Doctors prep for digital push

7/30/10 Wary providers eye billions in federal incentives for converting to electronic records - Nashville Business Journal

After nearly two years of waiting, hospitals and doctors now hold the key to unlocking up to $27 billion in federal incentives aimed at converting patients’ medical charts from paper files to electronic records.

Nashville’s hospital companies, the foundation of the region’s $30 billion health care industry, have been among the first to make the digital transition and hope to be first in line to land a chunk of the federal dollars.

The Centers for Medicare & Medicaid Services this month issued the final rule on “meaningful use” of electronic health records, spelling out what providers must do to cash in on incentive payments ranging from $64,000 for a single-physician practice to more than $5 million for a large hospital.

The rule has been a long time coming, not only for providers hoping to offset the costs associated with switching to electronic records, but for Nashville-based health care companies that have already invested months and millions of dollars making the leap to digital or positioning themselves to help others in the transition.

“For some folks, there’s been this air of skepticism that this is ever going to happen,” said Tom Stephenson, CEO of Nashville-based Healthcare Management Systems Inc., which has been working on its electronic records products for more than a year and a half. “Now that we’ve got the final rule, it gives people a little more stake in the ground to say, ‘It’s here. Now we actually have something we can work with.’”

The clock is ticking

They’ll have to work fast. Incentive payments for providers who demonstrate meaningful use of the records start in 2011 and gradually decrease through 2015 when penalties in the form of reductions to Medicare reimbursement rates kick in.

The tight timeline prompted more than 2,000 comments to a proposed rule for meaningful use issued by CMS in January that many felt called on providers to do too much, too fast. The final rule relaxes many of the proposed requirements while giving greater flexibility to providers in how they go about achieving meaningful use.

For example, the proposed rule included 25 criteria for physicians and 23 for hospitals, all of which had to be met to qualify for incentive payments. The final rule establishes a “core set” of 15 criteria for physicians and 14 for hospitals that must be met and allows them to defer up to five remaining criteria.

Dr. John Pirolo, chief medical information officer for Saint Thomas Health Services, calls the rule a “good first step.” He noted that the requirements are sure to become more stringent in future stages to be announced by CMS over the next couple of years.

“Providers and hospital systems can anticipate a broadening of the rules, a raising of the bar,” Pirolo said. “We’re looking at a 24-month wake-up call to move along, to get going with the understanding it will be significantly accelerated.”

Taking the leap

According to oft-cited industry statistics, fewer than 10 percent of U.S. hospitals and less than a third of office-based physicians have fully integrated electronic records systems.

Dr. Steven Mann is one of those in the minority. As a member of HCA Inc.’s TriStar Medical Group, Mann was part of a pilot program in 2007 to implement electronic records in every aspect of his practice, located on the campus of Skyline Medical Center.

The first three months or so were rough, Mann admits, and he had to cut back on his patient load while making the transition to the new system. But within the first year, he estimates productivity increased by up to 30 percent.

“I could see more patients or get home an hour or two earlier at night,” he said. “It’s made my life significantly easier, significantly better.”

Nashville-based HCA was among the first to recognize the benefits of electronic records, not only in terms of efficiency, but improving the quality and safety of patient care, said Kim Lewis, chief information officer for TriStar Health System, which includes seven hospitals in Middle Tennessee.

HCA implemented electronic records in all of its hospitals nationwide in 2004. Lewis said the company has been building on those systems ever since and was preparing for the “worst case scenario” of having to meet all 23 criteria included in the proposed rule.

“The final ruling, for us, just solidifies the work we’ve already done,” she said.

That’s also the case at Franklin-based Community Health Systems Inc., the nation’s largest publicly traded hospital company with more than 120 hospitals in 29 states. CHS began initial implementation of early electronic records in the mid-1990s, said Chief Information Officer Gary Seay.

He called the rule a “significant step forward” from an industry-wide perspective but cautioned it remains to be seen whether widespread implementation will lead to the kind of savings that policy makers are predicting.

“Certainly, I think we’re going to see improvement,” Seay said. “But just how comprehensive those improvements turn out to be is going to be a challenge for the country at large.”

Hurry up ... and wait

The waiting game surrounding electronic health records isn’t over just yet.

To be eligible for federal incentives, hospitals and physicians must use certified technology.

And while federal policy makers earlier this month released standards and certification criteria for electronic health records, they have yet to determine who will do the actual certifying.

The Office of the National Coordinator for Health Information Technology said this week that it has received several applications from organizations interested in becoming certifying bodies. Testing and certification could begin in late summer, with the first certified products hitting the market this fall.

That shortens an already crunched timeline for health care providers eager to implement electronic records before the largest incentive payments begin in 2011.

Meanwhile, health information technology companies like Nashville-based Informatics Corporation of America are doing everything they can to be among the first in line to have their electronic records products receive the federal stamp of approval.

“We have 18 months to certify all these products, to implement them across the country, and it took them 18 months to simply come up with the definition of what meaningful use was,” said John Tempesco, vice president of client services and marketing at Informatics Corporation of America. “Is it possible? Yes. But I think it’s improbable.”