meaningful use stage 1 summary gnyha

8/3/2019 Meaningful Use Stage 1 Summary GNYHA

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September ML-106Twenty-nine

2 0 1 0

TO: Chief Executive Officers

FROM: Kenneth E. Raske, President

RE: Summary of CMS and ONC HIT Regulations

Attached for your information is GNYHAs summary of the Centers for Medicare & MedicaidServices (CMS) final rule on the Medicare and Medicaid Electronic Health Record (EHR)

Incentive Program.

CMS final rule, which was published on July 28, provides the long-anticipated definition ofmeaningful use, as well as timeframes, methodology, and other details on how CMS will

implement the EHR Incentive Program. Also on July 28, the Office of the National Coordinator

for HIT (ONC) issued the final version of its companion rule on Standards, ImplementationSpecifications, and Certification Criteria for EHR technology. Together, these two regulations,

along with a third issued by the ONC pertaining to the certification process for EHR, provideguidance on how providers can qualify for Medicare and Medicaid incentive payments beginning

in FY 2011 and avoid penalties in FY 2015 and beyond. GNYHAs summary addresses

provisions of interest in the CMS rule, and provides information where there is alignmentbetween the ONC and CMS regulations.

GNYHA remains engaged in efforts to resolve certain elements of the regulation, particularly theissue of incentive payments to multi-campus hospitals.

Over the coming weeks and months, GNYHA will be in sustained communication with member

institutions regarding ongoing developments and providing guidance and clarification as theprogram begins. Additionally, member hospitals can soon expect to receive schedules reflecting

GNYHAs estimate of the potential funds available and penalties that are possible for individual

hospitals under the CMS program.

Please contact Zeynep Sumer, (212) 258-5315 or [email protected], with any further

questions on the HIT regulations.

Attachment


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cc: Chief Information OfficersChief Operating Officers

Chief Financial Officers

Information Technology WorkgroupHospital HIT Steering Committee

Medical DirectorsDirectors, Finance and ReimbursementLegal Affairs Committee

HIPAA Privacy and Security Workgroup

Government Affairs Forum


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GNYHA Summary:

CMS Final Rule on the Medicare and MedicaidElectronic Health Record Incentive Program

September 2010


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EHR Certification

Meaningful Use Objectives

Meaningful Use Measures

Permissible Exclusions

Meaningful Use for Medicaid Adopt, Implement, Upgrade

Reporting Clinical Quality Measures

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Legal and Regulatory Context for Defining Meaningful Use

The American Recovery and Reinvestment Act of 2009 (ARRA) authorized a number of healthinformation technology (HIT) activities under the Health Information Technology for Economicand Clinical Health Act (HITECH), including an electronic health record (EHR) incentive

program to be directed by the Centers for Medicare & Medicaid Services (CMS). Incentivepayments, as part of this program, are to be paid beginning in Federal fiscal year (FY) 2011 toeligible professionals and hospitals that demonstrate they are meaningful users of EHRtechnology. Medicare providers that fail to demonstrate they are meaningful users by FY 2015will begin incurring penalties.

Since the enactment of HITECH, CMS and the Office of the National Coordinator for HIT(ONC) have issued three sets of regulations that provide guidance on how the EHR incentiveprograms will be governed. These include:

1. The ONC Final Rule on the Temporary Certification Process, which defines the processfor EHRs to become certified, including the establishment of new EHR certifyingentities.

2. The ONC Final Rule on Standards, Implementation Specifications, and CertificationCriteria, which details the technical standards that EHR technology must meet to becomecertified.

3. The CMS Final Rule for the Medicare and Medicaid Incentive Program, which definesthe eligibility criteria for the incentive funds; the initial meaningful use criteria thateligible providers must meet; the timeframes and methodology for payments; as well asother operational details under the program.

The following GNYHA summary will focus on the CMS final rule for the Medicare andMedicaid Incentive Program, although elements of this program touch on aspects of the othergoverning regulations. Although this summary does not include details of the ONC regulations,information will be provided where there is alignment between the ONC and CMS programs.

Overview of Final Regulation

In its final rule on the EHR incentive program, CMS retains a great deal of the framework it putforward in its proposed rule, namely that meaningful use will be phased in over stages andbecome more stringent over time. CMS final rule, however focuses on defining therequirements for just the first stage of meaningful use for now and reserves defining criteria forfuture stages in later rulemaking, once it has had an opportunity to observe successes andchallenges from the implementation of the first stage.

CMS made important changes that GNYHA and its members appreciate in the final rule, largelyin response to comments and advocacy by GNYHA, its members, and other stakeholders.GNYHA is still concerned, however, that the goals CMS has set are challenging, if notimpossible for many hospitals to meet. The final rules economic impact analysis estimates thatincentive payments under the Medicare and Medicaid programs for FY 2011FY 2019 willrange from $9.7 billion to $27.4 billion. CMS estimates that between $8.4 billion and $14.4


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CMS acknowledges that further discussion is necessary to effectuate this alignment and toconsider issues such as the differences in payment years between Medicare and Medicaid.

The requirements for Stages 2 and 3 will be defined in later rulemaking. CMS also reserves theauthority to create additional stages of meaningful use beyond Stage 3. Although the final rulefocuses on Stage 1 criteria, CMS provides information on a number of criteria that can beexpected in Stage 2, including:

Computerized provider entry (CPOE) required for 60% of patients (versus 30% inStage 1);

Higher thresholds for functionality measures than those required in Stage 1, as well asadditional requirements to use structured data formats;

Stage 1 menu set objectives will all be core set objectives and be required; Inclusion of electronic claims submission and insurance eligibility verification as

additional objectives.

Table 1: Stage of Meaningful Use Criteria by Payment Year

First PaymentYear

Payment Year

2011 2012 2013 2014 2015+**

2011 Stage 1 Stage 1 Stage 2 Stage 2 TBD

2012 Stage 1 Stage 1 Stage 2 TBD

2013 Stage 1 Stage 2 TBD

2014 Stage 1 TBD

2015+* TBD

*Avoids penalties only for eligible providers in the Medicare EHR Incentive Program

Meaningful Use Criteria

The HITECH Act provides incentive payments under Medicare and Medicaid for eligiblehospitals and professionals that are meaningful users of certified EHR technology. UnderHITECH, meaningful use by a provider is broadly defined as meeting three requirements:

1. The use of certified EHR technology in a meaningful manner2. Having a certified EHR that is connected in a manner that provides for the electronicexchange of health information to improve care3. Provider submission of information on clinical quality measures selected by the

Secretary of Health and Human Services (HHS).

EHR Certification

Hospitals and eligible professionals must attest to using certified EHRs to qualify for incentive

funds. The certification requirements and process have been outlined in the companionregulations issued by ONC. As part of the temporary certification process that is outlined in the

regulations, ONC is accepting and reviewing applications from organizations that wish to

become certifying bodies and has named three entities thus far to assess and deem EHRs as

certified. However, there are currently no certified EHRs on the market today. ONC expects the

first wave of certified EHRs before the end of the year.


