Jason Fortin
Walt Zywiak

Meeting meaningful use criteria is only the first step in achieving the IT support needed for success under payment reform.

At a Glance

The HITECH provisions of ARRA include financial incentives for providers to demonstrate meaningful use of certified EHR technology. However, to maximize the value of IT under new payment models, provider organizations will need to go beyond meaningful use criteria in three key areas:

  • Delivering high-quality care
  • Ensuring coordinated care
  • Integrating financial systems

Today, meaningful use is the center of attention when it comes to funding healthcare IT. Starting in 2011, the Health Information Technology for Clinical Health (HITECH) provisions of the American Recovery and Reinvestment Act of 2009 (ARRA) allow providers that demonstrate meaningful use of "certified electronic health record (EHR) technology" to be eligible for incentive payments from the Centers for Medicare & Medicaid Services (CMS). Meaningful use requirements consist of three stages of criteria that will phase in over time. Stage 1 will be required to qualify for the first year of payment through 2014. Organizations that fail to meet Stage 3 meaningful use requirements in any year after 2015 will be subject to penalties. Although the requirements are aggressive and the window for qualifying is brief, the incentive payments are significant: Most nonhospital-based providers are eligible for as much as $44,000 under Medicare or $63,750 under Medicaid, while an average community hospital can anticipate receiving $2 million to $6 million overall. With such large stakes, most IT decisions over the next few years will largely be driven toward achieving meaningful use.

Achieving meaningful use is clearly a big step, but it also is only the first step in a longer journey to maximize meaningful value from IT. Payment for health care in the United States is on the cusp of a rapid shift from payment based on volume and intensity of service to a model that ties payment to high-quality and tightly coordinated care. As new payment models become a reality, providers will need to go beyond HITECH's meaningful use requirements. For example, data will need to be not just "exchanged," but also fully integrated with clinical and financial systems and made available to providers at the point of care, and quality data will need to be not only captured and reported to qualify for incentive payments, but also leveraged in real time to ensure that patients are receiving the care they need.

The work toward achieving meaningful use therefore needs to start today. It will require not only investment in IT, but also fundamental organizational and process change. Even though a lot needs to be accomplished in a short time, providers need to remain focused on the long-term goal of maximizing meaningful value from IT after all the incentive funds have been spent. Thinking toward the future will eliminate dead-end investments that cannot meet the requirements of next-generation health reform.

Providers should look beyond the defined criteria for meaningful use in three key areas: delivering high-quality care, ensuring coordinated care, and integrating financial systems.

Exhibit 1

exhibit-1-Beyond Meaningful Use

Delivering High-Quality Care

Meaningful use criteria incorporate a number of objectives aimed at improving quality of care. For Stage 1 criteria, the focus will be on ensuring that providers capture clinical data in a structured format. To qualify for incentive payments, hospitals and physician practices will need to collect data electronically from a variety of sources and report on quality measures, such as percentage of diabetics with blood sugar level under control and percentage of smokers offered smoking cessation counseling. Nonhospital-based eligible professionals will need to use computerized provider order entry (CPOE) functionality for at least 80 percent of all orders to meet Stage 1 criteria, while hospitals will need the authorizing provider to enter at least 10 percent of all inpatient orders directly into the CPOE system. Both hospitals and eligible professionals will be responsible for implementing five high-priority clinical decision support rules to qualify under Stage 1.

These quality criteria alone represent a high bar for most U.S. hospitals and physician practices, particularly smaller or medium-sized organizations where use of IT is low, capital is limited, and available resources are scarce. However, the trend away from fee-for-service will drive new requirements that can be met only if organizations go beyond meaningful use criteria and use the data collected to improve quality.

For example, Medicare's value-based purchasing (VBP) program will tie a portion of reimbursement to actual performance on process- and outcome-based measures, such as 30-day heart failure mortality and percentage of heart attack patients given aspirin at discharge, rather than paying solely on the basis of the hospital's ability to report the data. Hospitals with low relative scores or that demonstrate minimal improvement over time will be paid less than high-performing facilities. To maximize payment in the future, providers will need to receive real-time alerts about needed interventions at the point of care and identify problems before they escalate.

Payers are also increasingly refusing to pay for poor performance, such as hospital-acquired conditions and preventable medication errors. To avoid mistakes that will require uncompensated care, every provider organization will have to implement clinical decision support as required by HITECH, and implement it correctly so it is effective. Wherever possible, decision support should be aligned with the hospital's required quality and outcome measures. Alerts need to be frequent enough to minimize preventable errors but not so overwhelming that clinicians ignore them.

