Share on Facebook

Share on Facebook

The Centers for Medicare & Medicaid Services (CMS) will instruct all of its Medicare contractors not to evaluate or enforce the supervision requirements for therapeutic services provided to outpatients in Critical Access Hospitals (CAHs) for the duration of calendar year (CY) 2010.  The final 2010 hospital outpatient prospective payment system rule had specified that a “direct supervision” standard is required for therapeutic services furnished in hospital outpatient departments.  CMS believed this requirement to be a clarification of longstanding policy, but the rule has generated concern among some rural providers who had previously interpreted the CMS policy to require only “general supervision” and who believe that it may be difficult to meet this requirement.

CMS plans to revisit the issue of supervision for therapeutic services provided to hospital outpatients in CAHs through the annual rulemaking cycle for CY 2011.  CMS continues to expect CAHs to fulfill all other Medicare program requirements when providing services to Medicare beneficiaries and when billing Medicare for those services. While CMS is instructing contractors not to enforce the supervision requirements in CAHs for CY 2010, we continue to emphasize quality and safety for services provided to all patients in CAHs.

Share on Facebook

Share on Facebook

Today the Department of Health and Human Services released a Notice of Proposed Rulemaking for the Establishment of Certification Programs for Health Information Technology (Health IT). The rule first proposes the creation of a temporary certification program for Electronic Health Records (EHRs) and EHR modules. This serves as a bridge to the second, permanent certification proposal, which establishes detailed guidelines to support an ongoing program of testing and certification of health IT. The meaningful use of certified EHR technology is a requirement for qualifying for incentive payments under the Medicare and Medicaid EHR Incentives program.  The temporary program therefore is critical as it assures the availability of Certified EHR Technology prior to the date on which health care providers may begin demonstrating meaningful use.

Significant stakeholder feedback was taken into account as these rules were developed, including formal recommendations from the HIT Policy Committee (a Federal Advisory Committee). Other comments are invited  on the proposed rule which can be made at http://www.regulations.gov during the public comment period.

Share on Facebook

Share on Facebook

What is the 3-1-1-1-0 Recommendation?

The HIT Policy Committee today created a framework for much needed flexibility within the EHR incentive program. Rather than requiring providers to meet all of the 20-plus meaningful use objectives (as is currently required in the CMS proposed rule), the Policy Committee recommended that providers be able to defer a certain portion of meaningful use objectives without jeopardizing their incentive payments. The rationale given for this was that an “all-or-nothing approach may not accommodate legitimate, unanticipated, local circumstances and constraints.”

The American Hospital Association has advocated for this type of flexibility, and I have supported the approach in a recent blog “CMS Proposed Rule: How to Stretch Without Breaking.”

The way 3-1-1-1-0 works is that providers would have the ability to defer a certain number of objectives from 4 of the 5 meaningful use domains: 3 objectives from the quality/efficiency domain, 1 objective from the patient engagement domain, 1 from the care coordination domain, 1 from the population health domain, and 0 from the privacy and security domain. However, a list of 7 objectives would remain mandatory. (See the list at the end of this blog)

When I first heard of this new approach, I was excited by the prospect of finally being able to blog about a positive development in an HIT incentive program that has the potential, if only it were properly structured, to improve care quality and efficiency in rural communities.

Unfortunately, among the mandatory objectives is one that effectively undermines the recommendation’s intent to “accommodate legitimate constraints.” By recommending that computerized provider order entry (CPOE) be mandatory rather than deferrable, the HIT Policy Committee has given with one hand and taken away with the other.

Why CPOE Should be Deferrable

Of all the meaningful use objectives, CPOE is the poster child for deferability. This is because (1) it is the most complicated to achieve[1], (2) it is a capstone application that requires that most other elements of the EHR be in place before it can be implemented, and (3) if implemented without the time required and attention paid to success factors, CPOE is the most likely implementation to produce numerous unintended consequences that will increase medication errors, reduce care quality, and undermine efficiency.

