ARRA & HIT in Rural America

1. ARRA & HIT in Rural America Louis WenzlowDirector of HITRWHC for theWORH Financial WorkshopAugust. 18th, 2009

2. American Recovery & Reinvestment Actand Health Information Technologyin Rural AmericaPresentation Overview I - Medicare HIT Incentives in ARRA II - Certified Expense and Meaningful Use III - Rural HIT Challenges and Strategies IV - Preparing for ARRA Now

3. Overview of RWHC • Founded 1979 • Non-profit coop owned by 35 rural hospitals (net rev ≈ $3/4B; ≈ 2K hospital & LTC beds) • ≈ $7M RWHC budget (≈70% member fees, 20% fees from others, 5% dues, 5% grants) • 6 PPS & 29 CAH; 24 freestanding; 11 system owned or affiliated

4. I - HIT Incentives in ARRA • Give 70% of Americans an electronic health record (EHR) within 5-10 years. • Use Medicare to incentivize the adoption of EHRs to improve quality, provide data portability, and allow for performance evaluation. • Eventually penalize non-adopters by reducing reimbursement. • Some rural providers will also be eligible for Medicaid incentives. Last year was “not if but when.” This year “not when but now.” ARRA presents tremendous challenges for small and rural providers.

5. Physician Medicare Incentives Those that are meaningful users will receive 75% of estimated allowed charges limited to the following maximums: Year 1- $15,000; Year 2 - $12,000; Year 3 - $8,000; Year 4 – $4,000; and Year 5 -$2,000. If first adopting in 2011 and 2012, maximum Year 1 incentive increased to $18,000. Up to $44,000 in payments per physician. Penalties for non-users starting in 2015 (start at 1% fee schedule reduction and go to 3% reduction).

6. PPS Hospital Medicare Incentives Those that are meaningful users by 2013 are eligible for full 4 years of incentive payments (e.g., about $4 million average for Wisconsin hospitals). ($2 million base + volume adjustment) x (Medicare Share with charity adjustment). Payment reduced by 25% each of Years 2, 3, and 4. Penalties for non-users starting in 2015. Early adopters rewarded, since $$ are paid regardless of their costs or timing prior to 2013.

7. CAH Medicare Incentives CAHs that are meaningful users by 2011 are eligible for 4 years of enhanced Medicare payments (20% over Medicare Share* with charity adjustment) with immediate full depreciation of certified EHR costs, including undepreciated costs from previous years. Penalties for non-users start in 2015 (0.33% reduction in Medicare increases to 1% in 2017). Depreciated investments by “early adopters” are not eligible for any incentive payments * Definition for ARRA “Medicare Share” adds about 30% to definition in cost report + 20% in ARRA formula.

8. What This Means to CAHs (1 of 2) CAHs must become meaningful EHR users between 2011 and 2015 to qualify for bonus structure and avoid penalties. For CAHs that qualify, new and undepreciated “certified EHR costs” will get a roughly 50%* bump in Medicare Reimbursement (with 100% Maximum). Bonus incentives initiate only after most of the investments need to be made; the issue of capital/financing is left unaddressed. * Definition for ARRA “Medicare Share” adds about 30% to definition in cost report + 20% in ARRA formula.

9. What This Means to CAHs ( 2 of 2) Maximizing incentive bonus will involve strategy to leave as much “Certified EHR Expense” as possible undepreciated at the time of reaching “Meaningful User” designation. Definition of “Certified EHR” will ultimately determine (and could significantly reduce) the value of the incentive. Definition of “Meaningful Use” will ultimately determine whether the incentive is reasonably attainable by rural providers.

10. II - “Certified EHR Expense” and “Meaningful EHR Use”

11. What is a “Certified EHR Expense”? CAHs, unlike PPS Hospitals, will only receive an ARRA incentive for “Certified EHR Expenses.” Current certification programs cover only a fraction of the systems that make up an EHR. PACS, hardware, network infrastructure, and many other aspects of EHR do not have certification programs. Not currently clear what costs associated with EHR implementation can be applied to the CAH bonus. A timetable for answering the above not known.

