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1 Number 990 February 23, 2010 Client Alert Latham & Watkins Corporate Department New Regulations Issued to Implement Incentives for Meaningful Use of Electronic Health Records The CMS and ONC regulations serve to establish the preliminary requirements for eligibility for the programs. Although the notices are issued by separate agencies, they are inextricably linked, as together they provide a preliminary blueprint of relevant requirements for users of an EHR program to be eligible for HITECH s incentives. On January 13, 2010, the Centers for Medicare and Medicaid Services (CMS) and the Office of the National Coordinator for Health Information Technology (ONC) issued Federal Register notices to begin implementation of the electronic health record (EHR) incentive programs established by the Health Information Technology for Clinical and Economic Health Act (HITECH). 1 Under HITECH, which was enacted as part of the American Recovery and Reinvestment Act of 2009 (ARRA or Stimulus), Congress set aside over $19 billion in grants and incentives to hospitals and providers that implement and engage in meaningful use of certified EHR programs prior to The incentives are scheduled to begin in October 2010 for eligible hospitals and in January 2011 for eligible providers. The CMS and ONC regulations serve to establish the preliminary requirements for eligibility for the programs. Although the notices are issued by separate agencies, they are inextricably linked, as together they provide a preliminary blueprint of relevant requirements for users of an EHR program to be eligible for HITECH s incentives. CMS-Proposed Rule The CMS-proposed rule 2 sets forth the criteria that a hospital or provider must meet to qualify for the EHR incentives, and details the anticipated payment methodologies. Specifically, the rule would define the terms, meaningful EHR user and meaningful use, with specific criteria to demonstrate meaningful use of an EHR technology. A meaningful EHR user is defined as an eligible provider or hospital that can demonstrate meaningful use of certified EHR technology in the form and manner spelled out by the rule, including by using certified EHR technology to achieve: an improvement in quality, safety and efficiency of health care delivery; a reduction in health care disparities; an improvement in engagement of patients and families; an improvement of care coordination and public health; and an ability to ensure adequate privacy and security protections for personal health information. 3 Meaningful use is defined under the proposed rule as compliance with a number of specified criteria. For eligible providers, the 25 criteria include the following: 1. Use of computerized physician order entry (CPOE) for at least 80 percent of all orders. 2. Implementation of drug-drug, drugallergy and drug-formulary checks, as demonstrated by the eligible provider s (EP s) enabling of this functionality. Latham & Watkins operates as a limited liability partnership worldwide with affiliated limited liability partnerships conducting the practice in the United Kingdom, France and Italy and affiliated partnerships conducting the practice in Hong Kong and Japan. Under New York s Code of Professional Responsibility, portions of this communication contain attorney advertising. Prior results do not guarantee a similar outcome. Results depend upon a variety of factors unique to each representation. Please direct all inquiries regarding our conduct under New York s Disciplinary Rules to Latham & Watkins LLP, 885 Third Avenue, New York, NY , Phone: Copyright 2010 Latham & Watkins. All Rights Reserved.