Let’s consider just one of the dozens of CPOE success factors identified as “imperative”  in numerous case studies: the importance of implementing an EHR portal (along with the clinical systems that feed the portal) prior to any hospital CPOE implementation. The Advisory Board articulates this success factor as follows:

“CPOE entails a radical change to the day-to-day workflow of most physicians; hospitals are advised to introduce new functionality incrementally, gradually ramping up toward more complicated applications.

“Before deploying physician ordering functionality, hospital builds a user-friendly interface for physicians to retrieve all available patient information; goal is to entice physicians with convenient information access before asking them to actually input information.

“Once up and running, hospital ensures all physicians are trained and using the electronic record before deploying orders functionality; mandate enforced by requiring electronic signature and eliminating paper copies of the record.

“Building widespread portal usage before deploying physician ordering functionality accelerates the timetable for universal order entry, allows hospitals to tackle the initial physician adoption challenges-overcoming the fear of using the computer-before attempting to introduce order entry.”[2]

The takeaway from this is that all or most of a hospital’s clinical information needs to be in electronic form before CPOE can be effectively implemented. Lab, pharmacy, radiology, nurse documentation, EHR portal, e-signature and many other applications are required before even beginning the process of CPOE implementation. Mandating CPOE as part of Stage 1 meaningful use therefore ensures that most hospitals at early stages of EHR adoption will not be able to access any HIT incentives.

On the issue of unintended consequences, the Oregon Health and Science University identifies 9 categories of CPOE-related unintended consequences. The only one I will reference is their category 7: Generation of New Kinds of Errors.

“CPOE systems prevent some types of errors while creating or propagating new ones. New CPOE-related errors result from: problematic electronic data presentations; confusing order option presentations and selection methods; inappropriate text entries; misunderstandings related to test, training, and production versions of the system; and workflow process mismatches. Recognizing current unintended consequences should encourage system designers to optimize human computer interface design, and to exert caution when implementing new alerts.”[3]

These and other unintended consequences can certainly be overcome, but who among us doubts that rushing providers to CPOE without giving them time to implement the requisite base of applications, according to established success factors, will lead to failed implementations and reduced quality and efficiency on an unprecedented scale?

Recommendation

Let’s include early stage providers in the HIT incentive program by making CPOE a deferrable objective.

I would like to hear other perspectives on this important issue, so please post comments, especially if you disagree.

Figure 1: Mandatory Objectives (from HIT Policy Committee presentation: “Proposed Recommendations on MU Notice of Proposed Rule Making.)

[2] Computerized Physician Order Entry: Securing Physician Acceptance, Advisory Board, 2004

[3] POET Recommendations: Types of Unintended Consequences of CPOE, April 20, 2007

Share on Facebook

Figure 1: Hospitals (I Believe) Likely to be Excluded from Incentives

Let’s Get Meaningful

One thing we can all agree on: for the EHR incentive program to be meaningful, it needs to be designed to support our national goals of reducing healthcare costs and increasing healthcare quality. We’re moving to electronic health records not for the technology’s sake, but because we believe the technology is a means to actually help people and make things better.

The main area where people disagree is whether or not the meaningful use bar has been set too high to facilitate the accomplishment of these common goals. Those who argue for a high bar believe that lower standards will lead to watered down benefits. Those who argue for a lower bar believe that unachievable standards will lead to dramatically fewer providers making EHR adoption (and accompanying quality and efficiency) gains.

Mixed into all this are accusations from high-bar proponents that people who disagree with them are lazy whiners who should be focusing on meeting the standards rather than arguing against them, as well as suspicions from lower-bar proponents that advanced-EHR hospitals, systems, and provider groups have found a way to skim billions from the tax-payer trough for work that they have already done.

Let’s leave behind the name-calling and get meaningful!

Stretch Don’t Break

According to ONC, the principle for determining the meaningful use bar is to find the appropriate balance between feasibility and urgency. National Coordinator Dr. David Blumenthal has recently said that he intends to “stretch but not break” the healthcare community in setting the threshold for meaningful use.