12. Physician Meaningful EHR Use? ARRA requirements: Implement certified physician practice EMR Participation in Information Exchange Quality reporting participation E-prescribing Meet function and reporting requirements as determined by ONC and ultimately CMS

13. ARRA Requirements: Use of certified vendors Participation in Information Exchange Quality reporting participation Meet function and reporting requirements as determined by ONC and ultimately CMS Hospital Meaningful EHR Use?

14. HIT Policy Committee Recommendations CMS expected to make final rules by end of 2009. “Adoption year” 2011 is 1/1/11 to 12/31/12. “Adoption year” 2013 is 1/1/13 to 12/31/14 with more rigorous outcomes to be eligible. The Committee’s “concession” to rural concerns for providers at early stage of adoption is to allow the first “adoption year” metrics to slide into 2013; specifics unknown. But “Adoption year” 2015 is in fact 2015; at this time penalties are expected to kick in for non-adopters. The Certification Commission of Health Information Technology initially to be the certifying body.

15. HIT Policy Committee Recommendations to CMS on Quality & Efficiency by 2011-12 two year cycle: 10% of all orders entered by authorized providers through CPOE Drug contraindication checks Up-to-date problem lists of current/active diagnoses Active medication and allergy lists Demographic information & advance directives Record vital signs & smoking status Hospital Meaningful EHR Use? (1 of 5)

16. HIT Policy Committee Recommendations to CMS on Quality & Efficiency by 2011-12 two year cycle: Lab results available in EHR Ability to generate patient lists by condition Report quality measures to CMS Implement one decision support rule for priority condition Electronic insurance eligibility checks Electronic claims submission Hospital Meaningful EHR Use? (2 of 5)

17. HIT Policy Committee Recommendations to CMS on Patient Engagement by 2011-12 two year cycle: Provide patients with electronic copy of lab results, problem lists, meds and allergies upon request (could be on CD or USB drive) Provide patients with electronic copy of discharge instructions upon request Provide patient specific educational resources Hospital Meaningful EHR Use? (3 of 5)

18. HIT Policy Committee Recommendations to CMS on Care Coordination by 2011-12 two year cycle: Capability to exchange key clinical information among providers of care Medication reconciliation at relevant encounters and care transitions Population and Public Health: Submit data to immunization registries Submit lab results and syndromic surveillance data to public health Hospital Meaningful EHR Use? (4 of 5)

19. HIT Policy Committee Recommendations to CMS on Security & Privacy by 2011-12 two year cycle: Compliance with HIPAA Compliance with fair data sharing practices Note: There is more to come after the first two year cycle: eg real-time patient portals, closed loop medicine management, etc… Note: Reporting of measures will be required to confirm all “meaningful use outcomes/priorities. Hospital Meaningful EHR Use? (5 of 5)

20. Eligible Physician Issues HIT Policy Committee Recommendations to CMS for physicians by 2011-12 two year cycle are similar to those noted for hospitals as well as: CPOE for all orders Generate permissible prescriptions electronically Send reminders to patients for follow-up/preventive care Document a progress note for each encounter Provide clinical summaries for patients per encounter

21. Impact on Rural Providers • Rural providers have lower than average levels of adoption. • They are starting from farther behind with fewer resources to devote to EHRs. • AHA, RUHIT, NRHA and other provider and quality groups are concerned that the Committee recommendations are too aggressive to be reasonably achievable for the average small and rural provider.

22. HIMSS EHR Adoption Model HIMSS = (Healthcare Information and Management Systems Society)

23. 4th Quarter 2008 Adoption Rates (Data Provided by HIMSS)

24. Impact on Rural Providers Committee recommendations for 2011 roughly correspond to reaching 4.0 on HIMSS scale. While the Committee recommendations may be achievable by providers at 3.0 on the HIMSS scale, it is unclear, if not unlikely, they are achievable by those at 1.0 or lower on the scale. With providers being forced to rush, we may see a high rate of failed implementations, as well as setbacks in quality and efficiency. From provider perspective, important to move quickly but not at the expense of implementation success.

