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INDUSTRY INSIGHTS | WINTER 2010/20011 EFFECT

“Meaningful Use” Incentives for EHR Technology

How do we overhaul the health care system? Who pays to train people, invest in new technology, and make processes run more efficiently? While the country debates the challenges and merits of health reform, the effects are already beginning to take ground. This past July, the Centers for Medicare and Medicaid Services (CMS) released the final rule on electronic health records (EHR), further defining the provisions of the Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH). The final rule establishes financial incentives for hospitals, critical access hospitals (CAHs), and eligible professionals (EPs) that demonstrate they are able to use certified EHR technology in a meaningful manner in their organizations. Conversely, there will be financial penalties for those organizations that fail to demonstrate meaningful use.

Meaningful use incentives for EHR technologyDefining meaningful use

Although CMS is somewhat vague in its definition, the objectives and the required activities help fill out a picture of what qualifies as meaningful use. For instance meaningful activities include e-prescribing, electronically recording demographics and vital statistics of patients so that they can be easily shared, and providing patients with electronic copies of their health information. Similarly, the technology must provide for the electronic exchange of health information to improve quality of care. Finally, the technology must enable the organization to submit clinical quality and other measures to the health and human services authorities.

The transition to meaningful use of EHR will take place in three steps over the next five years. The first phase will establish a baseline for data collection and sharing; the next stages will be outlined further by CMS rulings.

Incentives

Both Medicare and Medicaid provide incentives, and the meaningful use criteria are the same for both. The incentives are designed to support providers in their transition to EHRs, with the ultimate goal of helping the United States improve the quality, safety, and efficiency of patient care. Depending on when an organization becomes certified for meaningful use and begins implementing EHR technology, it may be eligible for as much as $44,000 from Medicare and/or $63,750 from Medicaid in incentive payments paid over six years (depending on how it improves the use of its system).

Eligibility and limitations

Prior to applying for incentive payments, a review body authorized by the Office of the National Coordinator for Health Information Technology must certify your EHR technology for meaningful use. Hospitals and CAHs are eligible to participate in both the Medicare and Medicaid programs; however, EPs must choose one. EPs will be allowed to switch between the programs once.

The first payment year has more lenient standards. Medicare will require meaningful use for 90 consecutive days, while Medicaid only requires a demonstration of a commitment to adopt, implement, or upgrade certified EHR tools. From that point forward, the use of EHR must promote continued improvements in quality, safety, and efficiency. The biggest incentives are available for those that begin the certification process in 2011. After that, incentive payments will be available on a sliding scale based on your adoption and implementation of certified EHR technology.

Penalties

Failure to show that you are a meaningful user may eventually result in a reduction in Medicare fees. Beginning in 2015, reimbursement will be reduced to 99 percent of the fee schedule and decrease gradually to 95 percent for 2018 and beyond.

As our country moves to implement the provisions of health care reform, the health care industry’s information technology infrastructure must undergo significant improvements. Considerable time and effort will be required to achieve health and efficiency goals as we strive to improve an outdated system. If your organization hasn’t started on the path towards EHR implementation, it is imperative that you begin now.

 

Joe Lopatosky Joe Lopatosky is a health care manager with LarsonAllen.
jlopatosky@larsonallen.com or 617-984-8138

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