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The HITECH Act and EHR Reimbursement

Arguably, the most significant EHR-related initiative occurred in 2009 as part of the American Recovery and Reinvestment Act (ARRA). Two major parts of ARRA, Title IV and Title XIII are known as the Health Information Technology for Economic and Clinical Health or HITECH Act. Approximately $20-30 billion was dedicated for Medicare and Medicaid reimbursement for EHRs to clinicians and hospitals. In this chapter the focus will primarily be on reimbursement to eligible professionals (EPs) and not hospitals or Medicare Advantage organizations, even though they are also potentially reimbursable. The Centers for Medicare and Medicaid Services (CMS) established a comprehensive web site to explain the EHR Incentive Program, summarized in the following sections.¹⁶⁶ In order for clinicians to participate in this program they must be: (1) eligible, (2) register for reimbursement, (3) use a certified EHR, (4) demonstrate and prove Meaningful Use, and (5) receive reimbursement.

Eligible professionals (EPs)

Medicare:

Medicare defines EPs as doctors of medicine or osteopathy, doctors of dental surgery or dental medicine, doctors of podiatric medicine, doctors of optometry and chiropractors. Hospital-based physicians such as pathologists and emergency room physicians are not eligible for reimbursement. Hospital-based is defined as providing 90% or more of care in a hospital setting. The exception is if more than 50% of a physician’s total patient encounters in a six-month period occur in a federally qualified health center or rural health clinic. Physicians may select reimbursement by Medicare or Medicaid, but not both. They cannot receive Medicare EHR reimbursement and federal reimbursement for e-prescribing. They can receive Medicare reimbursement as well as participate in the Physicians Quality Reporting System (PQRs). If they participate in the Medicaid EHR incentive program they can participate in all three programs.

Medicaid:

Medicaid EPs are defined as physicians, nurse practitioners, certified nurse midwives, dentists and physician assistants (physician assistants must provide services in a federally qualified health center or rural health clinic that is led by a physician assistant). Medicaid physicians must have at least 30% Medicaid volume (20% for pediatricians). If a clinician practices in a federally qualified health center (FQHC) or rural health clinic (RHC), 30% of patients must be needy individuals. The Medicaid program will be administered by the states and physicians can receive a one-time incentive payment for 85% of the allowable purchase and implementation cost of a certified EHR in the first year, even before Meaningful use is demonstrated. Medicaid is also different from Medicare in the following: payment over six years does not have to be consecutive and there are no penalties for non-participation.¹⁶⁶

Registration:

Registration began in January 2011. Medicare physicians must have a National Provider Identifier (NPI) and be enrolled in the CMS Provider Enrollment, Chain and Ownership System (PECOS) and National Plan and Provider Enumeration System (NPPES) to participate.¹⁶⁶

Certified EHRs:

An EHR has to be certified by a recognized certifying organization in order for a physician or hospital to receive reimbursement. As of mid-2013 there were six organizations that can provide certification.¹⁶⁷ Standards and certification criteria are listed on the HHS site, as are the currently certified EHRs. Users can view ambulatory and inpatient EHR categories and search by product name. The search should review who certified the EHR, whether it was for a complete or modular EHR and the EHR certification ID number they would need for reimbursement. The newest 2014 certification is for stage 2 meaningful use. A search in September 2013 of all complete EHRs, ambulatory and inpatient for all versions by vendors reported 1792 offerings.¹⁶⁸

Meaningful use (MU):

The goals of MU are the same as the national goals for HIT: (a) improve quality, safety, efficiency and reduce health disparities; (b) engage patients and families; (c) improve care coordination; (d) ensure adequate privacy and security of personal health information; (e) improve population and public health. Three processes stressed by ARRA to accomplish this are: e-prescribing, health information exchange and the production of quality reports. As planned, Meaningful Use will occur in three stages. The intent is for stage 1 to begin the basic process of data capturing and sharing; stage 2 will require advanced data processes and sharing and stage 3 will examine actual patient outcomes. Figure 4.3 shows the proposed timeline for Meaningful Use.

