John T. Bigalke
Mitchell Morris

The final meaningful use regulations are out. What do they mean for you?

At a Glance  

  • Definitions, standards, and requirements for meaningful use are still evolving.  
  • The Centers for Medicare & Medicaid Services has established a five-year timeline for meeting meaningful use requirements.  
  • Providers should determine their meaningful use strategy as soon as possible and establish a clear Health Information Technology Economic and Clinical Health Act road map.  

The highly anticipated final "meaningful use" regulations for certified electronic health record (EHR) technology were published on July 28 by the Department of Health and Human Services and the Office of the National Coordinator for Health Information Technology (ONC), creating quite a buzz in the healthcare provider community. After more than 2,000 public comments were taken into consideration, the final regulations are more relaxed than the original proposed rules.

The highly anticipated final "meaningful use" regulations for certified electronic health record (EHR) technology were published on July 28 by the Department of Health and Human Services and the Office of the National Coordinator for Health Information Technology (ONC), creating quite a buzz in the healthcare provider community. After more than 2,000 public comments were taken into consideration, the final regulations are more relaxed than the original proposed rules.

Among the major changes reflected in the new regulations is a reduction in the number of meaningful use objectives. For example, hospitals must now achieve 14 core meaningful use measures and physicians need to meet 15, compared with the previous 23 and 25 measures, respectively. Additionally, hospitals and physicians have the flexibility to choose up to an additional five measures from a set of 10 measures, and can defer reporting on them until Stage II.

Other significant changes include a reduction in percentage thresholds for certain measures, such as ePrescribing, which has been reduced from 75 percent to 40 percent of permissible prescriptions. The reduction takes into account the fact that some pharmacies may not be able to accept electronic prescriptions and some patients may prefer a paper prescription over an electronic copy. Additionally, quality measures for hospitals have been significantly reduced, from 41 to 15 for the reporting period of 2011 and 2012. Physicians will now be required to report on three core or three alternate quality metrics plus three additional quality metrics that are not specialty-specific. If the physician is unable to report on any of the six core/alternate core metrics, then the physician must select six quality measures from the original set of metrics in the proposed rule.

Despite the final rule's increased flexibility, many are asking if it will be enough to help make the goal of achieving meaningful use to qualify for Medicare and Medicaid incentive payments more realistic. Although some providers and industry associations are pleased with the new regulations, others have expressed concern that the requirements may still be too difficult. There is no question that, for many, the road ahead will be paved with a variety of challenges. Although some organizations have already invested in moving forward with EHR certification, others have been waiting for further regulatory clarity. However, regardless of where their organization is in its EHR implementation process, healthcare providers can no longer afford to delay their detailed meaningful use planning.

Meaningful Use Implementation Timeline

As providers work to determine their implementation approach, they should closely review the timelines for each of the three stages defined by Centers for Medicare & Medicaid Services (CMS) for meeting meaningful use requirements during the five-year implementation period. Each stage has its own deadlines, associated incentives, and unique set of criteria. The requirements for each stage build on the requirements of previous stages until 2015, when all eligible professionals and hospitals are subject to the commencement of Medicare penalties for failure to achieve meaningful use. Furthermore, there is nothing that prevents future stages of meaningful use from being enacted after 2015. Providers should try to adopt meaningful use requirements as early as possible because as the requirements increase in specificity over time, incentive payments decrease until the noncompliance penalties begin in 2015.

View Exhibit  


Significant changes reflected in the final meaningful use regulations include a delay in the timing for meeting Stage I, II, and III requirements. The final rules cover only Stage I; subsequent regulations will be published by the end of 2011 for Stage II and the end of 2013 for Stage III. Note that CMS has delayed requirements for Stage III, which are still to be determined. In addition, CMS is also prolonging the time frame required to transition from Stage I to Stage II. Nevertheless, it is still important for healthcare providers to move forward promptly with an implementation strategy.

What Is Your Meaningful Use Strategy?

Despite some lingering uncertainty regarding the details around Stages II and III, providers cannot afford to delay their meaningful use planning. First and foremost, providers should decide whether their strategy is to secure incentive funds, to avoid getting penalized, or, ideally, both. Considerations include prioritizing the timing and extent of capital expenditures, and selecting the approach for clinical adoption and the methods to fulfill the specific requirements for meaningful use. The stakes are high for the loss of capital recoupment; there are also significant penalties for not demonstrating meaningful use by 2015 in the form of an adjustment to the market basket update to the Medicare inpatient prospective payment system payment rate for eligible hospitals. That adjustment is one-fourth for FY15, one-half for FY16, and three-fourths for FY17 and thereafter. In addition, hospitals would remain subject to a separate reduction for failure to report quality data under the Reporting Hospital Quality for Annual Payment Update.

Providers also should remember that being designated a "meaningful user" requires that they do more than merely implement an EHR system and provide patients with electronic access to health information in a timely fashion. Organizations may need to invest in business analytics and business intelligence capabilities to help them measure and report the results of their efforts.

In addition, many clinicians may need to significantly change their work flow and patient care processes to more fully utilize an EHR in their daily patient care activities. Furthermore, meaningful use requirements are intended to ramp up in later stages, as the government expects that the resulting new processes from implementing Stage I will deliver better clinical outcomes, increased efficiency, and an enhanced patient experience. Meaningful use has loftier goals than historical EHR use. Even those organizations already advanced in their EHR implementations will need to work diligently to optimize their use to meet the new requirements.

