March 12, 2010

Ms. Charlene Frizzera
Acting Administrator
Centers for Medicare & Medicaid Services
Hubert H. Humphrey Building
200 Independence Avenue, S.W., Room 445-G
Washington, DC 20201

Re: Medicare and Medicaid Programs; Electronic Health Record Incentive Program

Dear Ms. Frizzera:

Introduction

The Healthcare Financial Management Association (HFMA) appreciates this opportunity to comment on the interim final definition of meaningful use published by the Centers for Medicare & Medicaid Services (CMS) in the Federal Register on January 13, 2010.

In general, HFMA supports CMS's efforts in encouraging providers to adopt electronic health record (EHR) technologies that will improve the quality of care and efficiency of the healthcare system. Although we understand the need for stringent criteria, we are concerned that the proposed definition will make it impossible for the majority of providers to qualify for financial incentives and avoid substantial penalties. Further, HFMA believes that in some instances the definition will actually serve as a barrier to achieving CMS's intended outcome. Specifically, we have concerns about the timing and scope of the phases, the reporting burden, the broad definition of hospital-based physicians, the identification of hospitals for incentive payments, and the Medicaid incentive payment requirements.

Timing and Scope

Phase Timing

According to 2008 data from 3,342 hospitals that participated in a survey by the American Hospital Association (AHA), not one hospital met all of a subset of 12 standards included among the 23 objectives necessary to achieve meaningful use. Successful EHR adoption is an incremental process requiring significant expenditures, human resources, and cross-functional collaboration within the hospital or hospitals in the case of an integrated health system. This approach requires three to seven years, depending on a hospital's or health system's size and baseline capabilities. For example, many large health systems use different information system vendors for the same clinical discipline (e.g. radiology, pharmacy). The effort and cost to convert from multiple information systems can take years. The true benefit of EHRs cannot be achieved if hospitals within a health system function on disparate information systems.

CMS believes that 30 to 40 percent of providers (approximately 1,500 to 2,000 hospitals) will achieve meaningful use by 2011. Given the current range of baseline capabilities among U.S. hospitals and the time required to install an EHR, HFMA believes this estimate is optimistic. A large percentage of hospitals and their IT vendors simply lack the resources required to complete this undertaking in such a short period of time particularly as they have been coping with the largest economic crisis in decades.

Further exacerbating these difficulties is the current staggering of the phases. All providers, regardless of when they first become meaningful users, will be required to achieve Phase 3 meaningful use (whose requirements are currently undefined) by 2015 or face significant financial penalties. This requirement has the potential to cause two significant, unintended consequences that HFMA believes runs contrary to the intent of the legislation:

1. Instead of redesigning clinical and administrative pathways to take full advantage of EHR technologies, providers will be compelled to implement EHRs on top of existing, inefficient processes to meet the FY 2015 deadline. As a result, much of the opportunity for cost reduction and quality improvement could be squandered. For example, the implementation of EHRs is intended to improve patient safety through the implementation of computerized physician order entry (CPOE) which requires significant practice changes on behalf of physicians. This requires enormous change management efforts and an accelerated implementation of such change could result in unintended consequences on quality thus increasing costs to the American health system overall.
2. This timeline will challenge small and rural hospitals, which will struggle to access sufficient capital and be forced to compete against the purchasing power of larger systems for both human resources and vendors. The resulting payment reductions in 2015 will disproportionately impact these facilities because they have a higher mix of Medicare patients, jeopardizing their financial viability.

Phase I Scope

In light of the AHA survey results cited above, HFMA also believes that requiring hospitals to comply with all 23 of the requirements to qualify as meaningful users demands hospitals bridge too broad of a functionality gap in too little time. Hospitals adopt EHR functions incrementally. The 23 standards include advanced functions such as CPOE, clinical decision support, and electronic medication reconciliation. These functions are typically brought online at the end of a multiyear implementation as noted previously.