As the first step in laying the foundation for the future, independent and community hospitals, or those in the midst of implementing an EHR, should test whether they can report on CMS core measures directly from their clinical system. Stage 1 requires organizations to attest that quality information submitted was generated from "a certified EHR," and CMS core measures-identified at the agency's Hospital Compare web site (www.hospitalcompare.hhs.gov)-will be the likely starting point for the process and outcomes metrics included in Medicare's VBP program. Hospitals should understand the data elements required for each measure and the primary source for the information, such as physician and nurse documentation.

Provider organizations that are already capturing data electronically and capable of reporting on all required quality measures should ensure that their IT systems can use the data to help providers improve adherence to quality measures. At a minimum, organizations will need the equivalent of a patient registry that includes updates from all of a patient's providers and is capable of alerting clinicians at the point of care to any patients who are overdue for recommended services. Larger hospitals or delivery networks should consider robust business intelligence and data analytic tools that use both inpatient and outpatient data to proactively identify potential issues in real time and measure improvement across the spectrum of care.

Exhibit 2

exhibit-2-Beyond Meaningful Use

Coordinating Care

Meaningful use requirements place a heavy emphasis on capabilities to support health information exchange, which is limited today.
To qualify for incentive payments under Stage 1, providers will need to demonstrate they are capable of both sending and receiving key
clinical information to and from other hospitals, physicians, labs, pharmacies, and payers.

Future accountable care organizations (ACOs) will need to demonstrate quality while keeping spending for a defined patient population under a specific threshold. Data need to be comprehensive and accurate, and such data should be not only "exchanged," but also used to make informed decisions. For example, payment to an ACO might be partially contingent on a minimum percentage of diabetics receiving an annual foot exam and total spending for the patient population being lower than the previous year. If too few patients undergo foot exams, the ACO fails to meet minimum quality metrics and loses money. But if too many patients receive multiple foot exams, the ACO also loses money by failing to keep spending under the set threshold. Under this type of payment model, the only way to be successful is to ensure that data from all care settings are available at the point of care, in a shared medical record used by all of the patient's providers.

Medication reconciliation-defined by CMS as "the process of identifying the most accurate list of all medications that the patient is taking, including name, dosage, frequency and route, by comparing the medical record to an external list of medications obtained from a patient, hospital or other provider"-is an essential component of care coordination and will be required for at least 80 percent of all relevant encounters by Stage 1 meaningful use criteria. A first step for organizations just beginning to capture medication history electronically is to coordinate with health plans, whose pharmacy claims include much of the information needed on medications that patients have received through their pharmacy benefit. When patients with prescription drug coverage visit an emergency department or are admitted to a hospital, providers can work with payers to create ways (for example, using the payer's portal) to capture medication history in conjunction with checking benefits.

Delivery networks will need to carefully assess their ability to manage the care of a defined population of patients. Tightly aligned health systems with widespread use of IT and a hospital and physician practices in the same area should strongly consider participating in medical home or ACO pilots, so they can test, fine tune, and demonstrate the value of electronically exchanging data as patients cross care venues. In addition to providing the best possible experience of what the future will likely hold, many payers-led by Medicare-are giving participants the opportunity to share in some of the savings that accrue to the health plans. For example, this past August, CMS reported that five of the 10 physician groups that assumed responsibility for the cost and quality of care for patients as part of Medicare's Physician Group Practice (PGP) demonstration received bonus payments totaling $25.3 million in the program's third year for generating savings to Medicare.

Small, targeted projects to improve care coordination can have significant short-term impacts while also preparing both hospitals and physician practices for the reality of bundled payments in advance of sophisticated IT solutions. In an effort to reduce hospital readmissions at Boston Medical Center, according to a report prepared for the California HealthCare Foundation, a nurse "discharge advocate" is used to plan for a patient's post-discharge care, coordinating with other providers and educating the patient on the care plan after he or she leaves the hospital (see Homeward Bound: Nine Patient-Centered Programs Cut Readmissions, September 2009,(www.chcf.org/topics/hospitals). A few days after discharge, a clinical pharmacist from the hospital follows up with a phone call to the patient to reconcile medications. In a randomized trial, the effort resulted in a 32 percent reduction in 30-day readmissions and increased post-discharge visits to primary care physicians.

