Provider Groups: EHR Rule Misses Mark

HDM Breaking News, January 4, 2010

The proposed rule defining meaningful use of electronic health records could actually make it more difficult for providers to adopt EHRs, according to early reaction from the Medical Group Management Association and the American Hospital Association.

The government on Dec. 30 released for a proposed rule defining meaningful use of EHRs and an interim final rule that sets initial standards, implementation specifications and certification criteria for EHR technology. Both rules are available for viewing in a draft format at federalregister.gov/inspection.aspx. They will be published in the Federal Register on Jan. 13 with a 60-day comment period effective at that time.

The meaningful use rule includes about two-dozen requirements that eligible providers and hospitals must meet to qualify for incentives. “Overly burdensome requirements and needlessly complex administration will only discourage physician participation in the program and the implementation of EHRs,” contended William Jessee, M.D., CEO and president of the Medical Group Management Association in a written response.

The following is a statement from the Rick Pollack, executive vice president of the AHA, expressing a number of serious concerns with the rules:

“America’s hospitals have serious concerns that the new health information technology rules severely limit hospitals’ ability to access federal financing for health information technology that is used to improve patient care.  Moving toward broader adoption of electronic health records (EHRs) is an important goal and helping hospitals, doctors, nurses and other caregivers is essential in getting us there.  While health information technology holds great promise in improving care, widespread efforts toward adoption will be hindered unless key provisions in these rules are addressed.

“Under the American Recovery and Reinvestment Act of 2009, only hospitals that are considered ‘meaningful users’ of EHRs can receive much-needed financial assistance.  America’s hospitals believe the proposed definition of ‘meaningful use’ is a worthy goal, but it should be a destination point, not a starting point.  Today, many hospitals are using clinical systems that reduce medication errors, track quality and outcome measures, and collect basic patient health information using computer technology.  The intent behind the stimulus funds was to recognize the important efforts hospitals and physicians have undertaken to improve care and to stimulate greater use of health information technology and EHRs.  However, the rules released yesterday create a stringent definition of ‘meaningful use’ that doesn’t recognize these important efforts and would unfairly penalize many hospitals.  A more commonsense approach would reward the progress hospitals and physicians already have made toward adopting EHRs.

“In addition, the ‘meaningful use’ rule also fails to recognize how modern hospitals are organized and how care is delivered.  Simply put, the eligibility requirements for hospitals and physicians are too restrictive.  For example, health information technology payment incentives unfairly exclude physicians who practice in outpatient centers and clinics owned by a hospital.  An alternate approach that recognizes all non-hospital physicians and the myriad of physician-hospital relationships would go a long way toward ensuring patient care is better coordinated and adoption of health information technology is rewarded.

“America’s hospitals strongly embrace health information technology and want to accelerate its use to improve care.  However, as proposed, the current regulations may actually make it more difficult for hospitals and doctors to adopt health information technology.  Unless significant changes are made and timelines reexamined, it is unlikely that the vast majority of hospitals can meet the proposed standards, making them ineligible for this important funding, and also subject to penalties for not being in compliance.  We urge CMS to make changes to these regulations that would advance the adoption and use of clinical information technology to improve care for patients and communities.”

Phymedco will follow this issue closely and update you as a final ruling on the goverment’s meaningful use criteria of an EMR/EHR comes closer to realization.

A plan to hold Medicare claims for the first half of January 2010 is detailed below. It is yet to be seen how the extension of the 2009 Medicare Conversion Factor through the end of February will affect this plan.  Since this is a very important measure which affects the financial standing of Phymedco clients and health care practitioner’s throughout the nation we’ll continue to monitor this issue closely.

INFORMATION REGARDING HOLDING OF CLAIMS FOR SERVICES PAID UNDER THE 2010 MEDICARE PHYSICIAN FEE SCHEDULE (MPFS)

