Health Care and the Stimulus Package Webinar Series

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Health Care and theStimulus Package Webinar
Series

• HIPAA Goes HITECH Revisions to the Privacy and
  Security Rules
• Show Me the Money the Who, What, When, Where,
  Why and How of Health Care Stimulus Dollars
• The Government Giveth, and the Government Taketh
  Away Preparing for RACs and Increased
  Enforcement Activity

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You never want aserious crisis togo to waste.

• Rahm Emanuel
• White House Chief of Staff
• November 2008

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How Much Money for Health Care?

• Recovery.gov says 59 billion for health care,
  but HHS.gov/recovery says 135 billion
• Ten piles of cash
• 1. Maintaining health insurance coverage
• 2. Re-enforcing safety nets
• 3. Prevention and wellness fund
• 4. Investment in biomedical research
• 5. Comparative effectiveness research
• 6. Health professions training programs
• 7. Bureau of Indian Affairs
• 8. Department of Veterans Affairs
• 9. Rural broadband infrastructure
• 10. HIT/HIE

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1. Maintaining Health Insurance Coverage

• Medicaid Federal Matching Assistance Program
• Federal Medical Assistance Percentage (FMAP)
  increased by 6.2 percent from 10/1/08 to 12/31/10
• Estimated total cost 86.6 billion
• 15 billion in payments for 10/1/08 to 3/31/09
  released February 25
• Kansas 71.5 million
• Missouri 137 million
• Continue coverage for 49 million individuals, and
  potentially expand to another 20 million
• Kansas FY09 9 percent increase over prior year
  (twice the amount estimated)
• In addition to 01/09 expansion of SCHIP to cover
  children in families making 200 to 250 percent of
  FPL
• State maintenance of eligibility (MOE)
  requirements
• Applies to eligibility standards, methodologies,
  or procedures
• Does not include provider reimbursement rates

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1. Maintaining Health Insurance Coverage

• Extension of Transitional Medical Assistance
  Program
• Allows Medicaid beneficiaries who would otherwise
  become ineligible due to an increase in wages or
  hours to receive up to 12 months of benefits
• ARRA extends program from 07/01/09 to 12/31/10
  and eliminates barriers to participation
• Extension of Qualifying Individuals Program
• Federal funds to pay Medicare Part B premiums
  with beneficiaries with incomes between 120 and
  135 of FPL
• ARRA extends program for an additional year
  through 12/31/10
• Moratorium on Medicaid Regulations
• Imposes or extends moratorium on outpatient
  hospital, targeted case management, and provider
  taxes regulations from March 31, 2009, to June
  30, 2009
• COBRA Subsidies
• Provide 65 subsidy of COBRA premiums for up to
  nine months for those who involuntarily lost
  their jobs between 09/01/08 and 12/31/09
• AGI limits of 125,000 for individuals, and
  250,000 for joint filers
• Subsidy reflected in March COBRA bills

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2. Re-Enforcing Safety Nets

• 2 billion for community health centers
• Program administered by HHS Health Resources and
  Services Administration
• HRSA-supported centers treated 16 million in
  2008 nearly 40 percent had no health insurance
• 1.5 billion for construction, renovation, and
  equipment and acquisition of HIT systems
• Another 500 million to support new sites and
  service areas, increase services at existing
  sites, and provide supplemental payments for
  spikes in uninsured populations
• 155 million in grants to 126 centers released on
  3/2/09
• Grant application information
  http//www.bphc.hrsa.gov/about/apply.htm
• Increase states FY 2009 and FY2010 Medicaid DSH
  allotments by 2.5 percent
• FY 2009 allotment increased from 11.07 billion
  to 11.54 billion
• States only eligible once original funding has
  been spent down

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3. Prevention and Wellness Fund