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Related to this, the ONC rule on certification criteria, standards, and implementationspecifications defines the requirements that EHR vendors must meet in order to have theirsystems certified under the new process. The certification criteria parallel the CMS meaningfuluse criteria and essentially ensure that certified EHR products are meaningful use-ready.

Additionally, ONC has included certification criteria that would enable EHRs to automaticallycalculate the functionality measures with a percentage calculation. The criteria also includecalculation and submission of all clinical quality measures that are required by CMS.

Hospitals should be aware, however, that the ONC rule on certification criteria specifies thatcertification can be for either a complete EHR that meets all of the certification criteria or acombination of EHR modules that can meet at least one of the certification criteria. Hospitals areresponsible for ensuring that their EHR system is certified. In the case of hospitals using multipleEHR components to achieve meaningful use, each component being used for achievingmeaningful use status and to qualify for incentive payments, must work together and have beencertified. ONC will keep a running list on its Web site (http://healthit.hhs.gov) of all complete

EHR systems and EHR system components that are certified. GNYHA encourages hospitals tospeak with their vendors regarding vendor plans for product certification, and should also bemindful that the specific version of an EHR system or component that they are using has been orwill be certified.

Meaningful Use Objectives

Under HITECH, hospitals and eligible professionals must also use certified EHRs in ameaningful manner and for electronic exchange to qualify for incentive funds. The CMSproposed rule required hospitals to meet 23 objectives with no flexibility in prioritizing certainobjectives over others in the early adoption years. In the final rule, CMS offers some flexibilityby dividing the list of objectives for hospitals to meet in Stage 1 into a core set of 14 required

objectives and a menu set of ten objectives from which hospitals must choose five, for a totalof 19 objectives. Hospitals are further required to choose at least one public health objectivefrom the menu list.

CMS has made several notable changes to the list of objectives required to be met for meaningfuluse in the final rule. These include the following:

Two objectives related to administrative transactions previously required were deferred toa later stage of the program.

CMS has added two new objectives in the menu set, including one related to providingcondition-specific patient education resources and another related to recording advancedirectives in the EHR.

The final rule lowers the measurement thresholds for some of the provider objectives. Hospitals must collect, calculate, and report on 15 clinical quality measures, a significant

reduction from the proposed rules list of 35 quality measures.

Meaningful Use Measures

Each objective has a corresponding measure so that providers may demonstrate to CMS that theyhave met the objective. CMS specifies that measures are calculated in one of three ways.


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1. Percentage of all patients, including those with records in the EHR, for which thedenominator is determined by the hospital, the numerator is determined by the EHR,and the measure is calculated through the EHR.

2. Percentage of patients with records in the EHR for which the numerator and thedenominator values are determined by the EHR and the measure is calculated through

the EHR.3. Yes/No attestation, for which hospitals would need to enable functionality in the EHRor that a hospital has performed a test of an EHR capability. For measures that requirea testing of capability to exchange information, CMS indicates that hospitals may usea dummy case for this test and that the criteria will be considered met even if the testfails. However, if the test exchange is successful, CMS expectation is that thecapability is then enabled and regular exchange instituted.

In response to the comments it received from the hospital community and others, CMS modifiedthe functionality measures in several ways:

CMS lowered the threshold on a number of the measures, including the requirement forthe use of CPOE, from 80% of physicians to just 30 % of unique patients.

CMS has added emergency department admissions to the denominator of most of themeasures. Hospitals will need to include patient records with Place of Service codes 21 or23 (emergency department and inpatient settings) in their denominator to calculate thesemeasures. Since a majority of hospital admissions are likely to be through the ED,hospitals will need to have certified EHR systems in their EDs as well as in their inpatientunits.

In order to reduce the burden of calculating and reporting each of the measures, CMS hasmodified measures that in the proposed rule required manual calculation and the ONCcertification criteria now include calculating functionality measures as well.

Lastly, CMS has changed many of the definitions for the denominator of the measures tocounting unique patients versus patient encounters or physicians. This, in many cases,will make it easier for hospitals to meet the criteria.

Permissible Exclusions

New in the final rule is a provision that allows hospitals to indicate to CMS that a functionalityobjective does not apply to them. Hospitals may exclude certain objectives if they did not haveany patients to whom the objective applied or if they did not have enough cases to calculate themeasure. These exclusions would be in addition to the five measures from the menu set ofmeasures that a hospital can defer, so that by excluding a measure, hospitals reduce the numberof measures they need to meet. CMS specifies a total of seven measures for possible exclusionbased on the criteria.

A complete list of the hospital objectives, measures, measure calculation types, and measureexclusions are in Table 2.


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Table 2:Stage 1 Hospital Objectives for Meaningful Use

OBJECTIVE MEASURECALCULATION

METHOD*

ELIGIBLFOR

EXCLUSIO

Core Set: Hospitals must achieve all of the following objectives and meet the required thresholds.

1. Use CPOE for medicationorders directly entered byany licensed health careprofessional who can enterorders into the medicalrecord per state, local, andprofessional guidelines

More than 30% of unique patientswith at least one medication intheir medication list admitted tothe eligible hospitals inpatient oremergency department (POS 21 or23) have at least one medicationorder entered using CPOE

Patients with records inthe EHR

No

2. Implement drug-drug anddrug-allergy interactionchecks

The eligible hospital has enabledthis functionality for the entireEHR reporting period

Yes/No No

3. Record demographics Preferred language Gender Race Ethnicity Date of birth Date and preliminarycause of death in the eventof mortality in the eligiblehospital

More than 50% of all uniquepatients admitted to the eligiblehospitals inpatient or emergencydepartment (POS 21 or 23) havedemographics recorded asstructured data

All patients No

4. Maintain an up-to-dateproblem list of current andactive diagnoses

More than 80% of all unique

patients admitted to the eligiblehospitals inpatient or emergencydepartment (POS 21 or 23) haveat least one entry or an indicationthat no problems are known forthe patient recorded as structureddata

All patients No

5. Maintain active medicationlist

More than 80% of all uniquepatients admitted to the eligiblehospitals inpatient or emergencydepartment (POS 21 or 23) haveat least one entry (or an indicationthat the patient is not currentlyprescribed any medication)recorded as structured data

All patients No

6. Maintain active medicationallergy list

More than 80% of all uniquepatients admitted to the eligiblehospitals inpatient or emergencydepartment (POS 21 or 23) haveat least one entry (or an indication

All patients No


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METHOD*

ELIGIBLFOR

EXCLUSIO

that the patient has no knownmedication allergies) recorded as

structured data7. Record and chart changesin vital signs: Height Weight Blood pressure Calculate and displayBMI Plot and display growthcharts for children 2-20years, including BMI

For more than 50% of all uniquepatients age 2 and over admittedto eligible hospitals inpatient oremergency department (POS 21 or23), height, weight and bloodpressure are recorded as structureddata


