1. The Good, the Bad, and the Ugly of the EHR Meaningful Use and Certification Final Rules: What Hospital Leaders Should Know about the Medicare EHR Incentive Program September 9 and 10, 2010 1

2. Background and Overview 2

3. HITECH Act HITECH Act created the Medicare and Medicaid EHR Incentive Programs 3 HITECH Act was a section of the 2009 Federal Stimulus Bill – the American Reinvestment and Recovery Act (ARRA). HITECH Act directs the Centers for Medicare and Medicaid (CMS) and the Office of the National Coordinator for Health Information Technology (ONC) to promulgate regulations implementing the EHR Incentive Programs. Meaningful use and EHR certification rules Health care providers must be “meaningful users” of “certified” electronic health records in order to receive Medicare HIT incentive payments/not receive penalties.

4. Rulemaking Proposed Meaningful Use and EHR Certification rules 4 Released in December 2009. WHA and a number of Wisconsin hospitals submitted comments. Final Meaningful use and EHR certification rules Published in July 2010. No comment period.

5. Major Changes to Final Rule Final Rule - July 2010 All-or-nothing approach. Physicians in hospital OPDs and clinics excluded. CAHs ineligible for Medicaid incentives. High number of quality measures, required, not all of which had electronic specifications. Inequitable treatment of multi-campus hospital systems. Some flexibility for meeting MU requirements. Physicians in hospital OPDs and clinics, now included, per legislation fix. CAHs now eligible for both Medicaid AND Medicaid incentives. Fewer quality measures to report; all with electronic specifications. Multi-campus hospital system inequity not addressed. 5 Proposed Rule - December 2009

6. The Good… Modified “all or nothing” 6 Proposed Rule – 23 requirements Final Rule – 14 requirements PLUS choose 5 of 10 additional functionality requirements (1 public health related). Measures generally easier to meet. CAHs now eligible for Medicaid EHR incentives Exclusion for “hospital-based physician” narrowed Congress passed legislation correcting language that excluded many physicians who work in hospital-owned clinics from receiving EHR incentives Reduction in reporting burden Certification rule now requires certified EHRs to automatically calculate the meaningful use measures.

7. The Bad… Multi-campus hospital definition remains unchanged 7 Hospitals are defined by their provider number. Introduction of non-EHR related policy No long term plan CMS declined to follow recommendations to set requirements through 2017. Measure - 10% of admitted patients are “provided patient-specific education resources.” Stage 2 begins as early as October 1, 2012. Stage 2 criteria “expected” by “end of 2011.” Unclear if new criteria for FY2015 (penalty year) and beyond.

8. The Ugly. Regulatory uncertainty will hinder hospitals’ ability to meet timelines 8 No certified EHRs currently exist; certifying bodies just announced. Widespread adoption of EHRs? CMS believes additional $12K to CAHs (contingent on achieving MU) will lessen disparities. CMS estimate: As few as 32.1% of hospitals will get the maximum incentive. CMS estimate: As many as 33.7% of hospitals will receive penalties. Ambiguity in regulations; CMS to provide additional guidance and explanation. Unknown future stages. CMS agrees that rural hospitals will have a more difficult time achieving MU Significant changes to existing EHRs needed to calculate quality measures. Hidden functionality requirements in quality measure requirements

9. WHA’s Early Advocacy Strategy House Ways and Means Subcommittee 9 Letters to Reps. Kind and Ryan D.C. visits Contacts with their offices Multi-campus issue

10. Key Provisions 10

11. Medicare Incentive Timelines 11 First Qualifying Year Stage criteria EHs and EPs must meet in each payment year: FFY 2011 FFY 2012 FFY 2013 FFY 2014 FFY 2015 and Beyond FFY 2011Stage 1 Stage 2 TBD FFY 2012Stage 1 Stage 2TBD FFY 2013Stage 1 TBD FFY 2014Stage 1TBD FFY 2015TBD Only 90 days of compliance must be shown in first payment year. FFY begins October 1.

12. Medicare Incentive Timelines 12 Only 90 days of compliance must be shown in first payment year. FFY begins October 1. Incentive Payment Transition Factor for PPS Hospitals Year hospital first qualifies FFY 2011 FFY 2012 FFY 2013 FFY 2014 FFY 2015 Year hospital meets MU and receives incentive payment FFY 2011100% FFY 201275%100% FFY 201350%75%100% FFY 201425%50%75% FFY 201525%50% FFY 201625%

13. Medicare Incentive Timelines 13 Penalties if not adopting by FY 2015 FFY 2015 FFY 2016 FFY 2017 PPS Hospitals - Three-quarters of the applicable market basket update is reduced by: 33.33%66.66%100% CAHs – Allowable Medicare cost reimbursement percentage reduced to: 100.66%100.33%100.00% FFY begins October 1.