• 300 million for immunizations, 650 million for
  community prevention programs, and 50 million
  for reducing healthcare-associated infections
• Funds to be dispersed through a competitive
  grants process to state and local agencies for
  prevention and wellness strategies and public
  health workforce development activities
• At an April 1 Congressional hearing, HHS
  officials announced that Centers for Disease
  Control would be distributing 40 million to all
  states for the following purposes
• to create or expand state-based hospital-acquired
  infection prevention collaboratives
• enhance states' abilities to assess where HAIs
  are occurring and evaluate the impact of
  hospital-based interventions in other health care
  settings
• build a public workforce in health departments
  who can lead state-wide initiatives
• Also announced 10 million to CMS for inspections
  as ASCs to detect facility-based infections

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4. Investment in Biomedical Research

• National Institutes of Health pre-ARRA annual
  budget of 29.5 billion
• ARRA allocates additional 10 billion to NIH
• Role of Sen. Arlen Specter (R-PA)

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4. Investment in Biomedical Research

• Institutes and Centers and Common Fund
• 7.4 billion in grant funding for extramural
  research
• On 03/24/09, allocated 60 million for autism
  research and 21 million for educational
  opportunities in NIH-funded laboratories for
  students and science educators
• Criteria and process for applying for grants at
  http//grants.nih.gov/recovery/
• National Center for Research Resources
• 1 billion in grants for construction/renovation
  of research facilities
• 300 million for acquisition of capital research
  equipment
• Priority to projects that generate energy savings
  or beneficial environmental effects
• Office of the Director
• 800 million in short-term grants for hot
  button projects
• NIH Buildings and Facilities
• 500 million for construction and renovation

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5. Comparative Effectiveness Research

• 1.1 billion in new funding
• 300 million to HHS Agency for Healthcare
  Research and Quality
• Agencys current annual budget is 334 million
• 400 million to NIH (in addition to previously
  discussed NIH allocations)
• 400 million to be allocated at the Secretarys
  discretion
• Funds to conduct/support research to
  evaluate/compare clinical outcomes,
  effectiveness, risk, and benefits of treatments
  to address a particular medical condition
• Oversight provided by 15-member Federal
  Coordinating Council for Comparative
  Effectiveness Research
• Not intended to be used to mandate coverage,
  reimbursement, or other policies for any
  private/public payer
• On April 1, Senate rejected budget amendment
  designed to bar use of such research in federal
  health coverage decisions

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6. Health Professions Training Programs

• 500 million to HHS Health Resources and
  Services Administration
• Agencys FY08 budget was about 125 million
  awarded only 82 scholarships
• 300 million for National Health Service Corps
  recruitment and field activities
• 200 million for primary care scholarship and
  loan repayment programs, grants to training
  programs for equipment, and to foster cross-State
  licensing agreements

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7. Indian Health Service

• 85 million for HIT
• Agency plans to commit 60 of this money in FY09
• 415 million for new construction, repairs,
  maintenance, equipment
• Agency plans to commit 75 of this money in FY09
• http//www.hhs.gov/recovery/reports/ihsreport.html
  
• Medicaid protections for American Indians
• Restrict imposition of cost-sharing requirements
• Exemption of certain assets from eligibility
  calculations
• Access requirements for Medicare Advantage
  programs
• Cost 100 million

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8. Department of Veterans Affairs

• 1.3 billion to VA to support medical expenses of
  service men and women
• 150 million in state competitive grants in FY09
  and FY10 to fund extended care facilities for
  veterans

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9. Rural Broadband Infrastructure

• Total allocations of 7.2 billion for
  broadband-related projects
• 2.5 billion to USDAs Rural Utilities Service
  Distance Learning, Telemedicine, and Broadband
  Program
• 4.7 billion to Department of Commerces National
  Telecommunications Information Administration
  Broadband Technology Opportunity Program
• State grants for building out open access
  broadband services to rural, unserved, and
  underserved communities