One of the goals of the government's Health Information Technology Economic and Clinical Health Act (HITECH) program is the exchange of data across and between the providers in a "community," which highlights the need for the establishment of Health Insurance Exchanges (HIEs). As part of their meaningful use planning process, providers need to determine which, if any, plans their organization, community, and/or state has for an HIE.

Building a HITECH Road Map

Meeting meaningful use requirements should be a priority for a provider organization's senior leaders. An internal team of clinicians, health IT (HIT), and finance department staff should establish a clear HITECH road map that addresses important questions such as: What competencies do we have? What capacity do we have? What external resources will we need? Experience has shown that the time to build the right team and access the best resources is before a deadline is looming.

A meaningful use road map should include not only goals and expected outcomes, but also timelines, staffing requirements, and a projection of expected capital and operating costs. It is also important to factor in potential risks and the necessary controls. Remember, by applying for reimbursement from the federal government, you are attesting that you have implemented technology that fulfills the requirements of meaningful use and achieves certain metrics. It's much like receiving a grant; considerable reporting and compliance are involved-including the requirement to maintain evidence of qualification to receive incentive payments for 10 years.

Key Considerations for Providers

Despite still-evolving definitions, standards, and requirements, many hospitals and physicians find themselves compelled to move ahead with incomplete information to meet the aggressive time lines established by the HITECH Act. As a result, healthcare providers may feel like they are being asked to hit a moving target as they work to demonstrate meaningful use of certified EHRs to qualify for HITECH Act Medicare and Medicaid incentive payments.

Critical questions in the provider planning process should include:

  • Have we determined the estimated HITECH incentives and penalties (including Medicaid and physician estimates)?
  • Does our current timeline align with the HITECH incentives and penalties timeline?
  • Do we need to reevaluate our current EHR vendor to ensure it can meet the new requirements and certification criteria?
  • Do we have plans to accelerate implementation?
  • What about process redesign and clinician adoption? Do we have plans to deal with these common barriers?
  • Do we have a full understanding of the security and privacy requirements of the HITECH Act?

To receive meaningful use reimbursement, eligible hospitals and professionals will be voluntarily putting themselves into a more regulated environment. However, providers that proactively plan for meaningful use implementation and execute effectively should find their efforts to be worth the investment.

John T. Bigalke, FHFMA, CPA, is vice chairman and U.S. Industry Leader, Health Sciences & Government, Deloitte LLP, Orlando, Fla., and a member of HFMA's Florida Chapter (

Mitchell Morris, MD, is principal and national leader for health IT, Health Sciences & Government, Deloitte Consulting LLP, Costa Mesa, Ariz. (

Sidebar 1: Defining Meaningful Use

The federal government views certified electronic health record (EHR) technology used in a meaningful way as one piece of a broader health IT (HIT) infrastructure that is needed to reform the U.S. healthcare system, improve healthcare quality and patient safety, and control costs. The Centers for Medicare & Medicaid Services (CMS) has been given responsibility for implementing the new EHR Medicare and Medicaid incentive programs; for establishing standards, implementation specifications, certification criteria, and the certification process for EHR technology (through the Office of the National Coordinator for Health Information Technology); and for establishing privacy and security protections under the Health Information Technology for Economic and Clinical Health (HITECH) Act.

Specifically, CMS's Medicare incentive programs provide incentive payments to eligible professionals and inpatient prospective payment system hospitals, and critical access hospitals that are meaningful users of certified EHRs. The Medicaid EHR program, in turn, provides incentive payments to eligible professionals and acute care hospitals (including children's hospitals) for their efforts to adopt, implement, or upgrade certified EHR technology in year one and for achieving meaningful use in subsequent years. Demonstration of meaningful use can commence as early as October 2010 for eligible hospitals and January 2011 for eligible professionals, with incentives starting after the 90-day reporting period. At a high level, these payments could amount to as much as $44,000 to $64,000 for eligible professionals over five to six years, and typically range from $4 million to $8 million per hospital over a multiyear period.

Sidebar 2: Key Definitions Related to Electronic Health Records

Qualified electronic health record (EHR). An electronic record of health-related information on an individual that:

  • Includes patient demographic and clinical health information, such as medical history and problem lists
  • Has the capacity to:
    o Provide clinical decision support
    o Support computerized provider order entry
    o Capture and query information relevant to healthcare quality
    o Exchange electronic health information with and integrate such information from other sources.

EHR module. Any service, component, or combination thereof that can meet the requirements of at least one certification criterion adopted by the Secretary of the Department of Health and Human Services (HHS).

Complete EHR. Developed to meet all applicable certification criteria.

Certified EHR technology. A complete EHR or a combination of EHR modules, each of which:

  • Meets the requirements included in the definition of a qualified EHR
  • Has been tested and certified in accordance with the certification program established by the National Coordinator for Health Information Technology as having met all applicable certification criteria adopted by the HHS Secretary

Source: Health Information Technology: Initial Set of Standards, Implementation Specifications, and Certification Criteria for Electronic Health Records; Final Rule, Centers for Medicare & Medicaid Services, July 28, 2010.

Publication Date: Monday, November 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