Meaningful Use for Hospitals and Their Physician Practices

1. Meaningful Use for Hospitals and Their Physician Practices Elise Ames - Implementation Specialist/Consultant

2. Disclaimer • Not legal analysis or advice • Preliminary Analysis based on reviewing CMS Final Rule, CMS guidance documents, and analysis by other health care policy organizations

3. Agenda • ARRA/HITECH Overview • Meaningful Use • Financial Incentives • Temporary Certification Program • Roadmap to Meaningful Use

4. ARRA/HITECH • The ARRA/HITECH Act provides Medicare and Medicaid financial incentives for the Meaningful Use (MU) of certified EHR technology by hospitals and non-hospital based professionals • Intent is to achieve improved outcomes through automation with 3 stages of MU envisioned • Outcomes for Stage 1: • Improve quality, safety, efficiency and reduce healthcare disparities • Engage patient and their families in healthcare • Improve care coordination • Improve population and public health • Ensure adequate privacy and security of ePHI

5. Financial Incentives • Eligible hospitals can receive incentive payments from Medicare and Medicaid programs, based on patient volume, revenue and actual EHR costs • Eligible professionals can receive incentive payments from either Medicare or Medicaid, based on patient volume, revenue and “net average allowable EHR cost” • Provider organizations that encompass eligible hospitals and eligible professionals can receive either or both hospital and EP incentives* * Subject to requirements related to Meaningful Use of certified EHR technology, or (for Medicaid ) adoption, implementation or upgrade of certified EHR Technology

6. Who is Eligible for Incentive Payments?

7. Medicare Incentive Time Line • Fall 2010 - Certification of EHR vendors will start • 2011-2012 – Hospitals and Eligible Professionals can begin using a certified EHR in a meaningful manner • Jan. 2011 – Registration with CMS can begin • April 2011 - Attestation of Meaningful Use begins • May 2011 - CMS payments will begin *Medicaid EHR incentives will be managed by states

8. Meaningful Use

9. Meaningful Use • Use ofcertifiedElectronic Health Record (EHR) technology in accordance with the Meaningful Use criteria* • Electronic exchange of health information • Quality reporting *Medicaid allows hospitals and EPs who adopt, implement or upgrade to certified EHR technology to receive the first year incentive payment (through attestation) without demonstrating Meaningful Use

10. Meaningful Use Requirements for Stage 1 • Published in CMS final rule July 2010 • In addition to core requirements there is also a “menu” of 10 additional requirements from which 5 must be chosen by hospitals and eligible professionals • The final rule specifies the method of MU reporting (measure or attestation) with a numerator and denominator defined for each measurable criterion • A hospital or EP who believes that a requirement does not apply to them based on the exclusion criteria defined in the final rule may attest to this and have the number of MU criteria reduced

11. Meaningful Use Requirements Future Stages • Stage 2 • Stage 1 menu set will be transitioned into core set • Administrative transactions will be added • CPOE measurement will go to 60% • CMS will evaluate additional criteria and probably increase thresholds for existing • Stage 3 • Will be further defined in next rulemaking

12. Incentives for Hospitals

13. Medicare Hospital Incentive Payment Timelines • Can receive up to four years of incentive payments • First possible payment is in FY 2011 • begins October 1, 2010 • Last possible year to qualify for incentives is FY 2015 • begins on October 1, 2014 • Penalties begin in 2015 for failure to achieve Meaningful Use

14. PPS Medicare Hospital Incentive Calculation • For each payment year the incentive amount is based on: • An initial amount of $2,000,000 + a discharge-related amount ($200 x number or discharges between 1,150 and 23,000) • The Medicare share (based on volume and charges) • A transition factor for each payment year that reduces the payments over time

15. Transition Factor

16. Estimated Medicare Incentive Payment(PPS Hospital Example) Total Estimated Incentive Payment = $5,762,220 assuming MU by 2013 http://marketplace.himss.org/acct618b/Default.aspx?tabid=226

17. CAH Medicare Hospital Incentive Calculation • For each payment year the incentive amount is based on: • Actual costs (including depreciation) of certified EHR technology • The Medicare share (same calculation as PPS Hospitals but add 20%) • A transition factor for each payment year that reduces the payments over time

