On June 8, just three weeks before the start of the last 90-day reporting period for the 2011 federal fiscal year, the Health IT Policy Committee recommended that CMS delay Stage 2 until FY 2014 for health care providers who first attest to meaningful use in FY 2011. Despite this recommendation, the Advisory Board Company advises eligible hospitals to wait until FY 2012 to attest to meaningful use requirements. The Advisory Board Company produces iHealthBeat for the California HealthCare Foundation.
An eligible hospital should consider FY 2011 attestation only if:
- CMS delays Stage 2 attestation for early adopters prior to the end of the attestation deadline; and
- The organization is confident in its ability to meet and sustain Stage 1 measures throughout the 365-day reporting period that starts on Oct. 1, 2011.
Rationale for Not Attesting
Despite the strong recommendation from the Policy Committee to give health care providers who attest to Stage 1 of the meaningful use program in FY 2011 an extra year to comply with Stage 2 requirements, it is not advisable for most providers to move forward this year for several reasons.
Lack of formal regulation addressing Stage 2 timing:
The Policy Committee serves as an advisory committee for CMS and the Office of the National Coordinator for Health IT on regulations surrounding meaningful use of electronic health records. CMS in turn has to weigh the committee's recommendations against existing rules, regulatory impact and other market factors before proposing any changes to the regulations. To date, CMS has not confirmed that it will adopt the recommendation to delay Stage 2 until FY 2014 for providers who first demonstrated meaningful use in FY 2011.
Absent a ruling on Stage 2 timing from CMS before Nov. 30, 2011 -- the last date to attest to meaningful use for FY 2011 -- health care providers who attest to meaningful use for FY 2011 must be prepared to meet Stage 2 requirements by FY 2013, which begins Oct. 1, 2012.
This will be an unattainable leap for most health care providers because the final rule on Stage 2 is not expected until June 2012, leaving health care providers with fewer than six months before the start of FY 2013 to implement and adopt new, complex capabilities for Stage 2 of meaningful use. While CMS could address the timing issue at a later date, health care providers who attest for FY 2011 before any formal regulation on Stage 2 timing cannot be certain whether CMS' resolution will be in their favor and allow them additional time to demonstrate Stage 2.
Reliance on last 90-day reporting period leaves no margin for remediation:
Health care providers who rely on the last 90-day reporting period of FY 2011 (July-September) for demonstrating meaningful use Stage 1, Year 1, must start their 365-day reporting period for Stage 1, Year 2, immediately thereafter (i.e., on Oct. 1, 2011, the start of FY 2012). Unfortunately, the lack of time between the last 90-day reporting period and the start of the 365-day reporting period leaves health care providers with little room to address any issues identified during the first reporting period.
Ultimately, meaningful use demands consistent compliance with the requirements, and if an organization barely meets the meaningful use measures in the 90-day reporting period, it cannot be confident of its ability to meet the meaningful use performance requirements for the extended 365-day reporting period. This in turn could jeopardize Stage 1, Year 2, incentives because failure to meet meaningful use requirements in subsequent years will force the organization to forgo Medicare incentives for that year altogether.
No incentives lost for starting in FY 2012:
To maximize the incentive collection across all four payment years (Medicare incentives for hospitals end in 2016), hospitals must demonstrate Stage 1 of meaningful use no later than July 2013 and continue to successfully demonstrate subsequent meaningful use stages. This means that hospitals have no early mover financial advantage for achieving meaningful use in FY 2011 (other than collecting the incentives sooner).
In addition, hospitals run the risk of forfeiting their Medicare incentives in FY 2013 and beyond if they fail to successfully demonstrate future stages. Therefore, hospitals are better off delaying reporting on meaningful use until FY 2012 to allow adequate time to prepare for Stage 2. Providers achieving meaningful use in FY 2012 have until Oct. 1, 2014, for Stage 2.
Greater visibility into Stage 2 requirements:
CMS intends to release the proposed rule for Stage 2 requirements in January 2012, followed by a public comment period, and then issue the final rule by June 2012. Health care providers who wait to attest to Stage 1 of meaningful use until January 2012 or later will benefit from directional guidance issued in the proposed rule on Stage 2 requirements. Visibility into Stage 2 measures before attesting for Stage 1 not only will allow health care providers to assess their ability to meet Stage 2 requirements on schedule, but it also will enable them to modify any existing Stage 1 meaningful use processes in preparation for Stage 2 performance expectations.
Attesting for FY 2011 Right Answer for Few
If CMS does delay attestation for Stage 2 to FY 2014 for eligible hospitals that first attested in FY 2011, it would create a window of opportunity to realize three years of incentives for demonstrating Stage 1 for those hospitals that attest to meaningful use in FY 2011. This is particularly attractive given that eligible hospitals attesting to meaningful use in FY 2011 would collect 90% of the total Medicare incentive payment in three years (before Stage 2 starts in FY 2014) for demonstrating the lowest or easiest stage of meaningful use.
That said, in the absence of a ruling on Stage 2 timing from CMS to date, we recommend that only those hospitals that are far exceeding performance on Stage 1 requirements and are confident in their ability to sustain these performance levels for the 365-day reporting period that follows consider attesting to Stage 1 in FY 2011.