The much-awaited final rule defining the first stage of "meaningful use" of electronic health records -- a requirement that hospitals and eligible professionals (EPs) must meet in order to qualify for the Medicare and Medicaid incentives -- is finally here. Overall, the final definition relaxed the meaningful use criteria for hospitals and physicians, expanded the eligibility requirements making more entities eligible for incentives and clarified critical details surrounding the incentive program payout schedules. Detailed below are the most salient changes to the meaningful use requirements and their implications for health care providers aiming to collect the meaningful use incentives.
Changes to 'Meaningful Use' Requirements
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Meaningful use requirements relaxed and offer providers some flexibility. While the proposed rule required hospitals and EPs to demonstrate 23 and 25 objectives respectively, the final rule divided the meaningful use requirements into two categories -- a set of "core" objectives that must be met (14 for hospitals and 15 for EPs) and a set of 10 "menu" objectives each from which hospitals and EPs must meet any five. Of the five menu objectives, one must be from the population health category. While this two-track approach ensures that all providers qualifying for incentives meet a baseline for meaningful use, it does offer them latitude in other requirements to reflect their technical maturity and organizational priorities.
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Performance levels for several measures lowered, making meaningful use more attainable. Demonstrating meaningful use requires reporting on discrete measures tied to each objective. Under the proposed rule, the majority of the measures required 80% or greater performance levels to be considered a meaningful user -- in essence demanding near perfection from providers aiming to collect incentives. The final rule scaled back the expectations, reducing the performance threshold on several measures to 50% or lower, thereby allowing providers more time to drive toward universal adoption.
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CPOE remains vital to definition, with expectations eased to drive near-term adoption. Recognizing the challenges associated with CPOE adoption, the final rule requires only medication orders to be entered using CPOE in both the inpatient and ED setting as opposed to all orders, as suggested in the proposed rule. Furthermore, the orders must be entered by a licensed professional, thereby allowing physicians to bypass order entry altogether provided other licensed clinicians are available to input their orders. The amended CPOE requirements serve as a mixed blessing -- making meaningful use more attainable even for hospitals struggling to gain physician acceptance of CPOE, while simultaneously jeopardizing patient safety as non-ordering licensed professionals responsible for entering physician orders struggle to decipher illegible prescriptions.
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Emergency departments now must meet meaningful use of EHRs. With incentives for hospitals determined based on inpatient discharges, the proposed rule required hospitals to demonstrate the requirements only in the inpatient setting, with meaningful use measures based solely on unique patient encounters on the inpatient side. Unfortunately, the final rule expanded the definition to require hospitals to meet the meaningful use objectives across the emergency department and the inpatient setting, even though the calculation for incentives will be based only on inpatient discharges. This inclusion will expand the reporting denominator for several of the meaningful use measures and could impact overall performance on those measures if hospitals fail to drive adequate meaningful use compliance in the ED.
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Fewer but new clinical quality measures to report increases the documentation burden. In addition to adopting certified EHRs and demonstrating compliance with the meaningful use measures, hospitals and EPs aiming to collect incentives must report on a set of clinical quality measures. The final rule significantly reduced the number of clinical quality measures from the proposed rule. Hospitals now must report on 15 clinical quality measures, while EPs must report on just six -- three of which must come from the "core or alternate core" set and the remaining three can be selected from a set of 38 clinical quality measures. Furthermore, there is no performance requirement for any of these clinical quality measures. That said, despite the reduction in number of clinical quality measures, it will add to the documentation burden on clinicians because all of these measures are new and different from those reported by hospitals for the Reporting Hospital Quality Data for Annual Payment Update program.
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Most measures must be reported from EHRs, requiring complete and accurate documentation. The proposed rule defined several meaningful use measures in a manner that required providers to manually count every measure, even those that were not electronically recorded -- a labor intensive and non-productive endeavor. The final rule alters that proposal and instead requires providers to generate and report most of the meaningful use measures and all of the clinical quality measures from the certified EHR. While this change will significantly reduce the manual effort involved in reporting and allow providers to take advantage of reporting capabilities in their certified EHRs, it will also further increase the documentation burden on clinicians responsible for capturing all the relevant data in the EHR.