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HIT/HIE

• HIT/HIE viewed as key component of health care
  reform
• HIT/HIE cost savings
• Reduce adverse events/medical errors
• Eliminate duplication
• Facilitate adoption of medical home mode
• HIT/HIE quality of care
• Identify provider variations and inefficiencies
• Monitor quality of care
• Conduct comparative effectiveness research

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Definitions

• EHR Provider-maintained electronic health
  record
• CPOE Computerized order entry
• e-Rx Electronic prescribing
• e-CDS Electronic clinical decision support
• PACS Picture archiving and communications
  system (electronic image displays)
• HIT System incorporating all of the above (and
  more)
• PHR Patient-maintained electronic health record
• HIE Electronic exchange of health information
  between and among providers and payors

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HIT Adoption Levels Are Abysmally Low

• March 26, 2009, New England Journal of Medicine
• 17 percent of hospitals have computerized order
  entry for medications (CPOE)
• 7.6 percent of hospitals have an institution-wide
  basic system
• EMR, CPOE, and additional functions
• 3 percent of hospitals have basic system in
  only some departments
• 1.5 percent have comprehensive HIT systems
• Intercommunicating EMR, eCDS, CPOE, PACS, and
  additional functions
• 17 percent of ambulatory care doctors are in
  settings with EHRs, but only 4 percent had
  comprehensive HIT system

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Obstacles to Adoption

• Cost
• Lack of standardization/certification
• Lack of implementation support
• Lack of incentives for adoption
• Need for provider education
• Need for qualified staff to maintain systems
• Patient privacy concerns

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Prior Federal Strategy

• Office of National Coordinator created by
  Executive Order
• FY2008 budget of 61.3 million
• Federal support for private organizations
• Standardization
• Certification
• Other obstacles
• Mandates for federal agencies
• Anti-Kickback safe harbor and Stark exceptions
• CMS demonstration projects
• Incentives for quality reporting and e-Rx
• Medical home demonstration project

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Dr. Blumenthals Prescription for Federal HIT
Strategy

• 1. Direct funding to providers without resources
  to purchase and implement HIT systems, e.g.
  safety net providers, critical access hospitals,
  primary care physicians
• 2. Financial support for information exchange in
  local communities
• 3. Support research and development to improve
  HIT capabilities, evaluate its impact on quality
  and efficiency, and improve effectiveness of
  implementation
• 4. Payment reform based on quality of care
• 5. Create national regulations and standards

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HITECH Act

• 1. Create new federal infrastructure
• Office of National Coordinator (ONC)
• HIT Policy and HIT Standards Committees
• 2. Adoption of standards, implementation
  specifications, and certification criteria
• 3. Support for HIT/HIE adoption
• 2 billion to ONC
• HIT Research
• HIT Extension Program
• State planning and implementation grants
• Certified EHR technology loan fund (state grants)
• Academic training programs for providers and
  techies
• 4. 17 billion for Medicare/Medicaid incentive
  payments to physicians and hospitals

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New Federal Infrastructure

• Office of National Coordinator
• Update Federal Health IT Strategic Plan
  (objectives, milestones, metrics)
• Voluntary certification program(s)
• Ongoing research
• Provider resources
• Governance of nationwide health information
  network
• Chief Privacy Officer

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New Federal Infrastructure

• HIT Policy Committee
• Recommend areas in which standards,
  implementation specifications, and certification
  criteria are needed and the order in which they
  should be addressed
• Timeline Members to be appointed by 04/03/09
• HIT Standards Committee
• No specifications re membership will National
  eHealth Collaborative transition into this role?
• Develop, harmonize and recognize standards
• Timeline By 05/18/09, develop schedule for
  assessment of HIT Policy Committee
  recommendations

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Adoption of Standards, Specifications, and
Criteria

