What’s Meaningful U$e Got to Do with HIT?

1. What’s Meaningful U$e Got to Do with HIT? Presented by: Patricia A. Markus, Esq. Smith Moore Leatherwood LLP 2800 Two Hannover Square Raleigh, NC 27601 T: (919) 755-8850 F: (919) 838-3120 To ask a question during the presentation, click the Q&A menu at the top of this window, type your question in the Q&A text box, and then click “Ask.” After you click Ask, the button name will change to “Edit.” Questions will be queued and most will be answered at the end of the meeting as time allows.

2. Introduction • Overview: What DOES Meaningful Use Have to Do with HIT? • Meaningful Use Proposed Rule • Eligibility Requirements • Technology • Timelines for Achieving Meaningful Use • Payments • Proposed Pathways • Reporting • Areas of Concern

3. ARRA/HITECH • The HITECH Act, enacted within the February 2009 stimulus bill, was intended to improve the health of Americans and the efficiency and effectiveness of our health care system through adoption of meaningful use of electronic health records • Four goals of HITECH: • Define meaningful use (MU) • Encourage and assist attainment of MU through incentives and grants • Further public trust in electronic information exchange by ensuring privacy and security • Foster continued innovation in HIT

4. HITECH Initiatives That Support MU • Regional Extension Centers  $643 M • NC AHEC  $ 13.6 M • Morehouse SOM  $19.5 M • Beacon Communities  $235 M • Workforce Training  $118 M • Medicare/Medicaid Incentives and Penalties  $34 B • State Grants for HIE  $564 M • $13 M for GA • $12.9 M for NC • Standards and Certification Framework  $64.3 M • Privacy and Security

5. You Can Get Paid To Become an EMU • Two sections in the HITECH Act of the American Recovery and Reinvestment Act of 2009 (“ARRA”) directly address health IT (“HIT”) and health information exchange (“HIE”): • Division A, Title XIII directs the Office of the National Coordinator for Health Information Technology to establish certain grant and loan funding programs and established significant new privacy laws 2. Division B, Title IV established Medicare and Medicaid reimbursement incentives for eligible professionals (“EP”) and hospitals that are “meaningful users” of EHR.

6. CMS Meaningful Use Proposed Rule • Released as a Notice of Proposed Rule Making for public comment on December 30, 2009 • 42 C.F.R. Parts 412 et al., published in the Federal Register on January 13, 2010 • NPRM comment period closing on March 15, 2010 • To comment, go to www.regulations.gov, enter keyword CMS-2009-0117-0002 • Final rule anticipated by late spring to allow hospitals to prepare for the Eligible Hospital Incentive program in October 2010

7. CMS Meaningful Use Proposed Rule Proposed Rule specifies: • Definitions • Eligibility requirements for professionals and hospitals • Medicare and Medicaid EHR incentive programs • Criteria for Stage 1 meaningful use • Reporting methodology and timeframes • Eligibility rules • Payment periods • Payment calculations/procedures for Medicare/Medicaid

8. CMS Meaningful Use Proposed Rule EHR incentive payments will be made to: • Eligible providers • Who meaningfully use • Qualified EHRs • Which have been certified • By a certification organization recognized by the ONC

9. Meaningful Use Defined and Stages HHS Secretary will finalize definition, which includes: • Quality reporting • Electronic prescribing • Health information exchange Three “stages” of MU • Stage 1  2011 • Stage 2  2013 • Stage 3  2015

10. Goals of Meaningful Use Centered around national health outcomes goals – Improve quality, safety and efficiency of care, and reduce health disparities – Engage patients in their care – Increase care coordination – Improve the health status of the population – Ensure privacy and security

11. Medicare vs Medicaid Incentive Programs • Common definition of meaningful use, but several significant differences in incentive programs: • Eligibility • Payment amounts and timing of same • Governance

12. Tracking of Participants • CMS has a goal that all EPs and eligible hospitals achieve meaningful use by 2015 • CMS proposes to collect the following administrative data for the Medicare and Medicaid EHR incentive programs: • Name, NPI, business address, and business phone of each EP or eligible hospital • Taxpayer Identification Number (TIN) to which the EP or eligible hospital wants the incentive payment made • For EPs, whether they elect to participate in the Medicare EHR incentive program or Medicaid EHR incentive program.

