Final HIT Incentive Rule: CMS Takes a Big Step in the Right Direction

Final HIT Incentive Rule: CMS Takes a Big Step in the Right Direction

With the July 13^th release of the final HIT Incentive Rule, CMS has moved closer toward meeting our common goals of improving healthcare quality and efficiency through the use of electronic health records.

It is important to note that the rule does not contain some key elements that would have been desirable, such as (1) a full list of requirements extended through 2017 (which would have allowed for better planned and more effective implementations) and (2) a separate glide-path for small rural hospitals and physicians (who are starting at significantly lower stages of EHR adoption). However, the final rule is a significant improvement over the NPRM. While I have not read all of the 864 pages yet (I will be analyzing specific parts of the rule over the next several days and weeks), here is my initial impression of the key issues:

• There are a reduced number of required meaningful use objectives: The proposed rule had an all or nothing standard with providers needing to meet 23 (for hospitals) or 25 (for EPs) requirements to attain HIT incentives. The final rule has only 14 (for hospitals) or 15 (for EPs) required objectives. Another 5 objectives need to be chosen from a set of 10 menu requirements. Generally, the most challenging objectives are on the menu list rather than the required list. All this would be meaningless if CPOE had survived in its proposed form as a required objective. But it did not (see next item).

• While CPOE remains a required objective, it has been effectively downgraded to pharmacist or RN medication order entry: The proposed rule only counted orders entered directly by ordering physicians toward a 10% CPOE utilization metric. The final rule has raised the utilization requirement to 30%, but orders no longer need to be entered directly by the ordering physician. Any “licensed professional” may enter CPOE orders on behalf of the physicians. This means that RNs and pharmacists (who in most hospitals currently enter handwritten physician orders) can be utilized to meet the CPOE requirement, which postpones CPOE physician adoption challenges into later meaningful use stages, where they clearly belong.

• CAHs are now eligible for the Medicaid incentive: The proposed rule excluded CAHs from participating in the Medicaid program (even as high Medicaid utilization CAHs are the most in need of assistance). The final rule rectifies that problem. CAHs that meet the 10% Medicaid utilization threshold will now be entitled to the full “acute care hospital” amount of the Medicaid formula, just like PPS hospitals.

• The required quality metrics have been reduced to 15 that are NQF endorsed and tested for electronic use: The proposed rule included many metrics not validated to achieve quality improvement goals. Upon first glance (more to come on this), I believe the final rule includes a reasonable set of metrics.

• The CAH eligible expense incentive, while not clearly defined, remains broad: By defining a CAH eligible expense as “depreciable costs necessary for the administration of certified EHRs,” CMS seems to have effectively signaled that it intends to provide incentive funding for a large portion of costs necessary for CAHs to implement robust EHR environments, including network infrastructure, security systems, PACS, and other EHR-related depreciable costs.

• Eligible professionals practicing in provider-based clinics have been included as a result of a recent legislative change http://www.worh.org/hit/2010/04/good-news-most-provider-based-physicians-now-eligible-for-hit-incentives/ (Detail on how the final rule handles provider-based clinics will be provided in a future blog).

• It appears that CMS has taken steps to reduce the administrative burden that would have been caused by the NPRM, but we remain concerned about this issue and will be further examining the final rule with this consideration in mind.

Given all of the above, my first blush estimate is that the changes between the NPRM and the final rule effectively raise the % of rural hospitals that are likely to attain incentives from 30% (http://www.worh.org/hit/2010/02/cms-proposed-rule-how-to-stretch-without-breaking/) to as high as 60%, which is an important step. Though it of course still leaves the question of what we will be doing to help those 40% of rural hospitals (at the earliest stages of EHR adoption) for which the meaningful use goals remain reasonably unachievable.

There are three other critical issues to consider as we work together toward making the HIT incentive program a success:

• Rural hospitals will need robust technical assistance to help them meet even this level of EHR adoption. The ONC Regional Extension Center program was created to provide this type of technical assistance. However, ONC has prioritized only a small fraction of available funds to help CAHs and other small rural hospitals. Consider this: a small physician practice with 10 primary care providers merits $50,000 in REC support for assistance. A rural hospital, which is a magnitude of times more complex in terms of its EHR implementation challenges, merits $12,000. If we really care about succeeding in the rural hospital arena, this issue will need to be turned around. Establishing a national rural technical assistance program is also something that we and others (such as the NRHA and the Rural Health Resource Center) have and continue to recommend.

• There is still a problem relating to provider access to capital. How will rural providers get the capital they need for the front end investment in EHRs, when they won’t be getting their incentive for at least 1-2 years (and in most cases longer) after they make the investment? ARRA allowed for the creation of a loan program to address this problem, but ONC elected not to pursue such a program. Perhaps it is time for ONC to get going on this, or else to propose how they expect rural providers to overcome this challenge.

• Support HIT networks, but make sure they are networks that allow for rural hospitals to maintain their independence. There is discussion about the potential of future grant programs that support the establishment of HIT networks. We believe in HIT networks, and have even implemented one.  HIT Networks are a key part of the solution, especially for very low-volume rural hospitals. Let’s fund HIT networks. But let’s make sure to fund expansion of existing HIT networks (which will most quickly and effectively move small rural hospitals onto EHR systems) as well as the establishment of new ones. Let’s fund a network of networks to teach HIT network development best practices. Yes, support HIT networks, but HIT network funding should not be a mechanism to provide funds to systems and tertiary centers to gain control over rural community hospitals. It’s critical that we fund horizontal as well as vertical networks, and that policy makers working on FOAs recognize the subtleties surrounding this issue.

More to come…