GAO finds significant EHR incentive program dropouts

By one oft-reported measure, the federal government's electronic health record incentive payment programs have been an unmitigated success.

That measure is the increase in the number of hospitals and physicians (and other professionals) that have received payments from the programs under Medicare, Medicaid and Medicare Advantage for installing and “meaningfully using” EHRs. The payments are designed to incentivize providers to buy and use, in a meaningful manner, EHR systems.

Each month since the CMS began issuing monthly reports on the programs, which made their first payouts in January 2012, the number of providers receiving federal dollars has gone up.

Through January, the programs, created under the American Recovery and Reinvestment Act of 2009, have paid out more than $20.9 billion, providing incentive payments to 89% of eligible hospitals and 65% of physicians and other eligible professionals, according to the latest program report from the CMS.

But now, according to a March General Accountability Office review, there is another story in the CMS data—“a substantial percentage” of providers dropped out of two of the Medicare and Medicaid programs in 2012 after receiving payments for 2011. The findings are tucked into GAO's wide-ranging, 81-page review of the incentive payment programs, “Electronic Health Record Programs—Participation Has Increased, but Action Needed to Achieve Goals, Including Improved Quality of Care.”

The GAO looked at Medicaid program participation in 36 states and found that 60.8% of physicians and eligible professionals and 35.7% of hospitals that participated in the program in its first year, 2011, did not stick with it in 2012. Turnover in the Medicare program was far less significant, based on data nationwide, with 16.3% of physicians and other professionals and 9.5% of hospitals that participated in 2011 dropping out in 2012, according to the GAO.

CMS officials “told us that they are monitoring the issue and taking steps to reverse this trend,” the GAO said. “One CMS official told us there are various possible reasons Medicare and Medicaid providers did not continue to participate,” the report authors said. “Noteworthy for the Medicaid EHR program, and in contrast to the Medicare EHR program, providers do not need to participate in consecutive years to maximize their incentive payments,” they said.

Payments under the Medicaid program for these providers are available over a far longer period than under Medicare. Medicaid payments for them started in 2011 and could run through 2010. In contrast, payments for Medicare physicians and other “EPs” began in 2011 and will end in 2016.

“Another possible reason providers did not continue to participate in the Medicaid program in 2012 is that providers are not required to demonstrate meaningful use their first year of participation,” the GAO said. For them, the standard to qualify for a first-year payment under Medicaid is merely to adopt, implement or upgrade to a tested and certified EHR. Meeting meaningful use, a much higher bar, is not required for these participants until their second year of the program.

“One CMS official noted that a provider who received an incentive payment” under Medicaid the first year “could still be far from having the capability to demonstrate meaningful use,” the GAO said.

The CMS had surveyed program dropouts to determine why they left and found other rationales, including providers had switched EHR vendors and weren't ready to submit EHR data. Others found it more difficult to move up from the 90-day meaningful use reporting period required under the Medicare program in the first year to a full-year reporting period in the second year; still others surveyed said they simply were unaware of program deadlines, and some “did not realize they needed to participate in the program again,” the GAO said.

The GAO warned that stiffer program requirements for Stage 2, which began Oct. 1, 2013 for hospitals and Jan. 1, 2014, for physicians and other EPs, “may slow participation.”

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