I agree with this principle of “stretch don’t break,” but it’s unclear to me how and even whether it is being applied. What seems to be getting lost in the discussion is that it is logically impossible to “stretch not break” hospitals and physicians that are at very different stages along a continuum of EHR adoption by using a single rigid meaningful use standard. If you stretch providers at advanced stages of EHR adoption, those at early stages will break. If you don’t break providers at early stages of adoption, those at advanced stages won’t stretch.

Figure 1, at the top of this commentary, illustrates this issue. The colorful 7 stage grid includes HIMSS-provided percentages of critical access hospital (CAH) compared to prospective payment system (PPS) hospital EMR adoption statistics. I have added three text boxes to indicate (1) the CMS Stage 1 meaningful use threshold (black); (2) my assessment of the HIMSS stages that are least likely to meet these thresholds (red); and (3) my assessment of the HIMSS stages most likely to meet these thresholds (blue).

In the Figure 1 comparison, 70% of CAHs are at stages that I believe are less likely to achieve meaningful use, compared to 46% of PPS hospitals. 48% of CAHs are at the two lowest stages of adoption, compared to 15% of PPS hospitals.

We could (and should) do this same analysis with rural, small, disproportionate share, independent, and other categories of hospitals. The point of this is that when we talk about “stretch don’t break,” we need to clearly identify where providers are starting from, what timing requirements we are assuming are reasonably achievable, and what types of providers we are specifically referring to.

Americans who live in communities where providers are likely to have lower levels of EHR adoption have a right know that ONC and CMS have decided to “break” their local rural providers in order to “stretch” the urban ones a hundred miles away.

How to Stretch All Providers

If we are truly committed to stretching without breaking, how do we do this for all of our providers, whether urban or rural, small or large, independent or system-owned, PPS or CAH?

One way is to create more than one meaningful use bar, so that providers at different stages can all be incented to make meaningful EHR adoption strides with consideration paid to their starting points.

Another way is to allow for flexibility. Instead of creating a one-size-fits-all, all-or-nothing meaningful use standard, why not allow providers to select the 90% of the requirements that are most suitable for their environments? If we force providers to move faster than what is a reasonable stretch we will in all likelihood see lower not higher quality. (See my blog on this issue at http://www.worh.org/hit/2010/01/cms-proposed-rule-threatens-care-quality-in-rural-communities/)

A third way is to simply exempt certain types of providers from a portion of the meaningful use requirements, at least initially. If we know that it is unreasonable to think that 70% of CAHs and rural hospitals can implement CPOE in time to receive incentives that could go toward other important EHR adoption work (such as Pharmacy systems with contraindication checking capabilities and inpatient nurse documentation systems), then why are we requiring CPOE for these types of hospitals?

There are those who have come to the false conclusion that there is a secret sauce, an EHR implementation recipe that, if only all providers follow the instructions in the exact same way, will somehow fix the problems of our healthcare delivery system. My experience, which I think is borne out by most of the existing research, is that no such single recipe exists. Rather, EHR implementation success depends on an organization’s ability to ascertain the distinctive combination of interventions and strategies that will work within the organization’s specific environment.

According to AHRQ’s Costs and Benefits of Health Information Technology, “HIT implementation consists of a complex organizational change undertaken to promote quality and efficiency. Studies of organizational change are fundamentally different from studies of medical therapies. Organizational interventions interact with a wide range of organizational system components. To be successful, they must address these components in a locally effective way. Thus, in a sense, these interventions are by nature not widely generalizable…”

How are we accounting for this dynamic complexity by imposing the same rigid all-or-nothing meaningful use standard on every type of provider?

Share on Facebook

Summary

CMS’ claims regarding the financial benefits of electronic health records (EHRs) for providers are not supported by their source reference material; and the benefits CMS predicts are not likely to materialize, especially for small rural providers.

Due to their low volumes, small rural providers are much more likely to see a negative financial ROI on their EHR investments. So EHRs will in all likelihood increase the cost of rural healthcare. However, when implemented properly EHRs have the potential to generate other benefits, such as increased quality and patient satisfaction.

