Medicaid EHR Incentives – A Learning Experience

By now almost everybody that has any remote interest in Health Care is aware of the much publicized incentives made available to health care providers for the adoption and meaningful use of certified EHR technology. The most quoted number is $44,000 to be paid by CMS to Medicare physicians. Practically every EHR vendor website is adorned with a Flash banner “educating” doctors on this cash windfall, and practically every HIT detractor is warning that the incentives are just a pittance compared to the real costs of ownership of a certified EHR. Very rarely does anybody go into the intricacies of the available incentives for Medicaid providers, which are almost 50% higher than Medicare and involve clinicians providing care to our most vulnerable citizens. However, there is much to learn from the structure of the Medicaid incentives program.

The HITECH statute sets forth a “net” average allowable cost for purchasing and implementing an EHR at $25,000 for the first year and $10,000 for subsequent years. Of this “net” allowable cost, the Secretary of HHS is authorized to pay Medicaid Eligible Providers up to 85% in stimulus incentives for a total of 6 years. It appears that the Government is about to pay you 85% of your EHR costs for the next 6 years, which is a pretty good deal. Looks, however, can be deceiving. As any early adopter of EHR knows, the total cost of ownership for an EHR over 6 years is well over the “net” allowable of $75,000 set forth in the HITECH Act, and Congress knew that too. This is why the statute instructs the Secretary of HHS to determine the actual average allowable costs of EHR:

“(C) For the purposes of determining average allowable costs under this subsection, the Secretary shall study the average costs to Medicaid providers described in paragraph (2)(A) of purchase and initial implementation and upgrade of certified EHR technology described in paragraph (3)(C)(i) and the average costs to such providers of operations, maintenance, and use of such technology described in paragraph (3)(C)(ii). In determining such costs for such providers, the Secretary may utilize studies of such amounts submitted by States.”

The Secretary indeed researched and studied the actual costs of EHR adoption and, in the CMS final rule, came up with an average allowable cost for purchasing and implementing an EHR of $54,000 for the first year and $20,610 for subsequent years, putting the average cost of ownership for 6 years at $136,440 per Eligible Provider. This is closer to reality, although some would question if the Secretary brought into account loss of productivity while calculating these numbers. At this point, confusion sets in for most folks. If Congress already decided that they would pay no more than 85% of $75,000, why is the Secretary calculating the actual costs and showing us how inadequate the incentive payments really are? The answer lies in the little word “net”.

In the unlikely event that somebody, presumably the tooth fairy, gives you some money to buy an EHR, that amount of money must be deducted from the $54,000 for the first year, and your incentive amount is calculated as 85% of the remainder: First year incentive = ($54,000 – Cash gift for EHR)*85% -or- First year incentive = $25,000*85%, whichever one is smaller. The same logic applies to subsequent years. The only question now is what constitutes a cash gift for EHR technology. Well, the CMS final rule is pretty clear on that. First, State and local government contributions do not count. General grants for improvements do not count either. If you are employed by a Federally Qualified Health Center (FQHC) or Rural Health Clinic (RHC) or anybody else, and your employer purchases an EHR for you, that doesn’t count as a cash gift for EHR, and neither do any in-kind donations from vendors or other entities. Basically, unless someone not mentioned above hands you a wad of dollar bills wrapped in a note stating “This cash is exclusively for your EHR, doctor”, and that wad of dollar bills is greater than $29,000, your stimulus incentive will not be reduced.

You do have to show CMS that you paid for at least 15% of the "net" allowable EHR cost with your own money ($3,750 in the first year and $1,500 in subsequent years), but here is the beauty of the final rule: all those contributions from State, local governments, employers and in-kind donors, which did not count for calculating your “net” allowable cost, can be used to augment, and entirely substitute for, your out of pocket 15%. This is one of the most magnificent examples of bureaucracy at its very best, since when all rules and exclusions are counted, it seems that practically everybody will be eligible for the maximum incentive of $21,250 in the first year and $8,500 in subsequent years. It is worth noting that these amounts don’t cover even half of the Secretary’s estimated average EHR adoption costs.