18. Hospital Medicaid Incentives • 10% Medicaid volume and ALOS < 25 days • Calculation is the same for all eligible hospitals • Four payment years between FY 2011 and FY 2016 • Payments reduced each year by transition factor • Payments in years 2-4 adjusted by hospital growth rate for the prior 3 years

19. Hospital Medicaid Incentive Calculation • For each payment year the incentive amount is based on: • An initial amount of $2,000,000 + a discharge-related amount • The Medicaid share based on volume and charges • A transition factor for each payment year that reduces the payments over time • First payment year uses prior fiscal year discharges • Subsequent years’ discharge-related amount will be based on the hospital’s average annual growth rate for the 3 most recent years of available data

20. Medicaid Hospital Example • 2010 discharges = 2000 • Medicaid inpatient bed days = 7000 (each year) • Total 2010 inpatient bed days = 21,000 • Total charges – charity care = $8,700,000 • Total charges = $10,000,000 • Average annual growth rate = .0213

21. Estimated Medicaid Incentive Payment Total Estimated Incentive Payment = $ 2,069,936 assuming MU by 2013

22. Incentives for Eligible Professionals

23. EP Incentives • Non hospital-based EP’s must choose to receive incentives from either the Medicaid or Medicare program • EP’s may select Medicare or Medicaid incentive on a individual provider basis • An EP may switch incentive programs one time during the incentive period

24. Definition of Hospital-Based Provider • Final rule clarified definition of “hospital-based” providers who are excluded from the incentive program • A provider employed by a hospital who has 90% of services classified under place of service code 22 (outpatient hospital) is considered an Eligible Professional • Specifically not eligible are Radiologists, Anesthesiologists, Hospitalists, and ED Physicians

25. EP Medicare Incentive Timelines • Can receive up to 5 years of incentive payments • First possible payment is in Calendar Year 2011 • begins January 1, 2011 • No payments will be made after 2016 • EP’s that are Meaningful Users by 2012 will maximize their incentive value • Penalties begin in 2015 for non-Meaningful Users

26. Maximum Medicare EP incentives * No Medicare early adoption option

27. EP Qualifications for Medicaid Incentive * Second year requires a full year of patient volume

28. EP Medicaid Incentive Timeline • First possible payment year is 2011 calendar year • 6 years of payment, and the first payment year cannot occur after 2016 • First year payment can be for Adopting, Implementing or Upgrading certified EHR technology rather than attaining Meaningful Use

29. Maximum EP Medicaid Incentive • 1. Flat fee payment based on 85% of EHR “net allowable costs” • 2. Max. incentive for Pediatrician, with 20% patient threshold, is $42,500

30. ONC Temporary Certification Program

31. ONC Temporary CertificationProgram Timeline • June 18th 2010 – ONC established temporary certification program – including “final temporary” certification criteria • August 31, 2010 – First ONC-ACTB’s announced(No surprise, CCHIT is one) • Sunset date is December 31, 2010 unless ONC fails to establish a permanent certification program (rule expected Fall 2010)

32. Certification • EHR certification is the software vendor’s responsibility • Unless you have “self developed software” • Systems may be certified as • “Complete EHR Systems” • “EHR modules” • EHR Modules may be certified if they meet just one certification criterion (plus security) • The final temporary certification rule requires that systems must be able to report the numerator and denominator for each measure

33. The Road to Meaningful Use • Assessment and Gap Analysis • Planning • Implementation and Reporting

34. Assessment and Gap Analysis • Is needed automation in place for each requirement? • For each system/module needed • When will it be certified? • Which version? • Conduct HIPAA Security Risk Assessment • Estimate potential incentives from Medicare and Medicaid for both hospital and providers • Assess interoperability

35. Planning • Assign overall accountability • Identify and assign tasks • Workflow changes • IT implementations • Reporting • Develop schedule and budget • Select menu items for hospital and EPs based on level of effort, cost and timeline

36. Implement and Report • Design process changes • Implement and/or upgrade systems • Test reporting mechanisms • Finalize plans for attestation and reporting

37. How VITL Can Help • VITL can provide assistance with: • Gap analysis and readiness assessment • Planning • Implementation

38. Questions?