SUMMARY OF THE PROPOSED MEDICARE AND MEDICAID ELECTRONIC HEALTH RECORD INCENTIVE PROGRAM RULE

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1 SUMMARY OF THE PROPOSED MEDICARE AND MEDICAID ELECTRONIC HEALTH RECORD INCENTIVE PROGRAM RULE February 2010

2 SUBMISSION OF COMMENTS This document provides an overview of the proposed rule for the Medicare and Medicaid Electronic Health Record Incentive Program. Additional information regarding the EHR Incentive Program is available on the Centers for Medicare and Medicaid Services (CMS) Web site at CMS must receive comments on the proposal by March 15 at 5 p.m. CMS requests that comments reference the file code CMS-0033-P. Comments on the proposed rule can be submitted electronically at Click on the Submit Electronic Comments on CMS Regulations with an Open Comment Period link. (Attachments should be in Microsoft Word, WordPerfect, or Excel format.) -OR- By Regular Mail (an original and two copies): Centers for Medicare and Medicaid Services Department of Health and Human Services Attention: CMS-0033-P P.O. Box 8013 Baltimore, MD By Express/Overnight Mail (an original and two copies): Centers for Medicare and Medicaid Services Department of Health and Human Services Attention: CMS-0033-P Mail Stop C Security Boulevard Baltimore, MD OR- Hand-Delivered (an original and two copies): Room 445-G 7500 Security Boulevard Hubert H. Humphrey Building Baltimore, MD Independence Avenue, SW Note: Call (410) to Washington, D.C schedule the delivery if you use the Baltimore address.

3 TABLE OF CONTENTS I. Overview... 1 II. Legislative Mandate... 2 III. Eligible Providers... 2 Medicare Eligible Hospitals... 2 Medicare Eligible Professionals... 2 Medicaid Eligible Hospitals... 3 Medicaid Eligible Professionals... 3 IV. Meaningful Use... 4 EHR Reporting Period... 4 Payment Year... 4 Certified EHR Technology... 5 Meaningful Use Criteria... 5 Proposed Stage 1 Meaningful Use Criteria for Eligible Hospitals and Professionals... 6 Common Definition of Meaningful Use Under Medicare and Medicaid... 9 Medicaid Exception for First Year of Participation... 9 V. Quality Measure Reporting Reporting Requirements Hospital Quality Measures Physician Quality Measures VI. Incentive Payment Calculation Medicare Incentive Payments for Hospitals Medicare Incentive Payments for CAHs Medicare Incentive Payments for EPs Medicaid Incentive Payments for Hospitals Medicaid Incentive Payments for EPs... 15

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5 I. OVERVIEW The Centers for Medicare and Medicaid Services (CMS) published the proposed Medicare and Medicaid Programs: Electronic Health Record Incentive Program rule in the January 13, 2010 Federal Register. This document provides an overview of the final rule. Additional information regarding the rule is available on the CMS Web site at Note: Text in italics is extracted from the January 13 Federal Register. The Proposed Rule Includes: Definitions of Eligible Providers The proposed rule would apply to doctors and hospitals that meet the eligibility criteria. The criteria are slightly different under the Medicare and Medicaid programs. Medicare eligible hospitals - An eligible hospital under the Medicare program is any subsection (d) hospital that is paid under the inpatient PPS or a certified Critical Access Hospital (CAH). This definition would exclude cancer hospitals and children s hospitals from eligibility for EHR payment incentives under Medicare. Medicaid eligible hospitals - Under the Medicaid program definition, only short-term, inpatient acute care hospitals (including cancer hospitals) and children s hospitals would be eligible. The hospital must have at least 10 percent of its inpatient volume attributable to Medicaid beneficiaries (not applicable to children s hospitals). An eligible professional may only receive EHR incentive payments from one program either Medicare or Medicaid. Medicare eligible professionals (EPs) A professional provider must be a doctor of medicine or osteopathy, a doctor of dental surgery or dental medicine, a doctor of podiatric medicine, a doctor of optometry, or a chiropractor. The professional must be legally authorized to practice under state law. Hospital-based professionals, who provide 90 percent or more of their services in a hospital setting (including all hospital inpatient, outpatient, and emergency department settings), would not meet the EP definition. Medicaid EPs Eligible professionals under the Medicaid program would be non-hospital-based physicians, dentists, nurse practitioners, certified nurse midwives, and physicians assistants. The definition of hospital-based is the same as for the Medicare program, with the exception of services provided in Federally Qualified Health Clinics (FQHCs) or Rural Health Clinics (RHCs). A Medicaid EP must have at least 30 percent of his/her patient volume attributable to Medicaid patients with some exceptions. Definition of Meaningful Use CMS proposes to define three stages of meaningful use with criteria becoming more stringent over time. The proposed rule establishes Stage 1 criteria, requiring eligible hospitals and professionals to use certified electronic health records (EHRs) and have the capacity to capture and report specific data elements. (A related interim final regulation has been published by the Office of the National Coordinator of HIT (ONC) regarding the criteria for certified EHRs.) Stage 1 criteria would apply to all eligible hospitals and professionals that first qualify for the EHR incentive program during the 2011 through 2014 payment years. CMS will define its criteria for Stages 2 and 3 in future rulemaking. Quality Measure Reporting In order to meet the Stage 1 definition of meaningful use, eligible hospitals would be required to use EHRs to report on a set of 35 clinical quality measures, of which not all are currently adopted by the Health Quality Alliance (HQA). 1