• By 12/31/09, Secretary must publish interim final
  rule adopting initial set of standards,
  specifications, and criteria
• Receive recommendations from HIT Standards
  Committee
• Secretary must review with other federal agencies
• Must address at least the following
• Technology to protect patient privacy and
  security (including segmentation of sensitive
  health information)
• Nationwide health information technology
  infrastructure
• Use of certified EHRs by 2014 through US
• Technology to allow accounting in qualified EHRs
  for use for payment, treatment and operations
• Use of certified EHRs to improve quality
• Technologies to render health information in
  network unusable by unauthorized persons
• Technology to collect patient demographic data
  and address need of vulnerable populations

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Adoption of Standards, Specifications, and
Criteria

• Ongoing review, testing, and promulgation
• Commerce Departments National Institute of
  Standards and Technology (NIST) to support
  establishment of a conformance testing
  infrastructure, including the development of
  technical test beds.
• May involve accreditation of independent,
  non-Federal laboratories for testing.
• Mandatory v. voluntary
• While voluntary for private entities, federal
  agencies and health care payors and providers
  contracting with the feds must meet the standards.

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HIT Research

• HHS studies and reports
• NIST-funded Health Care Information Enterprise
  Integration Research Centers
• HIT Research Center

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HHS Studies and Reports

• By October 2010, Secretary must report on current
  availability of open source HIT systems to
  federal safety net providers and make
  recommendations for legislative or administrative
  action
• By February 2011, Secretary must issue reports
  from studies addressing
• Reimbursement incentives
• Aging services technology (remote monitoring)
• Integration of HIT/HIE into clinical education
• Overall status of HIT/HIE implementation

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Health Care Information EnterpriseIntegration
Research Centers

• Program to be established by NIST, with input
  from National Science Foundation and other
  federal agencies
• Competitive grants to colleges and universities
• 20 million in funding
• Cutting-edge, multidisciplinary research on the
  systems challenges to health care delivery
• NIST to establish process, timeline for grant
  applications

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HIT Research Center

• To be established within HHS
• Provide technical assistance and
  develop/recognize best practices to support and
  accelerate adoption and effective utilization of
  HIT
• Incorporate input from NIST and other federal
  agencies, as well as health care and HIT industry
• Particular focus on local/regional HIE
  initiatives
• Funding from 2 billion to ONC
• No timeline for implementation

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HIT Extension Program

• ONC to provide financial support for centers
  established by non-profit organizations
• Up to 50 percent of capital and annual operating
  budget for up to four years (unless Secretary
  determines cost-sharing requirement would be
  detrimental to the program)
• Blumenthals geek squads hands-on approach
• Priority to public, not-for-profit, and critical
  access hospitals FQHCs providers who care for
  uninsured small primary care physician practices
• Timeline By 05/18/09, Secretary must publish
  draft description of regional extension center
  program, procedures for grant applications, and
  maximum support levels

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State Planning and Implementation Grants

• Funding for qualified state-designated entity
  for the support of the physical and
  organizational infrastructure for health
  information exchange statewide
• Two separate programs
• Specified activities
• Required consultations
• Must be consistent with national strategic plan
• Shovel ready
• State matching funds
• FY09 or FY10 Secretarys discretion
• FY11 Not less than 1 for each 10 in federal
  funds
• FY12 17
• FY13 13
• Timeline To be defined in national strategic
  plan due 05/18/09

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Certified EHR Technology Loan Fund

• ONC to make grants available to states to
  establish loan programs
• Funds available to providers to purchase
  certified EHR technology, improve EHR utility
  (presumably for existing EHR systems), train
  personnel, and improve secure exchange of health
  information.
• State must develop requirements and
  accountability mechanisms to ensure that fund
  dollars are only used for the purchase of
  certified products.
• Providers must agree to submit reports on quality
  measures determined by the federal government in
  order to be eligible for loan funds.
• Timeline No loans made prior to 01/01/10
• National strategic plan due 05/18/09
• Need certification criteria
• Shovel ready

