THE NEED FOR CRITICAL ANALYSIS OF THE EHR INCENTIVE PROGRAMS October 20, 2010
Posted by jaxncmd in General EMR information.Tags: EHR, EHR Incentive Program, EHR purchase, electronic health records, electronic health records system, EMR, incentive payment, physician, provider
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The CMS EHR incentive programs represent an aggressive attempt by the federal government to advance the adaptation of electronic health records and develop a networked national healthcare infrastructure. While I firmly support the effort, I remain concerned that the initiative, formulated and administered by the government bureaucracy, may not fully represent and protect the interests of the participating providers. I have therefore carefully analyzed these programs so that my fellow healthcare providers are fully informed of the nuances of these programs, can achieve the maximum benefits, and avoid costly mistakes.
The EHR incentive programs are extremely complex, with the language of the law establishing these programs filled with massive amounts of bureaucratic double speak. As the implementation of the programs has progressed, CMS and ONC have attempted to clarify the specifics. Unfortunately, these efforts still leave significant points of confusion and concern in the programs.
Ironically, while the $18 billion that Congress has earmarked for this initiative sounds impressive, it is actually the healthcare providers who are providing the most significant financing for these programs. They are also the foundation on which the entire initiative is based. Due to the legal structuring of these programs, healthcare providers must first purchase their EHR/EMR systems before they can hope to obtain any reimbursement as incentive payments. It is therefore the healthcare providers who are actually providing the full financing for the initiative, with the incentive program offering the potential for some reimbursement for these costs after-the-fact.
From a provider standpoint, the financial structuring of this initiative, and the areas of confusion/concern in the programs, may potentially lead to major issues for the health of their practice. In particular, given the cost of electronic health record systems, providers face major financial exposure with an EHR purchase.
Since the initiative has been primarily crafted by government bureaucrats and administrators, it is imperative that the end-products are critically evaluated from the provider standpoint. While it is true that there has been input from providers, the fact is that small medical/healthcare practices, which represent the majority of providers, were not significantly represented in these efforts.
Since I have been in sole private practice for fourteen years, I am acutely aware of the needs, pressures, and concerns that occur in a small medical practice. I have therefore evaluated these programs from this point of view, with special attention to the “real world” implications that these programs can have for the medical practice.
Over the years, I have experienced frustration from the ever-expanding bureaucratization that administrative healthcare has brought down on providers. I have also experienced the anger and sense of futility with the current healthcare system that appears to be a common theme for many providers.
I hope that by critically analyzing the EHR programs that I can highlight the major points to fully inform my colleagues. By exposing the faults in the programs upfront, it will hopefully allow them to avoid more significant problems later on that could have otherwise been avoided.
I realize that this post is not as fact-filled as my usual posts, but I felt that it was important for readers to understand the source of my concerns regarding the electronic health records initiative. While I philosophically believe in the initiative, I also feel that the practical implications for healthcare providers must be fully considered and their interests protected.
This will hopefully complete my “philosophical posts”, and I will now return more practical issues.
THE TOP 3 REASONS FOR PARTICIPATING IN THE EHR INCENTIVE PROGRAMS October 18, 2010
Posted by jaxncmd in EMR "Hot Topics", General EMR information.Tags: cost, EHR, EHR Incentive Program, electronic health records, electronic medical records, EMR, incentive payment, physician participation EHR incentive program, provider
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While I have been extremely critical of the Medicare and Medicaid EHR incentive programs on this blog, I continue to feel that the overall goal is worthwhile and continue with my support for these initiatives. After carefully analysis, I feel that there are three primary reasons that all healthcare providers should participate in these programs. First, electronic health records have the potential to offer significant benefits to providers for the care of their patients. Second, electronic health records will eventually become the standard for healthcare in this country and all providers will need an EHR system in order to practice. Finally, the Medicare and Medicaid EHR incentive programs offer an opportunity for providers to reduce the overall cost for an EHR system.