6 Incentive Payment Calculation CMS outlines its proposed methodology for determining Medicare EHR incentive payments and provides guidelines for states to determine Medicaid EHR incentive payments. Payment Reduction Calculation The proposed rule outlines the Medicare payment reduction penalty that would be applied to those eligible providers and hospitals that do not meet the meaningful use criteria by FFY There would be no payment penalties under the Medicaid program. II. LEGISLATIVE MANDATE The proposed rule would implement provisions of the American Recovery and Reinvestment Act of 2009 (ARRA). Title XIII of Division A and Title IV of Division B of the ARRA are cited as the Health Information Technology for Economic and Clinical Health or HITECH Act. The HITECH provisions of the ARRA amend the Social Security Act by establishing incentive payments to eligible professionals and eligible hospitals that adopt health information technology and EHRs in such a way as to become meaningful users. III. ELIGIBLE PROVIDERS The EHR incentive program is only available to certain providers, hospitals and physicians, and the program s eligibility requirements are different for Medicare and Medicaid. Medicare Eligible Hospitals Federal Register page 1911 CMS Proposal: CMS proposes to use the definition of subsection (d) hospitals from the Social Security Act to define eligible hospitals for the Medicare EHR incentive program. CMS interpretation of the Social Security Act is that an eligible hospital must be located in one of the fifty States or the District of Columbia; therefore, hospitals in Puerto Rico would not be eligible. Subsection (d) hospitals also do not include hospitals excluded from payments under the inpatient PPS (IPPS) such as psychiatric, rehabilitation, long term care, children s, or cancer hospitals. Acute care hospitals in the state of Maryland would be considered eligible because they are operating under a special waiver. Eligible hospitals would be identified based upon their unique Medicare provider number. Hospitals with multiple, discrete campuses that operate with one Medicare provider number would be recognized as one provider, regardless of how many separate provider IDs, financial filings, etc. they may maintain. Medicare Eligible Professionals Federal Register pages CMS Proposal:...we propose to add a definition of the term eligible professional... to mean a physician as defined under section 1861(r) of the Act. Section 1861(r) of the Act defines the term physician to mean the following five types of professionals, each of which must be legally authorized to practice their profession under state law: a doctor of medicine or osteopathy, a doctor of dental surgery or dental medicine, a doctor of podiatric medicine, a doctor of optometry, or a chiropractor. A Medicare EP must provide services that are covered by the Medicare program and are paid according to the Medicare physician fee schedule. The HITECH Act specifies that hospital-based professionals are not eligible for the EHR incentive program. CMS proposes that a hospital-based EP be defined as a professional who furnishes 90 percent or more of his/her allowed services in a hospital setting including all hospital inpatient, outpatient, and emergency department settings. This definition does not consider whether the physician is employed by or under contract with the hospital, only where services are rendered which will be determined using the place of service (POS) code on the physician s Medicare claim. CMS is seeking 2

7 comments on its definition of hospital-based and whether it is reasonable to assume that the physicians falling into this category would be using the hospital s EHR technology. EPs who meet the eligibility requirements for both the Medicare and Medicaid EHR incentive programs may participate in only one program and must designate which program they choose. CMS proposes that, after the initial designation, EPs would be allowed to change their program selection only once during the incentive payment years. Medicaid Eligible Hospitals Federal Register pages CMS Proposal: The HITECH Act specifies that, for Medicaid EHR incentive payments, only acute care and children s hospitals are eligible. CMS is proposing to define an acute care hospital as an inpatient health care facility with an average length of stay of 25 days or less. CMS proposes to use its Medicare provider numbers (CMS Certification Number or CCN) as the means for identifying eligible acute care hospitals. Under the CCN nomenclature, the first two digits represent the State ID and the next four digits identify the facility type. The last four digits of the CCN for short-stay, acute care hospitals range between 0001 and Using this classification method, cancer hospitals are eligible, but CAHs and specialty hospitals (long term care hospitals, rehabilitation hospitals, psychiatric hospitals, skilled nursing facilities) are excluded. Eligible acute care hospitals must also have Medicaid patient volume that is at least 10 percent of total volume. CMS proposes the Medicaid patient volume threshold be calculated using total Medicaid encounters for any representative 90-day period in the preceding calendar year as a percentage of total encounters for the same period. The proposed rule is silent as to what constitutes an encounter; leaving in question whether the measure will be based on inpatient discharges or days and whether or not outpatient volume will be included. The Medicaid volume threshold must be reaffirmed for each incentive payment year. CMS proposes to allow individual states some discretion in determining the appropriate timeframe and data source for this calculation, but the approach must be auditable. The Medicaid volume threshold must include Medicaid beneficiaries enrolled in managed care plans, prepaid inpatient health plans, and prepaid ambulatory health plans. Children s hospitals are specifically identified as eligible for Medicaid EHR incentives. CMS proposes to recognize hospitals where the last four digits of the Medicare provider number fall between 3300 and 3399 as children s hospitals. CMS is soliciting comments as to alternatives for expanding this definition to include inpatient rehabilitation and psychiatric facilities. Children s hospitals are not held to a Medicaid patient volume threshold for eligibility. Similar to the Medicare eligibility requirements, hospitals with multiple, discrete campuses that operate with one CCN would be recognized as one provider, regardless of how many separate provider IDs, financial filings, etc. they may maintain. Medicaid Eligible Professionals Federal Register pages CMS Proposal: CMS lists five types of Medicaid professionals that meet the definition of an EP:...physicians, dentists, certified nurse-midwives, nurse practitioners, and physician assistants practicing in an FQHC or RHC that is so led by a physician assistant. 3

