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Electronic Health Record Incentive Programs

Electronic Health Record Incentive Programs. Eastern Michigan HFMA Insurance & Reimbursement Committee January 28, 2013 Neal A. Cooper, Seyburn Kahn. Electronic Health Record (EHR) Incentive Programs. Background Process Calculations Compliance Considerations. EHR Incentive Programs.

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Electronic Health Record Incentive Programs

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  1. Electronic Health Record Incentive Programs Eastern Michigan HFMA Insurance & Reimbursement Committee January 28, 2013 Neal A. Cooper, Seyburn Kahn

  2. Electronic Health Record (EHR) Incentive Programs • Background • Process • Calculations • Compliance Considerations

  3. EHR Incentive Programs Background The American Recovery and Reinvestment Act of 2009, enacted January 6, 2009 • Created a new Office of the National Coordinator for Health Information Technology (ONC) • Designated Division A, Title XII and Division B, Title IV the Health Information Technology for Economic and Clinical Health Act (“HITECH Act”)

  4. EHR Incentive Programs Background HITECH: • Added subsections (a)(7) and (o) to 42 USC § 1395w-4 • Added subsection (n) to 42 USC § 1395ww • Added subsections (l) and (m) to 42 USC § 1395w-23 • Made various changes in 42 USC § 1396b • Made certain other related and conforming changes

  5. EHR Incentive Programs Background HITECH: • Created Medicare EHR Incentive Programs • For Eligible Hospitals • For Eligible Professionals • Created Medicaid EHR Incentive Programs • For Eligible Hospitals • For Eligible Professionals

  6. EHR Incentive Programs Background Numerous Proposed Rules, Interim Final Rules, Final Rules issued to implement EHR incentive programs, especially: • Stage 1 Final Rule (July 28, 2010 Fed. Reg.) • Stage 2 Final Rule (September 4, 2012 Fed. Reg.)

  7. EHR Incentive Programs Players • Department of Health & Human Services (HHS) • Centers for Medicare & Medicaid Services (CMS) • Office of the National Coordinator for Health Information Technology (ONC) • Health IT Policy Committee (HITPC)

  8. EHR Incentive Programs Medicare EHR Incentive Programs • For Eligible Hospitals • Subsection (d) hospitals (those paid under IPPS) • Critical Access Hospitals (CAHs) • Medicare Advantage (MA) Hospitals • For Eligible Professionals • Doctors of medicine or osteopathy • Doctors of dental surgery or dental medicine • Doctors of podiatric medicine • Doctors of optometry • Chiropractors

  9. EHR Incentive Programs Medicaid EHR Incentive Programs • For Eligible Hospitals • Acute care hospitals (including CAHs) with at least 10% Medicaid patient volume • Children's hospitals (no Medicaid volume required) • For Eligible Professionals • Physicians • Nurse practitioners • Certified nurse-midwives • Dentists • Physician Assistants (PAs) in PA-led Federally Qualified Health Centers (FQHC) or rural health clinics (RHC)

  10. EHR Incentive Programs Medicaid & Medicaid EHR Incentive Programs • Certain Hospitals are Dually-Eligible • IPPS hospital or CAH in the 50 U.S. States or the DC; and • At least 10% of patient volume from Medicaid encounters • Eligible Professionals • May be eligible for both incentive programs • Must choose to receive payments under only one • Individuals participate, not groups (even if group owns EHR) • Hospital-based providers (>=90% of services furnished in hospital to inpatients or in ED; POS 21 or 23) are not eligible

  11. EHR Incentive Programs Basics • Eligible Hospitals and Professionals must demonstrate that they are “meaningful users” of certified EHR technology (CEHRT) • 3 Stages of Incentive Programs • EHR must be on the Certified Health IT Product List: http://healthit.hhs.gov/CHPL

  12. EHR Incentive Programs Basics • Eligible Hospital “meaningful user,” defined: • MEANINGFUL USE OF CERTIFIED EHR TECHNOLOGY. Use certified EHR technology in a meaningful manner. • INFORMATION EXCHANGE. Certified EHR technology is connected to provide, in accordance with law and applicable standards, for electronic exchange of health information to improve quality of health care (e.g., promoting care coordination). • REPORTING ON MEASURES USING EHR. Submits information for reporting periods on clinical quality and other specified measures.

  13. EHR Incentive Programs Basics • Eligible Professional “meaningful user,” defined: • MEANINGFUL USE OF CERTIFIED EHR TECHNOLOGY. Use certified EHR technology in a meaningful manner, including electronic prescribing as deemed appropriate by Secretary. • INFORMATION EXCHANGE. Certified EHR technology is connected to provide, in accordance with law and applicable standards, for electronic exchange of health information to improve quality of care (e.g., promoting care coordination). • REPORTING ON MEASURES USING EHR. Submits information for reporting periods on clinical quality and other specified measures.

