Introduction

The Federal Government, through CMS, now offers a range of incentive based HIT programs to qualified providers. Sometimes it is hard to keep track of all of them. In addition to offering incentives, the programs also sometimes have “adjustments” – “adjustments” is another way of saying “reduction in payment”. The existence of all these programs reveals some unmistakable trends in CMS thought processes:

• The encouragement of providers by CMS to adopt HIT with the goal of improving outcomes and reducing costs
• Mass adoption of HIT to report clinical data and quality measures
• Payment for physician services based on performance or outcomes as opposed to simply “fee-for-service”

In healthcare, concepts and programs initiated by the Federal Government quite often are subsequently adopted by states and payers. For instance, Maryland recently enacted a law that will reward primary care physicians for adopting electronic health records. This law establishes a program that is similar to the Meaningful Use incentive program in that physicians are required to participate in quality improvement outcomes initiatives and attest to the use of an EHR system (for more information see: http://mhcc.maryland.gov/electronichealth/ehr_state_incentives042711.pdf). Payers such as Aetna, United, WellPoint, Highmark and Humana have also announced various EHR based Pay-for-Performance incentives based on Meaningful Use-related criteria.

In addition to the above mentioned programs, there are numerous grants and pilot programs that are dedicated to use of HIT and EHRs. While it is impossible to list all of them, the following is a summary of the primary CMS HIT incentive programs. Please be aware that these are summaries only and all readers are advised to research each program in further depth to make sure participation and other requirements are well understood.

PQRS: Physician Quality Reporting System

This used to be called PQRI. The name was changed this year, as the program has moved from a time-limited trial to a permanent program. This program is independent of the other main CMS programs (eRX and Meaningful Use). PQRS has been amended several times since its inception, most recently by the Affordable Care Act of 2010. The rules are pretty much the same as in the past:

• To participate in 2011 PQRS, individual eligible professionals (EPs) report on quality measures via Medicare Part B claims.
• EPs who meet the reporting criteria will qualify to earn a Physician Quality Reporting incentive payment equal to 1.0% of their total estimated Medicare Part B Physician Fee Schedule (PFS) allowed charges. The bonus will drop to 0.5% from 2012 to 2014.
• For those who do not report, Medicare reimbursement will be reduced by 1.5% in 2015 and by 2.0% in 2016 (again, this is called a “payment adjustment”).
• Also different this year is the fact that EPs may choose to report (1) to CMS on their Medicare Part B claims, (2) to a qualified Physician Quality Reporting registry, or (3) to CMS via a qualified electronic health record (EHR) product.
• Finally, in 2011 EPs will have the opportunity to earn an additional incentive of 0.5% by working with a Maintenance of Certification entity.

Electronic Prescribing (eRX)

eRX is independent of the PQRS program, but there are some interdependencies with Meaningful Use. As with PQRS, EPs can report on eRX via Medicare Part B claims (specifically by submitting quality data code G8553 on part B claims). EPs are not eligible to receive both eRX incentives and Meaningful Use incentives. If an EP qualifies for both, the MU incentive will be paid out. It is important to note that reporting on eprescribing within MU does not qualify for reporting under eRX. If an EP neglects to report on eRX, the EP will be subject to a payment adjustment.

To qualify for 2011 eRX incentives, the EP must eprescribe on 25 Medicare encounters between January 1, 2011 and December 31, 2011. The EP will be eligible for a 1% payment incentive based on Medicare part B claims for 2011. This will be paid as a lump sum in 2012.

Importantly, an EP must eprescribe on 10 Medicare encounters between January 1, 2011 and June 30, 2011 to avoid a 1% payment adjustment in Medicare part B reimbursement for 2012. An EP can also avoid a 1.5% payment adjustment in 2013 by eprescribing 25 times between January 1, 2011 and December 30, 2011. The payment adjustment for non-qualifying EPs increases to 2.0% in 2014.

There are exemptions for providers without prescribing privileges, EPs with low prescribing volumes and EPs who work in an area with an undersupply of pharmacies that can accept eprescriptions.

Meaningful Use/EHR Incentive Program

Starting in 2011, EPs are eligible to receive $44,000 (through Medicare) or $63,750 (under Medicaid) for implementing and meaningfully using a certified EHR. EPs are not eligible for both Medicare and Medicaid payments. The monies are to be paid out over time. It is also important to note that non-complying EPs are subject to payment adjustments. The adjustments start at 1% in 2015, and are incremented to 2% in 2016 and 3% in 2017. The secretary of HHS can increase the adjustment after 2017 to 5% if EHR adoption does not reach certain levels. To receive payments, EPs must register and attest at https://ehrincentives.cms.gov/hitech/login.action.

Other CMS programs, such as PCMH and ACO will also base payments on the use of EHRs. The usage requirements are based on the existing Meaningful Use program.

Conclusion

As can be seen above, CMS is highly encouraging the use of EHRs through “carrot and stick” payment incentives and adjustments. Other payers will undoubtedly be following their lead. All providers would be wise to evaluate their current use of technology to understand how it affects their practice revenues.

About BEI

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