In regard to the first reason, it is simply the statement of a well-recognized fact. The benefits of electronic medical records for the delivery of care has been well documented over the years. These benefits include factors such as improved access to the patient record, both in locating the record and in remote access, better documentation of patient encounters and rendered services, and improved tracking and reporting of test results. Once a fully integrated and networked system is in place, these benefits should continue to increase exponentially as possibilities, such as immediate access to a new patient’s entire health history or access to previous results for comparison to current studies, become a reality. These benefits should clearly help providers provide better care for their patients.
The second reason is not well established, but I believe that it represents the direction in which healthcare is moving. I base this statement on the overall trend that the healthcare system is currently pursuing in regard to electronic health records. The Medicaid and Medicare incentive programs are part of this trend, but I believe that the “private” health insurance companies will eventually also pursue this course. I have previously discussed my rationale for this opinion in a earlier post that can be found at the following link – http://emrhelpline.wordpress.com/2010/06/02/why-do-i-need-to-buy-an-electronic-medical-records-system/.
The third, and what should be the least important, reason is that the current EHR incentive programs are an opportunity for providers to reduce some of the costs associated with the implementation of an EMR/EHR system. I feel that this should be the least important reason because providers will probably be extremely disappointed and frustrated if the incentive payment is their primary rationale for participation. The fact is that the purchase of an electronic health records system is a significant capital expenditure. As I have pointed out in many posts, the federal government’s estimate for the cost of an EHR system (as part of these programs) is $104,000 over five years. While the incentive payments are a significant amount of money, the maximized amounts will only cover 40-60% of the cost over the five years (depending on which program the provider participates in). Providers will therefore still been incurring significant financial costs for the EMR/EHR system. It would therefore make more sense for providers to consider the first two reasons as the primary motivation for obtaining an EHR system, with the third reason as a nice benefit, or perk, for pursuing the purchase while the incentive programs are in place.
I feel that these three benefits represent the best reasons for providers to participate in the CMS EHR incentive programs. They offer clear and tangible benefits that providers will be able to realize from both a practice standpoint and from a financial standpoint.
Now that I have clearly laid out my rationale for participation of the EHR incentive programs, I recognize that my critical analysis of these programs in my posts may appear to be a contradiction to my professed support. In my next post, I will take the opportunity to fully explain the motivation behind my careful analysis and criticism.
THE BIGGEST PROBLEM WITH THE MEDICAID EHR INCENTIVE PROGRAM October 13, 2010
Posted by jaxncmd in EMR "Hot Topics", General EMR information.Tags: electronic health records, incentive payment, Medicaid EHR Incentive Program, physician participation EHR incentive program
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As I discussed in my previous post, I feel that both the Medicare and Medicaid EHR incentive programs have inherent flaws in their design that could potentially compromise their success. The Medicare flaw is caused by the structuring of the incentive payment itself. The biggest problem with the Medicaid EHR incentive program, however, is caused by the criteria required for participation in the program. This qualification requirement has the potential to be the “critical error” that prevents and/or discourages providers from participating.
The specific problem with the participation criteria is that it requires a provider to have at least 30% of their patient volume from Medicaid. While this may not be a significant problem for some practices, such as pediatrics or family medicine, other medical practices, such as surgical specialties, may find that this requirement creates a significant associated financial burden. While the Medicaid EHR program offers a greater incentive payment than the Medicare program, the 30% requirement may make the greater incentive payments unaffordable from a business standpoint.
My rationale for the statement is based on the fact that Medicaid is typically one of the lowest paying insurance programs. The reimbursement from Medicaid is usually far below that of commercial insurance companies, and usually at or below Medicare rates. While there are exceptions to this rule, specifically with certain primary care specialties, in general, Medicaid is typically one of the worst payers for most healthcare providers.
This requirement for the patient volume to be almost 1/3 Medicaid patients, therefore, can potentially raise significant financial issues for the practice. First, one would have to wonder about the financial health of the practice given this payer mix, and whether the practice could even afford the significant costs of the electronic health records system (again, I point out that providers first need to purchase the system before ever hoping to receive any incentive payments). Unless the other 2/3 of patients had higher paying insurances, this practice may have underlying financial difficulties, particularly at a time when states are routinely further cutting Medicaid reimbursements due to the economic downturn.