How about Eligible Providers who are salaried employees, either in a cost-based FQHC or RHC, or any other fee-for-service entity? Most of these doctors assume that they have to assign their incentive payments to their employer, who provided them with the EHR. The CMS final rule clarifies that you can voluntarily assign your incentives to your employer, but you most certainly do not have to do so.

“We believe that, in accordance with 1903(t)(6)(A) of the Act, an EP could reassign payment to a TIN associated with his or her employer or the facility in which she or he works. …  Any reassignment of payment must be voluntary and we believe the decision as to whether an EP does reassign incentive payments to a specific TIN is an issue which EPs and these other parties should resolve.”

Reassignment of incentives to an employer, or any other entity promoting EHR technologies, is left to the physician and his/her employer. There are multiple strong warnings throughout the CMS final rule that such reassignment must be voluntary and the “States must guarantee that the assignment is voluntary”. For anybody contemplating creative arrangements that will reduce payments to employed physicians, in an FQHC for example, to compensate for EHR expenditures, CMS clarifies that “Incentive payments are payments designed to promote the adoption and meaningful use of certified EHR technology and are not payments for medical assistance provided in the FQHC. We do not have the authority under this program to provide that these funds be the basis for the State to reduce its per visit payment to the FQHC.”

In summary, if you are a Medicaid Eligible Provider in private practice, you can expect $63,750 from Medicaid over the next 6 years. If you are an employed Medicaid Eligible Provider, you should clarify with your employer what the expectations are. There is probably nothing regarding incentives in your contract, and while you could allow your employer to collect your incentives, nothing in the CMS final rule mandates that you do so, and quite the opposite is true. You may want to consider that an EHR will most likely reduce your productivity initially, and perhaps for longer than you expect. If you are practicing within a cost-based facility, your income will be adversely affected by the EHR adoption process, and it may make perfect sense to retain your incentive payments as partial compensation for loss of income, even if your employer paid for your EHR.

The Government EHR

No, you didn’t miss anything, there is no Government EHR. But should there be one? And if so, what should it look like?

The argument in favor of a Government EHR goes something like this: If we have 19 Billion dollars to spend on EHR adoption, why not spend a small fraction of that money and buy or build an EHR and make it freely available to all physicians and hospitals? Not a bad idea. I would add that, if we must, we could spend the rest of those billions on training and supporting physicians in their efforts to computerize their records. So how would a Government go about accomplishing such monumental task?

The first option would be a “fixer upper”. Buy something like Epic, which has both an inpatient and an outpatient EHR, hire a team of software developers and hordes of usability and medical informatics experts and set them down to work on the existing product. A slightly less expensive option, which is frequently mentioned, is to use VistA instead of Epic. After all the Government already spent boatloads of money on VistA and many of its users seem satisfied with the product even in its current state. Epic has many satisfied customers as well. Either way, it shouldn’t take more than a couple of years to have a fairly usable product, migrated to new technologies, scaled down for small hospitals and practices and scaled down even more for patients.

The second option is similar to the process by which the Pentagon acquires new fighter jets. HHS would publish a set of requirements and various vendors would create a prototype and bid for the contract. For an EHR, one would expect the likes of Microsoft, IBM, Apple or Google to lead the pack. For this scenario the Government would be free to specify requirements to facilitate all the data collection the Government may need, and probably base the entire project on a Federal Cloud with Internet access either through a downloadable smart client (e.g. TweetDeck) or plain browser (e.g. twitter.com), or both, as circumstances dictate. We should have something to look at in three years or so and could begin rolling it out in earnest in four.

Either option will overcome most impediments to achieving an EHR for every American. A Federal Cloud containing all medical records will obviate the need of reporting to CMS or any other government agency. A true multi-tenant Federal Cloud will be able to uniquely identify each patient, with a very high level of confidence, and automatically create a National Patient Identifier without all the legislative and bureaucratic hassle. Since all data is managed by one entity, assembling a longitudinal, complete record for each one of us, either persistent or on-demand, will become almost trivial. One database schema, one terminology and a unified user interface would practically guarantee abundant and high quality data points for clinical research. Privacy and security policies, all residing in one place, could be driven by the patient, or consumer, through their own longitudinal, comprehensive view of the medical record. There will be no need for intermediaries and push/pull addressing systems with all the associated complexity. Every doctor, clinician, hospital, insurer, researcher and consumer will be accessing the same data, through the same software, within the scope of various privacy & security policies. And it will all be free.