No

8. Record smoking status forpatients 13 years old orolder

More than 50% of all unique

patients 13 years old or olderadmitted to the eligible hospitalsinpatient or emergencydepartment (POS 21 or 23) havesmoking status recorded asstructured data

Patients with records in

the EHR

Yes

9. Implement one clinicaldecision support rulerelated to a high-priorityhospital condition, alongwith the ability to track

compliance with that rule

Implement one clinical decisionsupport rule

Yes/No No

10.Report hospital clinicalquality measures to CMSor the States

For FY 2011, provide aggregatenumerator, denominator, andexclusions through attestation

N/A No

For FY 2012, electronicallysubmit the clinical qualitymeasures

11.Provide patients with anelectronic copy of theirhealth information(including diagnostic test

results, problem list,medication lists,medication allergies,discharge summary,procedures), upon request

More than 50% of all patients ofthe inpatient or emergencydepartments of the eligiblehospital (POS 21 or 23) who

request an electronic copy of theirhealth information are provided itwithin 3 business days


Yes


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METHOD*

ELIGIBLFOR

EXCLUSIO

12.Provide patients with anelectronic copy of their

discharge instructions attime of discharge, uponrequest

More than 50% of all patients whoare discharged from an eligible

hospital inpatient department oremergency department (POS 21 or23) and who request an electroniccopy of their dischargeinstructions are provided it


Yes

13.Capability to exchange keyclinical information (forexample, dischargesummary, procedures,problem list, medicationlist, medication allergies,diagnostic test results),

among providers of careand patient-authorizedentities electronically

Performed at least one test ofcertified EHR technology'scapacity to electronicallyexchange key clinical information

Yes/No No

14.Protect electronic healthinformation created ormaintained by the certifiedEHR technology throughthe implementation ofappropriate technicalcapabilities

Conduct or review a security riskanalysis per 45 CFR 164.308(a)(1) and implement securityupdates as necessary and correctidentified security deficiencies aspart of its risk managementprocess

Yes/No No

Menu Set: Hospitals must achievefive of the following objectives and meet the required thresholds. In

choosing the five objectives, hospitals must includeat least one of three public health objectives (8, 9, or 10

1. Implement drug-formularychecks

The eligible hospital has enabledthis functionality and has access toat least one internal or externaldrug formulary for the entire EHRreporting period

Yes/No No

2. Record advance directivesfor patients 65 years old orolder

More than 50% of all uniquepatients 65 years old or olderadmitted to the eligible hospitalsinpatient department (POS 21)have an indication of an advance

directive status recorded


Yes

3. Incorporate clinical lab-test results into certifiedEHR technology asstructured data

More than 40% of all clinical labtest results ordered by anauthorized provider of the eligiblehospital for patients admitted to itsinpatient or emergencydepartment (POS 21 or 23) duringthe EHR reporting period whose


No


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METHOD*

ELIGIBLFOR

EXCLUSIO

results are either in apositive/negative or numerical

format are incorporated incertified EHR technology asstructured data

4. Generate lists of patientsby specific conditions touse for qualityimprovement, reduction ofdisparities, research oroutreach

Generate at least one report listingpatients of the eligible hospitalwith a specific condition

Yes/No No

5. Use certified EHRtechnology to identifypatient-specific education

resources and providethose resources to thepatient if appropriate

More than 10% of all uniquepatients admitted to the eligiblehospitals inpatient or emergency

department (POS 21 or 23) areprovided patient-specificeducation resources

All patients No

6. The eligible hospital thatreceives a patient fromanother setting of care orprovider of care orbelieves an encounter isrelevant should performmedication reconciliation

The eligible hospital performsmedication reconciliation for morethan 50% of transitions of care inwhich the patient is admitted tothe eligible hospitals inpatient oremergency department (POS 21 or23)


No

7. The eligible hospital thattransitions its patient toanother setting of care orprovider of care or refersits patient to anotherprovider of care shouldprovide summary of carerecord for each transitionof care or referral

The eligible hospital thattransitions or refers its patient toanother setting of care or providerof care provides a summary ofcare record for more than 50% oftransitions of care and referrals


No

8. Capability to submitelectronic data toimmunization registries orImmunization InformationSystems and actualsubmission in accordancewith applicable law andpractice

Performed at least one test ofcertified EHR technology'scapacity to submit electronic datato immunization registries andfollow up submission if the test issuccessful (unless none of theimmunization registries to whichthe eligible hospital submits suchinformation has the capacity toreceive the informationelectronically)

Yes/No Yes


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METHOD*

ELIGIBLFOR

EXCLUSIO

9. Capability to submitelectronic data onreportable (as required bystate or local law) labresults to public healthagencies and actualsubmission in accordancewith applicable law andpractice

Performed at least one test ofcertified EHR technologys

capacity to provide electronicsubmission of reportable labresults to public health agenciesand follow-up submission if thetest is successful (unless none ofthe public health agencies towhich the eligible hospitalsubmits such information has thecapacity to receive theinformation electronically)

Yes/No Yes

10.Capability to submitelectronic syndromicsurveillance data to publichealth agencies and actualsubmission in accordancewith applicable law andpractice

Performed at least one test ofcertified EHR technology's

capacity to provide electronicsyndromic surveillance data topublic health agencies andfollowup submission if the test issuccessful (unless none of thepublic health agencies to which aneligible hospital submits suchinformation has the capacity toreceive the informationelectronically)

Yes/No Yes

*Measures are required to be calculated by one of three methods. See the section titled

Meaningful Use Measures for details.

Meaningful Use for Medicaid Adopt, Implement, Upgrade

The final rule clarifies and finalizes CMS proposal for a common framework for meaningful

use for both Medicare and Medicaid. State Medicaid programs are allowed to propose to CMS

state-specific modifications to meaningful use as long as they are limited to public health

objectives and registries and do not require EHR functionality beyond what is included in the

ONC certification criteria. However, hospitals that qualify as meaningful users under Medicare

will be deemed qualified under Medicaid and will not need to meet any additional criteria

imposed by states.

Providers that are eligible for the Medicaid incentive funds may qualify, in their first adoptionyear, by adopting, implementing, or upgrading to certified EHR technology. This means that inthe first year that hospitals or eligible professionals receive funding under the Medicaid program,they can do so for activities related to working towards becoming a meaningful user of EHRs.However, in order to qualify, the provider must be in the process of adopting, implementing orupgrading an EHR that has been deemed certified under the new certification process.


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Reporting Clinical Quality Measures

The third element for meaningful use as defined by Congress under HITECH is to submitclinical quality measure data with the use of certified EHR technology to HHS. CMS intends,through the electronic reporting of these data, to move from the reporting of quality measuresusing claims data to direct reporting from the clinical record.

In the proposed rule, CMS put forward a total of 35 clinical quality measures on which hospitalsmust report. The list included measures from a number of clinical areas with a majority of themeasures having not been electronically specified. At that time, CMS acknowledged that a greatdeal of work would need to be done by measure developers and vendors before the measurescould be reported.