CMS should acknowledge that small rural providers have distinctive EHR challenges and should adjust the incentive program so that meaningful use criteria are achievable and flexible enough to meet these rural provider challenges.

Background

In supporting its case for the benefits of HIT for “all” eligible healthcare providers, CMS states: “there are benefits that can be obtained by eligible hospitals and EPs, including: reductions in medical record-keeping costs, reductions in repeat tests, decreases in length of stay, and reduced errors.” CMS goes on to reference a 2008 Congressional Budget Office (CBO) study, Evidence on the Costs and Benefits of Health Information Technology[1], to support this position, and then makes the claim that: “Certified EHR technology has the potential to help reduce medical costs through efficiency improvements, such as prompter treatments, avoidance of duplicate or … unnecessary services, and reduced administrative costs (once systems are in place), with most of these savings being realized by providers rather than by Medicare or Medicaid.”

If one reads the CBO study that CMS references (as well as another federal agency’s study: AHRQ’s Costs and Benefits of Health Information Technology[2]) it becomes clear that CMS has misstated the conclusions drawn by federal researchers.

What the CBO Really Says

Let’s start by looking at what the CBO really says about the examples given by CMS as ways for providers to achieve HIT-related savings:

1. Reductions in Medical Record-Keeping Costs: “Research has shown that physicians’ offices can realize savings from reducing the pulling of paper charts and the use of transcription services (Wang and others, 2003). Those savings might not apply in very small practices, however, because such offices typically have low but relatively fixed costs related to medical records and the physicians who work there are much more likely than those in larger practices to write notes manually in the charts. Savings from less pulling of charts is typically accomplished by reducing the number of staff required to do so. But that type of staff reduction may be impossible in a small practice if the employee who pulls charts also performs other tasks (such as scheduling and billing), as is usually the case.”

This is a key point that is also true of small rural hospitals. Financial benefits that may be achievable in large provider environments are very unlikely to be achievable in small provider environments.

2. Reductions in Repeat Tests: “For the most part, any savings from avoiding duplicate or inappropriate diagnostic tests would be realized primarily by a health insurance plan, not a health care provider. Thus, the extent to which savings in this area would actually benefit providers is unclear.”

3. Decreases in Length of Hospital Stays: “Reducing the length of time required to process a lab test or diagnostic image from the time it is ordered to the moment the results are delivered only speeds up the delivery of care; it does not necessarily reduce the amount of care provided or its associated cost. Moreover, the promise of shortening the average length of time that a patient stays in the hospital might not be very compelling to a typical institution because it already faces a sizable financial incentive to pare its costs per admission.”

4. Reduced Errors: “Because medical errors can lead to the use of additional health care services, health IT systems that successfully reduce such errors may also diminish expenditures on health care. The effectiveness of health IT in reducing errors, however, depends largely on the type, setting, and quality of the systems.”

I would add to the CBO assessment that reducing errors requires that appropriate time be given for providers to perform culture change, workflow redesign, and education activities. CMS’ proposed rule does not provide sufficient time for providers to implement EHRs in a way that will promote quality improvement.  For more on this, see http://www.worh.org/hit/2010/01/cms-proposed-rule-threatens-care-quality-in-rural-communities/

5. Savings Realized by Providers (Rather than Payers): “Many, if not most, providers would like to make more use of health IT in their practices, recognizing the technology’s potential to improve the quality of the care they provide, increase convenience for their patients, and perhaps reduce costs in their office. But many of those benefits accrue to others rather than to the providers who purchase the health IT system. As a result, many providers cannot generate the additional income necessary to justify the significant investment in time and money that the adoption of such a system would require.”

In nearly every example, the CBO report seems to contradict the conclusions drawn by CMS in the proposed rule, including that the supposed financial benefits of HIT will accrue to providers rather than CMS.