Second, although the Medicaid program offers higher incentive payments, providers may find that they are actually losing money due to the 30% requirement. If they are able to reduce the percentage of Medicaid patients to lower levels, such as 15-20%, and open up these office visits for patients with higher paying insurances, then providers may find that they are able to receive a much higher level of reimbursement that far exceeds the Medicaid EHR incentive payments.
Third, providers may object to this requirement on philosophical terms and find it to be offensive from both a political and economic standpoint. This requirement represents the government dictating the insurance makeup of a provider’s patient volume. Given the current political climate, many providers may feel that this is another example of “the government overstepping its boundaries” and object to this “free market” interference.
These concerns leave me feeling that this qualification requirement may create a significant hurdle for providers who may otherwise wish to participate in the program. In fact, it may actually serve as a disincentive for provider participation. The requirement also makes me question the primary purpose of the program. Although the stated purpose of the EHR incentive programs is to encourage provider adaptation of electronic health records, this patient volume criteria appears to have a more government-centric purpose. This 30% requirement appears to be an effort to encourage (force?) providers to maintain or increase Medicaid access at the same time that state government’s are further cutting Medicaid reimbursement.
Given these significant concerns with the Medicare and Medicaid EHR incentive programs, it may seem surprising that I still support these initiatives. Despite the limitations, I still feel that these programs are worthwhile and in my next post I will explain both the rationale for my support and the reason for my critical analysis.
THE BIGGEST PROBLEM WITH THE MEDICARE EHR INCENTIVE PROGRAM October 12, 2010
Posted by jaxncmd in EMR "Hot Topics", General EMR information.Tags: EHR Incentive Program, electronic health records, Final Rules, meaningful use, Medicare EHR Incentive Program, physician participation EHR incentive program, provider
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While the CMS EHR incentive programs are designed to encourage providers to adopt electronic health record systems, there is a significant problem in both programs that may interfere with the achievement of this goal. The major problems are not related to certification, the “Final Rules”, or meaningful use, but are instead flaws that are inherent in the design of these programs. The Medicare and Medicaid programs each have one of these “critical errors”.
The biggest problem with the Medicare EHR incentive program is that the incentive payment is directly tied to the Medicare allowable charges. While this may not seem like a significant problem, this association has the potential to create a significant source of provider dissatisfaction with the program. This association with Medicare reimbursement means that this EHR incentive program will therefore be afflicted with the same consternation that has been associated with provider Medicare reimbursement for over a decade.
As every Medicare participating provider is fully aware, the issue of Medicare reimbursement is a political football that has been kicked all over the field on a regular basis in recent years. This year alone, there have been several “fixes” to temporize the political rhetoric on this topic, but these efforts have failed to provide a long-term solution. In fact, within the next month, this topic will again rear its ugly head as the most recent “fix” expires. I will avoid digressing into a discussion of the specifics of the Medicare reimbursement issue, such as the sustainable growth formula problem, and simply note that until a long-term solution to this continuing and recurring problem has been made, then the Medicare EHR incentive program will be pulled down by this albatross.
This association has the potential to be a major source of provider dissatisfaction with the Medicare EHR incentive program, and it could potentially be a significant cause for providers to withdraw, or not even participate, in the program. My rationale for this statement is based on the fact that the proposed future reductions in Medicare reimbursement, unless repealed, have the potential to create an associated decrease in the provider payments under the EHR program. In order to retain the same level of “promised” incentive payments, providers will have to exponentially increase their productivity in order to simply “maintain the status quo” (unless of course their Medicare allowable charges are significantly above the threshold for qualifying for the maximum incentive payment).
Healthcare providers have already been angered and frustrated by the politics of Medicare reimbursement for many years. If Congress continues in their inability/unwillingness to create a long-term solution, this level of provider dissatisfaction will continue to grow. Since it is not unusual to hear providers considering reducing or eliminating Medicare services as a business response to these issues, it would not be surprising if the repercussions of this problem on the EHR incentive program is seen as further evidence demonstrating that Medicare participation is unsustainable from a business/financial standpoint. Ironically, this may result in the CMS EHR incentive program eventually itself becoming a disincentive for providers to participate in Medicare.
