AAMC Reporter: October 2009

Uncertainty Abounds on Health IT

In late August, Vice President Joe Biden announced the release of $1.2 billion in American Recovery and Reinvestment Act (ARRA) grants designed to help hospitals and physicians develop and install electronic health records (EHR). More rules—and funding—are on the horizon to help ensure that health IT is not only more widely used, but can make meaningful improvements in clinical care. In the meantime, however, widespread confusion exists over what providers will need to do to earn federal incentive payments, a problem made more pressing by the economic struggles that threaten health IT projects just as many institutions begin to implement them.

To add to the confusion, current health reform proposals also could have implications for health IT. A $856 billion health reform bill, introduced in September by Senate Finance Committee Chairman Max Baucus (D-Mont.), would provide bonus payments for Medicare Advantage sponsors who use certain health IT components and would extend health IT incentives to certain providers who are not currently eligible for stimulus payments.

Roughly half of the August grants will go toward establishing 70 Health Information Technology Regional Extension Centers. While many details of the extension centers are unclear, they will generally be multistakeholder, nonprofit organizations that will provide guidance on health IT. A national health IT research center will help the extension centers work together to identify and share best practices in health IT adoption.

"The extension centers may play an integral role in helping health providers become meaningful users of health IT, which can help advance the national effort to implement health IT by 2014," said Lori Mihalich-Levin, J.D., AAMC senior policy analyst for health care affairs.

The remaining grants will be given to states to support the development of nationwide health IT networks. All told, ARRA designated $19 billion in Medicare and Medicaid incentives for hospitals and eligible health providers who implement "meaningful use" of health IT and $2 billion for health IT-related grants. Beginning in 2011, Medicare and Medicaid providers who have implemented meaningful use of EHRs will be eligible to receive incentive payments. However, providers not using health IT by 2015 will face a reduction in Medicare reimbursement rates.

Health providers have touted the benefits of health IT and welcomed Biden's announcement, but confusion remains regarding the health IT provisions in the stimulus package. For starters, significant uncertainty centers on the term "meaningful use," which has yet to be fully defined. According to officials, the Centers for Medicare and Medicaid Services (CMS) are expected to propose a definition later this year, with final regulations expected next spring.

"Our goal is to get that out as fast as we possibly can, and that's about all we can offer," said David Blumenthal, M.D., M.P.P., the national coordinator for health IT, who oversees the Office of the National Coordinator for Health IT (ONC). "Development of the meaningful use regulation is going to be a very important development."

In the meantime, the ONC has encouraged its Health IT Policy Committee to develop and publicize recommendations for the meaningful use definition. The policy committee's recommendations might help guide health IT implementation at teaching hospitals, medical schools, and elsewhere.

"They are thoughtful, careful, well-informed recommendations and may serve to inform the decisions that [teaching hospitals] are going to be making about health IT," Blumenthal said.

After the meaningful use definition is finalized, CMS and the Department of Health and Human Services (HHS) likely will provide more specific guidance and instruction.

"This is obviously going to be a complicated rule, and I'm sure that many providers and patients will have questions about it," Blumenthal said.

Patricia Wise, vice president for health information systems at the Health Information Management Systems Society (HIMSS), a Chicago-based group that promotes health IT, said that although there is "quite a bit of confusion about the final regulations," the government has indicated that meaningful use of health IT will likely mean using electronic prescribing, clinical decision support, and quality reporting, among other things.

As the regulations are worked out, teaching hospitals, physicians, and other providers are thinking about how they will get their health IT systems up to speed and how they will train (or retrain) their staffs, Wise said. It typically takes about 18 months to implement an EHR system, officials said, and many providers will face a time crunch between the time when the final regulations are released and the first incentive payments are distributed in 2011.

"Once meaningful use is fully established, the main focus for health IT in the next year is helping hospitals and ambulatory practices move to the point that they can derive the benefits of the economic stimulus," Wise said.

Even hospitals that already have EHR systems in place are paying close attention to the rule-making process to ensure their existing systems meet the meaningful use standards, said Arthur Krumrey, chief information officer for Loyola Health System, which has an existing EHR system.

"The tricky thing for us having an established EHR is it has to be used according to the meaningful use definitions that are still evolving," Krumrey said. "In some respects, institutions that are putting in an EHR now have it a bit easier because all these definitions are going to be built into the system as they are installed."

Another challenge for providers, Krumrey said, is that they need to provide the money to implement EHR systems up front before they receive incentive payments. The economic downturn is likely making it even more difficult for hospitals and physicians to make upfront investments in health IT. In addition, providers who do not treat high numbers of Medicare or Medicaid patients might not be as inclined to implement health IT, Krumrey said.

"The two biggest obstacles are the requirement of upfront funding and the fact that it appears the incentives are pegged to Medicare and Medicaid," Krumrey said.

Providers that are having financial difficulties can apply for state grants and should take advantage of the assistance the regional extension centers will offer to ensure they receive stimulus funding, Krumrey said.

"It will be interesting to see how much [health IT] the stimulus bill really triggers because of the economic downturn," Krumrey said. "I'm concerned about institutions that are coping with the downturn and being able to find funding. I'm not sure [Loyola] would have been able to invest in an EHR now."

—By Sarah Mann