For all those pulling “1984” out and looking to see if medical records are mentioned there, relax, this utopian EHR is not on the Government agenda at this time. There are as many obstacles to building the Federal Cloud EHR as there are to providing a “Public Option” for health insurance and neither one is politically feasible at this time. There is a large and rather influential Health Information Technology industry which will be summarily killed off by a Government EHR initiative. The need for instant gratification and the greater need for political campaigning material preclude anything with a longer than four years time horizon. Americans have a historical aversion to centralized control and would much rather have multiple smaller corporations control smaller chunks of activities and information, regardless of the administrative costs and pitfalls of such approach.

And then, of course, there is the freedom of choice issue. What if I don’t like the Government EHR? What if I want to build my own, or buy one that suits me better? And what comes next, a Government Automobile? And the right to privacy of both consumers and providers is not far behind. Why should the Government have access to every minute detail of my business? What would lawyers do if the Government would require that all their dossiers be uploaded to a Federal Cloud? What do the Constitution and Bill of Rights have to say about such practice? Certainly this is not what our founding fathers had in mind.

Of all the billions of dollars available for EHR adoption, the Government is timidly allocating $60 million to EHR research activities in areas such as security, usability, clinical terminology and some peculiar concept of making EHRs more like iPhones. I have very little hope of anything tangible materializing from any of these research programs anytime soon. In the meantime, tax payers, physicians and various providers of health care services, are spending billions of dollars on “fixing”, deploying and interconnecting fragmented software systems perfectly matching our equally fragmented insurance and health care delivery system. With enough duct tape, strings and wires, we should be able to pull something together.  We’ll fix the rest later….

One Day in the Life of a Meaningful User

All the laws have been passed and all the final rulings have been published. In the spirit of the times, you went out and got yourself an EHR. You did your due diligence and sat through many hours of vendor demonstrations. In the end they all started to blend together, so you talked to friends and colleagues and accepted the Hospital’s offer to pay a big chunk of your EHR costs if you picked the one they wanted you to pick.
Your biller quit in disgust, but other than that the implementation was uneventful and the Hospital folks helped a lot. After several hiccups, your Medicare payments are coming in regularly now and your office is adjusting well to the new software. The documentation templates leave a lot to be desired, but you type well and when you find some free time you may take a stab at customizing them a bit. Here and there you run into bugs and a couple of times the EHR was unavailable for a good two to three hours. Not sure exactly why. Maybe it was the Internet that was unavailable.
Anyway, if all goes according to plan, you will be retiring in 10 years and your much younger partner will be bringing in someone who is probably in Medical School right now. Everything seems under control. But today is different...

Today is January 2nd, 2011 and you are driving to work. Today has to be meaningfully different and your first patient is waiting in Exam Room 1.

Mrs. Kline is a pleasant 68 year old woman, who has been seeing you for ten years or so, for her hypertension (which is well managed), hyperlipidemia and a touch of arthritis. You bring up her chart on your EHR and begin your meaningful use (§ 495.6(d)(7)(i) – Record Demographics - Check). There is a little red sign on the screen saying that Mrs. Kline is overdue for a routine mammogram (§ 495.6(d)(11)(i) – Clinical Decision Support - Check). She says that she got a little postcard from your office the other day (§ 495.6(e)(4)(i) – Patient Reminders - Check) and will be making an appointment soon. You look at the BP recorded by the nurse and also notice that Mrs. Kline gained some weight and her BMI is now well over 30 (§ 495.6(d)(8)(i) – Record Vitals and BMI - Check). You chuckle as you notice that the nurse duly noted that Mrs. Kline does not smoke (§ 495.6(d)(9)(i) – Record Smoking Status - Check). As you listen to Mrs. Kline’s account of her knees “acting up” again and how it is now painful to walk Fluffy in the morning, you glance at her problem list (§ 495.6(d)(3)(i) – Maintain Problem List - Check) and medications (§ 495.6(d)(5)(i) – Maintain Med List - Check). She also mentioned some shortness of breath when walking Fluffy and you proceed to do an examination.

