On the cusp of the new year, CMS and the Office of the National Coordinator for Health Information Technology (ONC) released copies of closely related rules to implement provisions of the HITECH Act which provides for incentive payments for the adoption and meaningful use of certified electronic health record (EHR) technology. These proposed and interim final rules delineate the preliminary standards, specifications and certification criteria for EHR technology and the much-awaited definition of "meaningful use."

Meaningful Use and Staged Set-Up

Meaningful Use Defined

In general, an eligible provider or hospital must be a meaningful user of certified EHR technology in order to receive Medicare and Medicaid incentive payments. To qualify as a meaningful EHR user, three requirements must be satisfied:

  • The provider or hospital must use certified EHR technology in a meaningful manner (e.g., electronic prescribing);
  • The provider or hospital must use certified EHR technology to improve the overall quality of care; and
  • The provider or hospital must submit information on clinical quality measures to CMS.

Phased Approach

CMS proposes to use a three-stage phased approach to introduce the meaningful use criteria. The longer an eligible provider or hospital delays implementing certified EHR technology, the more rapidly it will need to progress from Stage 1 to Stage 3 to receive the full incentive payments. Currently, the proposed rule only provides the goals of Stage 1 which focus on:

  • Electronically capturing health information in a coded format;
  • Using that information to track key clinical conditions and communicate for coordination of care purposes;
  • Implementing clinical decision support tools to facilitate disease and medication management; and
  • Reporting clinical quality measures and public health information to government agencies.

CMS will update the criteria periodically, and estimates that the Stage 2 and 3 criteria will be proposed by the end of 2011 and 2013, respectively.

Incentive Programs

The Medicaid and Medicare incentive programs for the adoption of certified EHR technology are separate programs, but share a common definition for meaningful use. Providers should note there are strategic differences between the two programs concerning eligibility and payment structure. Eligible Professionals (EPs) who are eligible for both the Medicare and Medicaid program may only participate in one program. Eligible hospitals, on the other hand, can qualify to receive payments from both Medicare and Medicaid EHR incentive programs.

Under the Medicare program, an EP is a doctor of medicine or osteopathy, a doctor of dental surgery or dental medicine, a doctor of podiatric medicine, a doctor of optometry or a chiropractor who is legally authorized to practice under state law. CMS has proposed that hospital-based EPs -- those who furnish 90 percent or more of their allowed services in hospital inpatient, outpatient and emergency department settings -- will not be eligible for incentive payments. Qualifying EPs can receive incentive payments beginning as early as 2011 and for up to five years. Generally, the maximum total incentive payment an EP can receive under the Medicare program is $44,000.

Eligible hospitals under the Medicare program include "subsection (d)" hospitals located within the 50 states or the District of Columbia and which are paid under the hospital inpatient prospective payment system. Eligible hospitals that meet the requirements for demonstrating meaningful use can receive incentive payments for up to four fiscal years for fiscal year beginning in October 2010. Hospital incentive payments are based upon a complex calculation that accounts for discharges, inpatient bed days and charity care.

Under the Medicaid program, EPs include a slightly different cast of eligible providers: physicians, dentists, nurse practitioners, certified nurse midwives and physician assistants practicing predominantly in a Federally Qualified Health Center or Rural Health Clinic (FQHC/RHC) that is directed by a physician assistant. Similar to the Medicare program, EPs are not eligible if 90 percent or more of their services are performed in a hospital setting. EPs must meet patient volume thresholds (e.g., 30 percent Medicaid), and can receive up to $63,750 over the six-year period, with maximum payment achieved by early adoption and meaningful use of qualifying EHR. Eligible hospitals include acute care hospitals and children's hospitals. The Medicaid incentive payment for hospitals is based on a statutory formula focusing on a hospital's Medicaid share.

"Certified EHR Technology": Standards, Implementation Specifications & Certification Criteria

Separately, in an Interim Final Rule published on December 30, 2009, the ONC released an initial set of standards, implementation specifications and certification criteria as "the first step in an incremental approach to adopting . . . [the] criteria to enhance the interoperability, functionality, utility, and security of health information technology." The criteria set forth in the Interim Final Rule are those necessary for an eligible provider or hospital to achieve Stage 1 of the "meaningful use" of "Certified EHR Technology" under the HITECH Act.

The Interim Final Rule follows similar terminology to that used in the HIPAA Privacy and Security Rules, in that it establishes "standards" and "implementation specifications" for four areas of EHR development and use: (1) vocabulary systems, (2) content exchange, (3) transport of information and (4) privacy and security of EHR technology. Although the rule identifies standards and criteria that support HIPAA security compliance, the rule focuses strictly on the capabilities of certified EHR technology and does not alleviate the need for a HIPAA security risk assessment and appropriate implementation of, or modifications to, a provider's compliance program and processes. The Secretary of the U. S. Department of Health and Human Services (HHS) states, the rule "does not change existing HIPAA Privacy or Security Rule requirements, guarantee compliance with those requirements, or absolve an EP or eligible hospital, or other healthcare provider who adopts Certified EHR Technology from having to comply with any applicable provision of the HIPAA Privacy or Security Rules."

The Interim Final Rule gives providers the option to satisfy the criteria for certified EHR technology through two methods. First, a provider may implement a "Complete EHR" system, which has been developed to meet all applicable certification criteria established by HHS. The second method is to assemble a combination of "EHR Modules" which are individually certified as meeting the specific functional criteria it is designed to address. However, assembling EHR Modules must be done in a way that ensures that the EHR Modules each are certified as meeting all of the applicable certification criteria, and the grouping of EHR Modules includes all of the capabilities required by the EHR certification criteria.

The public may comment on the Interim Final Rule through March 15, 2010. Providers should be aware that these EHR standards and implementation criteria are only the beginning of a lengthy process. HHS states that "the requirements for meaningful use will become more demanding over time, and consequently that certified EHR technology will need to include greater capabilities, as well as the ability to exchange electronic health information in a variety of circumstances with many different types of health information technology." Additional HHS rulemaking is expected shortly after this rule, with respect to the criteria for the HIT Certification Program, which will issue standards for the processes that a certification body will need to follow to become authorized by ONC to certify EHR technology, including standards for the EHR technology certification process itself.