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Academic Training Programs

• Healthcare Professionals
• Grants available through HHS to medical and
  nursing schools to carry out demonstration
  projects to develop academic curricula
  integrating certified EHR technology into
  clinical education of health professionals
• Funding limited to 50 percent of program costs
  (although Secretary may waive this requirement)
  cannot purchase hardware, software, or services
• Timeline Secretary must submit Congressional
  report by 02/10 describing specific projects
• Techies
• Grants available through HHS (in consultation
  with National Science Foundation) to colleges and
  universities to establish/expand medical health
  informatics education programs
• Preference to existing programs, and those
  programs designed to be completed within six
  months

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Overview of Incentives

• Meaningful use
• Must include
• E-Rx (physicians only not hospitals)
• Electronic exchange of health information to
  promote quality of care
• Submission of information on clinical quality
  measures
• Regulations will further define (part of the
  12/31/09 initial standards?)
• Method for demonstrating meaningful use to be
  determined by the Secretary, e.g., attestation,
  coding claims
• Standards likely to change as Secretary must seek
  to improve use of EHRs and quality over time by
  requiring more stringent measures of meaningful
  use

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Overview of Incentives

• Certified EHR is an electronic record of
  health-related information on an individual that
  
• Includes demographic and clinical health
  information (such as medical history and problem
  lists)
• 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 such information with other sources

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Medicare Incentive Payments for Physicians

• Also referred to as eligible professionals
  (EPs)
• EPs will not receive incentives if hospital
  based
• Substantially all services furnished in hospital
  setting (whether inpatient or outpatient)
• Use of facilities and equipment of hospital
• Focus on site of service, not employment or
  billing
• Excludes most pathologists, anesthesiologists,
  hospitalists, and emergency physicians

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Medicare Incentive Payments to EPs

• Notes
• Payments shown above depend on whether the EP
  continues to have meaningful use under the then
  current standards during each of the years
  following the first payment year.
• There are other possible interpretations of the
  amounts due when the first payment year is 2014.
• The EP may receive an additional 10 in a
  designated health professional shortage area.

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Sticks for EP EHR Use

• If an EP is not a meaningful EHR user in 2015 or
  thereafter, EPs Medicare fee schedule payments
  will decrease as follows
• 1 - 2015
• 2 - 2016
• 3 - 2017 and thereafter
• If less than 75 of EPs are meaningful EHR users
  by 2018, the fee schedule may be decreased by an
  additional 1 per year (but not to exceed 5)
• Secretary may establish hardship exceptions
  (e.g., rural provider with inadequate internet
  access)

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Medicare Advantage EP Incentives

• Similar amounts due for EPs who are employed by a
  qualified MA organization or an entity that
  provides at least 80 of all services to the MA
  enrollees and meet other requirements
• May not receive incentives under both MA and
  non-MA provisions
• MA organization selects the first payment year
  (not earlier than 2011)

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Medicare Incentive Payments for Hospitals

• Rehab, cancer, childrens, and long-term care
  hospitals not eligible
• Incentives available for critical access
  hospitals, but different formula based on costs

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Medicare Incentive Formula for Hospitals

• Base amount (2 million)
• plus
• Discharge Related Amount
• multiplied by
• The Medicare Share
• multiplied by
• Applicable Transition Factor

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Discharge Related Amount

• The Discharge Related Amount for a 12-month
  period is
• Zero for the first 1,149 discharges
• 200 per discharge for discharges between 1,150
  and 23,000 and
• Zero for discharges in excess of 23,000.
• The Discharge Related Amount depends on overall
  volume of discharges at the hospital not just
  Medicare patients

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Medicare Share

• The Medicare Share for the period is a fraction
• The numerator is the sum of the estimated number
  of Medicare (Part A) inpatient-bed days plus
  Medicare Advantage (Part C) inpatient-bed days
• The denominator is
• The total number of inpatient-bed days multiplied
  by
• The total amount of the hospitals charges (not
  including charges for charity care) divided by
  the total amount of the hospitals charges
• Some elements are subject to assumptions if the
  amounts are not known