2 3. Maintenance of an up-to-date problem list of current and active diagnoses based on ICD-9-CM or SNOMED CT, with at least 80 percent of all unique patients seen by the EP having at least one entry or an indication of none recorded as 4. Generation and transmission of permissible prescriptions electronically (erx), with at least 75 percent of all permissible prescriptions written by the EP transmitted electronically using certified EHR technology. 5. Maintenance of an active medication list, with at least 80 percent of all unique patients seen by the EP having at least one entry (or an indication of none if the patient is not currently prescribed any medication) recorded as structured data. 6. Maintenance of an active medication allergy list, with at least 80 percent of all unique patients seen by the EP having at least one entry (or an indication of none if the patient has no medication allergies) recorded as 7. Recordation of demographics, with at least 80 percent of all unique patients seen by the EP or admitted to the eligible hospital having demographics recorded as 8. Recordation and charting of changes in vital signs for at least 80 percent of all unique patients age 2 and over seen by the EP; recordation of blood pressure and BMI; and plotting of growth chart for children aged 2 to Recordation of smoking status for all unique patients 13 years or older for at least 80 percent of all unique patients. 10. Incorporation of clinical lab-test results into EHR as structured data, with at least 50 percent of all clinical lab test results ordered by the EP or by an authorized provider of the eligible hospital during the EHR reporting period whose results are in either in a positive/negative or numerical format are incorporated in certified EHR technology as 11. Generation of lists of patients by specific conditions to use for quality improvement, reduction of disparities, research and outreach, with at least one report listing patients of the EP with a specific condition. 12. Reporting of ambulatory quality measures to CMS or the States using attestation methodology as discussed in section II.A.3 of the proposed rule (for 2011, and for 2012, an EP would electronically submit). 13. Ensuring reminders are sent to patients per patient preference for preventive/follow-up care for at least 50 percent of all unique patients seen by the EP that are 50 and over. 14. Implementation of five clinical decision support rules relevant to specialty or high clinical priority, including for diagnostic test ordering, along with the ability to track compliance with those rules, with the EP implementing five clinical decision support rules relevant to the clinical quality metrics the EP is responsible for as described in section II.A.3 of the proposed rule. 15. Checking insurance eligibility electronically from public and private payers for at least 80 percent of all unique patients seen by the EP. 16. Submission of claims electronically to public and private payers for at least 80 percent of all claims. 2 Number 990 February 23, 2010

3 17. Ensuring patients are provided with an electronic copy of their health information (including diagnostic test results, problem list, medication lists and allergies) upon request, patients who request an electronic copy of their health information are provided it within 48 hours. 18. Ensuring patients are provided with timely electronic access to their health information (including lab results, problem list, medication lists and allergies) for at least 10 percent of all unique patients seen by the EP. 19. Provision of clinical summaries to patients for each office visit for at least 80 percent of all office visits. 20. Capability to exchange key clinical information (for example, problem list, medication list, allergies and diagnostic test results), among providers of care and patient authorized entities electronically, with at least one test of certified EHR technology s capacity to electronically exchange key clinical information. 21. Ensuring medication reconciliation is performed at relevant encounters and each transition of care for at least 80 percent of relevant encounters and transitions of care. 22. Provision of summary care record for each transition of care and referral for at least 80 percent of transitions of care and referrals. 23. Capability to submit electronic data to immunization registries and actual submission where required and accepted, where at least one test of certified EHR technology s capacity to submit electronic data to immunization registries is performed. 24. Capability to provide electronic syndromic surveillance data to public health agencies and actual transmission according to applicable law and practice, where at least one test of certified EHR technology s capacity to provide electronic syndromic surveillance data to public health agencies is performed (unless none of the public health agencies to which an EP or eligible hospital submits such information have the capacity to receive the information electronically). 25. Protection of electronic health information maintained using certified EHR technology through the implementation of appropriate technical capabilities, where the EP conducts or reviews a security risk analysis in accordance with the requirements under 45 C.F.R (a)(1) and implements security updates as necessary. Eligible hospitals are similarly subject to a set of 23 criteria that include: 1. Use of CPOE for orders directly entered by the authorizing provider (for example, MD, DO, RN, PA, NP), for at least 10 percent of all orders. 2. Implementation of drug-drug, drug-allergy and drug-formulary checks, as demonstrated by eligible hospital s having enabled this functionality. 3. Maintenance of an up-to-date problem list of current and active diagnoses based on ICD-9-CM or SNOMED CT, where at least 80 percent of all unique patients admitted to the eligible hospital have at least one entry or an indication of none recorded as 4. Maintenance of active medication list, unique patients admitted by the eligible hospital have at least one entry (or an indication of none if the patient is not currently prescribed any medication) recorded as 3 Number 990 February 23, 2010

