Some Concerns with the EHR Incentive Program

There has been much discussion and debate on the use of electronic health records and whether they are capable of improving the quality of care. In the recent Stanford University study by researchers Max Romano and Randall Stafford, MD, PhD, there was not much indication of quality improvement. In another study from Britain they were likewise unable to find empirical evidence of quality and safety improvement. However, my conclusion, unlike the headlines which blared "EHR Systems Do Not Improve Quality," is that while the technology itself will not automatically improve quality or safety the "meaningful use" of this technology can and will improve clinical outcomes and the quality of care. My concerns on the EHR Incentive Programs are not centered on this debate, but rather on components of the legislation and regulations.

I'm trying to remain optimistic about these programs, but there are some issues that I would like to highlight as potential roadblocks to success. Unfortunately, many of these problems are written into the legislation and can not be fixed by future rulemaking, but will require Congress to act. And the amount of incentive payments are too low and will not cover the transition costs for providers that are still on paper, although hospitals and health systems that have already made significant investments in health IT will see some return on their investment. I'm not much concerned that HR 408 the Spending Reduction Act of 2011, which would defund the HITECH Act incentive program, will become law. However, I would like to see checks make it to providers before future stages of meaningful use become a political football.

There are potentially some serious difficulties that rural providers and small hospitals will have being able to fund these projects within their limited resources, considering that the incentive payments will barely, if at all, cover the costs of implementation. I fear that billions of taxpayer dollars will pass right through the hands of hospitals and physicians and go straight to the bottom line of health IT vendors. Healthcare providers could end up having a very hard time maintaining the meaningful use of their EHRs with a dwindling revenue stream. The CBO estimated in 2008 that EHR implementation costs for hospitals amount to approximately $14,500 per bed for implementation. Annual operating costs amount to $2,700 per bed per year. For physician groups, the CBO reported that total implementation costs for office-based EHRs ranged from $25,000 to $45,000 per physician, with annual operating, licensing, and maintenance costs ranging between $3,000 and $9,000 per physician. These figures are conservative at best and costs have certainly risen since then in any event. The costs will continue to increase due to market pressures and vendor workforce shortages.

There are also eligibility problems that some providers in a Rural Health Clinic (RHC) setting are facing. The HITECH Act created an EHR incentive payment for an Eligible Professional (EP) under Medicare based on the allowed charges for covered professional services furnished by the EP. Only services billed under the Part B physician fee schedule meet the HITECH Act definition of "covered professional services." This means services provided in an RHC would not be included in the calculation for the Medicare EHR incentive. These providers may still qualify under their states Medicaid requirements, but only EPs who meet the 30 percent threshold for "needy individuals" as defined in statute and other program requirements will qualify for payments. This section of the law will cause some providers in rural and underserved settings to be unable to participate in the program at all.

This same section of the legislation also precludes Medicare Advantage providers from participating directly in the program since they do not bill Part B. Under the Medicare Advantage EHR Incentive Program, payments are made only to Medicare Advantage organizations that are licensed as HMOs, or in the same manner as HMOs, by a state. It seems that the legislation was crafted with particular lobbying interests at the table, and while no bill is perfect the HITECH Act was rushed through rather quickly and mistakes were made which are unlikely to be addressed in the current political environment.

Another group that is left out are Physician Assistants (PA)s, unless they are working in a RHC led by a PA. There are many PAs working in settings that will disqualify them from participating in the incentive program and this already having an effect on recruitment strategies. Why would a practice hire a PA who is ineligible instead of a Nurse Practitioner who is eligible? This can also create difficulty and confusion for EHR adoption strategy by clinics attempting to create a patient-centered medical home. The wise use of mid-level practitioners can be an important key to success. Addressing the primary care physician shortage is not helped by this provision in the legislation.

Finally, the Medicaid program is being approached in a wide variety of ways by the states, and some may be trying to use the incentive program as a policy lever to accomplish other goals. I am concerned that in some states the roll out of the incentive program may have lost sight of the economic stimulus side of the equation. Money continues to be poured into government run programs like the State Cooperative Agreements for health information exchange and the Regional Extension Centers to help with adoption, but few of these dollars are making it into the private sector. I like the "adopt, implement or upgrade to certified EHR technology (AIU)" provision in the Medicaid EHR Incentive Program. This will enable some to springboard to future stages of meaningful use. If this were expanded then perhaps there would not be so many rural providers and critical access hospitals left at the station...


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