25. III - Rural HIT Implementation Challenges and Strategies

26. Hospital EHR Modules & Functions Facility ManagementMedical RecordsInpatient Clinicals 1. Data Repository 1. HIM Core Module 1. Inpatient Charting 2. Master Patient Index 2. Chart & Film Tracking 2. Multidisciplinary 3. Database Reporting 3. Chart deficiency tracking 3. e-MAR 4. Registration/ADT 4. Release of Info. Tracking 4. Barcoding 5. Billing 5. Coding & abstracting 5. Patient Education 6. General Ledger 6. Reg. Scanning 6. Physician Portal 7. Accounts Payable 7. HIM Scanning 7. CPOE 8. Fixed Assets 8. Electronic Signature 8. Decision Support 9. Materials Management 10. Payroll/HR Departmental SystemsOther Modules 11. Time & Attendance 1. Pharmacy 1. Long Term Care 12. Executive Information 2. Lab 2. QI 13. Budgeting 3. Radiology 3. Physician EMR 14. Enterprise Scheduling 4. Other Ancillaries 4. Practice Management 15. Order Entry 5. ER 5. Contract Management 6. OR 6. PACS

27. Challenge: Underestimating Scope Strategies: • This is transformative culture change, not simply putting in new systems. • Recognize every department will be impacted. • Focus on improving workflow and quality. • Understand that many small and rural facilities have experienced the same challenges and have come out of the process better off.

28. Challenge: Limited HIT Expertise Strategies: • Invest in someone capable of leading the charge. • HIT leadership requires healthcare, project and change management expertise. • The new federally funded Regional Extension Centers may help. • Use consultants strategically without creating a dependency relationship.

29. Challenge: Normal Resistance to Change Strategies: • Solicit user feedback from early stages. • Provide lots of opportunities to learn. • Advertise anticipated system benefits. • Administration/Directors lead by example. • Stress that soon EMR will be the status quo.

30. Challenge: Physician Acceptance Strategies: • Bend over backwards to involve physicians in selecting the systems that will impact them. • ARRA will require significant physician HIT use, which may help motivate engagement. • Again, provide educational opportunities to help physicians overcome what will be a steep learning curve.

31. Challenge: Interdepartmental Tension Strategies: • Recognize that implementation process is stressful. • View this as an opportunity: make it a goal to fix dysfunctional workflow between departments. • Provide non-threatening forum for stakeholders to discuss resolution strategies. • Interdepartmental cooperation and communication are critical in an EMR environment.

32. Challenge: Staff Burnout Strategies: • Provide staff with the time and resources they need to successfully navigate the change events. • Accept that implementation and Go Live activities will necessitate higher staff/patient ratios. • Find opportunities to celebrate implementation milestones.

33. Challenges: Ongoing Costs Strategies • Pursue cost effective strategies, but make sure they will lead to the goals of meaningful use. • Find return on investment where possible, though this is a challenge for small facilities. • Consider collaborative opportunities.

34. IV - Preparing for ARRA Now

35. First Three Key Questions • Are you currently using a certified vendor? http://www.cchit.org/choose/inpatient/2007/ http://www.cchit.org/choose/ambulatory/08/ • If yes, will that vendor likely provide you with a migration path to meaningful use? • If yes, are you strategically committed to staying with your current vendor?

36. Recommendations If Yes to All Three • Continue an HIT Planning Workgroup. • Educate key stakeholders on ARRA & meaningful use. • Determine what vendor modules will likely need to be implemented by 2011 to achieve meaningful use. • Determine what 3rd party products may be required to fill primary vendor gaps and begin selection process. • Work with vendors to identify likely scheduling issues and challenges. • Continue assessing workflow and change goals at the department level.

37. Recommendations If No to Any of Three • Convene an HIT Planning Workgroup. • Educate key stakeholders on ARRA and meaningful use issues. • Set goals and develop a high level HIT strategic plan. • Identify regional collaborative opportunities. • Begin assessing workflow and change goals at the department level. • Begin vendor evaluation and/or selection process. • Be ready to sign contracts and begin implementations soon after final definitions are released.

38. Online Tool Kits • Stratis Health (Minnesota QIO) Toolkit for CAHs http://www.stratishealth.org/expertise/healthit/hospitals/index.html • Agency for Healthcare Research and Quality HIT Evaluation and Adoption Toolbox http://healthit.ahrq.gov/