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ARRA Issue Brief

Zach Finn and staff from BigBendHealth.com have provided this timely and important summary to Cap Scan

American Recovery and Reinvestment Act

On February 17, 2009, President Barack Obama signed into law the American Recovery and Reinvestment Act (ARRA). Title XIII (and title IV of division B) of ARRA are called the Health Information Technology for Economic and Clinical Health (HITECH) Act. The Act focuses on the development of a nationwide health information technology (HIT) infrastructure that supports electronic health records (EHRs) and health information exchange, as well as revised HIPAA privacy and security provisions.

Medicare and Medicaid Incentive Overview

Division B, Title IV of the HITECH Act, contains the Medicare and Medicaid Health Information Technology financial incentives, to be distributed to eligible professionals and hospitals for adoption and meaningful use of certified EHR technology. This Issue Brief outlines the Medicare and Medicaid payment incentives for eligible professionals however it is subject to federal guidelines.

What are certified electronic health records?

Certified EHR technology means an EHR that is certified to meet standards pursuant to the HITECH Act. To be qualified as a certified EHR technology, the certified technology must include patient demographic and clinical health information, such as medical history and problem lists, and have the capacity to provide clinical decision support to support physician order entry, to capture and query information relevant to healthcare quality, and to exchange electronic health information with, and integrate such information from other sources.

Who is a meaningful user?

A meaningful user is an eligible professional that can, based on Department of Health and Human Services (HHS) requirements, do the following:

• Demonstrate to the satisfaction of HHS that they are using certified EHR technology in a meaningful manner, including the use of electronic prescribing;
• Demonstrate to the satisfaction of HHS that their technology is connected in a manner that provides for the electronic exchange of health information; and
• Use the technology to report on clinical quality measures and other measures selected by HHS.

Demonstrate of meaningful use

HHS will specify how an eligible professional can demonstrate that they are a meaningful user. Options may include an attestation, the submission of claims with specific coding indicating that the patient encounter was documented using an EHR, a survey response, or through a reporting mechanism. HHS will also post on the Centers for Medicare and Medicaid Services website a list of the names, addresses and phone numbers of those eligible professionals that are meaningful EHR users.

Coordination of payments

Providers who qualify for both Medicaid and Medicare incentive payments will not receive duplication in incentive payments. They must elect to receive either Medicare or Medicaid incentive payments. They may not receive both.

Medicare vs. Medicaid incentives for adoption

Medicare incentive payments only reimburse eligible professionals that have EHR systems already in place; in contrast, Medicaid will reimburse eligible professionals (including non-physician providers) for a portion of their costs attributable to adoption and use of certified EHR technology.

Medicare E-prescribing limitations

The Medicare E-prescribing incentive will be phased out after 2009, with the adoption of the Medicare EHR incentives.

Penalties for failing to adopt EHRs

There are currently no penalties for providers who fail to adopt an EHR system except for those penalties associated with Medicare payments. No reductions in Medicaid payments are to be made if a provider does not adopt certified EHR technology.

Medicare Incentive for Eligible Professionals

The HITECH Act offers incentive payments to physicians equal to 75% of the Medicare Part B allowed charges per physician. Payments will be based on claims, submitted no later than 2 months after the end of the payment year, of the allowed charges for covered professional services furnished during the year. The HITECH also contains incentives and disincentives for physicians who provide the vast majority of their professional services through Medicare Advantage plans.

Who qualifies for Medicare incentive payments?

Physicians who receive Medicare reimbursement payments are eligible for this incentive program. The law excludes from the definition of eligible professionals physicians that are hospital based such as anesthesiologists, pathologists, and emergency room physicians. HHS will determine who is a hospital based physician based on whether a physician furnishes substantially all of his/her services in the hospital setting using hospital facilities and equipment. These determinations will not be based on employment or billing agreements.

How much are the incentive payments?

Incentive payments become available in 2011 and end entirely by 2016. Physicians demonstrating meaningful use by 2011 or 2012 may collect a maximum of $44,000 over a 5-year period. No incentives are available to those who do not begin payments by 2014. For physicians practicing in designated health professional shortage areas (HPSA’s), the incentive payment is increased by 10% per year for a total maximum incentive payment of $48,400. Incentive payments may start as early as 2011. This means that for physicians to qualify for the maximum amount of incentive payments, adoption and full operation of an EHR system must be in place by October 2010.

When do penalties begin?

Medicare will penalize physicians who do not become meaningful EHR users by 2015. For such physicians, payments for their professional services will be reduced by 1% in 2015, by 2% in 2016 and by 3% in 2017 and each subsequent year.

