Editor’s Note: In a two-part interview for “Healthcare Informatics,” Manatt Partner Deven McGraw—a member of the federal Health Information Technology (HIT) Policy Committee and chair of its Privacy and Security Workgroup—looks ahead at what to expect from the Meaningful Use Stage 3 proposed rule. Below is a summary of Deven’s predictions of what the new rule—scheduled to be released in early March—might bring. To read the full interview, click here for part 1 and here for part 2.

Expectations for the Stage 3 Proposed Rule of Meaningful Use

Based on the emphasis of the Office of the National Coordinator (ONC), the proposed rule is expected to focus on ensuring the goals of interoperability are achieved—that disparate systems will be able to exchange data, consume it and use it to populate their electronic health record (EHR) systems. The Health IT Policy Committee believes it’s important that Stage 3 focuses more on achieving outcomes rather than emphasizing process. In anticipating Stage 3, the Policy Committee thoughtfully articulates the tension between wanting to move toward more outcomes-based measures and fearing we’ll lose the progress we’ve made toward the process objectives in Stages 1 and 2. The proposed rule is likely to seek a balance between heightened attention to interoperability and some relief in the specific process objectives and quality reporting measures that brought complaints from providers.

There has been some talk that Stage 3 will focus on interoperability only. We don’t have many metrics around evaluating outcomes, however—and very few process measures incorporate the necessity of exchanging data in an interoperable way. It’s hard to envision a robust incentive program that is microfocused on interoperability alone.

Moving Away from a “Check the Box” Approach

In Stage 2, there was some pushback and discomfort among program participants with how objectives for exchanging data were presented. There was the feeling that the way the objectives were set—such as the percentages of exchange that needed to happen—reflected a “check the box” approach as opposed to a true holistic assessment of whether care is better coordinated because all of a patient’s providers can exchange data.

How can we reward the interoperable exchange of data in a way that’s less "check the box?" There are not as many options as we’d like, but outcomes measurement is one possibility.

Privacy Challenges of Interoperable Systems

In most cases and most states, it is legally allowed to exchange data to treat patients, on the presumption that most patients would consent to the exchange, if asked. Under the Health Insurance Portability and Accountability Act (HIPAA), as well as many state privacy laws, exchanging data is permitted without the need for specific patient authorization.

There are exceptions. Sharing information that’s covered by federal substance treatment laws requires specific patient authorization, as well as the need to put the recipient provider on notice that the data carries additional privacy protections. In addition, some state laws require patient consent even to exchange data. In those instances, it is the originating provider’s responsibility to get and store patient consent.

The ability to persist consent (meaning the consent obligation travels with the data as it crosses institutional/organizational boundaries) isn’t quite there yet from a technical capability standpoint, in terms of widespread availability and use. Ultimately, it is the provider’s obligation to have secure ways to exchange data and be sure it is going to the right place.

Is Meaningful Use Near Its End?

There are some people saying this is the last rule. The incentive dollars are no longer going to be there. The penalty provisions remain, however—and the Centers for Medicare & Medicaid Services (CMS) needs a strategy for dealing with penalties in the years ahead, when the incentive dollars are gone. Even though the incentive program may be done, now we are moving into the penalty phase. That could require adjustments in the objectives that must be met to avoid incurring penalties.

CMS has enormous financial resources at its disposal through the Medicare/Medicaid programs that it could continue to deploy to create either incentives or disincentives. It could shape objectives that are related to avoiding penalties the same way it shaped objectives around earning incentives. The real question is how much can we leverage the penalties?

While Stage 3 is not a swan song, it is a significant milestone. It marks the last time that a set of objectives can be tied to incentive dollars. After that, it’s all about the penalties.

Congress already wants to know what we have done—and what we have gained for the dollars spent. Stage 3 is our last shot at maximizing our investment in meaningful use.