Reducing hospital readmissions is a top priority for CMS, and admissions for conditions associated with high postacute spending are likely to be the first targeted by the government for bundled payments. Hospitals and ambulatory care physicians in the community who are able to work together to effectively reduce readmissions today will have a distinct financial advantage in the future.

Integration with Financial Systems

HITECH requirements for meaningful use are primarily focused on clinical capabilities demonstrated using certified EHR systems. However, as payment reform becomes a reality, integration with financial systems will also be critical.

Emerging models of reform affect the entire payment process between payers and providers. In the future, delivery organizations may receive payment from new types of entities (such as an ACO) or for entirely new types of services (such as care coordination). In some cases, a hospital or health system may even need to serve as a financial intermediary, receiving a bundled payment or shared bonus and then distributing funds to multiple providers. Revenue cycle
systems must be integrated with the EHR and able to reconcile new types of payments appropriately for hospitals and physicians.

As the first step, providers just getting started selecting an EHR should consider only systems that can support the standards required to obtain Department of Health and Human Services (HHS) EHR certification. Look carefully at meaningful use "guarantees"; any discounted implementation fees or months of free service promised if meaningful use is not achieved will not make up for the missed incentive payments, potential penalties, and the setback of losing valuable time.

Provider organizations with EHRs already in place should ensure that their systems have received provisional HHS certification and that the organization has upgraded to the certified version. Organizations should have a plan in place to implement any components of the clinical information system, such as nursing documentation and physician documentation capabilities, that will be needed to meet meaningful use requirements. Although CPOE is explicitly required and has received a lot of attention in the news, the only way to effectively meet all of the quality reporting requirements is for organizations to also implement-and use-clinical documentation across all settings.

On the financial side, organizations should have a plan for how the revenue cycle system bills for and distributes new forms of payment such as bundled payments or shared bonuses. As payment becomes less tied to prenegotiated rates for individual services and more dependent on providing high-quality care and coordinating with other providers, clinical and financial systems will need to be more closely integrated.

The Bottom Line
The HITECH incentives in ARRA represent an unprecedented opportunity for hospitals and physician practices in the near term, but narrowly focusing on meaningful use requirements will not be enough to succeed in the future when new payment models that require high-quality, coordinated care become widespread. Providers should start laying the foundation for remaining competitive in this new environment while they work toward meaningful use. Preparing for the future realities of health care will be a long and resource-intensive process, and achieving meaningful use is just the first step on the way to maximizing meaningful value from IT.

Jason Fortin is a senior research analyst, CSC, Waltham, Mass. (jfortin2@csc.com).

Walt Zywiak is principal researcher, CSC, Waltham, Mass. (wzywiak@csc.com).

Underlying Concepts of Payment Reform

Four concepts constitute the foundation of efforts toward payment reform.

Payments tied to evidence and outcomes. A percentage of a provider's payment is tied to adherence to evidence-based best practices and performance on specified outcome measures. The goal is to better manage chronic conditions, and accrue savings from fewer preventable emergency department and hospital admissions. Examples include Medicare's hospital value-based purchasing program and the Institute for Healthcare Improvement's pay-for-performance initiative in California.

Bundled/global payments. Providers prospectively receive a single payment intended to cover the anticipated costs for a defined set of services, such as congestive heart failure, including post acute care, and annual care for diabetic patients). Goals are to improve coordination of care across settings, reduce spending for duplicative or unnecessary healthcare services, and limit payment for preventable hospital readmissions. Examples include the Medicare Acute Care Episode Demonstration, Geisinger Health System's ProvenCare program, and the PROMETHEUS Payment® model.

Payment for care coordination. A provider or provider organization receives payment for coordinating all care for a patient in addition to traditional payment for treatment and services. Savings accrue by ensuring that patients-particularly those with chronic conditions-receive timely and appropriate interventions that improve care quality and safety. An example is the Patient-Centered Medical Home.

Shared accountability for spending. A portion of payment to a specified group of providers is tied to achievement of certain quality and spending benchmarks for a defined population of patients. The goal is to generate savings by helping providers deliver timely and evidence-based care and reduce spending on duplicative or unnecessary services. Examples include accountable care organizations and the Medicare Physician Group Practice Demonstration.

Publication Date: Monday, February 01, 2010

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