Stimulus Package Could Convert More Physicians to EHRs

April 01, 2009

April 1, 2009 — One hundred years ago, the federal government didn't write physicians a check for installing new-fangled telephones in their offices, and it didn't penalize them if they didn't.

Then again, it wasn't operating 2 budget-breaking healthcare programs called Medicare and Medicaid. So Washington didn't care how up to date or efficient physicians were.

In the 21st century, however, it's taking a carrot-and-stick approach with another technology called the electronic health record (EHR). The latest example is the American Recovery and Reinvestment Act (ARRA) that President Barack Obama signed in February. This $787 billion economic stimulus package sets aside at least $17 billion (some analysts put the figure higher) in incentive payments to physicians and hospitals that adopt EHRs, also called electronic medical records, or EMRs.

Lawmakers aren't in love with the technology for its own sake. They view a national network of EHRs as a means to improve the quality of care (no more illegible handwriting, for example) as well as dramatically lower Medicare and Medicaid costs (no more need to repeat a test because another physician's paper chart isn't handy). They're so gung-ho to digitize healthcare that they crafted ARRA to punish physicians who refuse the EHR carrot and persist with paper.

With ARRA, Washington would like to create a bandwagon for EHRs, and so would software vendors who spot a potential bonanza. One of them, eClinicalWorks, has partnered with Wal-Mart and Dell to offer a package deal of software, hardware, installation, training, and first-year support through Sam's Club stores nationwide, all with the purpose of helping physicians earn their incentive money.

Will a trip to Sam's speed up the conversion to EHRs, which have been around for 40 years? Only 17% of office-based physicians use some sort of EHR, according to a study that appeared in the July 3, 2008, issue of the New England Journal of Medicine. And only 4% have the kind of comprehensive EHR system promoted by the federal government, capable of sending prescriptions directly to a pharmacy's computer and providing "clinical decision support" — a drug-interaction alert, for example. The US Centers for Disease Control and Prevention put the overall EHR adoption rate at 38% in 2008, but it also reported that just 4% of physicians use comprehensive EHRs.

Hospitals are even less computerized. A study published online March 25, 2009, in the New England Journal of Medicine (by the same researchers who studied physician adoption rates) reported that just 1.5% of nonfederal hospitals have a comprehensive EHR system across all clinical units, while 7.6% have a basic system in at least 1 unit.

Incentives Come With Hoops Galore

One barrier to EHR adoption has been price. When software, installation, training, and support are tallied, a comprehensive system can easily cost more than $40,000 per physician over 5 years, and that's not counting hardware, according to Mark Anderson, a healthcare information technology consultant in Montgomery, Texas.

ARRA tries to lower the price barrier. You can receive up to $44,000 over 5 years under Medicare if you meet complicated qualifications for EHR use — more on those later. Working in a "health professional shortage area" entitles you to 10% more. But to receive the maximum $44,000, you must qualify as an EHR user beginning in either 2011 or 2012. Waiting until 2013 or 2014 reduces your bonus period — all payments cease after 2016 — and your total haul. If you get around to first qualifying in 2015, you receive nothing. So early birds get more of the worm.

Anyone who treats Medicare patients without an EHR by 2015 will see reimbursements decrease by 1% that year. The pay cut grows to 2% in 2016 and 3% in 2017 and every year afterwards. . If EHR adoption fails to hit the 75% mark by 2018, the Department of Health and Human Services (HHS) can boost the penalty to 4% that year and a maximum 5% in 2019 and beyond.

Incentives under Medicaid are more generous — up to $63,750 over 6 years, assuming you rely on the government program for at least 30% of your patients. If you're a pediatrician and Medicaid accounts for 20% to 30% of your volume, you can receive a maximum $42,500. The Medicaid incentive doesn't come with paper-chart penalties.

Physicians who have already implemented EHRs will still be eligible for either the Medicare and Medicaid incentives that go into effect in 2011, Robert Tennant, a senior policy advisor for the Medical Group Management Association (MGMA), told Medscape Medical News. You cannot receive incentives under both programs, however, so you must choose one.

To qualify for a check, your EHR system must be able to "talk" to systems from other vendors, and it must have advanced features such as clinical decision support. You also must demonstrate that you're a meaningful user of the technology — that is, you electronically prescribe, exchange data with other providers, and generate reports on how you perform on as yet unspecified "clinical quality measures." Such measures may resemble those in Medicare's Physician Quality Reporting Initiative (PQRI), such as the percentage of patients with diabetes who receive a yearly eye examination.

Finally, your EHR must also be certified. ARRA does not specify who will supply this stamp of approval, but the feds will likely choose the Certification Commission on Healthcare Information Technology (CCHIT), said Robert Tennant. He and other students of ARRA recommend that incentive-seeking physicians not only buy CCHIT-certified programs, but also contractually require vendors to meet all the standards that emerge as the law gets fleshed out.

While upfront financial support would have been ideal, the Medicare and Medicaid incentives will only be doled out after you've invested in an EHR, said Tennant. "This could act as a disincentive for EHR adoption, especially during the economic downturn." However, you may be able to get financing through state loan programs envisioned in ARRA. This money would come from $2 billion allocated to an HHS agency that promotes EHRs.

Physicians View Incentives With Hope, Skepticism, Scorn

The federal pressure to digitize has been building. Last year, Congress applied the carrot-and-stick technique to eprescribing in the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA). Those who eprescribe in 2009 and in 2010 qualify for a 2% raise based on their total Medicare revenue. The bonus decreases to 1% in 2011 and 2012, to 0.5% in 2013, and then disappears (physicians who receive the EHR bonus cannot receive the eprescribing bonus).

MIPPA also imposes a 1% penalty on physicians who do not begin eprescribing by 2012. The penalty increases to 1.5% in 2013 and to 2% in 2014 and beyond.

For the most part, organized medicine is holding its nose at the penalties while it applauds the bonuses.

"People respond better to positive incentives," family physician Douglas Henley, MD, executive vice president and chief executive officer of the American Academy of Family Physicians (AAFP), told Medscape Medical News. "Fortunately, in the case of EHRs, the stick has been delayed well into the future, and the carrot is substantial."

Robert Tennant added that like MIPPA, the economic stimulus legislation contains a hardship clause that exempts physicians who might live in an area lacking high-speed Internet access.

Many physicians at the grassroots level, however, view the federal jump-start for EHRs with skepticism, if not outright hostility. For internist Audrey Corson, MD, in Bethesda, Maryland, there are too many unknowns. "Doctors will have to select an EHR without knowing what standards will be adopted, and if their vendor will survive," Dr. Corson pointed out.

Some clinicians bristle at the notion of having to buy CCHIT-certified programs, which generally cost far more than noncertified programs and have a reputation for being hard to use. "I can't afford a system that will slow me down," said family physician Frederic Porcase, MD, in Jacksonville, Florida.

Dr. Porcase also wonders whether the incentive payments will be as hit-or-miss as those under the PQRI program, which pays bonuses to physicians who report their performance on quality measures. In the program's first year, only 52% of participating physicians received bonuses, and most physicians found Medicare's reporting process cumbersome, according to an MGMA survey.

Still others worry that the billions in incentives could be ill-spent on EHR systems that right now cannot exchange data with each other or with personal health records controlled by patients. ARRA makes interoperability a requirement for qualifying EHRs, but the standards for interoperability have yet to be specified. Dr. Henley of the AAFP said nailing down that language is paramount.

"If all we do with this bill is to create islands of electronic data that can't be transferred," he said, "we haven't accomplished anything."

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