HCIT and the Stimulus

Transcription

1 HCIT and the Stimulus The American Recovery & Reinvestment Act of 2009 Derek Schoonover VP & GM, Medisoft & Lytec McKesson Physician Practice Solutions May 19, 2009 Corporate Public Affairs MBA Intern Candidates February 28, 2008

2 HCIT and the Stimulus Agenda 1 Stimulus Plan Overview 2 HITECH Act Specifics 3 Physician Incentive Programs 4 McKesson s EHR Solutions 5 Next Steps and Discussion 2

3 Stimulus Plan Overview Where are we and how did we get here? The American Recovery & Reinvestment Act of 2009 (H.R. 1) One of the largest single pieces of legislation in U.S. history Signed 23 days after official introduction (28 days after inauguration) January 25, 2009 H.R. 1 introduced in the House Appropriations Committee February 10, 2009 Senate votes for their bill estimated at $837 B February 13, 2009 House passes Senate passes Scale = 1 day January 28, 2009 House votes for the bill estimated at $819 B February 11, 2009 Conference Committee reaches compromise with a bill estimated at $787 B February 17, 2009 President Obama signs The American Recovery & Reinvestment Act of

4 Stimulus Plan Overview What is in the stimulus plan? Estimated $787 billion in net impact on the federal deficit $212 billion (~27%) in net revenue effects, i.e. tax cuts $575 billion in net spending either discretionary or direct $308 billion in Discretionary Spending $267 billion in Direct Spending Agriculture Nutrition Rural Dev. Commerce Justice Science Defense Energy Water Environment Interior Federal Facilities Health Labor Education Housing Transportation Homeland Security State Dept. State Stabilization Military Veterans Unemployment Assistance Tax Health Provisions Insurance HCIT Medicaid $26 $16 $5 $51 $11 $7 $71 $3 $61 $1 $54 $4 $74 $57 $25 $21 $90 Health NIH Other HHS ONCHIT $10 $2 $10 Healthcare is over $157 billion (~ 27%) of the net spend Source: Congressional Budget Office Summary of Estimated Cost of the Conference Agreement for H.R., The American Recovery and Reinvestment Act of 2009; figures are rounded 4

5 Stimulus Plan Overview Healthcare provisions in the stimulus bill Medicaid $90 B Additional funding for state Medicaid programs Prevents additional state restrictions on Medicaid coverage Health Insurance $25 B Extension of COBRA as gap coverage for early retirees NIH $10 B Additional funding for scientific research grants Other HHS $10 B Comparative effectiveness, wellness and prevention initiatives Grants, loans and training programs Health IT $21 B Funding for health connectivity initiatives Incentives for physicians and hospitals to adopt EHRs HITECH Act ONCHIT $2 B New entities to establish standards, HIT policy and certify New (and more restrictive) privacy provisions 5

6 HCIT and the Stimulus Agenda 1 Stimulus Plan Overview 2 HITECH Act Specifics 3 Physician Incentive Programs 4 McKesson s EHR Solutions 5 Next Steps and Discussion 6

7 HITECH Act Specifics What is the timeline for the HITECH funding? Estimated Net Deficit Impact ($ billions) $15 $10 $5 $0 $0.7 $1.5 Incentives begin in 2011 $5.0 $6.3 $6.1 $13.8 $3.4 Penalties begin in $5 -$10 ($6.0) ($5.4) ($3.2) ($2.6) HITECH funding utilizes both a carrot and stick Incentive payments for use of healthcare IT begin in 2011 Penalties for non-compliance begin in

8 HITECH Act Specifics Overview of key healthcare technology components Standards & Interoperability Codifies Office of the National Coordinator (ONCHIT) New advisory bodies Health Policy and Standards Establishes Date Certain for interoperability standards (12/31/09) New role for NIST in testing and certifying standards compliance New provisions and restrictions to protect privacy of PHI Adoption & Use of Healthcare IT Significant incentives for use of certified EHRs Requirements for meaningful use 2 ways to qualify: Medicare Provision Medicaid Provision 8