HHS has the authority to exempt physicians from the payment reductions if they are able to demonstrate that compliance with the meaningful EHR user requirements would result in a significant hardship.

Medicaid Incentives for Provider Health IT Adoption and Operation

Medicare incentive payments only reimburse physicians that have EHR systems already in place. In contrast, Medicaid incentive payments are given to eligible professionals (including non-physician providers) who are acquiring EHR systems or updating existing systems. In order to receive Medicaid EHR reimbursement, an eligible professional must waive any rights to Medicare EHR Incentive payments available to professionals under the HITECH Act, including incentives available to providers associated with Medicare Advantage plans.

The HITECH Act calls for states to reimburse eligible Medicaid providers for a portion of their costs attributable to adoption and use of certified EHR technology. In order for a state to receive funds, for making Medicaid EHR payments and for certified EHR technology payments to be considered reimbursable to a provider, the following requirements must be met:

• The state must make certified EHR technology payments directly to providers without rebates or deductions.
• An eligible professional must pay the non-reimbursed 15% of “net average allowable costs.” for EHR technology.
• During the first payment year (for providers who have not already adopted EHR technology), the provider must demonstrate that it is engaged in efforts to adopt, implement, or upgrade certified EHR technology.
• For subsequent payment years, and for any provider who adopted certified EHR technology prior to its first payment year, the provider must demonstrate “meaningful use” of certified EHR technology, according to a standard which is likely to be the same as or similar to the Medicare “meaningful use” standard.
• The EHR technology being used must be compatible with the state and federal administrative management systems.

Who qualifies for Medicaid incentive payments? Medicaid incentive payments apply to a broader group of professionals as compared to the Medicare incentives. Eligible professionals include: physicians, dentists, certified nurse mid-wife, nurse practitioner, and physician assistants employed by a rural health clinic (RHC) or federally qualified health center (FQHC) that is led by a physician assistant. In order to qualify, these eligible professionals must meet one of the following eligibility requirements: Non-hospital based eligible professionals who attribute at least 30% of their patient volume to Medicaid patients; Pediatricians who are not hospital based and who attribute at least 20% of their patient volume to Medicaid patients; and Eligible professionals who practice predominantly in a FQHC or rural health clinic and who attribute at least 30% of their patient volume to “needy individuals.”

Needy individuals include individuals who: 1) receive assistance under Medicaid; 2) receive assistance under the State Children’s Health Insurance Program (SCHIP); 3) receive uncompensated care from the provider; or 4) receive reduced charges by the provider on a sliding scale basis based on the patient’s ability to pay.

How much are the incentive payments?

Medicaid incentive payments may be up to $63,750 per eligible professional. HHS will determine the “average allowable costs” which consist of the average first year costs associated with the purchase or upgrade of EHR technology and in subsequent years costs associated with the maintenance, operation and use of the EHR technology. Any payments received by the provider from other sources (i.e. state or federal grants) are then subtracted from the average allowable cost, creating the “net average allowable costs.”

A provider may collect up to 85% of the “net average allowable costs.” The net average allowable costs cannot exceed $25,000 in the first year (85% x $25,000 = $21,250), or $10,000 in the subsequent years (85% x $10,000 = $8,500). Incentive payments for the first year, which is intended to cover the purchase or upgrade of the EHR system, cannot be distributed after 2016. All payments end after 2021. Pediatricians may only collect 2/3rds ($42,075) of the dollar amounts of other qualifying eligible professionals, unless their practice exceeds over 30% of Medicaid patient volume.

NEXT STEPS

Both HHS and the state of Florida will be providing further clarification regarding the distribution and any further requirements related to these incentive payments. Until then, providers can focus on establishing and documenting their eligibility for certified EHR technology payments. This includes such steps as 1) determining and documenting Medicare and Medicaid patient volumes, 2) performing a preliminary calculation to determine whether it would be more beneficial to receive Medicare or Medicaid EHR incentives, 3) confirming that your existing or proposed EHR technology meets all applicable standards, 4) confirming compatibility of the EHR system with state and federal administrative management systems, 5) providers not currently using EHR technology can begin an EHR product review process, and 6) all providers can engage, learn about the administrative business efficiencies of, and how to connect to their local health information exchange.

Please feel free to contact www.BigBendHealth.com or Capital Medical Society, 877-9018 if you require assistance with these efforts.