I point out this problem so that providers will be aware that it exists as they consider participation in the program. Hopefully, by being aware of this association, providers will be less frustrated by these proposed repercussions if they do occur. I hope that this will also make providers more inclined to participate and put political pressure on Congress to create a long-term solution for Medicare reimbursement.
Now that I have addressed the Medicare EHR incentive program’s major problem, I will plan to review the Medicaid EHR program’s problem tomorrow, as it has a different “significant critical error”.
THE BIGGEST DECISION FOR PROVIDERS EVALUATING THE EHR INCENTIVE PROGRAMS October 11, 2010
Posted by jaxncmd in EMR "Hot Topics", General EMR information.Tags: cost, EHR, EHR Incentive Program, incentive payment, physician participation EHR incentive program, provider, purchase an EHR system
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Without doubt, the biggest decision that many providers will face regarding participation in the CMS EHR incentive program is whether they can afford to participate in it. Specifically, whether they can afford the costs of the EHR system in order to qualify for the program incentives.
While the marketing for the EMR and EHR systems makes qualification for the incentive payments seem like a foregone conclusion, the fact is that the structuring of these incentive programs place the financial burden for the entire initiative squarely on the shoulders of the providers. As I have discussed in previous posts, the marketing of these incentive programs is targeted to healthcare providers, but it is actually the providers who are providing the primary financing on which the success of the programs depends. Providers must first purchase an EHR system, or make additions/upgrades to their current systems, before potentially receiving any monetary benefit from these programs.
The decision for participation, therefore, is first and foremost a business financial decision rather than a “medical decision”. While the EHR systems clearly offer the potential for significant benefits for the medical practice, these benefits mean nothing if providers cannot afford the costs and go out of business. Given the significant cost of these systems (government estimate of $104,000 per provider over five years), it is imperative that providers do due diligence and fully research this capital expenditure to be sure that they are spending their money wisely. In addition, since the majority of these providers will be in small medical practices, the cost of an EHR system represents a significant investment and any mistakes, such as choosing the wrong system, will have significant consequences.
Obviously, the final decision as to whether a provider can afford to participate in the EHR incentive programs will be an individual decision. The information that I have recommended that providers obtain in my recent posts, however, will hopefully help in the decision making process.
By recognizing the status of their current practice situation, providers will be able to have a realistic expectation regarding the actual expenditures that will be required in order to achieve a fully certified and fully functioning EHR system. This will allow them to be a more directed and informed consumer when dealing with the EMR/EHR vendors. This should also allow them to prepare and budget these costs and avoid significant “sticker shock”. By anticipating these costs, providers will hopefully find the overall process of obtaining an EHR system to be more efficient and less confusing.
Armed with the data regarding their Medicare allowable charges and the percentage of Medicaid patients in the practice, providers will also be able to anticipate the potential benefits that they would receive from participation in the EHR incentive programs. This will therefore allow providers to have a realistic estimation of their potential incentive payments, rather than relying on the “promised” incentives from the marketing material of the EMR/EHR vendors. This will allow providers to perform a realistic cost-benefit analysis for this investment based on their own practice information.
Obviously, there are other considerations involved in this process, such as available cash flow and financing options. These are general financial evaluations that any business needs to pursue when undertaking such a significant capital investment, and this information should be thoroughly reviewed with the practice accountant.
As I previously stated, there are many benefits that providers may ultimately experience from an EHR system from a medical/healthcare standpoint. Unfortunately, these programs are primarily being “sold” to providers based upon the incentive payments. While the incentive payments do offer a financial offset for the purchase of these systems, the payments do not come close to covering the overall significant costs of these systems.
I hope that by pointing out the financial considerations involved in the EHR decision process that providers will be able to make a fully informed decision for their practice and avoid unnecessary financial difficulties. This will also hopefully allow providers to make an informed decision to invest in an EHR system for the benefits that the system can offer to their practice, rather than to partake in the promise of government “easy money” from the incentive programs.
While the incentive programs do offer an opportunity to recoup some of the costs of an EHR system, there is a major problem with the programs that all providers need to be aware of. I will discuss this topic in my next post.