8 A Medicaid EP may not be hospital-based. CMS proposes to use the same definition for Medicaid as it proposed for Medicare: a professional who furnishes 90 percent or more of his/her allowed services in a hospital setting including all hospital inpatient, outpatient, and emergency department settings. If an EP practices predominantly in an FQHC or RHC, where over 50 percent of his/her total patient encounters over a 6-month period occur at one or both of these settings, they are considered an EP. EPs must meet a Medicaid volume threshold of 30 percent (20 percent for pediatricians), that would be calculated in the same manner and with the same state discretion as for hospitals. The Medicaid volume threshold must include Medicaid beneficiaries enrolled in managed care plans, prepaid inpatient health plans, and prepaid ambulatory health plans. EPs that practice predominantly in an FQHC or RHC, must meet a needy individual threshold of 30 percent (or 20 percent for pediatricians). Needy individuals are defined as persons receiving medical assistance from Medicaid, the Children s Health Insurance Program (CHIP), or based on some other auditable reduced payment scale. EPs who meet the eligibility requirements for both the Medicare and Medicaid EHR incentive programs may participate in only one program and must designate which program they choose. CMS proposes that, after the initial designation, EPs would be allowed to change their program selection only once during the incentive payment years. IV. MEANINGFUL USE CMS proposes to define a meaningful user as an EP or eligible hospital who, for an EHR reporting period for a payment year, demonstrate meaningful use of certified EHR technology in the form and manner consistent with our standards... See Eligible Providers section above for the Medicare and Medicaid eligible hospitals and professionals definitions and criteria. EHR Reporting Period Federal Register page CMS Proposal: In this proposed rule, we propose a definition of EHR Reporting Period for purposes of Medicare and Medicaid incentive payments... For these sections, the EHR reporting period may be any continuous 90-day period within the first payment year and the entire payment year for all subsequent payment years. In future rulemaking, we will propose a definition of EHR Reporting Period for purposes of Medicare incentive payment adjustments... CMS notes that, in future years, the EHR reporting periods may be different for the Medicare and Medicaid programs. Payment Year Federal Register page 1848 CMS Proposal: For all EPs, we are proposing a common definition for both payment year and year of payment, as any calendar year beginning with because hospitals will have the opportunity to simultaneously participate in both the Medicare and Medicaid EHR incentive programs, we propose a common definition of payment year and year of payment for both programs... as any fiscal year beginning in A payment year for physicians is defined as a calendar year, while a payment year for hospitals, under Medicare and Medicaid, would be the federal fiscal year (October 1 through September 30). 4

9 CMS proposes its definitions for the first through sixth payment years. The first payment year would be the first calendar or FFY for which an EP or eligible hospital receives an incentive payment. The second, third, fourth, fifth, and sixth payment year would be defined as the second, third, fourth, fifth, and sixth calendar or FFY respectively, for which an EP or eligible hospital receives an incentive payment. CMS does not specify whether these years need to be consecutive. Certified EHR Technology Federal Register page 1848 Background: The Secretary of Health and Human Services (the Secretary ) has charged the Office of the National Coordinator for Health Information Technology (ONC) with developing the criteria and mechanisms for certification of EHR technology. The ONC has issued an interim final rule with comment period with details on the standards, implementation specifications, and certification criteria for EHRs. The ONC will also issue a separate proposed rule related to the certification of health information technology. CMS Proposal:... we propose to use the definition of certified EHR technology adopted by ONC. Meaningful Use Criteria Federal Register pages CMS Proposal: CMS proposes to define meaningful use in three stages, with criteria becoming more stringent over time. Stage 1 criteria, are the requirements for EPs and eligible hospitals to qualify for incentive payments in their first payment year, if they begin participation in the program between 2011 and All providers would be required to meet the standards for Stage 3 by CMS provides the following table to illustrate how it anticipates the stages of meaningful use to be implemented, depending upon a provider s first payment year: Payment Year: First Payment Year: Stage 1 Stage 1 Stage 2 Stage 2 Stage Stage 1 Stage 1 Stage 2 Stage Stage 1 Stage 2 Stage Stage 1 Stage Stage 3 Providers that begin participation in the program in 2011 or 2012 would be held to the Stage 1 criteria for their first two payment years. The Stage 1 criteria focus on ensuring that the providers EHRs have specific functionalities; the criteria differ marginally for EPs and eligible hospitals. Each criterion has a stated objective and a measurement requirement. The proposed Stage 1 criteria for eligible hospitals and EPs are listed on the next page: 5

