Margret Amatayakul

Should your organization do what's necessary to get the carrot and avoid the stick of the government's "meaningful use" standard?

At a Glance

Questions providers should consider in determining whether to meet standards for meaningful use of EHR technology in time to receive incentive funds and avoid monetary sanctions include:

  • Is the incentive meaningful?
  • Is it feasible to meet the standards for demonstrating meaningful use in time to qualify for the incentive?
  • Is the incentive real?
  • Is the "adjustment" sufficiently motivating?
  • Is it better to go for the incentive or simply attempt to avoid the adjustment?

The healthcare IT provisions of the American Recovery and Reinvestment Act (ARRA), passed in 2009, provide for a significant level of incentive money for healthcare providers that demonstrate "meaningful use of certified electronic health record (EHR) technology." The U.S. Department of Health and Human Services (HHS) released its proposed criteria for establishing meaningful use in late December 2009; final regulations for meaningful use will be published in spring 2010.

HHS stated in a news release issued Dec. 30, 2009, that, to demonstrate meaningful use of EHR technology in accordance with the proposed requirements, healthcare providers must use this technology "in a manner that improves quality, safety, and efficiency of healthcare delivery, reduces healthcare disparities, engages patients and families, improves care coordination, improves population and public health, and ensures adequate privacy and security protections for personal health information."

Upon closer inspection, some healthcare providers may find the proposed criteria for establishing meaningful use of an EHR daunting. However, for hospitals or healthcare professionals that do not achieve meaningful use of an EHR by 2015, ARRA carries a stiff sanction in the form of a reduction in Medicare reimbursement.

So the key question is, Will hospitals and professionals take advantage of these incentives or at least seek to avoid the sanctions?

Of course, no one has a crystal ball, and historical trends may not fully suggest an accurate answer because the amount of the incentive is significantly more than has ever been offered in the past. Additionally, specific technology is being required to qualify for the ARRA incentive, where in the past, data abstraction even from paper charts sufficed for quality reporting.

Answering the following key questions will help providers determine how to approach fulfilling meaningful use criteria.

Is the Incentive Meaningful?

A common starting point for healthcare providers is to ask whether the incentive for demonstrating meaningful use of EHR technology is worth the effort. The answer to this question is multifaceted.

If the cost of the EHR technology is your only consideration, it might well be worth the time and effort to ensure that your organization meets the criteria for demonstrating meaningful use. Given the legislative definition of meaningful use of EHR, computerized provider order entry (CPOE) and closed loop medication administration record (EMAR) appear to be the primary defining applications for hospitals. A 250-bed hospital with 20,000 annual discharges, of which 50 percent are Medicare and 3.5 percent are charity care, could earn roughly $4 million in incentives over five years. If this hospital already has a solid IT foundation, the three major ancillary systems (laboratory, radiology, and pharmacy), and a start on clinical documentation, expenditures for CPOE and EMAR could be approximately $4 million. Similarly, for an ambulatory EHR that costs a single provider $25,000 up front and 18 percent for maintenance over four years, the resulting cost of about $43,000 would be roughly equal to the Medicare incentive.

Obviously, there are many assumptions built into these numbers. At first blush, they might appear reasonable, especially for hospitals, given what many have already put into IT. But cost of applications may be considered the easiest issue to address given the level of effort, skills needed, change management, and end-user adoption challenges. Data from the HIMSS AnalyticsSM Database as of the third quarter of 2009 (latest data available) indicate that out of 5,172 reporting hospitals, about 19 percent did not have foundational applications or had only the three major ancillary systems. Another 70 percent of hospitals have these applications plus document imaging and a start at clinical documentation, but not CPOE and EMAR. That leaves only 11 percent of hospitals that would probably be able to qualify today for meaningful use. If implementing the two major components of an EHR were only about cost, it is very likely that many more hospitals would be ready.

Is It Feasible to Implement EHR Technology in Time to Earn the Incentive?

Capacity to implement within the designated time frame is another matter. To earn the full amount of the incentive, you must be ready to start making meaningful use of EHR by 2011, or 2012 at the latest.

Even with the requirements for meaningful use staged over a five-year period, the foundation of technology that focuses on patient safety and quality of care (i.e., CPOE and EMAR) for a hospital requires a lot of work to implement and assumes a solid foundation. If your organization finds it necessary to upgrade or add to foundational systems first, or if your organization has to go to market, these processes alone will be time consuming-and will add to the cost. Although physician offices may not require the multiplicity of applications needed to support an EHR in a hospital, issues of equal scale for physician offices include whether they even have a practice management system (PMS) or need to replace an old PMS, whether their stand-alone e-prescribing systems will integrate with their EHR systems (which appears unlikely), and whether they have established interoperability with their hospitals.

In addition, there are competing IT priorities for all care delivery organizations. During the incentive period, IT must also upgrade the Health Insurance Portability and Accountability Act (HIPAA) financial and administrative transactions to the 5010 version (by Jan. 1, 2012), and implement ICD-10-CM (by Oct. 1, 2013)-a process many are likening to Y2K.

Is the Incentive Real?

Recently, many physicians have questioned whether the incentives are real. In part, their concern stems from their experiences with the Physician Quality Reporting Initiative (PQRI).

Initially, few physicians participating in the PQRI could generate the data required to be reported from their EHR systems. Like most hospitals that participated in the CMS Reporting Hospital Quality Data for Annual Payment Update (RHQDAPU), the physicians faced manual abstraction of data. Although hospitals had borne this cost to ensure receiving their annual payment update, many physicians did not find the PQRI incentive sufficient to warrant the extra staff costs.