14. PPS Hospital Medicare Incentive Payment Formula 14 Step 1: Calculate base dollar amount ($2 million + (your discharges from 1150 through and including 23,000)*200)) Example assuming 3,149 discharges (2,000 within eligible range): $2 million + $400,000 = $2,400,000 Step 2: Calculate “Medicare Share” Medicare inpatient days / (total inpatient days*((gross revenue – charity) / gross revenue)) Step 3: Multiply base by Medicare share Using an example Medicare Share of.50: $2,400,000 X.50 = $1,200,000 Step 4: Determine payment for each year (Assuming 4 years of payments) Payment Year 1: $1,200,000 (100%) Payment Year 2: $900,000 (75%) Payment Year 3: $600,000 (50%) Payment Year 4: $300,000 (25%)

15. CAH Medicare Incentive Payment Formula Design of Medicare EHR incentives allows CAHs to accelerate and increase the inpatient payment for depreciation of reasonable costs for purchase of depreciable assets such as computers and associated hardware and software, to support meaningful use of certified EHR technology 15 Reasonable costs can be depreciated in a single year, rather than over the life of the assets. The costs of assets incurred in previous years that have not been fully depreciated may also be included. Medicare’s share of CAH EHR incentives is calculated the same as the PPS hospital EHR incentives plus 20 percentage points (not to exceed 100%). Basis for CAH Medicare EHR incentive payments is the reasonable cost reimbursement structure.

16. CAH Medicare Incentive Payment Formula 16 Step 1: Calculate Cost of HITHypothetical: FY 2011: $5 million FY 2012: $5 million FY 2013: $5 million FY 2014: $5 million Step 2: Calculate Medicare Share (Medicare inpatient days / (total inpatient days*((gross revenue –charity) / gross revenue))) + 20% Step 3: Multiply Cost by Medicare Share Using an example Medicare Share of 50%, plus 20% bonus = 70% $20,000,000 X.70 = $14,000,000 Step 4: Calculate 101% of Medicare Share of Costs Total Payment: 101% * $14,000,000 = $14,140,000

17. Medicaid EHR Incentive Program Significant differences between the Medicare and Medicaid EHR Incentive Programs 17 Focus of WHA’s September 21 webinar Only eligible for Medicaid Incentive Program if: The hospital is a children’s hospital or 10% or more of the hospital’s volume is attributable to Title XIX Medicaid. Hospitals can receive both Medicaid and Medicare EHR incentive payments; eligible professionals must choose either Medicaid or Medicare EHR incentive payments. Additional information on the Medicaid EHR Incentive Program can be found at: http://www.wha.org/education/default.aspx

18. 18 Meaningful Use Measure Highlights

19. CPOE retained, but substantially revised 19 Objective: Use CPOE for medication orders directly entered by any licensed healthcare professional who can enter orders into the medical record per state, local and professional guidelines. Measure limited to “patients whose records are maintained using certified EHR” CPOE only required for medication orders in Stage 1. Others may enter the order. Measure: More than 30% of unique patients with at least one medication in their medication list admitted to the eligible hospital’s or CAH’s inpatient or emergency department (POS 21 or 23) have at least one medication order entered using CPOE. Emergency department included in measure. Stage 2 increases percentage to 60%.

20. Meaningful Use Measure Highlights Quality measures and submission revised… 20 Hospitals must report 15 measures (3 sets) Endorsed by National Quality Forum Not in current quality reporting program (RHQDAPU) “e-specified” but not field tested Anticipate electronic submission in 2012 Calculation through the EHR, but submission is through attestation in 2011 Numerators Denominators Patient exclusions

21. Meaningful Use Measure Highlights Quality measures and submission revised 21 ConditionMeasure Name Emergency Department Throughput Median time from ED arrival to ED departure for admitted patients Admission decision time to ED departure time for admitted patients StrokeDischarge on anti-thrombotics Anticoagulation for A-fib/flutter Thrombolytic therapy for patients arriving within 2 hours of symptom onset Anti-thrombotic therapy by day 2 Discharge on statins Stroke education Rehabilitation assessment Venous Thrombo-embolism (VTE)VTE prophylaxis within 24 hours of arrival Intensive care unit VTE prophylaxis Anticoagulation overlap therapy Platelet monitoring on unfractionated heparin VTE discharge instructions Incidence of potentially preventable VTE

22. Meaningful Use Measure Highlights …but the new quality measures contain hidden functionality requirements 22 The 15 quality measures require data capture functionality beyond the initial EHR functional requirements explicitly required in certification and MU rule. Examples: Data sources for the quality measures include physician documentation, medication administration, computerized provider order entry and discharge instructions. Data elements for quality reporting must be in structured formats that are not widely used. Computer Sciences Corporation study: Hospitals meeting the explicit data capture requirements under meaningful use will have only 35% of the data needed for the hospital quality measures. The remaining 65% are hidden requirements of meaningful use.

23. Certification Rule Highlights No grandfathering of CCHIT certification 23 All providers with existing CCHIT certified EHRs will need to re-certify Hospitals must “attest” that they have certified EHR technology ONC will approve “ONC testing and certification bodies” (ONC-ACTBs) First ONC-ACTBs announced last week: CCHIT and the Drummond Group. ONC anticipates first certifications by the end of the year. Complete EHR, or Combination of EHR modules. No EHRs will be certified until ONC establishes certification entities Certification will be for 2011-2012 NEW certification will be required in 2013. Certification requirements linked to each meaningful use criteria

24. Resources WHA Toolkit 24 http://www.wha.org/toolKit/default.aspx http://www.wha.org/education/default.aspx Sept 21 - Medicaid and Meaningful Use - The "Other" EHR Incentive Program: What Hospital Leaders Should Know About the Medicaid EHR Incentive Program (Webinar) Third Party Webinars EHR Consulting Database (coming soon) WHA Education ONC Resources http://healthit.hhs.gov/portal/server.pt?open=512&mode=2&objID=3006&PageID=20401

25. Questions? 25