Perhaps the most troublesome proposed-rule conclusion (”any impacts that would arise from the implementation of certified EHR technology in a rural eligible hospital would be positive.”) is further contradicted by the following CBO analysis:

“A mandate to purchase health IT, or to purchase a particular functionality such as e-prescribing, by contrast, would probably induce nearly all providers to adopt it at a small cost to the government, and might produce net savings in health care spending. The requirement could be enforced either by not paying providers who failed to adopt such a system for other health care services that they delivered, or by imposing a specific penalty on those who did not comply. A less prescriptive version would involve paying providers without a health IT system less for any given procedure than providers with a health IT system were paid, which would create an implicit penalty for failing to adopt the technology. Either of those approaches, though, would come at a cost to providers, and that cost would be greatest for providers who were least able to capture the financial benefits of health IT systems.”

Due to the reality that HIT system financial ROI depends on provider volume levels, small rural providers will be the least able to capture the financial benefits of health IT systems.  According to the CBO, these providers will endure the greatest costs under an HIT incentive program.

How HITECH and the CMS Proposed Rule Will Raise the Cost of Rural Healthcare

According to the CBO, “Total costs for a health IT system include: the initial fixed cost of the hardware, software, and technical assistance necessary to install the system; licensing fees; the expense of maintaining the system; and the “opportunity cost” of the time that … providers could have spent seeing patients but instead must devote to learning how to use the new system and … adjust their work practices accordingly.”

Small rural hospitals and clinics (particularly those that do not get assistance from larger hospitals and systems) will likely see increased costs due to the following reasons:

1. Many small rural providers will not receive incentives to help pay for a portion of the above costs due to the fact that they are significantly farther behind with their EHR adoption efforts and are therefore less likely to achieve meaningful use and qualify for incentives.

2. Whether they receive incentives or not, due to the reasons discussed earlier, small rural providers are much less likely to attain a positive HIT system financial return on investment. Small rural hospitals and clinics do not have extensive chart-pulling and transcription staffs to downsize in order to generate a positive return.

According to a University of Iowa study, “the implementation of CPOE in rural or critical access hospitals may depend on net increase in operating costs. Adoption of CPOE may be financially infeasible for these small hospitals in the absence of increases in hospital payments or ongoing subsidies from third parties.”[3] CPOE is just one example of many HIT systems that do not scale down to create positive financial ROI for providers of a certain size.

3. One issue that has not been commonly discussed is that AHA and other surveys indicate that annual hospital HIT operating costs are more than double their HIT capital costs. Maintenance costs to the vendor average roughly 15-20% of the cost of the hardware and software, but this is just a fraction of what it costs to maintain an HIT environment, with most of the rest of the costs relating to the FTEs needed for ongoing network and system support. Small rural hospitals, which usually have 1 or 2 HIT FTEs, will be required to double or sometimes triple their HIT staffing levels in order to adequately support advanced EHRs.

For more information on how EHR system adoption impacts hospital IT FTE levels, see our Density of HIT Adoption in Rural Wisconsin Hospitals report.[4]

4. Critical Access Hospitals (CAHs) are being incented based on how much they spend on depreciable assets of “qualifying EHRs.” This prohibits CAHs from receiving incentives for costs associated with Application Service Provider (ASP) and/or cloud computing models (generally leasing arrangements), which can reduce the total cost of maintaining HIT applications, since they reduce the FTEs required to support the EHR systems. Ironically, those hospitals that can most benefit from ASP models are not being incented to utilize them to reduce their total cost of ownership. (PPS hospitals can use ASP models without jeopardizing their incentives.)

So who will be paying for all these additional costs? The answer is that everyone will be paying. The providers themselves will be paying. Private pay patients will likely see associated cost increases. And in the case of critical access hospitals (reimbursed at 101% of cost by CMS for their Medicare populations), CMS will also be paying.

Recommendation

Even if advanced EHRs increase the cost of rural healthcare, when implemented properly they have the potential to generate other benefits, such as increased quality and patient satisfaction. If rural providers are not to be left behind, we need to make this investment. But we need to do it wisely, by acknowledging that small rural providers have distinctive challenges, and by designing the incentive program in a way that flexibly optimizes the total value equation for these providers and their patients. Not by doing what CMS has done in their proposed rule, which is to effectively exclude those at early stages of EHR adoption and pretend that these challenges don’t even exist.

