CMS and ONC Propose Regulations on Meaningful Use of

Certified Electronic Health Records Technology

On January 13, 2010, the Centers for Medicare and Medicaid Services (CMS) published a proposed rule to implement provisions of the American Recovery and Reinvestment Act, commonly known as the Stimulus Bill, that provide initial incentive payments to eligible professionals (EPs) and eligible hospitals (EHs) participating in the Medicare and Medicaid programs that adopt and meaningfully use certified electronic health record (EHR) technology. Importantly, EPs and EHs should be aware that if meaningful use is not achieved by 2015, then such providers will be subject to reductions in Medicare reimbursement. The Office of the National Coordinator for Health Information Technology (ONC) also issued an interim final rule to adopt an initial set of standards, implementation specifications and certification criteria relating to such EHR technology that is closely related to and referenced in CMS' proposed rule.

CMS' goal is to define "meaningful use" in a way that is consistent with existing laws while allowing for a staged implementation over time to ensure EHR technology contributes to improving the efficiency and quality of the health care delivery system. In order to effectuate this goal, CMS plans to phase in more robust criteria for demonstrating meaningful use of certified EHR over three stages through the rulemaking process. Stage one will become effective in 2011, stage two in 2013, and stage three in 2015.

CMS' recent proposed rule focuses on the first stage, and includes the following information:

• Initial criteria an EP and EH must meet in order to qualify for incentive payments;

• Formula for calculating incentive payment amounts;

• Future payment adjustments under Medicare for covered professional services and inpatient hospital services provided by EPs and EHs failing to meaningfully use certified EHR technology; and

• Other program participation requirements.

Specifically, stage one criteria for meaningful use focuses on:

• Electronically capturing health information in a coded format;

• Using that information to track key clinical conditions;

• Communicating that information for care coordination purposes; and

• Initiating the reporting of clinical quality measures and public health information.

For stage one, CMS proposes criteria for meaningful use based on a series of specific objectives, each of which is tied to a proposed measure that all EPs and EHs must meet in order to demonstrate that they are meaningful users of certified EHR technology. CMS proposes 25 such objectives/measures for EPs and 23 for EHs. Beginning in 2011, EPs and EHs would be required to report the results of these objectives/measures through attestation. In an effort to ease the administrative burden of reporting clinical quality measures and to facilitate the routine reporting and use of this information, CMS proposes direct submission of clinical quality measures to CMS (or to the states for Medicaid) for 2012 and subsequent years.

The basic framework of the proposed rule provides that EHR incentive payments will be made to eligible providers who meaningfully use qualified EHR which have been certified by a certification organization recognized by the ONC. Each component is then broken down, defined and explained, including who is eligible for incentive payments under the Medicare and Medicaid incentive programs, what is meant by meaningful use, and how to demonstrate it. The ONC interim final rule focuses on what a qualified EHR is, what the criteria is for certification which is tied to the meaningful use objectives, the certification process, and how an organization becomes approved to certify qualified EHR.

CMS' proposed rule is complex and involves many important issues that should be reviewed and analyzed, but highlights of several important provisions are provided below. Hospital-based physicians would not be eligible for incentives under the proposed rule. In determining whether a physician is hospital-based, the emphasis is on where the physician provides the services and not the employer or billing arrangement. EHs may participate in both the Medicare and Medicaid incentive programs, but are limited to participation in only one state's Medicaid incentive program for a given year if a hospital services patients in more than one state. EPs must choose between participation in the Medicare incentive program or participation in the Medicaid incentive program and are permitted to switch one time between programs before 2015. EPs can receive incentive payments under the Medicare program beginning in calendar year 2011 and EHs in federal fiscal year 2011. Medicaid EPs can potentially receive payments as early as 2010 for adopting, implementing or upgrading qualified EHR technology. The proposed rule describes and distinguishes the Medicare and Medicaid EHR incentive programs. They closely track one another, with a few important differences, such as:

• Medicaid will not include the Medicare reimbursement reduction in 2015 for failing to achieve meaningful use;

• Medicare incentive program provides payments for meaningful use in year one;

• Medicaid incentive program provides payments for adopting, implementing or upgrading in year one;

• States are permitted to adopt a more rigorous definition of meaningful use;

• Eligible providers vary between the programs; and

• The last year an EP can initiate for Medicare incentive program is 2014 and for Medicaid it is 2016.

CMS anticipates that stage two will expand upon stage one criteria and focus on disease management, clinical decision support, medication management, patient access to their health information, transitions in care, quality measurement and research, and bi-directional communication with public health agencies. In this second stage, CMS may consider a more expansive application of the criteria to inpatient and outpatient hospital settings. Stage three will likely focus on achieving improvements in quality, safety and efficiency, patient access to self-management tools, access to comprehensive patient data, and improving health outcomes.

The comment period on CMS' proposed rule ended on March 15, 2010, and a final rule is anticipated by June 2010. If you have any questions about application of these proposed regulations or other questions about electronic health records, please contact Kevin Woodhouse, Chris Sears, or Margaret Emmert.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader must consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.