  14. EHR Incentive Programs Meaningful Use – determined by compliance with phased approach • 3 Stages: • Stage 1 • Stage 2 • Stage 3

  15. EHR Incentive Programs Meaningful Use – Stage 1 • Keys: • electronically capturing health information in a structured format; • using that information to track key clinical conditions and communicating that information for care coordination purposes; • implementing clinical decision support tools to facilitate disease and medication management; and • using EHRs to engage patients and families and reporting clinical quality measures and public health information. • Focuses heavily on establishing the functionalities in CEHRT that will allow for continuous quality improvement and ease of information exchange.

  16. EHR Incentive Programs Meaningful Use – Stage 2 • Keys: • Rigorous expectations for health information exchange including: • more demanding requirements for eprescribing; • incorporating structured laboratory results; and • the expectation that providers will electronically transmit patient care summaries with each other and with the patient to support transitions in care. • Encourage the use of health IT for continuous quality improvement at the point of care and the exchange of information in the most structured format possible.

  17. EHR Incentive Programs Meaningful Use – Stage 3 (not finalized) • Keys: • Anticipated to focus on: • promoting improvements in quality, safety and efficiency leading to improved health outcomes; • focusing on decision support for national high priority conditions; • patient access to self-management tools; • access to comprehensive patient data through robust, secure, patient-centered health information exchange; and • improving population health. • CMS intends to propose higher Stage 3 standards for meeting meaningful use.

  18. EHR Incentive Programs Meaningful Use – Timeline • Different “year” for hospitals vs. professionals • Eligible Hospitals use FFY (10/1 – 9/30) • Eligible Professionals use calendar year (1/1 – 12/31) • Each stage runs at least 2 years • Special rule for 2014 (Stage 1 or 2) requires at least 90 days of compliance • Stage 1: Begins as early as 2011 • Stage 2: Begins as early as 2014 • Stage 3: Expected to begin in 2017

  19. EHR Incentive Programs • Incentives • Eligible Hospitals • Medicare: • Annual payments • 2015 last year to begin Stage 1 • Penalty of 1% to 5% if not meaningful user in 2015 • Medicaid: • Annual payments • 2016 last year to begin Stage 1 • No penalty for not being meaningful user

  20. EHR Incentive Programs • Incentives • Eligible Professionals • Medicare: • Maximum $44,000 over 5 years • 2014 last year to begin Stage 1 (maximum $24,000) • Penalty of 1% to 5% if not meaningful user in 2015 • Medicaid: • Maximum $63,750 over 6 years • 2016 last year to begin Stage 1 • No penalty for not being meaningful user

  21. EHR Incentive Programs • Incentives for Eligible Hospitals Under Medicare Incentive Program • Medicare Annual payments: ($2 Million + Discharge-Related Amount)* x Medicare Share x Transition Factor = Incentive Payment • Minimum Initial Amount = $2 Million • Maximum Initial Amount = $6.37 Million *Initial Amount

  22. EHR Incentive Programs • Incentives for Eligible Hospitals Under Medicare Incentive Program • Discharge-Related Amount (DRA) • $200 x # of Hospital Discharges (all payors) • Excludes first 1,149 discharges • Excludes discharges after 23,000 • Thus, maximum • 21,851 discharges • $4,370,200 DRA ($200 x 21,851) • $6,370,200 Initial Amount ($2M + $4,370,200)

  23. EHR Incentive Programs • Incentives for Eligible Hospitals Under Medicare Incentive Program • Medicare Share • Numerator: # Inpatient Part A Bed Days + # Inpatient Part C Days • Denominator: Total Hospital Inpatient Days x (Total Hospital Charges – Charity Care Charges) ÷ Total Hospital Charges

  24. EHR Incentive Programs • Incentives for Eligible Hospitals Under Medicare Incentive Program • Transition Factor

  25. EHR Incentive Programs • Incentives for Eligible Hospitals Under Medicare Incentive Program – Hospital A: Eligible for incentives beginning in FY 2011. In FY 2010 (latest filed 12-month C/R): • 1,000 IP discharges • 3,000 Part A acute care inpatient-bed-days • 4,000 Part C acute care inpatient-bed-days • 10,000 total acute care inpatient bed-days. • $2,700,000 total charges excluding charity care • $3,000,000 total charges

  26. EHR Incentive Programs • Incentives for Eligible Hospitals Under Medicare Incentive Program – Hospital A:

  27. EHR Incentive Programs • Incentives for Eligible Hospitals Under Medicare Incentive Program – Hospital A:

  28. EHR Incentive Programs • Incentives for Eligible Hospitals Under Medicare Incentive Program – Hospital A:

  29. EHR Incentive Programs • Incentives for Eligible Hospitals Under Medicare Incentive Program – Hospital B: Eligible for incentives beginning in FY 2014. In FY 2013 (latest filed 12-month C/R): • 12,000 IP discharges • 20,000 Part A acute care inpatient-bed-days • 16,000 Part C acute care inpatient-bed-days • 45,000 total acute care inpatient bed-days. • $8,000,000 total charges excluding charity care • $9,000,000 total charges