13. Who Is Eligible For Incentives? • Eligible Hospital—Eligibility determined by CMS Certification Number (CCN) • Medicare Fee-For Service • Acute Care Subsection (d) Hospitals (IPPS) • Critical Access Hospitals • Eligible Professionals (EPs) • Excludes: psychiatric, rehab, long-term care, children’s and cancer hospitals and hospitals in US Territories • Medicaid • Acute Care Hospitals • Children’s Hospitals • EPs

14. Who Is Eligible For Incentives? • Eligible Professional—EPs identified by National Provider Identifier (NPI) • Medicare • MD, DO, DDS, OD, DPM, DC • Medicaid • MD, DO, DDS, NP, CNM, and PA in FQHC or RHC led by PA • Hospital based professional is not eligible • EPs who provide 90%+ of their professional services in inpatient or outpatient hospital setting or emergency room • Site of service code determinative (21, 22, 23 are hospital-based) • BUT: EPs ineligible for incentives also ineligible for “adjustments”

15. Which Incentive Program to Choose? • Hospitals • May participate in both programs if eligible • Hospital serving patients in more than one state can only participate in one state’s Medicaid incentive program in any given year • EPs • May participate in Medicare or Medicaid, not both • May switch between programs once before 2015

16. Certified EHR Technology • HHS issued an interim final rule on December 30, 2009: Initial Set of Standards, Implementation Specifications, and Certification Criteria for Electronic Health Record Technology (45 C.F.R. Part 170) • The rule establishes EHR certification criteria tied to meaningful use objectives and includes 60-day comment period • A final rule is expected in late spring 2010

17. Which EHR to Choose? • Must use “certified EHR technology” to get incentives • Complete EHR  all-in-one solution certified to meet all criteria • EHR Module  any service, component, or combination that is certified to meet at least one criterion (such as SaaS, interface, specific functionality) • “Buyer beware” with multiple modules • Each component must be certified • Know which module meets which certification criteria • Together, modules must address all certification criteria

18. Certification and Standards • Certification criteria exist for hospitals and EPs • General criteria apply to all complete EHRs or EHR modules • Ambulatory criteria apply to complete or modules designed for ambulatory setting • Inpatient criteria apply to complete or modules designed for inpatient setting • Standards for • Content (sharing clinical info—HL7, ASTM, messaging) • Vocabulary (terminologies—SNO-MED, CPT) • Transport (communication protocol between systems) • Privacy and Security (authentication, encryption)

19. Don’t Ignore HIPAA Compliance • Use of certified EHR does not mean you are in compliance with HIPAA privacy and security rules • Privacy advocates have charged that MU and Standards rules do not address privacy and security issues (e.g., how practically to ensure that PHI of patient who pays in full for care is not sent to insurer)

20. Meaningful Use Proposed Pathway • Three-stage approach with increasingly rigorous requirements: • Stage I – Electronic capture of health information in coded format; track key clinical conditions and communicate outcomes for care coordination; implement clinical decision support tools to facilitate disease and medication management; and report outcomes for public health purposes. • Stage II – Stage I plus: exchange data to accomplish computerized provider order entry; transitions in care; electronic transmission of diagnostic test results; and research. • Stage III – Stage II plus: improvements to health care quality and safety; focuses on clinical decision support at a national level by encouraging patient access and involvement; and, improved population health data.