10 Proposed Stage 1 Meaningful Use Criteria for Eligible Hospitals and Professionals Eligible Hospitals Eligible Professionals Objective Measure Objective Measure Use of computerized provider order entry (CPOE) for any type of orders directly entered by an authorizing provider (e.g. MD, RN, PA, NP) Implement drug-drug, drugallergy, and drug-formulary checks CPOE is used for at least 10% of all orders This functionality must be enabled Use CPOE Implement drug-drug, drugallergy, and drug-formulary checks CPOE is used for at least 80% of all orders This functionality must be enabled Maintain an up-to-date problem list of current and active diagnoses, based on ICD-9-CM or SNOMED CT Maintain active medication list Maintain active medication allergy list patients admitted have at least 1 entry or an indication of "none" recorded as structured data patients admitted have at least 1 entry or an indication of "none" recorded as structured data patients admitted have at least 1 entry or an indication of "none" recorded as structured data Maintain an up-to-date problem list of current and active diagnoses, based on ICD-9-CM or SNOMED CT Generate and transmit permissible prescriptions electronically (erx) Maintain active medication list Maintain active medication allergy list patients seen have at least 1 entry or an indication of "none" recorded as structured data At least 75% of all permissable Rx written are transmitted electronically using certified EHR technology patients seen have at least 1 entry or an indication of "none" recorded as structured data patients admitted have at least 1 entry or an indication of "none" recorded as structured data Record the following demographics: preferred language, insurance type, patients admitted have gender, race, ethnicity, date of demographics recorded as birth, date and cause of death (in structured data such event) Record and chart the following chages in vital signs: height, weight, blood pressure, calculate and display BMI for patients over 2 years old, plot and display growth charts for children between 2 and 20 years old (including BMI) Record smoking status for patients ages 13 and older Incorporate clinical lab test results into the EHR as structured data patients admitted, aged 2 and over: record blood pressure and BMI; plot and display growth charts for children between ages 2 and 20 patients admitted, aged 13 and older have smoking status recorded At least 50% of all clinical lab tests ordered, where results are in either positive/negative or numeric format are incorporated as structured data Record the following demographics: preferred language, insurance type, gender, race, ethnicity, date of birth Record and chart the following chages in vital signs: height, weight, blood pressure, calculate and display BMI for patients over 2 years old, plot and display growth charts for children between 2 and 20 years old (including BMI) Record smoking status for patients ages 13 and older Incorporate clinical lab test results into the EHR as structured data patients seen have demographics recorded as structured data patients seen, aged 2 and over: record blood pressure and BMI; plot and display growth charts for children between ages 2 and 20 patients seen aged 13 and older have smoking status recorded At least 50% of all clinical lab tests ordered, where results are in either positive/negative or numeric format are incorporated as structured data 6

11 Eligible Hospitals Eligible Professionals Objective Measure Objective Measure Generate lists of patients by Generate at least one report specific condition to use for listing patients with a specific quality improvement, reduction condition of disparities, and outreach Generate lists of patients by specific condition to use for quality improvement, reduction of disparities, and outreach Report hospital quality measures to CMS or the State (for Medicaid eligible hospitals) Implement 5 clinical decision support rules related to a high priority hospital condition, including diagnostic test ordering, along with the ability to track compliance Check insurance eligibility electronically with public and private payers Submit claims electronically to public and private payers Provide patients with an electronic copy of their health information (including diagnostic test results, problem list, medication list, allergies, discharge summary, and procedures) upon request Provide patients with an electronic copy of their discharge instructions and procedures at time of discharge, upon request Successfully report to CMS (or the State) clinical quality measures in the form and manner specified by CMS (or the State) Implement 5 clinical decision support rules relevant to the clinical quality metrics the hospital is responsible for (as described in the rule) Report ambulatory quality measures to CMS or the State (for Medicaid Eps) Send reminders to patients for preventative/follow-up care Implement 5 clinical decision support rules related to a high priority hospital condition, including diagnostic test ordering, along with the ability to track compliance Insurance eligibility checked Check insurance eligibility electronically for at least 80% of electronically with public and all unique patients admitted private payers At least 80% of all claims filed electronically Submit claims electronically to public and private payers Provide patients with an At least 80% of all patients who electronic copy of their health request an electronic copy of information (including their health information are diagnostic test results, problem provided that information within list, medication list, and 48 hours allergies) upon request At least 80% of all patients who are discharged and request and electronic copy of their discharge instructions and procedures are provided that information Provide patients with timely electronic access to their health information (including lab results, problem list, medication list, and allergies) within 96 hours of the information becoming available to the EP Provide clinical summaries for patients for each office visit Generate at least one report listing patients with a specific condition Successfully report to CMS (or the State) ambulatory quality measures in the form and manner specified by CMS (or the State) Reminders sent to at least 50% of all unique patients see, ages 50 and over Implement 5 clinical decision support rules relevant to the clinical quality metrics the EP is responsible for (as described in the rule) Insurance eligibility checked electronically for at least 80% of all unique patients seen At least 80% of all claims filed electronically At least 80% of all patients who request an electronic copy of their health information are provided that information within 48 hours At least 10% of all unique patients seen are provided timely electronic access to their health information Clinical summaries are provided for at least 80% of all office visits 7