  30. EHR Incentive Programs • Incentives for Eligible Hospitals Under Medicare Incentive Program – Hospital B:

  31. EHR Incentive Programs • Incentives for Eligible Hospitals Under Medicare Incentive Program – Hospital B:

  32. EHR Incentive Programs • Incentives for Eligible Hospitals Under Medicare Incentive Program – Hospital B:

  33. EHR Incentive Programs • Incentives for Eligible Hospitals Under Medicare Incentive Program – Hospital C: Eligible for incentives beginning in FY 2015. In FY 2014 (latest filed 12-month C/R): • 25,000 IP discharges • 40,000 Part A acute care inpatient-bed-days • 23,000 Part C acute care inpatient-bed-days • 75,000 total acute care inpatient bed-days • $26,750,000 total charges excluding charity care • $28,000,000 total charges

  34. EHR Incentive Programs • Incentives for Eligible Hospitals Under Medicare Incentive Program – Hospital C:

  35. EHR Incentive Programs • Incentives for Eligible Hospitals Under Medicare Incentive Program – Hospital C:

  36. EHR Incentive Programs • Incentives for Eligible Hospitals Under Medicare Incentive Program – Hospital C:

  37. EHR Incentive Programs • Incentives for Eligible Hospitals Under Medicare Incentive Program – Hospital D: Eligible for incentives beginning in FY 2011. In FY 2010 (latest filed 12-month C/R): • 25,000 IP discharges • 40,000 Part A acute care inpatient-bed-days • 23,000 Part C acute care inpatient-bed-days • 75,000 total acute care inpatient bed-days • $26,750,000 total charges excluding charity care • $28,000,000 total charges

  38. EHR Incentive Programs • Incentives for Eligible Hospitals Under Medicare Incentive Program – Hospital D:

  39. EHR Incentive Programs • Incentives for Eligible Hospitals Under Medicare Incentive Program – Hospital D:

  40. EHR Incentive Programs • Incentives for Eligible Hospitals Under Medicare Incentive Program – Hospital D:

  41. EHR Incentive Programs • Incentives for Eligible Hospitals Under Medicare Incentive Program – CAHs: • May qualify for Medicaid Program as acute hospital • For Medicare Program: • Maximum 4 payment years • Last Year 1 is 2015 • Reduced incentive payments if not participating by 2013 • Penalties if not participating by 2015 • Cost-based incentive payments

  42. EHR Incentive Programs • Incentives for Eligible Hospitals Under Medicare Incentive Program – CAHs: • Cost-based incentive payments Reasonable cost for purchase of CEHRT Multiplied by sum of: Medicare Share plus 20 percentage points • Reimbursement reduced if not meaningful user by: • FY 2015, from 101% to 100.66% of reasonable costs • 2016, from 100.66% to 100.33% of reasonable costs • 2017 and on, from 100.33% to 100% of reasonable costs • Reductions subject to maximum 5 years of hardship exemption

  43. EHR Incentive Programs • Incentives for Eligible Hospitals Under Medicare Incentive Program – CAH 1: Eligible for incentives beginning in FY 2012. In FY 2011 (latest filed 12-month C/R): • 300 Part A acute care inpatient-bed-days • 400 Part C acute care inpatient-bed-days • 1,000 total acute care inpatient bed-days • $2,000,000 total charges excluding charity care • $2,200,000 total charges Cost of EHR = $500,000; $100,000 depreciated in prior period

  44. EHR Incentive Programs • Incentives for Eligible Hospitals Under Medicare Incentive Program – CAH 1:

  45. EHR Incentive Programs • Incentives for Eligible Hospitals Under Medicare Incentive Program – CAH 1:

  46. EHR Incentive Programs • Incentives for Eligible Hospitals Under Medicare Incentive Program – CAH 2: Eligible for incentives beginning in FY 2014. In FY 2013 (latest filed 12-month C/R): • 6,000 Part A acute care inpatient-bed-days • 3,000 Part C acute care inpatient-bed-days • 14,000 total acute care inpatient bed-days • $8,000,000 total charges excluding charity care • $9,000,000 total charges Cost of EHR = $350,000; $50,000 depreciated in prior period $200,000 additional EHR expenses in 2014 (not depreciated)

  47. EHR Incentive Programs • Incentives for Eligible Hospitals Under Medicare Incentive Program – CAH 2:

  48. EHR Incentive Programs • Incentives for Eligible Hospitals Under Medicare Incentive Program – CAH 2:

  49. EHR Incentive Programs • Incentives for Eligible Hospitals Under Medicaid Incentive Program • Medicaid Annual payments: ($2 Million + Discharge-Related Amount)* x Transition Factor x Medicaid Share = Incentive Payment • Minimum Initial Amount = $2 Million • Maximum Initial Amount = $6.37 Million *Initial Amount

  50. EHR Incentive Programs • Incentives for Eligible Hospitals Under Medicaid Incentive Program • Discharge-Related Amount (DRA) • $200 x # of Hospital Discharges (all payors) • Excludes first 1,149 discharges • Excludes discharges after 23,000 • Thus, maximum • 21,851 discharges • $4,370,200 DRA ($200 x 21,851) • $6,370,200 Initial Amount ($2M + $4,370,200)

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