As you look over Mrs. Kline’s slightly swollen knees and check her wrists and elbows too, she tells you about her daughter Ellie and how she is now a third year Dermatology resident. Mrs. Kline is hesitantly wondering if her daughter could peek at her medical records once in a while. Sounds reasonable and you tell her to ask Mary at the front desk to set her up with access to the portal (§ 495.6(d)(12)(i) – Electronic Copy of Medical Records - Check). You explain to her that all her records are on the computer now and even today’s visit summary will be there before she gets home (§ 495.6(d)(13)(i) – Provide Visit Summaries - Check) and (§ 495.6(e)(5)(i) – Timely Access to Medical Records - Check). Her daughter in faraway California should be well informed from now on.

The exam was non eventful and the Lipid panel Mrs. Kline had last week looks good (§ 495.6(e)(2)(i) – Incorporate Lab Results - Check). You proceed to write a new prescription for Celebrex (§ 495.6(d)(1)(i) – CPOE for Meds - Check) and note that she is not allergic to anything (§ 495.6(d)(6)(i) – Maintain Allergy List - Check). The obligatory DDI pops up and you dismiss it as duly noted (§ 495.6(d)(2)(i) – Drug-Drug Interaction - Check). You adjust the BP meds and note that everything is on formulary (§ 495.6(e)(1)(i) – Formulary Check - Check). You ask Mrs. Klein which pharmacy she is using and promptly send all her scripts there (§ 495.6(d)(4)(i) – Electronic Prescribing - Check).  On your way out you talk to Mrs. Kline about the need to monitor her blood pressure carefully now that she is on new meds and to call you if anything changes before her next appointment. You say good bye and good luck to her daughter. Mrs. Kline stops by the front desk and Mary sets her up with a portal account, makes an appointment for her and hands her the BP home monitoring education materials you ordered (§ 495.6(e)(6)(i) – Patient Education Materials - Check).  Your next patient is in Exam Room 2.

As you walk over to your office, Mary mentions that the IT guy will be coming in later today to fill out some security survey (§ 495.6(d)(15)(i) – Protect Electronic Health Records - Check) and test the export function one more time (§ 495.6(d)(14)(i) – Capability to Exchange Clinical Data - Check) and he is certain that it will work this time. There is a new patient in the freshly cleaned Exam Room 1.

It’s after five o’clock and light snow is falling outside. You saw 20 patients today; some with chronic conditions, some very ill (one had to be admitted) and others with incidental scrapes and viruses, but pretty healthy otherwise. There was nothing unusual about today. On your way home you briefly consider that at this rate you should have plenty of data to report to CMS in 3 months (§ 495.6(d)(10)(i) – Report Quality Measures to CMS - Check) and Mary with the IT guy should figure out the rest when the time comes. That Christmas bonus was well deserved.

This was just one of the 3,653 days until your retirement. The extra three are for leap years.
Congratulations, you are now a Meaningful User of EHR technology.

All quoted section numbers are from the CMS Fina Rule on Meaningful Use

What’s in an EHR?

One of the most promising uses of Electronic Health Records (EHR) is Research. As EHRs become more and more widespread and the clinical data previously held in silos of paper charts becomes fluid, exchangeable and duly collected, large clinical repositories should emerge and be made available to those engaged in research, presumably medical research. The results of such research are expected to help us identify cost effective therapies, health care trends and a myriad other quality improving, cost reducing strategies. With such lofty goals in mind, it may be beneficial to look at the actual contents of an EHR as they are today and as they may be tomorrow.

The clinical data captured in many of today’s EHRs, and in all future EHRs, contains a very rich structured and codified data set.

• Diagnoses complete with dates of onset and resolution (if any) and characteristics such as improving or worsening over time
• Medications and Allergies, including all historical changes and adjustments
• Procedures and Immunizations, including diagnostic procedures, surgeries and treatments, all with dates and some with outcomes
• Hospitalizations, ED and Office Visit dates and durations
• Diagnostic Tests and Screenings, including labs, radiology, cognitive screenings, genetic screenings, etc. all with results and dates of service.
• Complete vitals over time, such as height, weight, blood pressure, etc.
• Family Histories of disease and outcomes all the way to aunts, uncles, cousins, nephews and nieces

On top of the clinical data, EHRs also contain demographics and socio-economic data sets.