Additionally, some of the nonclinical standards, such as electronic insurance verification and claims submission, duplicate capabilities hospitals already have within their billing systems. While we support the use of electronic claims, we do not believe that this objective should be a part of meaningful use. It is not directly related to improvements in patient safety or quality of care. We believe that these functions are more appropriately housed within billing systems and encourage CMS to remove them from the meaningful use criteria.

Reporting Burden

HFMA is deeply concerned about the reporting burden for both health IT (HIT) functionality and quality data and recommends changes to both. We believe hospital efforts are better spent implementing EHRs than generating reporting.

HIT Functionality Measures

As currently constructed, many of the proposed HIT functionality measures require burdensome reporting that exceeds the estimated eight hours per year included in the proposed rule.

For example, to calculate the percentage of all orders placed through CPOE, hospitals will need to define the denominator of all orders placed via CPOE, in writing, or by another means. This process will require manual chart review, which generally takes 20 minutes per chart for experienced reviewers. To reduce the administrative burden on hospitals, HFMA recommends that CMS require hospitals to activate CPOE.

HFMA also recommends that CMS include in the measure the use of CPOE within a hospital's emergency department (ED) for patients who are subsequently admitted. This is important because, in many hospitals, the majority of patients admitted enter the hospital through the ED as the initial point of access. CPOE within the ED helps with care handoffs.

Of the 22 proposed hospital measures (not including quality reporting), eight require a declarative response, and 15 require calculation of actual performance through use of a percentage. Industry experience with hospital quality reporting suggests that the measures requiring use of a percentage pose a significant burden. For some measures, calculating a percentage may actually prove to be impossible.

To ensure efficient reporting, we urge CMS to reformulate the percentage performance measures so that:

• Numerators and denominators are explicitly specified
• No measures require hospitals to look across paper and electronic processes
• Each measure provides a minimum threshold of cases for reporting
• Sampling is allowed for any measure that involves manual processing

Quality Reporting

HFMA strongly supports quality improvement initiatives, including quality reporting. However, developing and testing measures for automated reporting takes time and is essential to ensure that vendor products, once installed and in use, produce scientifically valid and reliable data.

We are concerned that the list of measures proposed in this rule takes a broad approach with no overarching quality improvement vision in mind. We offer the following specific recommendations for the selection of clinical quality measures for the EHR incentives program:

• Measures chosen for use in the Medicare pay-for-reporting program should be considered for implementation in the EHR incentives program.
• Measures should be selected for their potential to advance patient care and with the consultation of quality reporting stakeholders.
• Measures selected for the EHR incentive programs should be comprehensively tested in the field to ensure that they are thoroughly specified, clinically valid when the data are collected through an EHR system, and feasible to collect.
• Measures should be phased in over time in clinically related measure sets to allow for a smooth transition.

HFMA also urges CMS not to use any of the readmission measures. The readmission measures are inappropriate as meaningful-use criteria. Currently, the 30-day risk-adjusted readmission rates for heart attack, heart failure, and pneumonia are calculated by CMS based on Medicare claims data because hospitals cannot capture data on patients who were admitted initially to their facilities but later readmitted to another hospital. In addition, hospitals do not have the data needed to apply the risk-adjustment methodology for the readmission measures that CMS uses.

Definition of Hospital-Based Physician

The ARRA law defines hospital-based eligible professionals as those who furnish substantially all of their services in a hospital setting (whether inpatient or outpatient) using the facilities and equipment, including the qualified EHR, of the hospital. CMS proposes to further define such professionals (for both Medicare and Medicaid purposes) as those who furnish at least 90 percent of their services in the inpatient hospital, outpatient hospital, or ED setting. The agency considers as outpatient hospital settings all types of outpatient care settings within the main provider facility, within on-campus and off-campus provider-based departments of the hospital, and within entities having provider-based status.

