Finance and Sustainability Workgroup

1. Finance and Sustainability Workgroup 6/24/09 1:30-2:30 pm Patricia MacTaggart

2. Basic A, B, C’s of World of HIT • Acronyms Abound: • HIT, EHR, EMR, CPOE, e-prescribing, e-xxxx • Building Trust: • Privacy + Security + Consent = Trust (authentication/authorization) • Costs Count: • Success = less face to face + less duplication = less revenue • (Hardware, Software, Training)

3. Consumers Seek HIT that Supports: • Access to Insurance Coverage: Eligibility Systems • Benefits Appropriate to Health Care Need provided once covered for Insurance: Clinical Decision Support • Capable Providers who will provide the Benefits: Claims Processing • Deference to the Culture and Language: Web-based “Literacy” • Elimination of Medical Errors • Factual “Circumstances”: High Percent of Homeless Have Cell Phones • Guaranteed “view” of Data: Personal/Individual Health Records

4. Providers Seek HIT That Supports: • Adequate Reimbursement: Funding for HIT Infrastructure • Benefits to Serving Populations out way Negatives: Tools • Cultural Competency: Awareness and Tools • Deference to Clinical Judgment: “Alert” Fatigue • Expedited Payment and Decision Making: e-bank transfers, e-billing

5. States Seek HIT that Supports: • Alignment of Incentives: Consumers, providers, taxpayers, regulators to improve quality of health and health care delivery • Balancing “3 Legs of the Quality Stool”: health, access and affordability • Continuity of Care: Continuity of Providers + Continuity of System of Care • Development from Payer to Purchaser: using e-health • Evidence Based Medicine

6. Opportunities through HIT • Actual Literacy = Health Literacy + Computer Literacy • Better Communication = Interoperability + Integration • Data Dominated Information: • Retention of Data – Dirty Date + Data Distribution • Efficiency, Effectiveness and Ease of Use

7. HIT Opportunities:Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA)H.R. 2 • Enrollment/Retention: Express Lane Eligibility and Eligibility Systems • Improving Quality: Encourage development and dissemination of model children’s e-health record

8. Opportunities for States through ARRA: Grants, Loans and TA • Established through the National Coordinator • Planning and implementation grants • Targeted to states or qualified state-designated entities (not for profit) • Principal goal is to improve health care through exchange and use of health information) • Required state match dollars beginning in 2011

9. Opportunities for States & Indian Tribes for Optional Loan Programs through ARRA • Competitive grants to states and Indian Tribes • Entities receiving grants use the money to create loan programs to support provider adoption of EHRs • Enables use of private sector contributions

10. ARRA for Medicaid: 3 State Responsibilities in Order to Draw Down FFP for Administration and Incentive Payments to Medicaid Providers (100% FFP) • States must use the funds for purposes of administering the incentive payments, including tracking of meaningful use by Medicaid providers; • MMIS Structure: Capability to pay the incentive payments. • Advanced Planning Document (APD): Submission required for enhancements to or development of new management information structures for Medicaid

11. ARRA Medicaid State Responsibilities Cont. • States must conduct adequate oversight, including routine tracking of meaningful use attestations and reporting mechanisms; • will require look behind capability that will also require human and IT resources. • may require state changes via State Plan Amendments, state laws/regulations.

12. ARRA Medicaid State Responsibilities Cont. • States must “pursue initiatives to encourage the adoption of certified EHR technology to promote health care quality and the exchange of health care information under this title, subject to applicable laws and regulations governing such exchange” • Aligns with the MITA framework level 3-5 • Needs to address information exchanges with: • other state agencies within their state, • other public and private entities within their states, • Indian reservations • other states and entities in other states • ONC/federal government

13. ARRA Medicaid State Responsibility 3 Cont. • Following the MITA framework, states need to establish: • Baseline “as is” : • snapshot of activities of Medicaid • also other activities within the state both public and private. • Vision “to be” : • “goal” for the state within the state • “goal” in relationship to other states, federal government and Indian reservations. • Roadmap to go from “as is” to “to be”: • timeframes • Benchmarks • percentage of providers by year, • how the MMIS will evolve, • how providers will need to evolve, etc. • MITA identified “swim lanes” : IT infrastructure, education/technical assistance, communities of practice, etc.

14. ARRA Incentive HIT Payments to Medicaid Providers • 100 percent Federal match to States for eligible Medicaid providers who meet certain requirements • No state mandate • States must prove that the allowable costs are paid directly to the provider without any deduction or rebates • 90 percent Federal match to States for administrative duties and costs in administering the incentive payments to eligible providers.

15. Requirements for Medicaid Providers to Obtain Incentives Through ARRA • Non-hospital based professionals: have at least 30 percent patient volume attributable to Medicaid patients, including physicians, dentists, certified nurse mid-wives, nurse practitioners and certain physician assistants • Non-hospital based pediatricians: have at least 20 percent of their patient volume attributable to Medicaid patients • Children’s Hospitals • Acute-care hospital: has at least 10 percent patient volume attributable to Medicaid patients • Federally Qualified Health center or Rural Health Clinic : has at least 30 percent of the center or clinic’s patient volume attributable to needy individuals

16. “Meaningful Use”: Established by State Acceptable to the Secretary Aligned with Medicare Exchanges information across different health care providers Reporting quality measures Including Support Services: Maintenance and Training Adoption and Operation Certified EHR Technology Includes: Patient demographic and clinical health information Clinical Decision Support capacity: Support physician order entry Capture and query information relevant to healthcare quality Exchange electronic health information with, and integrate such information from other sources. Incentive Payments for “Meaningful Use” of Certified EHR Technology

17. Maximum Medicaid Incentive Payments to Providers • For Providers: No more than 85% Percent of Net Average Allowable Costs for: • Certified EHR technology • Support services including maintenance and training that is for, or is necessary for the adoption and operation • For Hospitals Payments: • Medicare Payment Algorithm with 2 Differences: • Fully weighted for the first four payment years rather descending weights in use for Medicare incentive payments • Medicaid patient load instead of the Medicare patient • States may not pay more than 50% of an aggregate amount to a hospital in any year, and must spread payments to hospitals out over at least 3 years (showing meaningful use) • First year payments must start by 2016 • May qualify for both Medicare and Medicaid incentives

18. Medicaid Hospital HIT Methodology Amount: “Overall hospital EHR amount” x “Medicaid share” • “Overall hospital EHR amount”: sum of a base amount ($2M) added to its discharge related payment • Discharge related amount: $200 for each discharge, for • 1,150th through its 23,000th discharges • For years 2-6, add growth factor – average annual growth rate in discharges from previous 3 years • Medicaid share: Medicaid portion of inpatient bed days, including Medicaid HMO patients, adjusted upward for charity care (may not include bad debt) • “Secretary shall establish, in consultation with the State, the overall hospital amount for each hospital…”

19. Questions/Comments