MedPAC Questions EHR Incentive Design



WASHINGTON – Federal technology incentives may not cover the true cost of implementing an electronic health record, according to members of the Medicare Payment Advisory Commission.

At MedPAC’s April 5 meeting, several commissioners expressed concern about the burden placed on smaller practices by the requirements of the Health Information Technology for Economic and Clinical Health (HITECH) Act.

Physicians who meet requirements for the meaningful use of an electronic health record (EHR) can earn incentive payments of up to $44,000 under HITECH. Beginning in 2015, physicians who do not participate will be penalized.

Dr. Ronald D. Castellanos, a MedPAC commissioner, noted that between the cost of purchasing, and the hassle of implementing, an EHR, many physicians are feeling forced to abandon their private practices and are joining hospital groups.

"People are going into the hospital or employed market because of the hassle factor, and it’s a hassle to this learning curve, and it’s a cost," said Dr. Castellanos, a urologist.

One thing the incentive pay does not cover, according to Commissioner Peter Butler, is the time necessary to manage all the additional data requirements.

"What [incentives] do not do is provide dollars for decision support, for data repositories, data warehouses, which are really the heart of managing in an [accountable care organization] capitated world. It kind of ignores some of the real tools that ultimately you need to kind of make a difference," said Mr. Butler, president and chief operating officer at Rush University Medical Center, Chicago.

Dr. Karen Borman, a MedPAC commissioner, added that the additional data requirements are also forcing physicians to spend more time in front of the computer instead of interacting with the patient.

As data requirements increase, the commission should consider how to address that concern in terms of patient satisfaction, noted Dr. Borman, a surgeon at Abington (Pa.) Memorial Hospital.

Despite the flaws in the EHR incentive program, commissioners agreed that, if it’s done right, EHRs would benefit both physicians and patients.

MedPAC Commissioner Dr. William Hall noted that EHR systems support a higher level of coding, which would mean higher payments to physicians than even incentive payments could offer.

"If you’re able to do it and willing to go through what’s a painful transition process, it pays for itself," said Dr. Hall, professor of medicine at the University of Rochester (N.Y.).

Joanna Kim, senior associate director of the American Hospital Association, Washington, testified to the commission that EHR requirements are too challenging, even for hospitals.

"[Incentive payments] are slow to come because the stage one requirements were set entirely too high," Ms. Kim said. She added that certain elements, like the patient portal are too expensive to implement, cause major security concerns, and carry uncertain benefits.

In addition, she said, CMS penalties for failing to meet meaningful use requirements will not hit until 2015, but they’ll be based on 2013 performances. Ms. Kim said this offers less time for physicians to adapt to requirements and increases the possibility that they’ll get a penalty payment along with any incentive payment.

MedPAC June Report to Congress

In addition to examining the EHR incentive program, the commission unanimously recommended changes to Medicare fee-for-service benefit design, including:

• Establishing a limit for out-of-pocket expenses to protect beneficiaries who reach catastrophic levels of Medicare costs. Although the commission recognized that a small group of beneficiaries would reach the out-of-pocket cap in any given year, they said many more would benefit from the cap.*

• Replacing coinsurance (where the beneficiary pays a percentage of the fee) with copayments (where the beneficiary pays a proscribed fee per service) that vary according to the type of service and provider. According to MedPAC staffers, copayments are more predictable, easier to budget for, and easier to understand than is coinsurance.

• Placing an additional charge on private supplemental insurance, or Medigap, that pays for services not covered under Medicare. The commission said the charge would help recoup some of the added costs of Medicare.

Allowing the HHS secretary to determine cost sharing based on evidence of the value of services.*

• Maintaining a deductible for Part A and Part B services.

The recommendations were included in the commission’s June report to Congress.*

* UPDATE: Additional information was added to this story on 6/25/2012.