HIMSS13: Sequester Will Affect Medicare EHR Pay, ONC Budget

by Kate Ackerman, iHealthBeat Managing Editor

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NEW ORLEANS -- There were nearly 60 education sessions at the Healthcare Information and Management Society's Annual Conference on Tuesday, not to mention the more than 1,100 firms displaying their products in the exhibit hall, but it was a brief reference near the end of a CMS Town Hall that had HIMSS13 attendees all abuzz.

Elizabeth Holland -- director of the HIT Initiatives Group in CMS' Office of E-Health Standards & Services -- confirmed that Medicare meaningful use payments will be subject to mandatory cuts under budget sequestration, including a 2% reduction to Medicare payments.

On Friday, President Obama signed an order to initiate the $85 billion in spending cuts for the fiscal year ending on Sept. 30. The mandated cuts are the first installment of nearly $1 trillion in across-the-board reductions.

While the news about the Medicare meaningful use payments is not entirely surprising, there had been some speculation that electronic health record incentive payments might be spared because the meaningful use program could be considered mandatory, as its funding is specified by statute.

Chantal Worzala, director of policy at the American Hospital Association, said that when the sequester first became law in 2011, "we looked at it as something that would affect all Medicare payments," including meaningful use.

However, she noted that recently there were some questions raised about how the sequester would affect Medicare meaningful use payments, adding, "there definitely was a period of uncertainty."

Jeffery Smith -- assistant director of public policy at the College for Healthcare Information Management Executives -- said, "This was big a surprise to me." He added, "The consensus I was hearing was that because these dollars ... were not in the general Medicare pot for reimbursements," they'd likely be safe.

Worzala said, "As far as I know, today is the first time we've gotten an official statement from CMS" on the issue.

Holland said that under sequestration, Medicare will make 2% cuts to all payments that are processed after April 1. She added, "It will not matter when you attested [to meaningful use]; it will matter when the payment is filed." Medicare files payments about once a month, Holland noted.

Holland said the Medicare payment cuts will have "big ramifications moving forward."

Medicaid meaningful use payments will not be affected, as that program is exempt from the sequester's automatic cuts.

Worzala said that hospitals have been "working very, very hard" to get to meaningful use and that AHA is "very disappointed" that incentive payments will be "less than promised."

She said that the financial picture for hospitals is very challenging right now, noting that the federal government is "scaling back Medicare payments quite significantly" through the sequester, the Affordable Care Act and the deficit reduction bill signed into law in January. As a result, hospitals might "find it difficult to commit" the necessary resources to EHR implementation, Worzala said.

Smith said CMS officials told him they're not sure the exact percentage that Medicare meaningful use payments will be cut but that it will be limited to 2%.

He said, "This isn't going to be a material hit on the program, and I don't think providers are going to necessarily feel it, but it is troubling that Congress would roll out a program like meaningful use with a very defined, very structured ... payment regime and then have this happen."

Smith said, "Generally speaking, I don't think it's going to be a big deal. But I do think it's kind of a troubling trend."

ONC To See $3M Budget Cut Under Sequester

At a media briefing on Wednesday, National Coordinator for Health IT Farzad Mostashari said, "This sequester is going to hurt."

Last year, the Office of the National Coordinator for Health IT had a budget of $60 million -- the same amount of funding it received in 2004 when the office was formed through an executive order by President George W. Bush, Mostashari said.

Under the sequester, ONC will receive a $3 million budget cut, reducing its funding to $57 million, he said.

"Absent a furlough, it's going to mean that we have a major cut in the contracts we have," Mostashari said, adding, "There [are] going to be things that the industry expects us to do and that patients and providers expect us to do ... that we simply won't be able to do."

Eric Topol: Technology Changing the Physician-Patient Relationship

In other news from the HIMSS conference, Eric Topol -- a cardiologist, the West Endowed chair of Innovative Medicine at Scripps Health and a professor of genomics at the Scripps Research Center -- highlighted the potential of technology to drastically change the physician-patient relationship.

He said, "A lot of what we're doing is stuck in the 1960s population view" of medicine and "we don't recognize that each person is an individual."

However, he said the shift from practicing medicine on a population level to an individual level is possible "because we now have the tools we didn't have before."

For example, smartphones "have changed our lives," Topol said, and their use in health care will only grow.

He highlighted a variety of smartphone applications that can screen and diagnose a wide range of ailments, from Parkinson's disease to lung cancer to eye problems.

In fact, technology could help patients "bypass physicians," Topol said, adding that most health care tasks "could be taken on by patients" thanks to smartphone technology. He predicted that the idea of going to a physician office eventually will feel as obsolete as going to a video store.

However, information parity between physicians and patients is necessary to facilitate patient engagement and connectivity, according to Topol. He added the attitude of superiority among some physicians "has got to go."

Topol said it is "unacceptable" to limit patients' access to their own health information. He ended his speech by playing a clip from the movie "Jerry Maguire." Cuba Gooding, Jr.'s voice was dubbed over to say, "Show me the data!" instead of the famous line, "Show me the money!"

CMS Official Touts Power of Health Data

Piggybacking off Topol's remarks, Maribel Franey -- director of the Privacy Policy Compliance Group in CMS' Office of E-Health Standards & Services -- said, "Show me the data, but show it to me in a secure manner."

At the CMS town hall, she noted that "patients want to see their data" and that a "greater and more seamless flow of information, aided by electronic health records, can transform health care."

Franey said, "Medicine is an information-rich enterprise," adding, "Making the patient the center of e-health transformation is a key to success."

ONC Officials Discuss Efforts on Health IT and Patient Safety

Meanwhile, officials from ONC discussed efforts around health IT and patient safety.

Jacob Reider, ONC's chief medical officer, said that the use of health IT can help cut medical errors but also can lead to new errors.

He said the industry still does not know enough about:

  • The level of harm attributed to health IT;
  • How health IT affects patient safety; and
  • How to improve health IT, its implementation and its use to maximize patient safety.

Reider said that the government, health IT developers and health care providers have a "shared responsibility" to take steps to "further our understanding" and "improve health IT and patient safety."

Jodi Daniel, director of ONC's Office of Policy and Planning, said, "We see health IT as helping to provide an infrastructure" for safer care, adding, "We strongly believe ... that health IT is part of the solution."

However, she noted that the industry needs to learn more about how to mitigate patient safety risks related to the use of health IT.

In December 2012, ONC released draft Health IT Patient Safety Action and Surveillance Plan and accepted public comments on the plan through Feb. 4. Daniel said ONC expects to release a final health IT safety plan in early summer.

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