In the final rule, CMS has eliminated all of the measures that are not currently electronicallyspecified, leaving a list of 15 measures focused in the areas of stroke care, prevention, treatmentof venous thromboembolisms, and ED throughput. Each of these remaining measures hastechnical specifications that have been developed and that are available at

www.cms.gov/qualitymeasures/03_Electronicspecifications.asp#topofpage. Each is alsoendorsed by the National Quality Forum and has been adopted by the Hospital Quality Alliance.However, none of the 15 measures is included in the current Reporting Hospital Quality Data forthe Annual Payment Update (RHQDAPU) program, and is not included among the list putforward in the final Inpatient Prospective Payment System (IPPS) rule identifying measures tobe reported to CMS for payment for the upcoming year.

Since there is currently no capacity for electronic submission of clinical quality data to CMS, in2011 hospitals are expected to attest to using a certified EHR to capture and calculate each of theclinical quality measures. In addition, hospitals would need to submit a summary report as it isgenerated from their certified EHR. This summary report would include information on thenumerator, denominator, and all patient exclusions for a measure, as well as the beginning andending dates for the reporting period.

Hospitals must also report to CMS on all measures for which they have applicable cases, withoutregard to payer. In addition, hospitals must report on all measures for which they did not seepatients. In this case, a hospital would report that it had zero cases in the denominator for thatmeasure. Therefore, all hospitals must report on all clinical quality measures, regardless ofwhether it applies to their patient population.

In the proposed rule, CMS included a separate list of measures on which Medicaid providersmust report. In the final rule, CMS eliminates this requirement and states that the requiredclinical quality measures under the Medicare program also apply to the Medicaid program.

In 2012, CMS anticipates having developed a portal through which hospitals can submitsummary information on the clinical quality measures directly to CMS through their EHRsystems. CMS will develop and post information on the technical requirements to submit datathrough this portal by April 1, 2011. CMS also plans to provide alternate methods for providersto submit information, including through a health information exchange, a health informationorganization, or through a registry.


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CMS list of clinical quality measures on which eligible hospitals must report are in Table 3below.

Table 3: Stage 1 Hospital Clinical Quality Measures for Meaningful Use

MEASURE GROUP MEASURE 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

Stroke Discharge on anti-thrombotics

Anticoagulation for atrial fibrillation/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 Thromboembolism

(VTE)

VTE prophylaxis within 24 hours of arrival

Anticoagulation overlap therapy

Platelet monitoring on unfractionated heparin

VTE discharge instructions

Intensive care unit VTE prophylaxis

Incidence of potentially preventable VTE


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Meaningful Use Requirements for EPs

Eligible professionals have similar requirements to meet to qualify as meaningful users of EHRsand earn incentive funds, with a few exceptions. EPs must meet 15 core set measures and anadditional five measures from a menu set of 10 measures, for a total of 20 measures to qualify.Like hospitals, EPs would also have to choose one public health measure from the menu set.

A list of the functionality objectives, measures, measure calculation methods, and measureexclusions for EPs are listed in Table 4.

Table 4:Stage 1 Meaningful Use Objectives and Measures for Eligible Professionals

OBJECTIVE MEASURECALCULATIONMETHOD*

ELIGIBLEFOREXCLUSIO

Core Set: EPs must achieve all of the following objectives and meet the required thresholds.

1. Use CPOE for medication ordersdirectly entered by any licensed

health care professional who canenter orders into the medicalrecord per state, local andprofessional guidelines

More than 30% of unique patientswith at least one medication in their

medication list seen by the EP have atleast one medication order enteredusing CPOE

Patients with recordsin the EHR

Yes

2. Implement drug-drug and drug-allergy interaction checks

The EP has enabled this functionalityfor the entire EHR reporting period

Yes/No No

3. Generate and transmit permissibleprescriptions electronically (eRx)

More than 40% of all permissibleprescriptions written by the EP aretransmitted electronically usingcertified EHR technology


Yes

4. Record demographics Preferred language Gender Race Ethnicity Date of birth

More than 50% of all unique patients

seen by the EP have demographicsrecorded as structured data

All patients No

5. Maintain an up-to-date problemlist of current and activediagnoses

More than 80% of all unique patientsseen by the EP have at least oneentry or an indication that noproblems are known for the patientrecorded as structured data

All patients No

6. Maintain active medication listMore than 80% of all unique patients

seen by the EP have at least oneentry (or an indication that the patientis not currently prescribed anymedication) recorded as structureddata

All patients No

7. Maintain active medicationallergy list

More than 80% of all unique patientsseen by the EP have at least oneentry (or an indication that the patienthas no known medication allergies)

All patients No


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ELIGIBLEFOREXCLUSIO

recorded as structured data

8. Record and chart changes in vitalsigns:

Height Weight Blood pressure Calculate and display BMI Plot and display growth

charts for children 2-20 years,including BMI

For more than 50% of all uniquepatients age two and over seen by theEP, height, weight, and bloodpressure are recorded as structureddata


Yes

9. Record smoking status forpatients 13 years old or older

More than 50% of all unique patients13 years old or older seen by the EP

have smoking status recorded asstructured data


Yes

10. Implement one clinical decisionsupport rule relevant to specialtyor high clinical priority alongwith the ability to trackcompliance of that rule

Implement one clinical decisionsupport rule

Yes/No No

11.Report ambulatory clinicalquality measures to CMS or the

States

For 2011, provide aggregatenumerator, denominator, andexclusions through attestation

N/A No

For 2012, electronically submit theclinical quality measures

12.Provide patients with anelectronic copy of their healthinformation (including diagnostictest results, problem list,medication lists, medicationallergies), upon request

More than 50% of all patients of theEP who request an electronic copy oftheir health information are providedit within 3 business days.


Yes

13.Provide clinical summaries forpatients for each office visit

Clinical summaries provided topatients for more than 50% of alloffice visits within 3 business days


Yes

14.Capability to exchange keyclinical information (for example,problem list, medication list,medication allergies, diagnostictest results), among providers ofcare and patient authorizedentities electronically

Performed at least one test of certifiedEHR technology's capacity toelectronically exchange key clinicalinformation

Yes/No No


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ELIGIBLEFOREXCLUSIO

15.Protect electronic healthinformation created or maintained

by the certified EHR technologythrough the implementation ofappropriate technical capabilities

Conduct or review a security riskanalysis per 45 CFR 164.308 (a)(1)and implement security updates asnecessary and correct identifiedsecurity deficiencies as part of its riskmanagement process

Yes/No No

Menu Set: EPs must achievefive of the following objectives and meet the required thresholds. In choosing the fobjectives to meet, EPs must includeat least one of two public health objectives (9 or 10).