[2] http://www.ahrq.gov/downloads/pub/evidence/pdf/hitsyscosts/hitsys.pdf

[3] “Implementation of Hospital Computerized Order Entry in a Rural State: Feasibility and Financial Impact,” Robert Ohsfeldt et all, JAMIA 2005;12:20-27 doi:10.1197/jamia.M1553

[4] http://www.rwhc.com/Papers/Density.pdf

Share on Facebook

CMS Excludes Most “Provider-Based” Clinics from All EHR Incentives (1-29-10: revised to clearly indicate that RHCs are eligible for Medicaid incentives, whether or not they are provider-based)

On December 30^th, CMS released its proposed rule for the ARRA electronic health record incentive program. Among the issues that will impact rural providers is which physicians will qualify for the Medicare and Medicaid eligible professional incentives.

Summary

My interpretation of which eligible professionals (see Key ARRA Language for definitions of eligible professional) qualify for the incentives is as follows:

• Eligible professionals that practice in RHCs and FQHCs are not eligible for Medicare incentives. They are eligible for Medicaid incentives if they have at least 30% patient volume attributable to “needy” patients.
• Eligible professionals that practice in clinics designated as “provider-based” (except the RHCs mentioned above) are not eligible for either Medicare or Medicaid incentives
• Eligible professionals that practice in independent or non-provider-based hospital-owned clinics (that use place of service code 11 on their 1500s) are eligible for the Medicare incentives. They are also eligible for the Medicaid incentives if they have at least 30% Medicaid volume (20% if they are Pediatricians). But they can participate in only one of the two (Medicare or Medicaid) programs
• See next sections for language and rationale supporting this interpretation

The impact of this incentive structure is that all physicians practicing in non-RHC “provider-based” clinics (many of which are in rural communities) will be unfairly excluded from much needed incentives. CMS should revise the proposed rule to create a distinction between hospital-based physicians (i.e. physicians that predominantly use the hospital’s inpatient EHR, such as pathologists and ER physicians) and physicians that practice in clinics, including provider-based clinics (i.e. physicians that predominantly use a physician clinic EHR). The latter physicians should all be eligible for incentives, with the understanding that provider-based clinics in CAHs cannot claim both eligible professional and CAH incentives for costs associated with the same EHR modules.

Key ARRA Language

ARRA states that “No incentive payment may be made under this paragraph in the case of a hospital based eligible professional … a hospital-based eligible professional means, with respect to covered professional services furnished by an eligible professional during the EHR reporting period for a payment year, an eligible professional, such as a pathologist, anesthesiologist, or emergency physician, who furnishes substantially all of their services in a hospital setting (whether inpatient or outpatient) and through the use of the facilities and equipment, including qualified electronic health records, of the hospital.  The determination of whether an eligible professional is a hospital based EP shall be made on the basis of the site of service (as defined by the Secretary) and without regard to any employment or billing arrangement between the eligible professional and any other provider.”

In ARRA, covered professional services are defined as “the meaning given such term in (k)(3).“  [1848 (k)(3) of the Social Security Act established RBRVS (Resource-Based Relative Value Scale) under which physicians bill Medicare for reimbursement using 1500 forms. The implication of this is that those clinics that do not bill with 1500s do not provide eligible covered professional services and are therefore excluded from the ARRA Medicare incentive.]

A Medicare eligible professional is a physician as defined in Section 1861 (r) of the Social Security Act:  Doctor of Medicine or Osteopathy, Doctor of Dental Surgery or of Dental Medicine, Doctor of Podiatric Medicine, Doctor of Optometry, Chiropractor.

A Medicaid eligible professional is a physician, dentist, certified nurse midwife, nurse practitioner, and physician assistant (insofar as the assistant is practicing in a rural health clinic that is led by a physician assistant or is practicing in a Federally Qualified Health Center that is so led).