12 Eligible Hospitals Eligible Professionals Objective Measure Objective Measure Capability to electronically exchange key clinical information (e.g. discharge summary, procedures, problem list, etc.) among providers of care and patient-authorized entities Perform medication reconciliation at relevant encounters and each transition of care Provide summary care record for each transition of care and referral Performed at least one test of the certified EHR technology's capacity to electronically exchange key clinical information Perform medication reconciliation for at least 80% of relevant encounters and transitions of care Provide summary care record for at least 80% of transitions of care and referrals Capability to electronically exchange key clinical information (e.g. discharge summary, procedures, problem list, etc.) among providers of care and patient-authorized entities Perform medication reconciliation at relevant encounters and each transition of care Provide summary care record for each transition of care and referral Performed at least one test of the certified EHR technology's capacity to electronically exchange key clinical information Perform medication reconciliation for at least 80% of relevant encounters and transitions of care Provide summary care record for at least 80% of transitions of care and referrals Capability to submit electronic data to immunizaion registries and actual submission where required and accepted Performed at least one test of the certified EHR technology's capacity to electronically submit data to immunization registries Capability to submit electronic data to immunizaion registries and actual submission where required and accepted Performed at least one test of the certified EHR technology's capacity to electronically submit data to immunization registries Capability to provide electronic submission of reportable lab results (as required by State or local law) to public health agencies and actual submission where accepted Performed at least one test of the certified EHR technoology's capacity to provide electronic submission of reportable lab results (as required by State or local law) to public health agencies (unless none of the public agencies have the capacity to receive the information electronically) Capability to provide electronic syndromic surveillance data to public health agencies and actual transmission according to applicable law and practice Protect electronic health information created or maintained by the certified EHR technology through the implementation of appropriate technical capabilities Performed at least one test of certified EHR technology's capacity to provide electronic syndromic surveillance data to public health agencies (unless none of the public agencies have the capacity to receive the information electronically) Conduct or review a security risk analysis in accordance with the requirements of HIPAA and implement security updates as necessary Capability to provide electronic syndromic surveillance data to public health agencies and actual transmission according to applicable law and practice Protect electronic health information created or maintained by the certified EHR technology through the implementation of appropriate technical capabilities Performed at least one test of certified EHR technology's capacity to provide electronic syndromic surveillance data to public health agencies (unless none of the public agencies have the capacity to receive the information electronically) Conduct or review a security risk analysis in accordance with the requirements of HIPAA and implement security updates as necessary For eligible hospitals, the proposed measures would apply to inpatient services. Patients seen in the emergency department or other outpatient settings would not be included in the percentage of patients measures for Stage 1. CMS is considering whether to expand the applicability of the measurements to the outpatient setting for Stages 2 and/or 3. The proposed rule would require that EPs and eligible hospitals demonstrate meaningful use via an annual attestation, occurring after the completion of the EHR reporting period for any payment year. The attestation would include identification of the certified EHR technology in use, reporting of the objective measurements, and reporting of clinical quality measures. Eligible hospitals and EPs would be required to use certified EHR technology to meet the specified objectives and report the specific measures to CMS this includes both the 8