HFMA is extremely concerned that the definition of meaningful use inappropriately excludes hospital-based physicians from incentive payments simply because their offices or clinics are located in a facility owned by the hospital. An EHR that is used in an ambulatory setting is entirely different from an EHR that is used in an inpatient setting because of the inherent differences between the types of care provided in each. In fact, many physicians who treat patients in the ambulatory setting do not provide care in the inpatient setting and, thus, do not use the inpatient EHR. Moreover, even within the ambulatory setting, the hospital may purchase for its ambulatory physician services a separate physician practice EHR that is distinct from the hospital ambulatory EHR.

A hospital that implements a separate EHR in an ambulatory setting incurs a substantial cost above and beyond the cost of the inpatient EHR. A primary reason that hospitals make a separate investment is that the inpatient EHR technology platform does not have the functionality required for ambulatory care sites, such as modules for appointment scheduling, office and physician workflow automation, prescription tracking and renewal, patient progress notes, patient care coordination (e.g., preventive care reminders), and other ambulatory-care-specific practice management tools.

HFMA believes that excluding physicians who provide the majority of their care in ambulatory settings is counter to the legislative goals set forth in the American Recovery and Reinvestment Act (ARRA). The lack of financial incentive payments for hospital-based physicians will slow the adoption and implementation of EHRs for these providers and hinder the goals of greater physician-hospital integration that is so crucial for improving quality and reducing the cost of care.

Hospital Identification

HFMA has concerns about CMS's proposal to use the cost-report CMS certification number (CCN) to identify entities eligible for incentive payments. There is no standard approach to defining exactly what facilities a Medicare provider number encompasses, and in many instances, a single provider number can include multiple sites of a hospital system. The Medicare and Medicaid payment incentives in ARRA are on a base amount of $2 million plus a capped per discharge amount per hospital. Therefore, if the Medicare provider number is used to define a hospital, a healthcare system with multiple hospital sites (but a single Medicare provider number) would receive one ARRA incentive payment for the entire healthcare system (that is, one $2 million base payment plus the capped per discharge amount).

If the Medicare provider number is used to define a hospital for EHR incentive payment purposes, a healthcare system with multiple hospital sites and a single Medicare provider number representing all of these sites will be disadvantaged relative to others enumerated with multiple IDs. Multiple hospitals assigned one Medicare provider number would be eligible only for one base amount and would be much more likely to reach the discharge cap, thereby receiving substantially less funding than if the hospitals were enumerated separately.

For HIT incentive payment purposes, HFMA urges CMS not to use a CCN as the sole criterion to define a hospital or critical access hospital (CAH). Instead, we ask CMS to use a multipronged approach that allows a hospital or CAH to be defined in ways that acknowledge the varied organizational structure of multihospital systems, including by a distinct CCN, a distinct ED, or a distinct state hospital license. Under this multipronged definition, each distinct hospital or CAH would be eligible to qualify separately for the HIT incentives.

Medicaid Incentive Payment Program

Access to capital is the largest barrier to hospital adoption of EHR systems. Given that the Medicare EHR Incentive Program provides funding only after successful adoption has occurred, the one year of Medicaid support for adoption, implementation, or upgrading of EHR systems will be vitally important.

The proposed rule gives states flexibility in deciding how the aggregate EHR incentive payment to a hospital is apportioned over years. CMS proposes that states must make payments over a minimum of three years and a maximum of six years. In any given payment year, no annual Medicaid incentive payment to a hospital may exceed 50 percent of the aggregate incentive amount. Likewise, over a two-year period, no Medicaid payment to a hospital may exceed 90 percent of the aggregate incentive.

HFMA recommends that CMS instruct states to provide hospitals with the maximum incentive payments possible in their first two payment years-that is, 50 percent of the hospital's aggregate incentive payment in the first year and another 40 percent in the second year-as a limited source of capital for adoption, implementation, and upgrades.

Common Definition of Meaningful Use

CMS proposes to create a common definition of meaningful use for the Medicare and Medicaid programs. CMS proposes to allow states to add additional objectives to the definition or to modify existing objectives only if those changes "further promote the use of EHRs and healthcare quality" and do not "require additional functionality beyond that of certified EHR technology." CMS notes that, to be approved, these information exchange mechanisms must be readily available to providers and not represent a financial burden.