21. Progression Through MU Stages

22. Progression Through Stages • The earlier you become an EMU, the more time you have to develop compliance with various criteria to move through the stages • Can begin as late as 2104 and still receive incentives for stage 1 compliance

23. Medicare Payment to EPs • Get an additional 75% of charges for Medicare-covered services for year, capped at the annual maximum (next slide). • Cap determined by year of first qualification and number of years provider has earned incentive • EPs providing services in HPSAs eligible for an additional 10% in incentive payments

24. Maximum Total Medicare Incentives for EPs

25. Payment Timing • For EPs in Medicare incentive program, CY beginning on January 1, 2011 • For hospitals, federal fiscal year, beginning on October 1, 2010 • Some state Medicaid programs may be ready to commence payments in October 2010

26. Medicaid Incentives • Based on Medicaid patient volumes • For EPs, at least 30% Medicaid patient encounters over 90 consecutive days • Pediatricians must have at least 20% Medicaid patient encounters over same time period • EPs in FQHC/RHC must have at least 30% of “needy individual” patients • For hospitals, at least 10% Medicaid patients • Incentives based on EHR amount multiplied by Medicaid share

27. Medicaid Payments • For EPs, 85% of “net average allowable costs” for EHR • These costs can’t exceed $25,000 in year 1 and $10,000 in years 2 through 6 • Pediatricians may get less if under 30% Medicaid patient volume • Maximum incentive: $63,750 (85% of $75,000) over 6 years

28. Medicare vs Medicaid Incentive Programs • Medicare • Implemented by feds • Payment “adjustments” kick in after incentives expire • Must be an EMU in year 1 • MU definition • Physicians, subsection (d) hospitals, CAHs • Last year EP can start is 2014 • Medicaid • States implement • No payment “adjustments” • Can adopt, implement, or upgrade in year 1 • States can adopt stricter definition (like HIPAA preemption) • Several types of EPs and hospitals • Last year EP may start is 2016 • EPs may receive more $

29. Meaningful Use Proposed Pathway • For each of the three stages, there are: • Objectives • For Hospitals • E.g., 10% of all orders via CPOE, implement once clinical decision rule, report quality data to CMS, etc. • For Providers • E.g., same as hospitals but add electronic prescribing, generate lists of patients with specific conditions, etc. • Measures • E.g. the percent of patients with hypertension under control, etc. Complete matrix is available on ONC website: http://healthit.hhs.gov

30. Proposed Pathway, Stage 1 This table outlines a few of the Stage 1 objectives defining meaningful use and what criteria the government will use to measure meaningful use.

31. Proposed Pathway, Stage 1

32. Reporting • Hospitals and EPs are able to use an attestation methodology to submit summary quality information to CMS (Medicare) or states (Medicaid) in 2011. Expect a more formalized process from HHS by 2012. • Hospitals and EPs have a 90-day minimum reporting period in the first year to qualify as a meaningful user. Subsequent years require full year reporting. • Hospitals can participate in both Medicare and Medicaid incentives, if eligible by volume.

33. Areas of Concern • Funds are all or nothing, depending on whether you achieve/report on all measures • Objectives and Measures are numerous (23 for hospitals, 25 for EPs) and very high – can EPs and hospitals meet these standards? • American Hospital Association concerned with the stringent definition of “meaningful use” that doesn’t recognize existing health IT efforts and may unfairly penalize many hospitals • Payment incentives exclude physicians who practice in outpatient centers and clinics owned by a hospital

34. Next Steps • If you currently use successful EHR technology that likely will not meet the new certification requirements, submit comments to CMS (consider grandfathering request?) • Learn about your state’s plans for Medicaid incentive program and, if you are an EP, determine which program likely will benefit you more • If you’re in the market for an EHR, negotiate with vendors and be sure you have language in the contract requiring certification and compliance with MU requirements and, in the event of noncertification or noncompliance, termination and indemnification rights for your organization

35. Questions? Patricia A. Markus Trish.markus@smithmoorelaw.com (919) 755-8850