• Stage 1 (2011): Meaningful Use mandates a core set and a menu set of objectives. To be a Meaningful Use Stage 1 user, participants must meet all 15 of the core objectives and select five out of 10 menu objectives. They must choose at least one population and public health measure. Appendix 4.1 compares stage 1 with stage 2 for EPs, not hospitals. For each objective there are reporting measures that must be met to prove Meaningful use. In 2011 the results of all objectives and measures, to include clinical quality measures were reported by clinicians and hospitals to CMS and Medicaid clinicians reported to states by attestation. Quality measures are derived from the Physician Quality Reporting System (PQRS) and the National Quality Forum (NQF). Each EP must submit information on three core quality measures in 2011 and 2012 (tobacco use, blood pressure measurement and adult weight screening). They must also choose three other measures that are ready for incorporation into EHRs. Physicians must fill in numerators and denominators for Meaningful Use objectives and indicate if they qualify for exclusions and attest that they have met Meaningful use. Details about Meaningful Use and attestation for Medicare and Medicaid are available on the CMS web site.¹⁶⁶
• Stage 2 (2014): The final rule for stage 2 was published in September 2012 with the intent of implementation in 2014. The proposed changes include increasing the percent compliance with Stage 1 objectives, moving several menu objectives to core and adding new objectives (e.g. secure messaging).¹⁶⁸ Specifically, stage 2 will require 17 core objectives and 3 out of 6 menu objectives. In the 2014 reporting period all EPs and EHs need to upgrade to 2014 certified EHR technology and EPs should remember that 2014 is the last year to start the Medicare Meaningful Use program.¹⁶⁶ For reporting periods during or after fiscal or calendar year 2014 EPs will need to have EHRs certified by the 2014 standards. In late 2013 the reporting period was extended to 2016
• Stage 3 (2017): In mid-2013 the HIT Policy Committee (Meaningful Use Workgroup) proposed basic functionality and health outcomes goals one might expect with stage 3. Stage 3 will begin in 2017 and only for those who have completed 2 years of stage 2. Appendix 4.2 lists these proposed goals for stage 3 Meaningful Use.¹⁷⁰

Reimbursement

Tables 4.4 and 4.5 list the Medicare and Medicaid reimbursement levels for EHRs. Payments will be held until the Medicare physician meets the $24,000 threshold for allowed charges. Medicare physicians may earn an additional 10% if they practice in a healthcare professional shortage area (HPSA). Payments are based on the calendar year. It is important to note that no monies are paid upfront and contrary to what is published by EHR vendors and others, the amount listed yearly in Table 4.4 is a maximum. Physicians will be reimbursed 75% of allowable Part B charges or up to, for example, $18,000 in the first year. Clinicians are paid in a single annual payment and have to demonstrate Meaningful Use for 90 days of continuous EHR use in the first year and the entire calendar year thereafter. Medicare physicians who do not use a certified EHR nor demonstrate Meaningful Use will receive penalties of 1% in 2015, 2% in 2016 and 3% in 2017 when they bill Medicare. Penalties could reach 5% in 2018 and beyond if fewer than 75% of physicians are using EHRs at that point. In addition, late adoption might mean that more complex Meaningful Use (Stage 2 or 3) will be required, likely to make purchase and implementation more difficult. The timeline was changed in late 2013 such that stage 2 was extended through 2016 with stage 3 beginning in 2017. Other changes are likely to occur so EPs and EHs should closely monitor the ONC and CMS web sites. Medicaid is administered by states and will use the same Meaningful Use criteria. In addition to the states being given the reimbursement money by the federal government to give to clinicians and hospitals, they will also receive 90% reimbursement for the cost of administering the program. Medicaid EPs and hospital-based physicians are not subject to possible payment reductions. Unlike Medicare, Medicaid physicians can be paid the first year just to adopt, implement or upgrade an EHR and not yet meaningfully use the EHR. Medicaid EPs must demonstrate Meaningful Use in years two through six. Medicaid physicians are not eligible for the 10% HPSA bonus but can receive the e-prescribing and PQRI (also known as PQRS) bonuses. PQRS and Meaningful Use are not aligned well and this is discussed in the chapter on quality improvement strategies. The last year to begin participation in the Medicaid program is 2016. Hospitals can also be reimbursed for the purchase of EHRs and can share this technology with the known limits of the Safe Harbor Act discussed elsewhere in this chapter. Hospitals will start at a base of $2 million annually with decreasing amounts over five years, plus an additional amount dependent on patient volume. Hospitals may receive reimbursement from both Medicare and Medicaid.¹⁶⁶ Critical access hospitals and small rural hospitals have shown a definite increase in meeting meaningful use criteria but there is still concern that rural physicians lag behind urban doctors in terms of adoption of EHRs.

EHR Incentive program update: June 2013

The Office of the National Coordinator for HIT submitted a Report to Congress on the adoption of HIT in June 2013. The following are some of the salient findings of the report:

• Roughly 394,000 eligible physicians and hospitals have registered for reimbursement and 291,000 eligible professionals have received incentive payments, representing more than half of the eligible candidates. Over 3800 hospitals have received incentive payments, representing more than 80% of eligible hospitals.
• Among eligible professionals receiving reimbursement, 90% were from metropolitan areas.
• There has been steady growth in the use of the Regional HIT extension centers (RECs), but only 38% of the primary care clinicians who used RECs, demonstrated meaningful use.
• The percent of non-federal hospitals capable of meeting core and menu meaningful use measures varied from a low of 55% to a high of 94% in 2012.
• The percent of physicians using EHR-based e-prescribing increased from 7% in 2008 to 54% in 2012.
• As of December 2012, thirty-nine states participated in the Direct (push) exchange of medical information and 25 states were participating in the query (pull) exchange of medical information.¹⁷¹

Table 4.3: Meaningful Use Stages 1-3 Timeline for EPs

Table 4.4: Maximum Medicare reimbursement for EHR adoption EPs

Table 4.5: Maximum Medicaid reimbursement for EHR adoption for EPs

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