1. Implement drug-formularychecks

The eligible EP has enabled thisfunctionality and has access to at leastone internal or external drugformulary for the entire EHRreporting period

Yes/No No

2. Incorporate clinical lab-testresults into certified EHRtechnology as structured data

More than 40% of all clinical lab testsresults ordered by the EP during theEHR reporting period whose resultsare either in a positive/negative ornumerical format are incorporated incertified EHR technology asstructured data


Yes

3. Generate lists of patients byspecific conditions to use forquality improvement, reductionof disparities, research oroutreach

Generate at least one report listingpatients of the EP with a specificcondition

Yes/No No

4. Send reminders to patients perpatient preference forpreventive/follow up care

More than 20% of all unique patients65 years or older or 5 years old oryounger were sent an appropriatereminder during the EHR reportingperiod


Yes

5. Provide patients with timelyelectronic access to their healthinformation (including lab results,problem list, medication lists,medication allergies) within fourbusiness days of the informationbeing available to the EP

More than 10% of all unique patientsseen by the EP are provided timely(available to the patient within fourbusiness days of being updated in thecertified EHR technology) electronicaccess to their health informationsubject to the EPs discretion towithhold certain information

All patients Yes

6. Use certified EHR technology toidentify patient-specific educationresources and provide thoseresources to the patient ifappropriate

More than 10% of all unique patientsseen by the EP are provided patient-specific education resources

All patients No


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ELIGIBLEFOREXCLUSIO

7. The EP who receives a patientfrom another setting of care or

provider of care or believes anencounter is relevant shouldperform medication reconciliation

The EP performs medicationreconciliation for more than 50% of

transitions of care in which the patientis transitioned into the care of theEP


Yes

8. The EP who transitions theirpatient to another setting of careor provider of care or refers theirpatient to another provider of careshould provide summary of carerecord for each transition of careor referral

The EP who transitions or refershis/her patient to another setting ofcare or provider of care provides asummary of care record for more than50% of transitions of care andreferrals


Yes

9. Capability to submit electronicdata to immunization registries orImmunization InformationSystems and actual submission inaccordance with applicable lawand practice

Performed at least one test of certifiedEHR technology's capacity to submit

electronic data to immunizationregistries and follow up submission ifthe test is successful (unless none ofthe immunization registries to whichthe EP submits such information hasthe capacity to receive the informationelectronically)

Yes/No Yes

10.Capability to submit electronicsyndromic surveillance data topublic health agencies and actual

submission in accordance withapplicable law and practice

Performed at least one test of certifiedEHR technology's capacity to provideelectronic syndromic surveillance datato public health agencies andfollowup submission if the test is

successful (unless none of the publichealth agencies to which an EPsubmits such information has thecapacity to receive the informationelectronically)

Yes/No Yes

Clinical Quality Measures for EPs

Like hospitals, eligible professionals also have to report on a set of clinical quality measures inorder to qualify for incentive funds. EPs are required to report on three core measures that aremandatory for all EPs, as well as three additional measures chosen from a list of 38 measures.Unlike for hospitals, if an EP reports a denominator of zero for a core measure, the EP must

choose an additional alternate core measure on which to report. EPs can be required to report onup to three additional alternate core measures in this case.

Each of the EP clinical quality measures has been specified for collection through the EHR. Thetechnical specification for these measures can be found atwww.cms.gov/qualitymeasures/03_Electronicspecifications.asp#topofpage.


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As is the case for hospitals, EP measures are the same for Medicare as they are for Medicaid.However, since EPs do not qualify for payments under both programs and must choose eitherMedicare or Medicaid, they must report clinical quality measure information to their state if theywish to qualify for the Medicaid incentives. Again, as is the case for hospitals, in 2011, EPswould need to attest to using a certified EHR to capture and calculate quality measure data and

use an electronic submission for reporting in 2012. Clinical quality measures for EPs can befound in Table 5.

Table 5: Clinical Quality Measures for Eligible Professionals

CONDITION MEASURE

Core Measures (Must be Reported)

Hypertension Blood pressure management

Prevention Tobacco use assessment and tobacco cessationintervention

Adult weight screening and follow-up

Alternate Core Measures (Required for Submission if any of the Core Measures = Zero)

PreventionWeight assessment and counseling for children andadolescents

Preventive care and screening: influenzaimmunization for patients 50 years old

Childhood immunization status

Must Choose three of the Following 38 Measures to Report on:

Diabetes

Hemoglobin A1c poor control

Hemoglobin A1c control (8.0%)

Low Density Lipoprotein (LDL) management andcontrol

Blood pressure management

Diabetic retinopathy: documentation of presence orabsence of macular edema and level of severity ofretinopathy

Diabetic retinopathy: communication with thephysician managing ongoing diabetes care

Eye exam

Urine screening

Foot exam

Ischemic Vascular Disease Blood pressure management

Use of aspirin or another antithrombotic

Complete lipid panel and LDL control

Pneumonia vaccination for older adults

Breast cancer screening

Colorectal screening


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Preventive Care

Smoking and tobacco use cessation, medicalassistance:

(a) advising smokers and tobacco users to quit(b) discussing smoking and tobacco cessationmedications(c) discussing smoking and tobacco use

cessation strategies

Initiation and engagement of alcohol or other drugdependence treatment

Prenatal care: screening for HumanImmunodeficiency Virus (HIV)

Prenatal care: anti-D immune globulin

Controlling high blood pressure

Cervical cancer screening

Chlamydia screening for women

Cancer

Oncology breast cancer: hormonal therapy forstage IC-IIIC estrogen receptor/progesterone

receptor positive breast CancerOncology colon cancer: chemotherapy for stage IIIcolon cancer patients

Prostate cancer: avoidance of overuse of bone scanfor staging low-risk prostate cancer patients

Coronary Artery Disease (CAD)Beta-blocker therapy for CAD patients with priormyocardial Infarction

Drug therapy for lowering LDL-cholesterol

Oral antiplatelet therapy prescribed for patientswith CAD

Heart Failure

Angiotensin-Converting Enzyme (ACE) orAngiotensin Receptor Blocker (ARB) therapy forleft ventricular systolic Function

Beta-blocker therapy for left ventricular systolicdysfunction

Warfarin therapy patients with atrial fibrillation

Depression Anti-depressant medication management: (a)effective acute phase (b) effective continuationphase treatment

Glaucoma Primary open angle glaucoma: optic nerveevaluation

Asthma Asthma pharmacologic therapy

Asthma assessmentUse of appropriate medications for asthma

Pharyngitis Appropriate testing for children with pharyngitis.

Imaging Low back pain: use of imaging studies


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Demonstrating Meaningful Use

Once hospitals and EPs are certain they meet the meaningful use criteria with a certified EHR,they can submit an attestation that identifies their certified EHR and the results of theirperformance on all of the meaningful use functionality measures. There will be a common

method for demonstrating meaningful use for Medicare and Medicaid. States will develop theirown, CMS-approved plans for deeming providers qualified.

Reporting will take place through a secure mechanism that CMS has yet to establish. Providersmay attest as early as April 2011 for any EHR reporting period between October 1, 2010 andMarch 30, 2011. For subsequent reporting periods, providers may attest as soon as they havefinished a reporting period and will have 60 days after the end of the reporting period to make anattestation.