In addition, the reporting requirements for PQRI were cumbersome and not always sufficiently understood, so a number of physicians thought they were earning the incentives when they were not. As an example, some physician offices missed out on the e-prescribing incentive because they were unaware of the need for the workaround that required assigning a one-cent value to the G codes to report e-prescribing usage. Going forward, some vendors have added PQRI reporting tools, and CMS is encouraging use of a registry for current PQRI reporting. But many remain skeptical after a bad experience. CMS still does not have the capability to receive quality measure reporting and has proposed an attestation process, at least for the first year of the incentives, in the notice of proposed rulemaking issued Dec. 30, 2009. Although this may make reporting easier, many now have become concerned that the proposal carries a high degree of risk for fraud.

Other concerns about the incentives stem from the fact that many hospitals and physicians are not in a cash position to front the money for new applications and do not have staff resources or expertise required to implement systems. Low- and no-cost loans and workforce training programs to address staff shortage may be on the horizon, but there are concerns as to whether even their availability will be sufficient to enable the leap to EHR systems for some organizations. As with everything else, there is never enough for everyone to get everything they want, so the savviest-and probably those furthest along already-will likely benefit the most.

In the end, the most likely answer to this question is that the administration is committed to releasing the funds as described, even if the funds won't have the desired impact. Some organizations will benefit, and others will not-but only time will tell how many will benefit and who will benefit.

Is the Incentive 'Real Enough'? Is the 'Adjustment' Sufficiently Motivating?

So the true "carrot and stick" issue is whether the incentives, and later the adjustment, are enough for hospitals and physicians to take on the enormous challenge that an EHR presents. Although there is growing interest in EHRs, a huge contingent of physicians-and, to a lesser extent, hospitals-continue to doubt that these systems can fulfill the promises of putting more money into their coffers, making their lives easier, and making a difference in patient care.

This resistance speaks to a corollary question: What should the EHR be?

Interestingly, the controversy surrounding certification of EHR systems that has occurred as a result of the stimulus legislation has raised the industry's awareness of the level of sophistication and comprehensiveness needed in an EHR. As suggested by the earliest Institute of Medicine (IOM) study of patient record technology, the American healthcare industry has generally defined an EHR as "a system specifically designed to support users by providing accessibility to complete and accurate data [implying interoperability and health information exchange], alerts, reminders, clinical decision support systems, links to medical knowledge, and other aids." The IOM described such a system as encompassing "a broader view of the patient record than is current today, moving from the notion of a location or device for keeping track of patient care events to a resource with much enhanced utility in patient care (including the ability to provide an accurate longitudinal account of care), in management of the healthcare system, and in extension of knowledge."a

Until the stimulus legislation, this view of a comprehensive EHR was assumed to be essential, and the certification process developed by the Certification Commission for Health Information Technology embodied its principles. Although vendors have struggled to provide such robust functionality, they certainly have sold products intending to provide comprehensive capability, and at a price that complemented that intent.

Once stimulus dollars were tied to certification, however, many began again to question the assumption about how comprehensive an EHR system should be. Conversations were held about "lite EHRs" and alternative certifications that focus only on the components "necessary for meaningful use."

Yet these conversations overlook the fact that ARRA describes a "qualified EHR" as one that "includes patient demographic and clinical health information, such as medical history and problem lists, and has the capacity to provide clinical decision support, support physician order entry, capture and query information relevant to healthcare quality, and exchange electronic health information with and integrate such information from other sources." Such a description is far from "lite." Hence, a dilemma is emerging regarding the purpose of the incentives and what technology is essential for providing healthcare value.

Should Your Organization Go for the Incentive-or at Least Attempt to Avoid the Adjustment

The final question seems to boil down to this: What does any given healthcare delivery organization do?

There are many factors to weigh. Each healthcare provider should analyze where it currently stands on the EHR migration path. As part of this analysis, the provider should thoughtfully consider not only the amount of spending required, but also what components should be purchased and whether the purchase will enable the provider to reach its own value expectations.

The provider also should consider its financial position and thoroughly evaluate the readiness of its clinician community. It is important not to make assumptions here. Many assume that physicians will automatically take their business elsewhere or that older clinicians will be unwilling to learn new technology. Times really are changing, however: Some physicians may actually be looking for more robust technological support, and older workers may very well realize they must keep up.

Realistically, if your organization is a hospital, you may be close enough to demonstrating meaningful use to be able to press ahead and earn at least some of the incentive money. If not, it will probably be enough for your organization to set a pace that will enable it to avoid the adjustment.

For physicians, considerations on cost and readiness should extend over a longer planning horizon than just the initial incentive period. Many physicians buy IT and expect to keep it for the duration of their practice lives. But under the stimulus influence, a decision to buy a lite EHR product may end up costing more as it becomes necessary, or desirable, to convert to a more comprehensive product. Many physicians do not fully appreciate the advantages of an EHR, but once they experience an EHR, this often changes quickly. A product that a practice can grow into may be best for those early in their readiness cycles.

Whatever path your organization chooses to take, make the choice an informed one rather than one that is solely based on guesswork or emotion. The ARRA healthcare IT incentive dollars are huge and will definitely be a boon to some providers. Why shouldn't your organization be one of them?

Margret Amatayakul, RHIA, FHIMSS, is president, Margret\A Consulting,
LLC, Schaumburg, Ill. (

a. Dick, R.S., and Steen, E.B., editors, The Computer-Based Patient Record: An Essential Technology for Health Care, Committee on Improving the Patient Record, Division of Health Care Services, Institute of Medicine, Washington, D.C.: National Academies Press, 1991.

Publication Date: Monday, February 01, 2010

Login Required

If you are an existing member, please log in below. Username and password are required.



Forgot User Name?
Forgot Password?

If you are not an HFMA member and would like to access portions of our content for 30 days, please fill out the following.

First Name:

Last Name:


   Become an HFMA member instead