9 HCIT and the Stimulus Agenda 1 Stimulus Plan Overview 2 HITECH Act Specifics 3 Physician Incentive Programs 4 McKesson s EHR Solutions 5 Next Steps and Discussion 9

10 Physician Incentive Program Providers must choose a program General Must be office-based physicians, i.e. practice primarily outside the hospital No exclusions based on employment or billing relationships with hospital Eligible professional must prove meaningful use of a certified EHR Medicare Incentive Pays 75% of the all Part B claims submitted up to an annual maximum Potential incentives up to $44,000 over a 5-year period beginning 2011 Must qualify before 2013 to receive full incentive payout Must qualify before 2015 to avoid Medicare penalties Medicaid Incentive Pays 85% of the Net Average Allowable Cost up to an annual maximum Requires 30% Medicaid patient volume or 20% for pediatricians Potential incentives up to $63,750 over a 6-year period beginning 2011 Must qualify by 2016 to receive full incentive payout No Double Dipping Providers may receive incentive payments from only one program, even if they qualify for both 10

11 Physician Incentive Program Eligible Professional Medicare Provision Eligible Professional is a physician as defined in the Social Security Act section 1861: a doctor of medicine or osteopathy a doctor of dental surgery or of dental medicine a doctor of podiatric medicine a doctor of optometry a chiropractor To receive Medicare incentive payments, the physician must: Not be hospital-based; Submit Medicare Part B claims 11

12 Physician Incentive Program Eligible Professional Medicaid Provision The Medicaid HIT Incentive program expands the definition of eligible professionals to include: certified nurse mid-wife nurse practitioner physician assistant (under certain circumstances) To receive Medicaid incentive payments, eligible professionals must: Not be hospital-based; Treat a patient population, of which at least 30% receive medical assistance (or 20% if the physician is a pediatrician). 12

13 Physician Incentive Program Eligible Professional Hospital-employed and Independent office-based physicians are eligible Hospital-based physicians are not eligible, such as a pathologist, anesthesiologist, or emergency physician, who furnishes substantially all of such services in a hospital setting (whether inpatient or outpatient) HHS has some flexibility in the final interpretation of hospitalbased 13

14 Physician Incentive Program Medicare incentive program uses a part B claims method Pays 75% of part B claims up to max $3,000 bonus to qualify by 2012 Requires meaningful use of certified EHR system Up to $44k per physician over 5 years with a 10% bonus for physicians in shortage areas Must qualify by 2012 to receive max Reduced incentives for No payments to providers after 2016 Penalties begin in % cut in Medicare payment % cut 2017 and beyond 3% to 5% cut pending overall market adoption rate $30 $25 $20 $15 $10 $5 $0 $24 $3 $15 Medicare Incentive Potential $16 $12 ($ Thousands) Up to $44k per physician $10.7 $8 $5.3 $4 $2.7 $2 Year 1 Year 2 Year 3 Year 4 Year 5 Potential Payout Bonus Part B Claims Req d 14

15 Physician Incentive Program Medicare Reimbursement Schedule Maximum Incentive Payments Payment Year Now Adoption Year $18k $12k $18k $8k $12k $15k $4k $8k $12k $12k 2015 $2k $4k $8k $8k $2k $4k $4k Part B Annual Charges Maximum Payment $24,000 $18,000 $16,000 $12,000 $10,667 $8,000 $5,334 $4,000 $2,667 $2,000 Total $44K $44K $39K $24K Shortage Area $48.4K $48.4K $42.9K $26.4K Source: MTS Primary Research Survey 15

16 Physician Incentive Program Medicaid incentive program uses a cost based method Pays 85% of the net allowable costs Includes system, implementation, training, maintenance, etc. Requires meaningful use by Year 2 Year 1 can be for adoption only Up to ~$64k per physician over 6 years $30 $25 $20 $25 Medicaid Incentive Potential ($ Thousands) Up to ~$64k per physician Must qualify by 2016 to receive max No payments to providers after 2021 $340M available until expended Requires 30% Medicaid patient volume 20% for pediatricians, but receive only 66% of net allowable costs $15 $10 $5 $0 $21.3 $10 $10 $10 $10 $10 $8.5 $8.5 $8.5 $8.5 $8.5 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Potential Payout Net Allowable Costs 16