In implementing the common definition of meaningful use, HFMA requests that CMS not approve any additional state criteria. The requirements under the proposed rule are complex and will be extremely challenging for hospitals to meet, particularly under the suggested timelines.

CMS further proposes to "deem" hospitals that are meaningful users under Medicare as meaningful users under Medicaid, with no obligation to meet any additional or different, state-specific meaningful-use requirements approved by the Secretary. HFMA asks CMS to adopt and affirm the deeming approach in its final rule and ensure that the regulatory language reflects this approach.

Medicaid Incentive Payment Calculation for Hospitals

ARRA provides for Medicaid incentive payments to eligible hospitals that are meaningful users of certified EHR technology. At their option, state Medicaid agencies are fully responsible for administering and disbursing these Medicaid incentive payments and may receive 100 percent federal financial participation for these payments. It is critical that these incentive payments be made in a timely manner and not be delayed or otherwise affected by any state budget problems or changes to state Medicaid program payments or eligibility, especially given that the federal government is bearing 100 percent of the cost of the EHR incentive payments. Additionally, these incentive payments should not be included in any calculation of total Medicaid payments for the purpose of determining Medicaid shortfalls, disproportionate share payments, upper payment limits, or any general Medicaid program service. To ensure that this occurs, HFMA asks CMS to consider Medicaid incentives as separate and apart from other Medicaid program payments for patient care.

Eligibility of CAHs for the Medicaid Incentive Program

For purposes of the Medicaid EHR incentive payment program, ARRA defines an eligible hospital as an acute care hospital or a children's hospital. CMS proposes to define an acute care hospital as a healthcare facility whose average length of patient stay is 25 days or fewer, and whose Medicare CCN has its last four digits in the series 0001 through 0879.

These CCN numbers encompass short-term general hospitals and the 11 cancer hospitals in the United States, but not CAHs because all CAHs have a Medicare CCN with the last four digits in the series 1300 through 1399. However, under the Social Security Act, CAHs are, by definition, general, acute care hospitals with an average length of patient stay of 25 days or fewer. Thus, CAHs meet both the ARRA definition of being acute care hospitals and CMS's proposed definition of being short-term general hospitals. Accordingly, we urge CMS to revise its definition of hospitals that are eligible for Medicaid payment incentives to also include hospitals with a Medicare CCN that has the last four digits in the series 1300 through 1399.

Conclusion

HFMA believes that the changes discussed above will better support hospitals as they transition to EHRs. We appreciate CMS's effort to improve the definition of the term meaningful use and look forward to any opportunity to provide assistance or comments. As an organization, we take pride in our long history of providing balanced, objective financial technical expertise to Congress, CMS, and advisory groups.

We are at your service to help CMS gain a balanced perspective on this complex issue. If you have additional questions, you may reach me, or Richard Gundling, Vice President of HFMA's Washington, D.C. office, at (202) 296-2920 ext. 605. The Association and I look forward to working with you.

Sincerely,

Richard L. Clarke, DHA, FHFMA
President and Chief Executive Officer
Healthcare Financial Management Association

About HFMA

HFMA is the nation's leading membership organization for more than 35,000 healthcare financial management professionals. Our members are widely diverse, employed by hospitals, integrated delivery systems, managed care organizations, ambulatory and long-term care facilities, physician practices, accounting and consulting firms, and insurance companies. Members' positions include chief executive officer, chief financial officer, controller, patient accounts manager, accountant, and consultant.

HFMA is a nonpartisan professional practice organization. As part of its education, information, and professional development services, HFMA develops and promotes ethical, high-quality healthcare finance practices. HFMA works with a broad cross-section of stakeholders to improve the healthcare industry by identifying and bridging gaps in knowledge, best practices, and standards. 

Publication Date: Friday, March 12, 2010