• Names, addresses, emails, phone numbers for patients and sometimes family members if appropriate
• History of insurance coverage over time with effective coverage dates
• Pharmacies and testing facilities used in the past
• Ethnicity, preferred language, level of education, occupation and employment history
• Academic performance, preferred areas of study, schools and camps attended
• Safety measures in the home (fire safety) and on the road (seatbelts, helmets)
• Family circumstances, including number of children, miscarriages, sexual orientation, habits and abusive or predatory history
• Travel, hobbies, diet, exercise, alcohol, coffee and tobacco consumption over time
• Very limited financial information, such as credit card numbers, bill paying promptness and necessity of payment plans or discounts

By all accounts, this is an exceedingly rich data set and should facilitate almost any type of research one can dream of. We could examine the effects of various therapies on disease progression and estimate cost effectiveness and various correlations with socio-economic circumstance. We could study disparities. We could assess quality of outcomes, sliced and diced by region and institution type. The sky seems to be the limit, or is it?

As anyone engaged in research knows, data points are only one side of the story. Data quality is another. The most publicized assault on the contents stored in our EHRs came over a year ago from the, now very famous, e-patient Dave who attempted to download his medical records from a hospital into his Google Personal Health Record (PHR), only to discover that his EHR was laden with inaccuracies. There were diseases he never had, missing dates, missing meds and tests results, visits that never occurred and all that from one of the most advanced hospital EHR systems in existence. If you look at smaller hospitals and ambulatory practices, you will find that some medical records are electronic but some portions of care are still documented on paper. Patients sometimes ask their doctors to not document certain things and, given the option, some choose to “hide” sensitive information. Physicians sometimes dispense sample medications or call in a script and make only a cursory note in the EHR, or advice patients to see a specialist with no particular follow up documentation. Clerical errors are a given. The possibilities of incomplete, corrupt and misleading, data sets are endless. If that’s not enough, EHRs barely communicate with each other and creating an accurate picture of the continuum of care for any given patient shuttled from doctor(s) to hospital(s) to specialist(s) is nearly impossible.

One solution suggested by so called e-patients is the self-maintained PHR. Patients who want their “damn data” in a computable format seem to think that they could clean it up and make it usable for all sorts of innovative applications. The question here is of course whether the average patient has enough knowledge and enough information to correct the data set and accurately supplement it. For personal use, it is plausible to assume that some of us would be motivated enough and capable enough to create a decent longitudinal medical record in a PHR. For clinical research purposes, such PHR edited data sets would not pass muster any more than the deficient and erroneous original EHR data sets would.

The inescapable conclusion is that, currently, EHR data is ill suited to  the customary rigor of clinical research, and has very little to offer above and beyond claim data which is already in use for general studies on broad trends, such as the famed Dartmouth Atlas Medicare expenditures studies. Looking ahead, it is feasible to assume that data quality will be improving and as paper is phased out and EHRs become more robust, user friendly and widespread, and as privacy and security issues are resolved, we may indeed end up with the proverbial mountain of pure gold for equally pure clinical research.
With lots of patience, determination and proper stewardship, the long term societal rewards from Electronic Health Records are very clear. Right now, we just need to do the right thing and we all, physicians, patients, entrepreneurs, government regulators, know exactly what the right thing is.

The EHR Circle of Trust

Every day millions of Americans and billions of people around the globe are routinely accepting colorful pieces of paper in return for their labor and placing those hard earned possessions in modern glass buildings whose owners they do not know. It took a few hundred years to change how business transactions are conducted, but today, there is very little apprehension about depositing one’s wealth in a bank. Public trust in both the government issued paper and the financial institution’s ability to safely store the increasingly virtual representation of buying power had to be painstakingly created and watchfully maintained.

When people, for one reason or another, lose trust in government paper or banks, the entire financial system fails miserably. Public trust is a prerequisite to any national monetary system and public trust is a very delicate thing. Nations create laws and regulations around financial institutions specifically aimed at building public trust. People have to trust that paper and its virtual counterpart can be exchanged for goods and they need to trust that banks, while safely storing their funds, will always make them available to their rightful owner on demand. Banks have a legal and fiduciary responsibility to take good care of your possessions, thus very few folks feel the need to store their family jewels in a strong box under their floor boards.

