Anticipating the Final Rule: The Rural Dynamics of the EHR Incentive Program
For those of us who hoped that the ARRA EHR incentive program was intended (at least in part) to help rural hospitals and physicians modernize their systems toward improving care quality and efficiency, the last 18 months have provided us with multiple experiences of dashed expectations.
Let me present a quick recap of some of the key issues:
- CMS and ONC have proposed that all providers need to reach the same meaningful use standard in order to access incentives. If finalized, this incentive structure will ensure that providers starting at low-stages of EHR adoption (primarily small and rural) will be the least likely to access incentives and avoid penalties. It’s important to note that the small providers being structurally excluded are also the ones least likely to see an EHR return on investment. According to the CBO, providers least able to capture the financial benefits of HIT systems will endure the greatest costs under an incentive program. For more information: http://www.worh.org/hit/2010/01/how-the-cms-proposed-rule-will-raise-the-cost-of-rural-healthcare/
- CMS has proposed that critical access hospitals (CAHs) be made ineligible for the Medicaid incentives, which would mean that those small hospitals most in need of assistance (i.e. the neediest of the needy) would see the very lowest incentives, even assuming they can attain meaningful use. For more information: http://www.worh.org/hit/2010/01/cms-excludes-cahs-from-medicaid-incentives/
- The CAH incentive structure (to be distinguished from the PPS hospital incentive structure) ultimately pivots on how CMS defines “certified EHR cost.” If the definition is too restrictive, the value of the CAH incentive will be minimal. Also, continued ambiguity around what investments qualify for the CAH incentive will make it difficult for CAHs to engage in rational strategic planning relating to EHR implementation goals. For more information: http://www.worh.org/hit/2010/01/cah-ehr-eligible-expense-definition-still-lacks-clarity/
- CMS and ONC have been seen by many to highly underestimate the challenges of EHR implementation in small provider environments. Despite significant evidence to the contrary, CMS has made the claim that “any impacts that would arise from the implementation of certified EHR technology in a rural eligible hospital would be positive.” For more information: http://www.worh.org/hit/2010/01/what-cms-says-and-doesnt-say-about-small-and-rural-providers/
Rather than helping the providers most in need of assistance, I would argue that the incentive program has the potential to cause actual harm. Why is this happening? What is the rationale behind this pattern of disregard for the providers most at risk?
Without CMS or ONC actually coming out and telling us, we can only guess at the answers to these questions. But here are some related factors to consider:
- Several House members led the charge to first eliminate and then minimize the critical access hospital incentive. Their argument was that CAHs, who are reimbursed at 101% for Medicare patients, are already being incented through their current reimbursement structure. It is unclear how that position can be reconciled with the facts that on average CAHs have lower profit margins and significantly lower levels of EHR adoption than other hospitals.
- On the bright side, 249 representatives signed a letter urging CMS to ease the meaningful use requirements and to include CAHs in the Medicaid incentives. That’s a significant majority of House members. According to the letter, “CMS’s exclusion of CAHs from the Medicaid program is contrary to the statute and inappropriate.”
- Rural and small providers have no representation on the HIT Policy Committee (chaired by ONC), which played a critical role in designing the framework of the proposed rule. Decisions were made by federal bureaucrats and HIT Policy Committee members (that represent large provider, system, and EHR vendor interests) with no stake in addressing rural and small provider needs.
- ONC and other groups with influence have been misleadingly framing their related agenda around the issue of quality. If the meaningful use requirements aren’t strict enough—their argument goes—our healthcare quality goals won’t be realized. The fact of the matter is that rushing implementations with unreasonable timelines that do not account for real world success factors is likely to erode not improve care quality. For more information: http://www.worh.org/hit/2010/01/cms-proposed-rule-threatens-care-quality-in-rural-communities/
- CMS has appeared to many of us to have engaged in a pattern of devaluing the inpatient (acute) care provided by CAHs and other small rural hospitals. On issues relating to physician supervision, participation in quality and value-based purchasing initiatives, as well as the HIT incentive rule, CMS has been quick to treat CAHs as non-hospitals or else to impose rules inappropriate for small provider environments.
Even considering the above factors, the policy logic of the current state of affairs is murky. If EHRs are a critical component of healthcare reform and future reimbursement mechanisms (as most of us believe), then it seems unconscionable to withhold assistance from those providers that will face the greatest challenges adjusting to the swift pace of change. Over time, the impacts of the current CMS and ONC positions are likely to include: (1) reduced rural resident access to local care, (2) reduced local control of healthcare, and (3) negative effects on rural economies.
But there’s still an opportunity to avoid these results. More and more people (including those 249 representatives) are requesting that CMS adjust course and make the changes needed for the incentive program to succeed.
So what rulings would make it more likely that small and rural providers (especially those at greatest risk) could participate in the incentive program?
When the final rule is finally released, I will be reviewing it based primarily on the following criteria:
- Will the requirements for accessing incentives be reasonably achievable by the small and rural providers that are at early stages of EHR adoption? There is talk of a deferral mechanism that would allow providers to access incentives while deferring requirements to future years. This sounds good in principle, but if CPOE (the most challenging requirement on the list) is not deferrable, then the ability to defer other requirements will be practically meaningless. CPOE deferability and/or other ways to flexibly provide funding to small and rural hospitals that do not have the resources to achieve what is currently an unreasonable standard of meaningful use will be critical.The AHA suggestion to expand the program out through 2017 and provide additional flexibility for hospitals with less than 100 beds is a solid model for achieving this. For more information on the logic of CPOE deferability: http://www.worh.org/hit/2010/02/hit-policy-committee-recommendation-one-small-cpoe-step-from-flexibility/
- Will the definition of “certified EHR expense” be clear and broad enough to cover significant portions of what CAHs will be forced to spend to implement successful EHR environments? It is not enough to partially fund the cost of the software and hardware needed to reach stage 1. Network infrastructure, security mechanisms, telemedicine, patient safety, and other EHR-related systems (such as PACS, medication dispensing, wireless, etc.) will all be required to reach our common EHR goals. For the CAH incentive to be meaningful, it must be applicable to the broad array of components necessary for CAHs to successfully implement robust EHR environments.
- Will CAHs be eligible for the Medicaid incentive? If the proposed CAH exclusion is not overturned (especially now that so many members of Congress have indicated it was their clear intent to include CAHs), it will be widely seen that CMS and ONC are unabashedly antagonistic to the neediest CAHs and the rural communities they serve.
My firm hope is that ONC and CMS will publish a final rule that avoids the damage the proposed rule would have surely done to many rural providers. Having heard our concerns, these agencies now have an opportunity to address the identified shortfalls, or else to carefully explain why they’ve decided to pursue whatever course of action they determine is appropriate.
If we don’t see a significant shift in rulemaking, my recommendation will be that rural advocates mount a major campaign to accomplish a revision of the HIT incentive rules specific to small and rural providers. With unity, a clear message, and the involvement of legislators who represent rural communities, we may be able to force a remedy that will ensure our neediest providers have equal access to the resources they sorely need to participate in, and ultimately survive, reform.
