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Practice Perfect: Information Technology
Feds’ Incentives for EHRs: What You Need to Know, Part One
By Leslie Burling-Phillips, Contributing Writer
 
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Legislators hope that a new incentive program will encourage physicians to make more extensive use of electronic health records (EHRs). From 2011 through 2016, up to $27 billion in payments will be available to eligible professionals (EPs) who meet the criteria for meaningful use of a certified EHR system.

This month, EyeNet gives a general outline of the incentive program. See next month’s EyeNet for more detail on EHR certification.

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Should You Take the EHR Plunge?

You should be clear about your practice’s reason(s) for considering EHRs, and don’t lose sight of that in your decision-making. It also is important to understand how the transition will impact your practice, which system is best for your practice and how the costs compare with the benefits.

A major undertaking. “There is strong evidence—both anecdotally and in published studies—that EHRs can improve the effectiveness and efficiency of health care and decrease medical errors. Conversely, EHRs that are not implemented properly can actually slow practices down and create a myriad of problems. We also have discovered that transition is not a quick process,” said Michael F. Chiang, MD, who chairs the Academy’s committee on Medical Information Technology and is associate professor of ophthalmology and biomedical informatics at Columbia University. Julia Lee, JD, agreed: “EHR implementation is a huge project and it requires tremendous commitment. You must be dedicated to long-term maintenance and devote the proper resources to ensure an effective implementation.” Ms. Lee chairs the AAOE subcommittee on EHRs and is executive director of Ophthalmic Partners, a multispecialty practice in the Philadelphia area.

Define your needs and evaluate your options. If you are new to the EHR marketplace, you should research both the software and vendors and decide which one(s) match the unique needs of your practice, said Michael X. Repka, MD, who is the Academy secretary for Federal Affairs and professor of ophthalmology and pediatrics at Johns Hopkins University.

Compare costs and benefits. “The incentive payments will not cover all the costs associated with EHR adoption. Practices should assess the long-term value of their investment and calculate the ongoing fees associated with EHR maintenance, database storage, hardware replacements and software licensing fees,” said Dr. Repka. “Compare these costs,” said Ms. Lee, “with the savings you will receive from discontinuing the use of paper patient charts and medical record storage, for example. Balance the expenses that you will shed against those you will have to pay on a recurring basis.” (For an ROI calculator, go to www.aao.org/ehr, select “Planning and Selection” and then “Research and Select Your Vendor.” Extra resources are at www.aao.org/mit.)

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When Should You Adopt EHRs?

“If you have reasons independent of the incentives and EHRs make sense for your practice, I see no tangible reasons to delay, as long as you have confidence in your vendor,” said Ms. Lee.

Know the schedule for bonus payments. Incentive payments will be paid on a yearly basis. To promote early entry into the program, the incentive schedule provides the greatest returns if you start in 2011 or 2012. “Although the difference between starting in 2012 [$44,000] and 2013 [$39,000] is only a reduction of $5,000, to maximize your money, you must begin the transition by the last quarter of 2012. If you don’t start until 2014 [$24,000], the original dollar amount is cut by almost half. So by the end of 2013, your system should be up and running if you are going to participate and receive a sizable bonus,” said Dr. Repka. And if you wait until 2015 to achieve the meaningful use criteria, you will not receive any incentive payments, but you won’t be penalized either.

Know the schedule for penalties. Although not currently mandatory, EHR implementation will eventually be necessary to avoid incurring penalties. In 2015, the initial penalty will be 1 percent of the Medicare fee schedule, increasing to 2 percent in 2016 and 3 percent in 2017. After that, regulators have the option of increasing the penalty by 1 percent per year, up to a maximum of 5 percent.

A late start may mean a more sudden transition. To earn the bonus payments, you must demonstrate meaningful use of EHRs, and the definition of meaningful use will change over three stages of implementation—stages 1, 2 and 3—which are expected to become progressively more comprehensive and stringent at each stage. If you start between 2011 and 2014, in your first year in the bonus program you must meet the stage 1 criteria of meaningful use to receive the extra payment (see chart). The regulators had initially proposed that by 2015, everybody would have to meet the stage 3 criteria for meaningful use—regardless of whether they started participating in the program in 2011 or 2015. But after reviewing public feedback on that proposal, regulators decided more time was needed to review the concerns that were raised. The meaningful use requirements for 2015 onward won’t be known until a later round of rule-making, but regulators say they still want to get all program participants on the same page by that year.

A multiphysician practice may earn multiple payments. The incentive payments will be paid on a participating-physician basis. “A solo practice is buying a system for one doctor, which is an expensive investment with only one stimulus bonus to help with the costs. My expectation is that EHRs will be more appealing to the multiphysician practice and those who have already made the move to integrate EHRs into their practice,” said Dr. Repka. Ms. Lee agreed: “For a large group like ours—we can receive 11 incentive payments if we meet all the criteria—the payments could pay for the original cost of acquisition.”

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Societies Lobby the CMS

“The entire rule-making process has been very closely monitored by the Academy, which has taken a proactive role on behalf of its members,” said Ms. Lee. “It has submitted written commentary, participated in various meetings, provided testimony, and worked with the AMA on a joint letter that expressed concern on behalf of physicians and specialty societies about the structure of the meaningful use criteria [in the provisional rule].” In some ways, the provisional rule went too far with a one-size-fits-all approach to the design of the incentive program. Although it makes sense that different specialties have many overlapping measures as part of their meaningful use criteria, there are other measures—such as recording vital signs—that wouldn’t normally be part of a routine ophthalmic exam. “Conversely, we also need specialty-specific measures in place,” said Dr. Repka.

“The Academy has taken an active role in providing feedback to the CMS on how these guidelines could and should be applied to ophthalmologists to make them most relevant for ophthalmology,” said Dr. Chiang. “The bottom line is that EHRs should enable ophthalmologists to focus on taking better care of their patients.”

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PP500 Sept 2010

EHR INCENTIVE PROGRAM. To earn the Medicare bonus,* you must demonstrate meaningful use of a certified EHR system.

What’s the reporting period? In the first year you receive a bonus, you must meaningfully use a certified EHR system for a reporting period of 90 consecutive days. In later years, the reporting period is the entire payment year.

What are stages 1, 2 and 3 of meaningful use? The regulations anticipate a phased approach—stages 1, 2 and 3—with the criteria for meaningful use becoming progressively more comprehensive and stringent.

What is TBD for 2015 and beyond? Regulators had planned that everyone would need to meet stage 3 criteria by 2015, but now they want more time to review the objections that were raised. The issue is to be decided at a later date.

Stages 2 and 3—a caveat. Criteria for stages 2 and 3 have not yet been defined, but regulators hope to do so by the end of 2011 and 2013, respectively.

* There is a parallel program of bonus payments for Medicaid.

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