Key CMS Proposed Rule Language

“In our proposed approach, a hospital-based eligible professional, would be ineligible to receive an EHR incentive payment under either Medicare or Medicaid, regardless of the type of service provided, if more than 90 percent of their services are identified as being provided in places of service classified under place of service codes 21, 22, or 23.”

See last section for additional CMS proposed rule language.

Implications for RHCs and FQHCs

Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs) bill using USB04s rather than 1500s, so physicians practicing in RHCs and FQHCs are not eligible for Medicare incentives.

However, RHC and FQHC physicians (whether provider based or not) that have at least 30% of their volume attributable to needy (Medicaid, sliding fee, uncompensated care, or Title XXI) individuals are specifically mentioned as eligible for Medicaid incentives.

Physicians practicing in RHCs and FQHCs that do not meet this threshold of “needy” care do not qualify for any federal incentives.

Implications for Provider-Based Clinics

Even though they bill using 1500s, clinics with the designation “provider-based” use the place of service code 22 (Outpatient Hospital), so physicians practicing in “provider-based” clinics (excepting those RHCs eligible for Medicaid incentives) are not eligible for either the Medicare or Medicaid incentives.

Implications for Independent and Non-Provider-Based Hospital-Owned Clinics

Independent and non-provider-based hospital-owned clinics bill using 1500s and use the place of service code 11 (office), so physicians practicing in such clinics are eligible for the Medicare incentives.

EPs in these clinics are also eligible for Medicaid Incentives if the Medicaid provider is an eligible professional who: (1) has at least 30% patient volume attributable to Medicaid patients, (2) is a pediatrician that has at least 20% patient volume attributable to Medicaid patients.

These eligible professionals may choose to participate in either the Medicare or the Medicaid incentives but not both.

Additional Relevant CMS Proposed Rule Language

“Because that the parenthetical after the term “hospital setting” in the statutory definition of hospital-based EP specifically refers to both inpatient and outpatient hospital settings, we believe the term “hospital setting” should be defined to also include the outpatient setting. So although a “hospital” is an institution that primarily provides inpatient services, we propose to define the term “hospital setting” for purposes of the Medicare and Medicaid EHR incentive payment programs to also include all outpatient settings where hospital care is furnished to registered hospital outpatients. For purposes of Medicare payment and conditions of participation, it is CMS’s longstanding policy to consider as outpatient hospital settings include those outpatient settings that are owned by and integrated both operationally and financially into the entity, or main provider, that   owns and operates the inpatient setting. For example, we consider as outpatient hospital settings all types of outpatient care settings in the main provider, on-campus and off campus provider-based departments (PBDs) of the hospital, and entities having provider based status, as these entities are defined in §413.65…

“Because, by definition of the requirements for provider-based departments and entities, EPs who furnish substantially all of their covered professional services to hospital outpatients use the hospital’s facility and equipment, including the integrated medical record system, for which payment is made by Medicare to the hospital, we believe these EPs should be considered hospital-based EPs, and thus excluded from the Medicare EP EHR incentive payments. This is fully consistent with the definition of hospital-based EPs in section 1848(o)(1)(C)(ii) of the Act…

“In summary, we propose that EPs that provide substantially all of their professional services in the inpatient hospital setting, in any type of outpatient hospital setting, or in any combination of inpatient and outpatient hospital settings, be considered hospital-based EPs…

“We propose to consider the use of place of service (POS) codes on physician claims to determine whether an EP furnishes substantially all of their professional services in a hospital setting and is, therefore, hospital-based…

“In our proposed approach, a hospital-based eligible professional, would be ineligible to receive an EHR incentive payment under either Medicare or Medicaid, regardless of the type of service provided, if more than 90 percent of their services are identified as being provided in places of service classified under place of service codes 21, 22, or 23. Accordingly, for both Medicare and Medicaid incentive payment purposes, we propose that a hospital-based eligible professional is defined as an EP who furnishes 90 percent or more of their covered professional services in any of the above listed places of service.”

Share on Facebook