CMS will post online for each payment year the names of all providers that were deemedmeaningful users and that received incentive payments.

EHR Reporting Period

In order to receive payments, hospitals and EPs must demonstrate meaningful use during theEHR reporting period of the relevant payment year. For a providers first payment year, which isthe first year that it qualifies for incentive payments, CMS allows for a shortened reportingperiod of any 90-day period within the payment year. Therefore, hospitals may demonstrate thatthey are meaningful users during a 90-day period beginning as early as October 2010. Forhospitals that want to qualify for incentive payments in FY 2011, the EHR reporting period canbegin as late as July 2011.After the first payment year, providers must demonstrate that they are meaningful users for anentire payment year.

For hospitals receiving payments for adopting, implementing, or upgrading to certified EHRtechnology under the Medicaid program, the payment year immediately following the firstMedicaid payment year will also have a 90-day reporting period.

Hospital Incentive Payments

The ARRA provides Medicare and Medicaid HIT incentive payments to eligible hospitals who

are meaningful users of HIT.

Medicare Incentives for HospitalsEligibility

The ARRA statute provides Medicare HIT incentive payments to subsection (d) hospitals, orhospitals that are reimbursed under the Medicare inpatient acute care prospective paymentsystem (PPS). Hospitals and units excluded from the acute care PPS such as psychiatric,rehabilitation, long term care, childrens, and cancer hospitals are not eligible to receiveMedicare HIT incentive payments. Critical access hospitals (CAH) are eligible to receiveincentive payments, but based on a separate formula.


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Despite wide opposition from the provider community, CMS finalized its proposal to use theMedicare provider number, also known as the CMS Certification Number (CCN), to define ahospital for incentive payment purposes. Payments to eligible hospitals will therefore be made toeach provider as distinguished by the provider number in the hospital cost report. This policydoes not provide multi-campus hospitals with separate payments for each individual campus.

Legislation was recently introduced by the House Ways & Means Committee and the HouseEnergy & Commerce Committee that would provide multi-campus hospitals with incentivepayments for its main provider hospital, as well as for each hospital campus or remotelocation. Hospitals would be given the choice of the following two incentive payment methods:1) a $2 million base payment for each campus and one discharge-related amount for the totaldischarges across the entire system; or 2) one $2 million base payment amount and a discharge-related amount for each campus location based on the average number of discharges per campus.GNYHA strongly supports this legislation.

Medicare Incentive Payments

As proposed, the Medicare incentive payment would be equal to:

($2 million base amount + $200 per discharge for all-payer acute discharges 1,150 -

23,000) * the hospitals Medicare share, adjusted for charity care * the applicable

transition factor.

The incentive payment consists of a $2 million base amount plus a discharge-related amount,which equals $200 per all-payer acute care discharges for total discharges between 1,150 and23,000. The first 1,149 discharges and all discharges above 23,000 are disregarded. This sum ismultiplied by the Medicare share. The Medicare share is the sum of Medicare FFS days andMedicare HMO days, divided by total hospital days. The denominator, total hospital days, isadjusted by a charity care adjustment. The charity care adjustment is calculated as total charges

minus charity care charges, divided by total charges. The effect of this adjustment is to provide ahigher incentive payment to hospitals that provide a greater percentage of charity care. Theresulting amount is then multiplied by a transition factor, which phases down over the period inwhich the hospital is eligible to receive incentive funds as is shown in Table 6.


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Table 6: Hospital Payments by Fiscal Year

FY 2011 2012 2013 2014 2015

2011 100% ---- ---- ---- ----

2012 75% 100% ---- ---- ----

2013 50% 75% 100% ---- ----

2014 25% 50% 75% 75% ----

2015 ---- 25% 50% 50% 50%

2016 ---- ---- 25% 25% 25%

Hospitals may begin receiving incentive payments in FY 2011; CMS expects to begin makingpayments to qualifying hospitals in May 2011. The last year in which a hospital may become ameaningful user eligible to receive incentive payments is FY 2015 and no incentive paymentswill be made after FY 2016. Only hospitals qualifying as a meaningful user by FY 2013 willreceive their full incentive allocation; hospitals qualifying in later years will receive reducedamounts.

In the final rule CMS clarified that hospitals must qualify as a meaningful user in eachconsecutive year in order to receive their full incentive allocation. If the hospital does not qualifyfor incentive payments in one year, the following year will be paid at a reduced transitionamount. For example, if the hospitals first qualifying year is 2011 but they do not qualify in the

following year (i.e., 2012) and then qualify again in 2013, the transition amount for 2013 wouldbe 50%. The hospital would have missed the opportunity to receive the 75% transition amountthey should have received in 2012.

Payment Example

Hospitals characteristics:o Per discharge amount

Total acute discharges = 19,500 Qualifying HIT discharges = 19,500 1,149 = 18,351

o Medicare share Medicare FFS + Medicare HMO days = 46,000 Total days = 105,000 Medicare share = 43.8%

o Charity care adjustment Charity care charges = $5,000,000 Total charges = $450,000,000 = ($450,000,000 - $5,000,000) / 450,000,000 = 98.9%


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Therefore, the Medicare incentive payment would be calculated as follows:o = [$2,000,0000 + ($200 * 18,351)] * .438 / .989o = $2,511,999

And for each year, with the transition adjustment applied, assuming that the hospitalbecomes a meaningful user before FY 2013 and that the hospital qualifies in consecutive

years, the annual payments for each year would be as follows:o Year 1: $2,511,999 * 100% = $2,511,999o Year 2: $2,511,999 * 75% = $1,883,999o Year 3: $2,511,999 * 50% = $1,255,999o Year 4: $2,511,999 * 25% = $627,999o Total maximum 4-year Medicare incentive payments = $6,279,996

Data Sources and Process for Payment

In order to calculate the incentive payment amount, CMS will use hospital Medicare cost reportsas the data source to determine discharges, Medicare days, total days, and the charity careadjustment. The metrics needed to compute the hospitals incentive payments will be taken from

the following Medicare cost report worksheets displayed in Table 7:

Table 7: Medicare Cost Report Worksheets for Computing Hospital Incentive Payments

Metric Revised Cost Report

Worksheet Column Line

Discharges E-1, Part II

S-3, Part I

-

15

1

14, 15, 17

Medicare FFS IP Days E-1, Part II

S-3, Part I

-

6

2

1, 8-12, 16, 17

Medicare HMO IP Days E-1, Part II

S-3, Part I

-

6

3

2, 3, 4

Total Inpatient Days E-1, Part II

S-3, Part I

-

8

4

1, 8 - 12

Charity Care Charges E-1, Part II

S-10

-

-

6

20

Total Charges E-1,Part II

C, Part I

-

8

5

200

A preliminary incentive amount will be paid based on the hospitals most recently submitted 12-month cost report with a final incentive payment to be based on the hospitals settled cost reportthat begins after the beginning of the payment year. Hospital incentive payments will becalculated by the FIs/MACs, but the distribution of payments will be made through a singlepayment contractor, who will issue a single initial payment per year after the provider hasdemonstrated that it meets the meaningful use criteria for a given FY. CMS expects that


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payments will be made to providers within 1546 days after meeting the meaningful userequirements.