Changes to Eligibility Requirements
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Multifacility system with a single CMS certification number (CCN) will receive smaller incentive, face greater penalties. The final rule defines an eligible hospital -- for purposes of meeting meaningful use criteria and receiving incentive payments -- based on unique CCNs. This means multifacility health systems that operate under a common CCN are considered to be a single entity for the purposes of meaningful use demonstration and incentive calculation. Such classification will severely disadvantage multifacility systems with a single CCN because failure to meet meaningful use at a single campus could negatively impact the overall performance on the meaningful use measures, hampering the system's ability to collect the incentives. Moreover, the incentives for meeting meaningful use are limited because each CCN receives only a single payment each year, capped at 23,000 discharges, regardless of the number of facilities and total discharges included under the CCN. However, failure to achieve meaningful use at even one facility within the CCN before the penalties commence will mean every facility under the CCN will face payment reductions. So, while the incentives only benefit the first 23,000 discharges per CCN, the payment reductions are on reimbursement rates for the entire CCN, making the penalties strong enough to drive meaningful use compliance.
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Physicians practicing in hospital-owned outpatient clinics now eligible for incentives, requiring hospitals to rapidly meet EP meaningful use requirements in outpatient clinics. A recent amendment to the federal economic stimulus package modified the definition of hospital-based physicians to those who predominantly practice in the hospital inpatient or ED setting, thus allowing physicians practicing in hospital-owned outpatient clinics to qualify for meaningful use incentives. While this amendment comes as welcome news to physicians, most hospitals have been focused on wiring the inpatient setting for meaningful use and this eligibility expansion will put pressure on hospitals to simultaneously meet the physician meaningful use requirement in outpatient clinics so that the physicians can collect federal incentives.
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Critical access hospitals (CAHs) now eligible for Medicaid incentives, likely to approach hospitals for support with meaningful use compliance to maximize incentives. The stimulus package provided negligible Medicare incentives for CAHs to achieve meaningful use -- amounting to an additional 20% of reasonable costs for depreciable assets required to adopt EHRs, as compared with their current reimbursement from Medicare for reasonable costs. The final rule amended that provision, making CAHs eligible for Medicaid incentives as well, using the same calculation that will be used for acute care hospitals. The ability to qualify for Medicaid incentive payments in addition to the Medicare incentives detailed in the stimulus bill will dramatically increase the incentives at stake for CAHs and drive them to achieve meaningful use.
Incentive Payout Changes and Clarifications
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Adopt, implement, or upgrade clause allows eligible providers to collect Medicaid incentives in Year 1 without demonstrating meaningful use. The proposed rule required EPs and hospitals to demonstrate efforts to adopt, implement or upgrade EHRs for 90 continuous days before being eligible for Medicaid incentives in Year 1. The final rule modified this requirement stripping away the reporting time associated with collecting Medicaid incentives in Year 1 for adoption, implementation or upgrade of EHRs. Instead, the 90 days of continuous reporting now applies to the second year of the Medicaid incentive program, which will be the first year that a Medicaid eligible hospital or EP demonstrates meaningful use. By eliminating the reporting time requirement for Year 1, CMS has paved the way for all Medicaid eligible hospitals and EPs to collect incentives in 2011 provided they can demonstrate tangible signs of adoption, implementation, or upgrading EHRs. Furthermore, by modifying the reporting period requirement for the second year under the Medicaid program, CMS has further expanded the window of time available to hospitals and EPs to demonstrate meaningful use and collect incentives.
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Under Medicare, hospitals and physicians must demonstrate meaningful use in successive years to maximize incentive. The final rule clarifies that Medicare-eligible hospitals and physicians have exactly four and five successive years of incentive payouts respectively. This means a hospital that achieves meaningful use in 2011 will receive payouts for three more years, ending in 2014, provided the hospital can demonstrate meaningful use in each of the subsequent three years. Failure to meet the requirements in any year, based on hospital's stage of meaningful use, will result in lost incentives that cannot be recovered in later years. Given the restrictions in the Medicare incentive program -- the potential to lose incentive payments for failure to meet meaningful use requirements in any year following the first payment year, and the shorter timeframe of the Medicare incentive program (hospitals must demonstrate meaningful use by 2015 and EPs must do the same by 2014) -- hospitals essentially have no margin for error if they want to maximize their incentives.