4 5. Maintenance of an active medication allergy list, where at least 80 percent of all unique patients admitted to the eligible hospital have at least one entry (or an indication of none if the patient has no medication allergies) recorded as structured data. 6. Recordation of demographics, unique patients admitted to the eligible hospital have demographics recorded as 7. Recordation and charting of changes in vital signs, for at least 80 percent of all unique patients age 2 and over admitted to the eligible hospital; recordation of blood pressure and BMI; and plotting of growth chart for children aged 2 to Recordation of smoking status for patients 13 years or older, for at least 80 percent of all unique patients. 9. Incorporation of clinical lab-test results into EHR as structured data, where at least 50 percent of all clinical lab tests results ordered by an authorized provider of the eligible hospital during the EHR reporting period whose results are in either in a positive/negative or numerical format are incorporated in certified EHR technology as 10. Generation of lists of patients by specific conditions to use for quality improvement, reduction of disparities, research and outreach, with at least one report listing patients of the eligible hospital with a specific condition. 11. Reporting of hospital quality measures to CMS or the States, where for 2011 an eligible hospital would provide the aggregate numerator and denominator through attestation as discussed in section II.A.3 of the proposed rule, and for 2012, an eligible hospital would electronically submit the measures as discussed in section II.A.3. of the proposed rule. 12. Implementation of five clinical decision support rules relevant to specialty or high clinical priority, including for diagnostic test ordering, along with the ability to track compliance with those rules as described further in section II.A.3 of the proposed rule. 13. Checking insurance eligibility electronically from public and private payers for at least 80 percent of all unique patients admitted to an eligible hospital. 14. Submission of claims electronically to public and private payers for at least 80 percent of all claims filed by the EP or the eligible hospital. 15. Ensuring patients are provided with an electronic copy of their health information (including diagnostic test results, problem list, medication lists, allergies, discharge summary and procedures) upon request, patients who request an electronic copy of their health information are provided it within 48 hours. 16. Ensuring patients are provided with an electronic copy of their discharge instructions and procedures at time of discharge, upon request, patients who are discharged from an eligible hospital and who request an electronic copy of their discharge instructions and procedures are provided it. 17. Ensuring capability to exchange key clinical information (e.g., discharge summary, procedures, problem list, medication list, allergies, diagnostic test results) among providers of care and patient authorized entities electronically, where at least one test of certified EHR technology s capacity to electronically exchange key clinical information is performed. 4 Number 990 February 23, 2010

5 18. Ensuring medication reconciliation is performed at relevant encounters and each transition of care for at least 80 percent of relevant encounters and transitions of care. 19. Ensuring a summary care record for each transition of care and referral is provided for at least 80 percent of transitions of care and referrals. 20. Ensuring capability to submit electronic data to immunization registries and actual submission where required and accepted, where at least one test of the certified EHR technology s capacity to submit electronic data to immunization registries is performed. 21. Ensuring capability to provide electronic submission of reportable lab results to public health agencies and actual submission where it can be received, where at least one test of the certified EHR technology s capacity to provide electronic submission of reportable lab results to public health agencies is performed (unless none of the public health agencies to which eligible hospital submits such information has the capacity to receive the information electronically). 22. Ensuring capability to provide electronic syndromic surveillance data to public health agencies and actual transmission according to applicable law and practice, where at least one test of certified EHR technology s capacity to provide electronic syndromic surveillance data to public health agencies is performed (unless none of the public health agencies to which an eligible hospital submits such information has the capacity to receive the information electronically). 23. Protection of electronic health information maintained using certified EHR technology through the implementation of appropriate technical capabilities, where the eligible hospital conducts or reviews a security risk analysis in accordance with the requirements under 45 C.F.R (a)(1), and implements security updates as necessary. These criteria focus on capturing electronic health information in particular formats to track key clinical conditions, and to communicate that information appropriately and securely for coordination of care. The rule also focuses on implementation of clinical decision support tools to facilitate disease and medication management, and to establish reporting systems for certain public health information and clinical quality measures. The definition of meaningful use would apply across the board to eligible providers participating in the Medicare fee-for-service, Medicare Advantage or Medicaid programs and eligible hospitals. For purposes of the Medicaid EHR incentive, the definition of meaningful use in the proposed rule would serve as a floor, but not a ceiling; states may petition CMS for approval to add to the requirements, but would be prohibited from implementing less rigorous measures to demonstrate meaningful use. The proposed rule sets out a phased approach to defining and achieving meaningful use of EHR by providers, and divides the implementation into three stages. Stage one is comprised of the criteria set out in the proposed rule itself. Over time, CMS will continue to develop the meaningful use criteria by future rulemaking (i.e., stages two and three), consistent with the available technology and provider experience. Stage two criteria are anticipated to be proposed by the end of 2011, and stage three criteria should be proposed by the end of Number 990 February 23, 2010

