1 Dinetia M. Newman Balch & Bingham LLP MEANINGFUL USE: HISTORY AND TIPS ON IMPLICATIONS FOR FORREST GENERAL HOSPITAL Presented to FORREST GENERAL HOSPITAL LEADERSHIP MEETING June 23, 2010

2 Overview of Presentation I.History of ARRA, HITECH Act II.Basic Definition of ARRA/HITECH – How Applicable to Forrest General Hospital III.Who is Eligible for Incentive Payments: Hospitals and Physicians IV.Short Explanation of “Meaningful Use” V.Specific Issues Impacting Forrest General Hospital’s Qualification for Incentive Payments

3 History of American Recovery and Reinvestment Act of 2009 (ARRA) And Health Information Technology for Economic and Clinical Health Act (HITECH)

4 FEDERAL STRUCTURE OF HIT PROVISIONS Health Insurance Portability and Accountability Act of Enacted August 21, 1996 CMS Issuance of Privacy and Security Rules – President Bush issues E.O ONCHIT February 17, President Obama signs ARRA EHR Incentive Notice of Proposed Rulemaking – 12/30/09 Standards, Implementation Specifications and Certification Criteria for EHR – Interim Final Rule – 1/13/10

5 ARRA’s Monetary Incentives for EHR and HITECH ARRA – Two Divisions – Division A & B Division A - Appropriations – 16 Titles –Division A, Title XIII – HITECH Act Subtitle C – Grants and Loans Funding Subtitle D - Privacy Division B – Tax, Unemployment, Health, State Fiscal Relief, and Other Provisions - 7 Titles –Division B, Title IV – Medicare and Medicaid Health Information Technology; Miscellaneous Medicare Provisions Subtitle A – Medicare Incentives Subtitle B – Medicaid Incentives

6 ARRA’s Monetary Incentives for EHR and HITECH Division B - Title IV – Medicare and Medicaid Health Information Technology –$20.8B over 10 years in net direct expenditures for Medicare/Medicaid EHR incentives for hospitals and professionals

7 Medicare Incentives for Eligible Hospitals and Physicians

8 MEDICARE INCENTIVES FOR ELIGIBLE HOSPITALS AND PROFESSIONALS WHO IS ELIGIBLE? –ELIGIBLE HOSPITALS –ELIGIBLE PHYSICIANS

9 MEDICARE INCENTIVES FOR ELIGIBLE HOSPITALS Eligible Hospitals –Acute care hospitals Not rehab, cancer, psychiatric, children’s or + 25 day stay hospitals Must be "meaningful users" of "certified EHR“

10 MEDICARE INCENTIVES FOR ELIGIBLE HOSPITALS Formula = ($2M + Discharge Related Amount) X Medicare Share X “Transition Factor” –Discharges not limited to Medicare discharges Eligible CAHs may expense EHR costs in one cost reporting year and certain prior period costs

11 MEDICARE INCENTIVES FOR ELIGIBLE HOSPITALS Earliest payment year : no payments after 2016 Penalties if not EHR user by 2015

12 MEDICARE INCENTIVES FOR ELIGIBLE PROFESSIONALS Eligible Professionals –Physicians who are "meaningful users" Means medical doctors, doctors of osteopathy, dentists, podiatrists, optometrists, chiropractors Means use of eRx and electronic exchange of health information –Excludes hospital-based physicians WHAT DOES THIS MEAN?

13 MEDICARE INCENTIVES FOR ELIGIBLE PROFESSIONALS What physicians are “hospital-based”? –Radiologists, anesthesiologists, pathologists –What about physicians in hospital-owned clinics? How does being “hospital-based” impact Forrest General’s ability to receive EHR incentives for implementation of EHR in those physicians’ offices?

14 MEDICARE INCENTIVES FOR ELIGIBLE PROFESSIONALS –What is payment amount for EHR implementation? Based on Physician Fee Schedule - 75% of estimated allowed charges for payment year capped based on first year of EHR Additional 10% if in HPSA –When may physicians receive payment? earliest payment year No payments after 2016

15 MEDICARE INCENTIVES FOR ELIGIBLE PROFESSIONALS Penalties if not "meaningful EHR users" by 2015

16 Medicaid Incentives for Eligible Professionals and Hospitals

17 MEDICAID INCENTIVES FOR ELIGIBLE PROFESSIONALS Eligible Professionals –Definition is broader than “physicians” –Must treat required percentages of Medicaid or “needy” patients