The fast approaching era of Health Information Technology (HIT) raises the same dilemma faced by our forefathers trying to decide if they should take their gold coins to the bank, or stuff them in a secret compartment of their jacket, or maybe bury them under the cowshed. We need to decide if we want to make our Electronic Health Record (EHR) part of a Health Information Exchange (HIE), or carry them with us on a USB stick, or just leave them locked up in our doctor’s office. There are obvious benefits and risks to each approach.

As long as banks were easily robbed on a daily basis, and as long as nobody guaranteed that your money was safe in a bank, and as long as you didn’t travel much, the cowshed was the best option. For the frequent traveler, the lovingly sown secret pocket was the optimal choice. When bank robberies disappeared from our daily experience and boats, railroads, automobiles and eventually airplanes transformed us all into a society of modern nomads, banks became the most practical choice, particularly since government insured our deposits were safe. Having a critical mass of citizens elect to store their wealth in banks allowed the economy to flourish. Millions of small personal fortunes aggregated together served as the engine by which banks fueled growth of businesses, which in turn created more and better paying jobs and ultimately added much value to those disparate small personal fortunes. Everybody benefited.

In 21st century America, most of us travel and change residence frequently. It would be nice to have our medical records be as portable as we are. Most of us use computers every day and couldn’t imagine life without the Internet. We also recognize the benefits of aggregating millions of data points to bring about more medical knowledge, better research and ultimately better health outcomes for everybody. So why is it that most people surveyed are as uncomfortable with EHR and HIE as Farmer John was with banks two hundred years ago?

In Health Care today we are at the “daily bank robbery” stage. It seems that every day another laptop loaded with clinical data is stolen, or a hospital computer system is breached. On top of that there is very little government assurance (HIPAA) that those holding our medical records should act responsibly and not use our personal records for “getting rich quickly” schemes while possibly inconveniencing, or even harming, us in the process. So before Farmer John can bring himself to deposit his medical records with an HIE, he needs evidence that not every fifteen year old with a gun (hacker) can easily avail himself of any records he chooses to have. Security of electronic medical information must be of Fort Knox quality. This is not currently the case when all sorts of unencrypted laptops and portable storage devices are floating around in employees’ cars and homes, and most hospitals and clinics have nothing in place even remotely resembling the security of financial systems.

When you deposit your valuables in a bank safety deposit box, banks are prohibited from peeking into your box, making lists of your possessions and sharing that information, unless required by law. When it comes to medical records, aggregators may hire a person familiar with statistics to attest that sufficient data elements were removed from personal records before a sale of information takes place, so only a “very small” risk of identifying the owner remains (HIPAA § 164.514), and there is no requirement for public disclosure of these shady transactions. EHR data sets are very rich with personal, not just medical, information and are worth many billions of dollars. Selling records to marketers, employers, “wellness companies”, insurers, pharmaceutical and device corporations should be explicitly prohibited by enforceable legislation. Aggregators of medical records should be allowed to modestly profit from supplying data to non-profit research institutions, and just like banks pay interest to those facilitating bank profits, medical records aggregators should share profits with Farmer John, either directly or by reimbursing providers for electronic data collection. And no, free software is not nearly enough compensation. Furthermore, any and all dealings and data exchanges should be fully transparent to the customer who chooses to deposit records with a particular aggregator. If Farmer John does not approve of an HIE’s policies and transactions, he should have the ability to take his medical records elsewhere. We need to know that our records are properly guarded and that we are the ultimate decision makers when it comes to their utilization. Public trust will follow.

Trust is not built in a day and trust is not created in complete darkness and trust will not come about without concrete evidence that trust is possible. Asking people to trust their life records to an unnamed chain of software vendors operating with no legally enforceable regulations, while the headline news are chockfull of medical records robbery announcements, is very similar to Jesse James requesting Farmer John to deposit his life savings at the rickety bank he is about to rob. Talk is cheap and Americans are smarter than that.  Like Jesse James, I am from Missouri, so “Show Me” trustworthy conduct and I will trust.