Medicare Payment Penalties for Hospitals

In addition to the payment incentives, the ARRA also included Medicare hospital market basket

update penalties for those hospitals that are not meaningful users in FY 2015 and eachsubsequent FY. The penalties are applied to the applicable FY in which the hospital does notqualify as a meaningful user and are not cumulative so that hospitals have a constant incentive tomeet the meaningful use criteria (i.e. if a hospital does not meet the meaningful use definition inFY 2015, but does in FY 2016, the payment penalty would only apply for FY 2015). Thepayment penalties apply as follows:

FY 2015: 25% of the market basket update; FY 2016: 50% of the market basket update; and FY 2017 and each FY thereafter: 75% of the market basket update.

The penalties apply in addition to any other market basket reductions from Federal health reformand/or penalties in effect for the provider, such as a market basket reduction for a hospital failingto report data under the Medicare Quality Incentive Reporting Program. CMS has not yetproposed how the payment penalties would be calculated/applied, but is expected to do so infuture rulemaking.

Medicaid Incentives for Hospitals

Eligibility

The ARRA statute provides Medicaid HIT incentive payments to acute care hospitals (includingcancer hospitals and CAHs), and childrens hospitals.

Acute care hospital: CMS defines an acute care hospital as a health care facility where theaverage length of stay (LOS) is less than 25 days and where the facilitys last four digits of itsCCN (Medicare provider number) are in the range of 00010879 or 13001399. Included in thiscategory are general short-term hospitals, cancer hospitals, and CAHs. CAHs were previouslynot eligible for Medicaid incentives under the proposed rule. CMS states that its intent is tocapture hospitals that are classified as general acute care hospitals and cancer hospitals under theMedicare program; it is not CMSs intent to capture hospitals that are classified as LTCHs forMedicare purposes (hospitals with a Medicare LOS of 25 days or more).

Childrens hospital: The final rule defines childrens hospitals as separately certified childrenshospitals, either freestanding or a hospital-within-hospital, where the last four digits of its CCNin the range of 33003399, and predominantly treats individuals under 21 years of age.

Similar to the Medicare incentive program, CMS will use the CCN to identify hospitals forpurposes of calculating Medicaid incentive funds. There are however, some importantdifferences in the hospital eligibility criteria for Medicaid incentive payments compared toMedicare incentive payments. In order to qualify for Medicaid incentive payments, acute care


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hospitals (including CAHs) must meet the meaningful use criteria discussed above, and mustalso have a Medicaid volume percentage of at least 10%. Childrens hospitals are not subject tothe 10% requirement.

Hospitals may begin qualifying for and receiving incentive payments in FY 2011; the last year in

which a hospital may begin receiving Medicaid incentive payments is in FY 2016. Unlike theMedicare program, the statute did not include Medicaid payment penalties for those hospitalsthat do not meet the meaningful use criteria beginning in FY 2015. Hospitals may only qualify toreceive Medicaid incentive payments in one state.

Medicaid Incentive Payments

The hospital Medicaid incentive formula is structured similar to the Medicare incentive formula,except that the hospitals Medicaid share, adjusted for charity care, will be applied in lieu of theMedicare share. Similar in concept to the Medicare share, the Medicaid share would becalculated as the (Medicaid FFS + Medicaid HMO days) / [Total days * charity care adjustment].CMS intends to count inpatient bed days in the same way they are counted for Medicare

purposes. In New York State, inpatient detoxification, drug rehabilitation, and alcoholrehabilitation services are considered exempt, non-acute services for Medicaid purposes, but areconsidered acute care services by Medicare. Under this final rule, these days would be classifiedas acute care for purposes of calculating the hospitals Medicaid share. The number of dischargesused in the discharge related amount for the three years following the first payment year(considering the four year payment scenario) will be calculated by applying the hospitals mostrecent three years average annual rate of growth, whether positive or negative.

The aggregate amount of incentive payments that a hospital may receive will be determinedusing the Medicare transition adjustments described above (100% for year one, 75% for yeartwo, 50% for year three, and 25% for year four). States have flexibility however, to distributeincentive payments over a minimum of three years and a maximum of six years, instead of overthe prescribed four-year transition period for Medicare. The funding amount that a hospital mayreceive in any one year is capped at 50% of its estimated total allowable Medicaid incentivepayment and 90% over two years. GNYHA has strongly recommended to New York State that itprovide the maximum amount of funding allowed.

States will be responsible for calculating the hospital-specific amounts and may use data sourcessuch as Medicare cost reports, Medicaid cost reports, Medicaid claims information, and hospitalfinancial statements. Similar to the Medicare incentives, states may use data from the cost reportyear prior to the payment year to determine payments.

Eligible Professional Incentive Payments

Eligibility

Eligible professionals (EPs) are also eligible for HIT incentive payments. For Medicareincentives, EPs are generally defined as physicians such as a doctor of medicine or osteopathy,dental surgery or medicine, podiatric medicine, optometry, and chiropractics. For Medicaidincentives, the definition is more expansive and includes dentists, certified nurse-midwives,


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nurse practitioners, and physician assistants practicing in a Federally Qualified Health Center(FQHC) or Rural Health Clinic.

Hospital-based eligible professionals physicians are excluded from qualifying for EP incentivefunds. These are defined as physicians who furnish substantially all their services in an inpatient

or emergency room setting. In the proposed rule, services provided in outpatient settings werealso included in the definition of hospital setting. As part of the Continuing Extensions Act of2010, in a provision strongly supported by GNYHA, Congress changed this definition, so in thefinal rule hospital-based setting is restricted to services provided in inpatient and emergencyroom settings. This allows some hospital-based EPs who practice substantially all of theircovered services in outpatient settings to qualify for incentive payments. This determination willbe made based on site of service and without regard to any employment or billing arrangementbetween the EP and any other provider (such as a hospital). In addition, the hospital-basedexclusion does not apply to EPs practicing predominantly in FQHCs or RHCs, even if they arehospital-owned.

Substantially all is defined as a physician who furnishes 90% or more of his or her Medicare-covered professional services during a relevant EHR reporting period in a hospital setting. CMSwill determine an EPs qualification based on Medicare physician claims data and classifyphysicians who bill at least 90% of their Medicare claims using certain place of service (POS)codes, identifying the location in which the service was provided, as hospital-based. The POScodes that will be classified as hospital-based setting include POS 21Inpatient Hospital, andPOS 23Emergency Room, Hospital.

Incentive Payments for Eligible Professionals

Unlike hospitals, EPs are eligible to receive HIT incentive payments from either the Medicare orMedicaid program, but not both. The EP must notify CMS of which program they choose toparticipate in. Once elected, an EP will be permitted to switch between programs, but only onetime, and only prior to 2015.