13 HIT functionality measures and the reporting of clinical quality measures. (See the following section Quality Measure Reporting for details.) To qualify as a meaningful EHR user for 2011, we propose that an EP or eligible hospital must demonstrate that they meet all of the objectives and their associated measures... Except as otherwise indicated, each objective must be satisfied by an individual EP as determined by unique National Provider Identifiers (NPIs) and an individual hospital as determined by unique CMS certification numbers (CCN). Common Definition of Meaningful Use Under Medicare and Medicaid Federal Register pages CMS Proposal: We believe that given the strong level of interaction on meaningful use encouraged by the HITECH Act, there would need to be a compelling reason to create separate definitions for Medicare and Medicaid. We have found no such reasons for disparate definitions in our internal or external discussions. Therefore, we propose to create a common definition of meaningful use that would serve as the definition for providers participating in the Medicare FFS and MA EHR incentive program, and the minimum standard for EPs and eligible hospitals participating in the Medicaid EHR incentive program. We clarify that under Medicaid this common definition would be the minimum standard. The proposed rule criteria would be the minimum standards for the Medicaid incentive program. The CMS proposed rule allows states to add additional objectives to the definition of meaningful use or modify existing objectives only if the changes... would further promote the use of EHRs and healthcare quality... Medicaid Exception for the First Year of Participation Federal Register pages The HITECH Act gives States some latitude in applying the meaningful use criteria for the first payment year. Eligible hospitals and EPs can qualify for Medicaid incentive payments in the first payment year by adopting, implementing, or upgrading to certified EHR technology. CMS Proposal: CMS proposes that eligible hospitals and EPs attest to having adopted, implemented, or upgraded their certified EHR technology using the following criteria: Evidence of adoption requires that the provider demonstrate actual installation of certified EHR technology (as opposed to efforts to install) Evidence of implementation requires that the provider has started using the certified EHR technology in their clinical practice. Implementation activities include staff training, data entry of patient information, or establishing data exchange agreements with other health care entities. Evidence of upgrade requires the provider demonstrate certified EHR technology functionality expansion, such as an addition of clinical decision support, erx, or CPOE. The States would be responsible for verifying the attestations of eligible hospitals and EPs. 9

14 V. QUALITY MEASURE REPORTING EPs and eligible hospitals must successfully report clinical quality measures in the form and manner specified by CMS to qualify as Stage 1 meaningful users of EHR technology.. Reporting Requirements Federal Register pages CMS Proposal: For the 2011 and 2012 EHR reporting periods, CMS proposes that providers use an attestation methodology to submit summarized data, generated using certified EHR technology, on the required clinical quality measures (numerator, denominator, and exclusions). CMS is expected to develop the capacity to receive EHR data electronically by Beginning in 2013, EPs and hospitals would be required to submit patient-level data, via the EHR, for calculation of quality measures. The reporting of quality measures for the EHR incentive program are in addition to the reporting requirements under other federal and state programs (e.g. the Medicare Reporting Hospital Quality Data for Annual Payment Update (RHQDAPU) program). The proposed quality measures would also apply to the Medicaid incentive program, although CMS does provide some alternative Medicaid-specific measures for use by eligible hospitals. Hospital Quality Measures Federal Register pages CMS Proposal: CMS proposes 35 clinical quality measures for eligible hospitals to submit electronically for payment years 2011 and The measures are listed in Table 20, on page 1896 of the Federal Register. Not all of the measures are currently reported under RHQDAPU, some are proposed for future Medicare reporting. Fifteen of the proposed measures have electronic specifications. CMS invites comments on the proposed measures and seeks recommendations for potential quality measures for 2013 and thereafter, including comments on whether future quality data submissions should be expanded to include all patients, without regard to payer. The CMS Table is summarized on the next page: 10

15 Proposed Clinical Quality Measures for Electronic Submission by Eligible Hospitals for Payment Years Condition Acute Myocardial Infarction / Heart Attack Heart Failure Pneumonia Surgical Care Improvement Quality Measure Aspirin at discharge Beta-blocker at discharge ACE inhibitor or ARB for LVSD PCI received within 90 minutes of arrival 30-day hospital-specific readmission rate (risk-adjusted) 30-day hospital-specific readmission rate (Non-risk-adjusted) 30-day hospital-specific readmission rate (risk-adjusted) 30-day hospital-specific readmission rate (Non-risk-adjusted) Blood culture performed prior to administration of first antibiotic(s) 30-day hospital-specific readmission rate (risk-adjusted) 30-day hospital-specific readmission rate (Non-risk-adjusted) Selection of antibiotic given to surgical patients Median time from ED arrival to ED departure for admitted patients Emergency Department (ED) Throughput Stroke Venous Thromboembolism (VTE) Healthcare-Acquired Infections Global Readmissions Rates Admission decision time to ED departure time for admitted patients Median time from ED arrival to ED departure for discharged patients Discharge on anti-thrombotics Anticoagulation for A-fib/flutter Thrombolytic therapy for patients arriving within 2 hours of symptom onset Anti-thrombotic therapy by day 2 Discharge on statins Stroke education Rehabilitation assessment VTE prophylaxis within 24 hours of arrival ICU VTE prophylaxis Anticoagulation overlap therapy Platelet monitoring on unfractionated heparin VTE discharge instructions Incidence of potentially preventable VTE Ventilator bundle Central line bundle compliance Ventilator-associated pneumonia rate for ICU and high-risk nursery patients Urinary catheter-associated urinary tract infection rate for ICU patients Central line catheter-associated blood stream infection rate for ICU and high-risk nursery patients All-cause, all-patient 30-day hospital-specific readmission rate (risk-adjusted) All-cause, all-patient 30-day hospital-specific readmission rate (Non-risk-adjusted) 11