UPDATE

By Steven R. West, M.D., FMA President

“You may have to fight a battle more than once to win it."
- Margaret Thatcher

At the invitation of Chris G. Constance, MD, I had the opportunity to speak to the Charlotte County Republican Club about the challenges facing the medical community in Florida, including declining physician reimbursement, the aging patient population, rising liability costs and an impending physician shortage. I also spoke about the Florida Medical Association’s (FMA) 2009 Managed Care Legislation that is on its way to Governor Crist and awaits his signature. I asked that everyone in attendance contact the Governor’s office and ask him to sign this bill.

As noted before, it took a tremendous effort, with all of organized medicine pulling together, to pass this critical piece of legislation. The opposition from big insurance was ferocious and unfortunately this opposition continues.

We have discussed SB 1122 with the Governor’s staff, who have indicated that Governor Crist has serious concerns. The managed care companies have been attempting to persuade the Governor to veto this bill and will stop at nothing to achieve their goal. As demonstrated by their argument during the last few days of session, which suggested that mandatory assignment would put Blue Cross out of business, their goal is clear: to cause as much confusion and fear of this bill as possible.

To convince the Governor to sign this bill, it is imperative that all of Florida’s physicians forcefully convey the message of how important this bill is to them and to their patients. To that end, it is important that you write a letter of support for SB 1122, addressed to Governor Crist. Please send your letter this week to:

The Honorable Charlie Crist
Office of the Governor
State of Florida
The Capitol
400 S. Monroe St.
Tallahassee, FL 32399-0001

The Executive Vice President of the American Medical Association (AMA), Mike Maves, MD and AMA Senior Vice President of Advocacy, Richard A. Deem, traveled to Florida and met with the FMA Executive Committee of the Board of Governors. They spoke about the AMA’s May 11th meeting with President Barack Obama. The AMA and five other stakeholder organizations met with President Obama at the White House on May 11 to discuss their shared goal of reducing the growth in health care spending by 1.5 percent annually over the next ten years. The health organizations did not strike a deal with the Obama administration on a health system reform plan, but they came together to demonstrate their commitment to doing their part to help pave the way toward a financially sustainable health care system.

The groups identified initiatives such as administrative simplification and standardization, transparency to support effective insurance markets, coordinated care, adoption of best practices and disease prevention among those that promise to make heath care costs more sustainable. AMA President-Elect, J. James Rohack, MD, and Chair-Elect of the AMA Board of Trustees, Rebecca J. Patchin, MD, represented the AMA. Other organizations at the table included the Advanced Medical Technology Association, American’s Health Insurance Plans, the American Hospital Association, Pharmaceutical Research and Manufacturers of America, and Service Employees International Union.

“The AMA is committed to action to help achieve greater value from our nation’s health care spending,” Dr. Rohack said. “We want to help bend the spending curve and move forward on health reform.”

• Has the AMA agreed to the concept of a single bundled payment for hospitals to share with physicians?
• Does reducing the growth rate in total health care spending consign physicians to steep payment cuts?
• What is the AMA position on repealing the Sustainable Growth Rate (SGR) update system?

For the answer to these questions and others about slowing the growth of health care costs, go to: http://informz.net/medone/data/images/scan3572_000.pdf

Leon County Dental Association Hosts Social — Invites We Care Staff

By Shannon Dent, CMS Marketing Assistant

The Leon County Dental Association held a social event for their member dentists, their spouses and business partners on Tuesday, May 12th at Dorothy B. Oven Park. This was the first time, in nine years they have done this particular event. It was extra special that they invited staff from the We Care Dental Network.

To represent the We Care Dental Network, Ashley Crowley, Dental Case Manager and I attended the event. We especially wanted to thank our dentist volunteers who donate their care to low-income, uninsured patients. This program would not be possible without their willingness to help and we wanted to show our support for them!

Reminder: The Capital Medical Society is hosting a joint CME program on Tuesday, November 10 at 6:00pm, featuring Walt Colón, DMD, Periodontal Associates of North Florida and Tom Noel, MD, Southern Medical Group. We hope to have a large crowd at this program.

(L-R) Tyler Baldock, DDS, MS, LCDA Executive Board; Susan Byrne, DMD, LCDA Executive Board; Ashley Crowley, We Care Dental Case Manager; Heather Burch, DMD, MS, LCDA Outgoing President; Jim McSoley, DMD, LCDA Executive Board; Joe Barnett, DDS, LCDA Incoming President; Jay Walton, DDS, Florida Dental Health Foundation Chair.

(L-R) Mark McQuary, DDS, Current President of the North West District Dental Association; Walt Colón, DMD, MS, Chair, We Care Dental Committee; E. Lynn McLarty, DDS, We Care Dental Committee; M. Darrh Bryant, DMD, We Care Dental Committee; Ashley Crowley, We Care Dental Case Manager.