EPs are allowed to reassign their incentive payments to either an employer with whom thephysician has a contractual arrangementwhere the employer or entity can bill for and receivepayment for covered services provided by the EP, or to an entity that promotes the adoption ofEHR technology. However, EPs may reassign their incentive payments to only one entity, oronly one employer if the EP practices at more than one place of employment.

Medicare FFS Incentive Payments and Penalties

EPs are eligible to receive incentive payments in an amount based on 75% of the estimatedMedicare-allowed charges for all covered professional services provided in a payment year,subject to an annual cap, which varies based on the eligibility payment year. If the first year anEP qualifies as a meaningful user is either 2011 or 2012, the EP may receive a maximum of$18,000; if the first qualifying year is 2013, the maximum eligible payment is $15,000, and$12,000 in 2014. The maximum aggregate amount of incentive payments an EP can receiveunder Medicare is $44,000. The annual limits and total maximum incentive payments for EPs areprovided in the table below. Payments may be received for up to five years, but not after 2016,and EPs that do not qualify as meaningful users prior to 2015 will not receive any incentive


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payments. In addition to these amounts, EPs practicing predominantly in a federally designatedhealth professional shortage areas (HPSAs), defined as providing at least 50% of their services ina HPSA, will receive an additional 10%. EPs will receive incentive payments in a single,consolidated annual payment following CMS verification of eligibility for the payment year.

Table 8: Medicare Incentive Payments forEPs by Payment YearCY 2011 2012 2013 2014 2015+

2011 $18,000 ---- ---- ---- ----

2012 $12,000 $18,000 ---- ---- ----

2013 $8,000 $12,000 $15,000 ---- ----

2014 $4,000 $8,000 $12,000 $12,000 ----

2015 $2,000 $4,000 $8,000 $8,000 $0

2016 ----- $2,000 $4,000 $4,000 $0

Total $44,000 $44,000 $39,000 $24,000 $0

Similar to hospitals, beginning in 2015, EPs that are not meaningful users of EHR are subject toMedicare payment penalties. The penalties would be applied to the Medicare physician feeschedule rates as follows: for 2015, the penalty is 1%; for 2016, the penalty is 2 %; for 2017, thepenalty is 3%, and, for 2018 and thereafter, the penalty can be adjusted by the HHS Secretary tobe between 3% and 5%, but never more than 5%. The Secretary may grant hardship waiversfrom the payment penalties for EPs for whom complying with the meaningful use criteria wouldcause extreme hardship. In no case may an EP receive a hardship waiver for more than fiveyears.

Medicaid Incentive Payments for EPs

In order to qualify for Medicaid incentive funds, an EP must have a Medicaid patient volume ofat least 30%. There are two exceptions to this rule: 1) the qualifying threshold for pediatricians is20%; and 2) for EPs practicing predominantly in an FQHC or RHC, the qualifying threshold is30% but it is based on patient volume attributable to needy individuals, which CMS interpretsto mean as Medicaid, CHIP, or uninsured individuals. States have the option to select thespecified methodology for determining patient volume from CMS provided options, or from astate designed methodology subject to CMS approval.

The Medicaid incentive payments for qualifying EPs are based on 85% of the net averageallowable costs of purchasing and using an EHR. Per the ARRA statute, the net allowablecosts are capped at $25,000 in the first year and $10,000 for each of five subsequent yearsthereafter, or $75,000 throughout the HIT incentive program. Therefore, the maximum Medicaidincentive payment that an EP could receive is 85% of $75,000, or $63,750, more than themaximum allowed under Medicare. EPs are eligible to receive incentive payments over sixyears. There is no transition factor applied to Medicaid incentive payments, and regardlesswhich year is the first year of qualifying as a meaningful user, EPs are eligible to receive themaximum allowable amount over the entire six years. The annual limits and total maximumincentive payments for EPs are provided in the table below. Pediatricians that meet the minimum


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20% threshold but not the non-pediatrician EP threshold of 30% receive reduced incentivepayments, capped at $42,500 over the six-year period.

Table 9: Medicaid Incentive Payments for EPs by Payment Year

CY 2011 2012 2013 2014 2015 2016

2011 $21,250 ---- ---- ---- ---- ----

2012 $8,500 $21,250 ---- ---- ---- ----

2013 $8,500 $8,500 $21,250 ---- ---- ----

2014 $8,500 $8,500 $8,500 $21,250 ---- ----

2015 $8,500 $8,500 $8,500 $8,500 $21,250 ----

2016 $8,500 $8,500 $8,500 $8,500 $8,500 $21,250

2017 ---- $8,500 $8,500 $8,500 $8,500 $8,500

2018 ---- ---- $8,500 $8,500 $8,500 $8,500

2019 ---- ---- ---- $8,500 $8,500 $8,500

2020 ---- ---- ---- ---- $8,500 $8,500

2021 ---- ---- ---- ---- ---- $8,500

Total $63,750 $63,750 $63,750 $63,750 $63,750 $63,750

Program Interaction with State Medicaid

State Medicaid programs may receive 100% match under Federal financial participation (FFP)on incentive payments they make to Medicaid providers for the adoption, implementation,upgrade, and the meaningful use of EHRs. Additionally, states will receive 90% of theiradministrative costs related to managing the Medicaid EHR incentive programs for their state,including oversight activities and promotion of health information exchange.

State Medicaid programs will establish their own processes for determining eligibility, deemingproviders as qualified for incentive payments, and distributing payments. State participation inthe EHR incentive program is voluntary and states that wish to participate must submit theirformal HIT plans to CMS on how they will administer the program. Medicaid programs willbegin on a rolling basis, as CMS approves state HIT plans.

CMS Program Implementation and Registration

Although ARRA authorizes payments under the EHR incentive program as early as October2010, CMS will start the program in January 2011. However, as previously stated, the first


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hospital EHR reporting period will still begin in October 2010 for those hospitals that wish todemonstrate that they are meaningful users.

Beginning in January 2011, CMS will make available a registration portal athttp://www.cms.gov/EHRIncentivePrograms/50_Registration.asp#TopOfPage for hospitals

and EPs to register for the EHR program. Providers are urged to begin registering for theprogram at this time, rather than waiting until they are ready to attest to qualifying for payments.Registering for the program will not obligate providers in any way.

In order to register, providers must have the following:1. A national provider identification (NPI) number;2. Registration for the Provider Enrollment, Chain and Ownership System (PECOS)

database;3. An active user account in the National Plan and Provider Enumeration System

(NPPES).

Key Dates Related to CMS and ONC Operations

Fall-Winter 2010 Based on the ONC temporary certification process rule, ONC anticipatesthat certified EHR technology will be available for purchase or upgrade by hospitals.

January 2011 Launch of CMS single-registration portal for both Medicare and Medicaidincentive programs.

April 1, 2011 Hospitals and EPs may begin attesting to meeting the meaningful use criteriawith a certified EHR.

Mid-May 2011 CMS will begin making Medicare EHR incentive payments to providers thatqualify and that have made an attestation.

meaningful use stage 1 summary gnyha

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