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MU Final Rule Disappoints Some CIOs

 |  By smace@healthleadersmedia.com  
   September 02, 2014

Most hospitals are not ready to face the double-whammy of reductions in Medicare payments and the loss of meaningful use program incentive payments for the fiscal year that begins October 1.

As summer begins to lose its grip, the Meaningful use Stage 2 deadline continues to close in on U.S. hospitals.


Russell P. Branzell
President and CEO of CHIME

Few are prepared.

As of August, only 3.1% of hospitals had cleared the Stage 2 threshold, according to industry analyst Frank Poggio. And yet, a full reporting year begins in less than 30 days, on October 1.

Those hospitals which are not ready face the double-whammy of loss of incentive payments for the fiscal year 2015 that begins that day, as well as reductions in Medicare payments that could be in the range of $200,000 annually for a hospital of 250 beds, according to Kelzon.

After CMS published the final rule on its Stage 2 adjustments late last Friday afternoon, one group, the College of Healthcare Information Management Executives (CHIME), basically hit the panic button on behalf of its members.

"This afternoon the Centers for Medicaid & Medicare Services (CMS) and the Office of the National Coordinator for Health IT (ONC) finalized a regulation granting providers additional flexibility in meeting Meaningful Use (MU) requirements in 2014," said Russell P. Branzell, CHIME president and CEO, in a statement.

The final rule, however, lacked a key provision that would ensure continued EHR adoption and MU participation.

"CHIME is deeply disappointed in the decision made by CMS and ONC to require 365 days of EHR reporting in 2015. This single provision has severely muted the positive impacts of this final rule. Further, it has all but ensured that industry struggles will continue well beyond 2014.

"Roughly 50% of EHs and CAHs were scheduled to meet Stage 2 requirements this year and nearly 85% of EHs and CAHs will be required to meet Stage 2 requirements in 2015. Most hospitals who take advantage of new pathways made possible through this final rule will not be in a position to meet Stage 2 requirements beginning October 1, 2014. This means that penalties avoided in 2014 will come in 2015, and millions of dollars will be lost due to misguided government timelines.

"Nearly every stakeholder group echoed recommendations made by CHIME to give providers the option of reporting any three-month quarter EHR reporting period in 2015. This sensible recommendation, if taken, would have assuaged industry concerns over the pace and trajectory of rulemaking; it would have pushed providers to meet a higher bar, without pushing them off the cliff; and it would have ensured the long-term vitality of the program itself. Now, the very future of Meaningful Use is in question."

EHR Developers Pleased
In the hours after Branzell's statement, reaction online was subdued. Here and there, some declared meaningful use dead. Others said they would read CMS's final rule over the holiday weekend and then weigh in.

John Halamka, CIO of Beth Israel Deaconness Medical Center, struck a positive note. "Many CIOs tell me that they will be ready for transition of care and patient view/download/transmit for the full year October 1, 2014–September 30, 2015," he wrote on his blog.

On Sunday, the EHR Association, the trade association for vendors of EHR software, put out its own positive statement. "EHRA is pleased that CMS has released the Final Rule so quickly, as they had indicated they would, to minimize confusion and delays for both EHR developers and providers," stated Mark Segal, EHRA chair and vice president, government and industry affairs, GE Healthcare IT.

"We appreciate that many of our customers will have more flexibility in achieving meaningful use for 2014 given the timing issues created by the Stage 2/2014 regulatory and certification schedule."

Although EHRA offered to put me in touch with a spokesman, none was available through Labor Day evening.

Final for Now
My suspicion is we have not heard the last about this final rule by any means. I did reach Branzell, and he added these thoughts.

"We will believe 100% in this program, [but] it hurts no one to change to a 90-day reporting period" for fiscal year 2015, he said. CMS "could have easily done that within the rule structure they had. But now, in theory, if I can't get that [meaningful use] data in the month of October, my entire fiscal year is shot."

I asked Branzell why he had qualified his last statement with "in theory." Did he mean that providers will once again petition for hardship extensions, as they had in fiscal year 2014?

"There may be still some flexibility if enough people raise enough concern," Branzell said. "In theory, they could go back and change it. I don't believe they will now, because they've once again drawn a very clear line in the sand, that reputations and perspectives will be challenged if it wouldn't happen.

In rejecting the call of CHIME and others to reduce the 365-day period to 90 days, CMS in its final rule had stated that it wanted to maintain the momentum of the meaningful use program.

But how much real momentum can Stage 2 have at this point if fewer than 100 hospitals have attested to it as of August?

I recently spoke with a CIO at one hospital which had successfully attested in the April–June quarter, and while its forward-looking leadership clearly had played a role in achieving early attestation, another factor might have been its location. The hospital is in a market–St. Louis–dominated by Epic, where the informal ties that permitted care coordination efforts with competitors to go forward was facilitated through the St. Louis Epic user group.

Plenty of Blame
That should send a shudder through regional markets where Epic does not dominate, where the cooperation and coordination do not have such a way for those competitors to interact. For those concerned about Epic's market dominance, this should be another reason for concern.

With more than $24 billion in incentive payments paid out, there is now a natural constituency in place to drown out the concerns of CHIME and others with calls for hospitals to toe the line, attest to Stage 2, or take their lumps.

There are those of the opinion that time is up for those hospitals who would continue to blame their EHR vendors for their inability to attest to Stage 2. According to this line of thought, the blame will now be shouldered by hospital leaders who simply took their eye off the meaningful use ball.

It may be difficult to decide whether the fault is with the meaningful use program or its would-be adopters. Probably some of both. But for now, expect to see the words "in crisis" and "meaningful use" used in close proximity for a while to come.

Scott Mace is the former senior technology editor for HealthLeaders Media. He is now the senior editor, custom content at H3.Group.

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