16 Physician Quality Measures Federal Register pages CMS Proposal: CMS proposes that EPs report on three core measures and a set of measures specific to one of 15 individual specialty groups. The 90 proposed physician measures are listed in Table 3 on page 1874 of the Federal Register. Specialty measures are proposed for cardiology, pulmonology, endocrinology, oncology, proceduralist/surgery, primary care, pediatrics, obstetrics and gynecology, neurology, psychiatry, ophthalmology, podiatry, radiology, gastroenterology, and nephrology (Tables 5 through 19). CMS proposes that EPs be required to report on all applicable cases for the core measures as well as each measure in one selected specialty group. EPs would be required to select the same specialty group for both the first and second EHR reporting year. EPs would be allowed to attest that none of the measures are applicable to their specialty. VI. INCENTIVE PAYMENT CALCULATION The HITECH Act provides for incentive payments for the meaningful use of certified EHR technology under the Medicare and Medicaid programs. A provider must meet the definition of either eligible professional or eligible hospital and satisfy the criteria for meaningful use for a payment year in order to qualify for incentive payments. Eligible hospitals (except cancer hospitals, children s hospitals, and CAHs) may qualify for payments under both programs. Cancer hospitals and children s hospitals may only qualify for incentive payments under the Medicaid program; CAHs may only qualify for incentive payments under the Medicare program; EPs may participate in only one program and must designate which program they choose. Medicare Incentive Payments for Hospitals (excluding cancer hospitals, children s hospitals, and CAHs) Federal Register pages CMS Proposal: Qualifying eligible hospitals would receive EHR incentive payments for up to four years. The first possible payment year would be FFY 2011, which begins on October 1, The last payment year for which a hospital may qualify is FFY 2015, which begins on October 1, For each qualifying year, the incentive payment would be calculated as an initial amount multiplied by the hospital s Medicare share and a transition factor. The initial amount would be calculated as a base amount ($2 million) plus a discharge-related amount ($200 per discharge for discharges between 1,150 and 23,000). The Medicare share would be calculated as the proportion of Medicare inpatient days to total inpatient days, with an adjustment to reflect charity care. The transition factor decreases the incentive payments over the four-year period. The formula can be represented as follows: Incentive Payment = Medicare Share = Transition Factor = [$2 million + ($200 * # discharges between 1,150 & 23,000)] * Medicare Share * Transition Factor Medicare Inpatient Bed Days {(Total Inpatient Bed Days) * [(Total Charges - Charity Care Charges) / Total Charges]} 100%, 75%, 50%, or 25% depending upon payment year All data for calculating the Medicare incentive payment would be taken from hospitals Medicare Cost Reports, including the data for charity care charges, which is expected to be available on the new Cost 12

17 Report worksheet S-10, which is to be effective for cost reporting periods beginning on or after February 1, CMS states that, if data on charity care is not available, data on uncompensated care would be used. If neither of these two data elements is available, CMS will assume the ratio of charges excluding charity care to total charges to be 1. Table 25 on page 1915 of the Federal Register (copy below) illustrates how the transition factors will be applied based upon a hospital s first qualifying year and how many years it has qualified. First Qualifying Year: Payment Year: % % 100% % 75% 100% % 50% 75% 75% % 50% 50% 50% % 25% 25% The CMS proposal would provide the largest incentive payments to early adopters of meaningful EHR technology. Later adopters would receive less incentive money in total. The maximum number of incentive payment years for any hospital would be four. The CMS chart implies that payments must be made in consecutive years, but the language of the proposed rule does not specify any such restriction. Eligible hospitals that do not qualify as meaningful users by FFY 2015 would not receive any incentive payments and would be subject to inpatient PPS payment penalties as follows: FFY 2015: Marketbasket reduced by 25% FFY 2016: Marketbasket reduced by 50% FFY 2017 and thereafter: Marketbasket reduced by 75% These payment penalties would be in addition to any other marketbasket penalties the hospital may incur for failing to meet the reporting requirements under RHQDAPU. By FFY 2017, hospitals that do not meet both the RHQDAPU and the meaningful use requirements would not receive any marketbasket update to their Medicare inpatient PPS payments. CMS, in this proposed rule, would direct the FIs/MACs to calculate and disburse the Medicare incentive payments, on an interim basis, once the eligible hospital has demonstrated that it qualifies as a meaningful user. The incentive payments would be based upon the prior year s Cost Report and available PS&R data, and would be subject to reconciliation upon final settlement of the appropriate Medicare Cost Report. Medicare Incentive Payments for CAHs Federal Register pages CMS Proposal: Qualifying CAHs may receive incentive payments in up to four payment years, beginning with cost reporting periods that start in FFY The year with a cost reporting period that begins in FFY 2015 is the last payment year for which a qualifying CAH may receive incentive payments. 13

