same period, 71,378 physicians and other “eligible professionals” have registered with the CMS under the Medicare EHR program but only 2,129—or about 3%—have shared in $38.3 million in Medicare EHR payments. Unlike hospitals, professionals can't participate in both the Medicare and the Medicaid incentive programs.

Richard Lang, vice president and chief information officer of 192-bed Doylestown (Pa.) Hospital, said the hospital has had its IT systems in place and for months has been monitoring its ability to meet all of the Stage 1 meaningful-use criteria.

But when the Advisory Board opinion first came out in February, “I talked to our senior management team and we agreed it would behoove us to wait and make sure our processes are solid.”

That meant taking a pass on attesting and getting paid in 2011.

“We're ready to go,” Lang said. “We're probably going to start our 90-day reporting period on Oct. 1. If they (the CMS) modify the rule, people will make out,” but if they don't “and the Stage 2 requirements come out in April, your vendors have to get all of those requirements into a new release, install that release and make all the changes and report by Oct.1. It's impossible.”

In Lang's opinion, the time for hospitals to decide whether they could go for it this year passed sometime in July. “We run the reports for every core measure and criteria. It's a lot of review and work. I'm sure there are hospitals that would run the reports and plug them in, but that's a risk I'd not be willing to take.”

Hospital CIOs should be fully confident in their numbers before telling the CMS they've met the criteria this fall, Lang said. “There should be no question, ‘Could we meet that or not meet that?' It took me months to feel confident about our processes, so I don't know how anybody could say, ‘Let's run a report and see how we do,' and make a decision now.”

For many providers, however, the question is moot. They're simply not ready.

Garden City (Mich.) Hospital plans to spend about $5 million to upgrade and prepare to become meaningful-use compliant, but that won't all get done this year, said Gary Ley, president and CEO of the 215-bed hospital. “Our full IT system is here,” Ley said, but “we've got to build all the screens and protocols.”

The Yuma (Colo.) District Hospital and Clinics, which includes a 12-bed critical-access hospital, probably won't go live with its new EHR until early next year, CEO John Gardner said. But physicians in Yuma's rural health clinic have been using an EHR for about five years. “On our clinic side, we're ready to start collecting the data Oct. 1,” he said.

That will give the clinic just enough time to record the 90 days needed to still qualify for first-year payments in calendar year 2011, Gardner said.

Still others, though, have their first-year meaningful-use money already banked. Dr. John Halamka, CIO of Boston-based Beth Israel Deaconess Medical Center, said his hospital was the first in the country to attest and receive Medicare incentive payments.

Three affiliates—Beth Israel Deaconess' Needham campus; Mount Auburn Hospital, Cambridge; Milton (Mass.) Hospital— all plan to attest by the end of September, Halamka said.