To the extent possible and in consideration of possible legislative changes, the Centers for Medicare & Medicaid Services (CMS) is working with Congress, health care providers, and the beneficiary community to avoid disruption in the delivery of health care services and payment of claims for physicians, non-physician practitioners, and other providers of services paid under the Medicare physician fee schedule, beginning January 1, 2010. In this regard, CMS has instructed its contractors to hold claims containing services paid under the Medicare Physician Fee Schedule (MPFS) for the first 10 business days of January (January 1 through January 15) for 2010 dates of service. This should have minimum impact on provider cash flow because, under current law, clean electronic claims are not paid any sooner than 14 calendar days (29 days for paper claims) after the date of receipt. Meanwhile, all claims for services delivered on or before December 31, 2009, will be processed and paid under normal procedures.
　
After 10 business days, contractors will begin releasing held claims into processing under the fee schedule which implements current law. This, of course, could result in claims being processed with the negative 21.2 percent update. If a new law is enacted which changes the negative update effective January 1, CMS will correctly process claims under the new law and, if necessary, CMS is prepared to automatically reprocess most of those claims which have already been processed at the lower rate.　
　
Under the Medicare statute, Medicare payments to physicians and other affected providers are based upon the lesser of the actual charge or the MPFS amount. Providers who submit charges that are greater than the negative 2010 MPFS will automatically have their claims reprocessed.　 Physicians who submit charges that are equal to or less than the 2010 MPFS amount will need to request an adjustment. Submitted charges on claims cannot be altered without a request from the physician/provider.
　
To the extent possible, providers may hold claims in-house until it becomes clearer as to whether new legislation will be enacted or until cash flow becomes problematic. This will reduce the need for providers to reconcile two payments (i.e., the initial claim and the reprocessed claim), and it will simplify provider billings of beneficiary coinsurance and payment calculations for payers which are secondary to Medicare.

Because this is only a two month extension of the current formula, it means that physicians will be facing the same SGR cut on March 1, 2010 unless Congress intervenes to prevent the cut from taking place then rather than January 1^st. 

Phymedco continues to be an advocate for a permanent fix to the SGR (Sustainable Growth Rate) problem and will keep you updated on the progress or lack thereof made in Congress.

            By now, your practice should have its 2010 budget in place. This is a very important tool in the process of estimating cash flow and predicting potential shortfalls. The first quarter of the New Year, and in particular January, always seems to present significant cash flow challenges for many practices. In this article we’ll quickly talk about how to create a budget and then overlay cash flow projections to identify potential shortfalls. We’ll then offer a few suggestions to close those gaps to achieve a prosperous 2010.

            Here are the steps we normally take in our process:

Month by month total of expenses. Most accounting software can accomplish this task by running one or two reports. If you still keep a manual checkbook, simply create a spreadsheet listing each month across the top and each category of expense down the left side. Enter your expenses by month and category for the year. You may need to make some adjustments for 2010. If your employees are paid bi-weekly, there will be 2 months with 3 payrolls. Also factor in any planned raises or bonuses. Some other items to consider are rent escalation and new hires. It’s not important to be exact. It’s an estimate. You can always adjust it when needed.

Cash receipts estimate. The next step is to create a cash receipts spreadsheet or report by month for 2009. Estimate November and December either by using 2008 figures or, if your practice is fairly steady in terms of patient visits, use the average deposits from the previous 10 months. At this point you can create an estimate of 2010 cash receipts. We don’t yet know what Congress will do in response to Medicare’s projected 21% payment cut. Consensus seems to be some Congressional action will forestall these cuts. However, it appears this issue will not be solved until after the debate on healthcare reform finishes. So it may very well be into 2010 before the SGR 21% cut is resolved. Best bet in trying to estimate 2010 receipts is to use 2009 figures.

Create a Receipts and Expense Forecast. We’ve created estimates for 2010 receipts and expenses. Now we lay them side by side to try to identify those months were a cash flow shortfall might occur. The example table below illustrates what your final report will look like. The columns of this spreadsheet are Month, 2009 Deposits, 2010 Projected Deposits, 2010 Projected Expenses and Surplus (Deficit). The Surplus (Deficit) column is derived by subtracting 2010 Projected Expenses from 2010 Projected Deposits. Total all columns in the last row. From the example one can readily see January through March, and July through October will present challenges for this practice in meeting its cash requirements.

Act now. Now is the time to start formulating solutions. A three provider practice (1 M.D. and 2 NPs/PAs) could generate an additional $75,000 per year if each provider sees just 2 more patients per day. Are there services that your practice is referring out that you may be able to bring in-house? Don’t forget to have those services added to your fee schedule before you sign a lengthy equipment lease. Has a work flow study been completed? Many employees will state they don’t have the time to do more. In most cases that is absolutely true! They don’t have the time to do more the same way they’re doing it now. All the more reason they need to change the way they’re doing things! Other areas to consider include scheduling, provider utilization and patient feedback. Have you considered an EMR? Don’t approach this project as an expense. Consider it an opportunity to gain efficiency and reduce costs. There is a lot of stimulus and grant money that will become available to help you fund this project as well. Finally, work with your accounting firm and advisors to come up with other creative answers before there is a cash crunch. I believe it is always better in the long run to grow the revenues than it is to cut the expenses.