18 MEDICAID INCENTIVES FOR ELIGIBLE PROFESSIONALS Payment to Eligible Professionals –May receive EITHER Medicare or Medicaid incentives – BUT NOT BOTH –Payments are subject to cap

19 MEDICAID INCENTIVES FOR ELIGIBLE PROFESSIONALS NO PENALTIES if not "meaningful EHR users" by certain dates BUT must incur costs by 2016

20 MEDICAID INCENTIVES FOR ELIGIBLE HOSPITALS Which Hospitals are eligible? –Only acute care hospitals and children’s hospitals How are payments calculated? –Formula for calculating incentive amount similar to that for Medicare incentive payments When are payments made? –6 year payment period beginning by 2016 May hospitals receive both Medicare and Medicaid payments? –Yes

21 Summary of and Thoughts Regarding Monetary Incentives Statute provides structure; details will come in rules Physician incentives: begin CY 2011 Hospital incentives: begin FY 2011 Carrot/stick: Medicare Payments will be reduced if standards are not met Government may make EHR available if market place does not react quickly enough

22 KEY ELEMENTS OF MEANINGFUL USE Demonstration that is “meaningful EHR user” of a “qualified EHR”: –Demonstration that the hospital or physician is using certified EHR in a meaningful manner as defined by HHS, including professionals’ electronic prescribing by professionals; –EHR Connection in a manner providing for electronic exchange of health information to improve the quality of care –Electronic reporting on clinical quality and other measures.

23 KEY ELEMENTS OF MEANINGFUL USE Definition of Qualified EHR An Electronic Record of health-related information on an individual that (i) includes Demographic and Clinical Health Information (such as medical history) and (b) has the Capacity to: –provide Clinical Decision Support –support Physician Order Entry –capture and query information relevant to Health Care Quality –Exchange electronic health information with and Integrate the information with other sources

24 KEY ELEMENTS OF MEANINGFUL USE What are the stages for Meaningful Use adoption? 3 stages –Stage 1 – Starts in 2011 – Criteria in Proposed Rule –Stage 2 – Starts in 2013 – Criteria in future rule –Stage 3 – Starts in 2015 – Criteria in future rule Phases 2 and 3 – expect more and more stringent requirements Many standards apply to both eligible hospitals and eligible professionals - but with differences

25 KEY ELEMENTS OF MEANINGFUL USE Key terms: –Year: calendar year for professionals and fiscal year beginning on October 1 for hospitals –Payment Year: Depends on the year in which Stage 1 is first achieved –First Payment Year: Professionals and hospitals must achieve meaningful use for only 90 consecutive days –Later Payment Years: Professionals and hospitals must achieve meaningful use for the entire Year

26 KEY ELEMENTS OF MEANINGFUL USE Stages of Meaningful Use Payment Year Stage 1 Stage 2 Stage Stage 1 Stage 2Stage Stage 1Stage 2Stage Stage 1Stage Stage 3

27 Timing of “Meaningful Use” for Medicare Incentives May demonstrate “meaningful use” for only 90 days in first “payment year” Must demonstrate “meaningful use” for entire year in following “payment years”

28 Timing of “Meaningful Use” for Medicaid Incentives Must demonstrate “meaningful use” in second and later incentive “payment years” to Secretary and State

29 Specific Issues Impacting Forrest General Hospital’s Qualification for Incentive Payments

30 Quality Measures HospitalsStage 1 Measures Report hospital quality measures to CMS or the States. For 2011, provide aggregate numerator and denominator through attestation as discussed in section 11(A)(3) of this proposed rule. For 2012, electronically submit the measures as discusses in section 11(A)(3) of this proposed rule.

31 Problem Lists HospitalsStage 1 Measures Maintain an up-to-date problem list of current and active diagnoses based on ICD-9-CM or SNOMED CT © At least 80% of all unique patients seen by the EP or admitted to the eligible hospital have at least one entry or an indication of non recorded as structured data.

32 Medication Reconciliation HospitalsStage 1 Measures Perform medication reconciliation at relevant encounters and each transition of care. Perform medication reconciliation for at least 80% of relevant encounters and transitions of care.

33 Interoperability HospitalsStage 1 Measures Capability to exchange key clinical information (for example, discharge summary, procedures, problem list, medication list, allergies, diagnostic test results), among providers of care and patient authorized entities electronically. Performed at least one test of certified EHR technology’s capacity to electronically exchange key clinical information.

34 THANK YOU Dinetia M. Newman Balch & Bingham LLP 401 E. Capitol Suite 200 Jackson MS (Office) (Cell)