17 Physician Incentive Program Medicaid Reimbursement Schedule Maximum Incentive Payments Payment Year Adoption Year 30% Provider % Pediatrician Year 1 $21,250 $14,167 Year 2 $8,500 $5,667 Year 3 $8,500 $5,667 Year 4 $8,500 $5,667 Allowable Costs Max Pmt For 30% provider (85% of allowable cost) Max Pmt For Pediatrician (20% to 29%) Allowable Cost*2/3*85%) $25,000 (year 1 only) $21,250 $14,167 $10,000 $8,500 $5,667 Year 5 $8,500 $5,666 Year 6 (up to 2021) $8,500 $5,666 TOTAL $63,750 $42,500 Source: MTS Primary Research Survey 17

18 Physician Incentive Program Meaningful Use Meaningful use is largely up to HHS interpretation but expected to include: E-prescribing Interoperability Clinical reporting Secretary may require more stringent measures of meaningful use over time 18

19 Physician Incentive Program Certified EHR System Certification requirements are not known yet and may not be for quite some time McKesson s leadership believes that any new certification requirements will be based on the standards that have been adopted by the Certification Commission for Health Information Technology (CCHIT) McKesson has been deeply involved in this important work and we have well established plans to meet upcoming CCHIT criteria in our future product releases 19

20 HCIT and the Stimulus Agenda 1 Stimulus Plan Overview 2 HITECH Act Specifics 3 Physician Incentive Programs 4 McKesson s EHR Solutions 5 Next Steps and Discussion 20

21 Traditional Barriers to EMR Adoption Cost and Disruption Barriers for EMR Adoption (# of Respondents w/o EMR) n = 107 Respondents Cost has been the top barrier for physicians adopting an EMR System Cost Disruption Disruption is also a significant barrier to increased adoption Support Physical Chart Preference Practice Management replacement MD / Staff Resistance 21 Implementation Puchased / Purchasing 19 Training Data Security / Loss No Market Leader Workflow No Appropriate System 10 Liability Concerns Source: MTS Primary Research Survey 21

22 McKesson s EHR Solution Industry Certifications & Recognition Completes Chart with Dynamic Processing Technology Instantly synchronizes data across the chart, from a single screen, to complete the entire patient record Matches a Physician s Personal Style Adapts to your style of charting with a choice of documentation tools from dictation to speech recognition. Maps Patient Data for Flexible Quality Reporting Automatically maps data into quick searchable fields for more flexible quality reporting Delivers 5-Star Electronic Prescribing Package Meets all of the five major functions as a certified Surescripts solution -- electronic prescribing, electronic refills, Rx history, eligibility and formulary Extends Clinical Reporting with Practice Partner Research Network PPRNet measures 80 clinical benchmarks for physicians and currently has about 700 participating providers and 1.8 million patients in 38 states. Backed by an Industry Leader McKesson Corporation, currently ranked 18th on the FORTUNE 500, is the longest-operating company in healthcare 22

23 HCIT and the Stimulus Agenda 1 Stimulus Plan Overview 2 HITECH Act Specifics 3 Physician Incentive Programs 4 McKesson s EHR Solutions 5 Next Steps and Discussion 23

24 Next Steps and Discussion Timeline for Medicare and Medicaid February 17, 2009 President Obama signs The American Recovery & Reinvestment Act of Physician early adopter bonus expires 2021 Medicare incentives to physicians begin reduction All Medicaid incentives payments cease 2011 Medicare / Medicaid incentives begin to eligible providers 2015 Medicare penalties for non-adopters begin Medicare incentives to physicians adopting no longer available 2017 All Medicare incentive payments cease Scale = 6 months 24

25 Next Steps and Discussion Several key questions remain to be answered What is the definition of meaningful use for a particular period? What costs qualify as net average allowable costs under Medicaid? What is the standard / requirement for certification and interoperability? What funding may be available for providers who are not eligible? 25

26 Next Steps and Discussion Q & A 26