6 Public comment on the proposed rule is due by 5 PM on March 15, Comments will be accepted electronically, by regular mail, by express or overnight mail, or by hand or courier. Comments received on the final rule will also be available for public inspection. ONC Interim Final Rule The ONC Interim Final Rule 4 (IFR) establishes the standards, implementation specifications, and certification criteria to enhance the interoperability, functionality, utility, and security of health information technology and to support its meaningful use. 5 The rule seeks to establish a common technology to ensure accurate and secure transfer of electronic health information where the EHR systems on either end of the exchange are different. Specifically, the interim final rule (i) sets forth standard formats for clinical summaries and prescriptions; (ii) defines standard terms to be used to describe clinical problems, procedures, laboratory tests, medications and allergies; and (iii) establishes security standards for exchange of electronic health information over the internet. The IFR also establishes standards for certification of a particular EHR technology. Compliance with these standards supports a provider s demonstration of meaningful use to qualify for the EHR incentives. Specifically, the IFR defines the terms, implementation specification, certification criteria, qualified electronic health record, EHR Module, Complete EHR and Certified EHR Technology. Importantly, a Certified EHR Technology is defined as a Complete EHR or a combination of EHR Modules, each of which: (1) meets the requirements included in the definition of a Qualified EHR; and (2) has been tested and certified in accordance with the certification program established by the National Coordinator as having met all applicable certification criteria adopted by the Secretary. 6 As discussed above, eligibility for the incentives depends on the meaningful use (as defined in the CMS Proposed Rule) of a Certified EHR Technology (as defined in the ONC IFR). Thus, the ONC IFR and the CMS Proposed Rule must be read in tandem to ensure eligible hospitals and providers meet the applicable requirements for the HITECH incentives. The IFR becomes effective on February 12, 2010, but the public has an opportunity to submit comments until 5 PM on March 15, The final rule is expected to be issued at some point in Endnotes 1 American Recovery and Reinvestment Act of 2009, 13001(a) et seq., Pub. L. No (2009). 2 Medicare and Medicaid Programs; Electronic Health Record Incentive Program, 75 Fed. Reg (proposed Jan. 13, 2010) (to be codified at 42 C.F.R. pts. 412, 413, 422, and 495). 3 Id. at Health Information Technology: Initial Set of Standards, Implementation Specifications, and Certification Criteria for Electronic Health Record Technology, 75 Fed. Reg (Jan. 13, 2010) (to be codified at 42 C.F.R pt. 170). 5 Id. at Id. at If you have any questions about this Client Alert, please contact one of the authors listed below or the Latham attorney with whom you normally consult: Andrew H. Gantt Washington, D.C. Elizabeth Meltzer Washington, D.C. 6 Number 990 February 23, 2010

7 Client Alert is published by Latham & Watkins as a news reporting service to clients and other friends. The information contained in this publication should not be construed as legal advice. Should further analysis or explanation of the subject matter be required, please contact the attorney whom you normally consult. A complete list of our Client Alerts can be found on our Web site at If you wish to update your contact details or customize the information you receive from Latham & Watkins, please visit to subscribe to our global client mailings program. Abu Dhabi Barcelona Beijing Brussels Chicago Doha Dubai Frankfurt Hamburg Hong Kong Houston London Los Angeles Madrid Milan Moscow Munich New Jersey New York Orange County Paris Rome San Diego San Francisco Shanghai Silicon Valley Singapore Tokyo Washington, D.C. 7 Number 990 February 23, 2010

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