18 Since CAH payments are based upon actual costs, including capital costs, the HITECH Act and the proposed rule allows for accelerated depreciation of the capital costs associated with implementation and support of meaningful use. The accelerated depreciation/reimbursement of these capital costs would only apply to relevant and qualifying assets and could only be used for new purchases or the remaining, undepreciated portions of existing assets. Qualifying CAHs would receive prompt interim payments (subject to reconciliation) equal to the reasonable depreciable cost of the asset multiplied by the CAH s Medicare share. The Medicare share for CAHs would be calculated in the same manner as for hospitals plus an additional 20 percentage points (not to exceed a total Medicare share of 100 percent). Eligible CAHs that do not qualify as meaningful users by FFY 2015 would not receive any incentive payments and would be subject to reduced cost-based payments as follows: FFY 2015: % of cost FFY 2016: FFY 2017 and thereafter: % of cost 100% of cost Medicare Incentive Payments for EPs Federal Register pages CMS Proposal: Qualifying EPs would receive up to five years of Medicare incentive payments. The incentive payments would be equal to the lesser of 75 percent of the physician s allowed Medicare charges for the payment year or a specified maximum. Similar to the transition factor for hospitals, the maximum payment for qualifying EPs would decrease over time, depending upon the first qualifying year and number of years of payments. CMS would make one consolidated annual payment to qualifying EPs in each payment year. The following table illustrates how payments would be made to qualifying professionals based upon first qualifying year and number of years assuming the maximum payment in each year: First Qualifying Year: Payment Year: $18, $12,000 $18, $8,000 $12,000 $15, $4,000 $8,000 $12,000 $12, $2,000 $4,000 $8,000 $8, $2,000 $4,000 $4,000 - Total $44,000 $44,000 $39,000 $24,000 - The maximum number of years for which a qualifying EP could receive incentive payments is five and the maximum total incentive payment is $44,

19 Qualifying EPs that practice predominantly in Health Professional Shortage Areas (HPSAs) would receive 10 percent additional incentive funding (a maximum of $48,400). CMS proposes to define an EP as practicing predominantly in a HPSA when he/she provides more than 50 percent of their Medicare-covered services in a HPSA. 15

20 Eligible EPs that do not qualify as meaningful users by FFY 2015 will not receive any incentive payments and will be subject to reduced payments as follows: FFY 2015: 1% payment reduction FFY 2016: FFY 2017 and thereafter: 2% payment reduction 3% payment reduction At the Secretary s discretion, additional payment penalties of up to 5 percent may be applied in 2018 and later years if fewer than 75 percent of EPs are meaningful users. The Secretary may also grant a hardship exception to individual EPs if the payment penalty would create a significant hardship. Medicaid Incentive Payments for Hospitals (excluding CAHs) Federal Register pages The HITECH Act mandates the federal government provide matching funds to the States for implementation of a Medicaid EHR incentive program. The matching funds are 90 percent of the costs of administering the program and 100 percent of the cost for incentive payments made to providers. The HITECH Act gives States some latitude regarding how many years of payments can be made and how those payments may be divided over the years. The limiting factors are 1) total incentive payments to a qualifying hospital may not exceed a predetermined maximum; 2) the minimum number of years of payments is three and the maximum number is six; 3) the last year for a qualifying hospital to receive any Medicaid incentive payments is 2016; 4) the incentive payment amount for any one year may not exceed 50 percent of the predetermined maximum; and 5) the incentive payment amount for any two-year period may not exceed 90 percent of the predetermined maximum. CMS Proposal: The maximum payment amount for any individual qualifying hospital would be calculated according to the Medicare payment formula, using a Medicaid share in place of the Medicare share, assuming four years of payment at the Medicare transition factors described above. The four-year total would then be the maximum amount available for the State to disburse to the qualifying hospital. Each State may use the same Medicare Cost Report data sources for calculating the maximum amount as are proposed for the Medicare calculation or they may use alternate data sources, such as State Medicaid Cost Reports. Any alternate data sources must be auditable. CMS also proposes, for the discharge-related payment portion, that States should the average volume growth rate for the past three years to project volume growth over the four years in the maximum calculation. There are no payment penalties for eligible hospitals that do not qualify for incentive payments by any certain date. Medicaid Incentive Payments for EPs Federal Register pages CMS Proposal: Medicaid incentive payments to qualifying EPs would be based on 85 percent of the net average allowable costs of purchasing, installing, and maintaining the certified EHR technology over a 6- year period. The maximum Medicaid payment for qualifying EPs would be $21,250 in the first payment year and $8,500 in each subsequent year, up to a total of 6 payment years. The maximum total Medicaid incentive payment, over six years, is capped at $63,750. Pediatricians with high Medicaid patient volumes (between 20 percent and 29 percent of total patient volume) would qualify for additional incentive payments. 16

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