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Transition Factor

• The earliest payment year (PY) is fiscal 2011
  (not a calendar year)
• The initial Transition Factor is 1.0 for PY1,
  0.75 for PY2, 0.5 for PY3, 0.25 for PY4, and zero
  thereafter
• The Transition Factor will be reduced if the PY1
  is after 2013
• The Transition Factor will be zero if the PY1 is
  after 2015 (i.e., no incentive payments in 2016
  and thereafter)

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Sticks for Hospital EHR Use

• Starting in 2016, hospital places portion annual
  market basket update at risk if fail to report
  required quality data or not a meaningful EHR
  user
• Hospital may seek hardship exemption for a
  particular fiscal year for up to five years

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Medicare Incentives and Reductions for CAHs

• Average IPPS hospital will receive 4 million on
  bonus payments
• Average CAH will receive 480,000
• CBO estimates only one-half of CAHs will be
  meaningful users by 2019
• Incentives based on 20 percent increase in
  Medicare share for purposes of calculating
  cost-based reimbursement for certified ERH
  costs
• Usual cost-based reimbursement of EHR expenses
  unless and until CAH meets meaningful user
  standard
• If a meaningful EHR user by FY 2015, CAH can
  expense certain EHR costs in one year for cost
  reporting purposes (does not need to depreciate)
  and certain prior period costs
• Early adopters may receive no incentive payments
• If a CAH is not a meaningful user by 2015 or
  thereafter, percentage reimbursement will be
  reduced to 100.66 in 2015, 100.33 in 2016, and
  100 in 2017

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Medicaid Incentives for Certain Professionals

• Professionals who may qualify
• Physicians
• Dentists
• Certified nurse midwives
• Nurse practitioners
• Physician assistants who lead RHCs or FQHCs
• Professionals seeking Medicaid incentives must
  waive right to receive Medicare incentives

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Medicaid Incentives for Certain Professionals

• Professionals must have the following patient
  volumes to qualify for Medicaid incentives
• Professionals not hospital-based at least 30
  of patients receiving medical assistance
• Pediatricians not hospital-based at least 20
  of patients receiving medical assistance
• Professionals who practice predominantly in rural
  health clinics or federally qualified health
  centers at least 30 of patients are needy
  defined as
• Receiving Medicaid assistance
• Receiving SCHIP assistance
• Receiving uncompensated care, or
• Being charged on a sliding scale based on ability
  to pay

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Medicaid Incentives for Certain Professionals

• Incentives for professionals may not exceed 85
  of net allowable costs (determined by Secretary)
  for certified EHR technology (implementation or
  upgrade) and the support and training needed for
  adoption and operation, subject to caps
• First year - 25,000
• Second and subsequent years - 10,000 per year
• Pediatricians limited to ? of these amounts
• No payments for more than 5 years or after 2021

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Medicaid Incentives for Certain Hospitals

• Available to
• Acute care hospitals (other than childrens
  hospitals) that have at least 10 of patient
  volume receiving medical assistance
• Childrens hospitals regardless of patient volume
• Hospital must adopt EHR by 2016
• Incentives limited to 6 years
• State must demonstrate to Secretary that it is
  using funds properly and encouraging adoption of
  EHRs

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Medicaid Incentives for Certain Hospitals

• Aggregate incentive capped at the product of the
  overall Hospital EHR Amount and the Medicaid
  Share for such provider (Medicaid Total Maximum
  Incentive)
• In any year, the total amount shall not exceed
  50 of the Medicaid Total Maximum Incentive
• In any 2-year period, the total amount shall not
  exceed 90 of the Medicaid Total Maximum Incentive

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Medicaid Incentives for Certain Hospitals

• Overall Hospital EHR Amount is the sum of the
  applicable Medicare incentive amounts for the
  hospital for the first 4 payment years except
• Assume that the Medicare Share were 1, and
• Assume that discharge rates will increase each
  year at the average annual rate of growth based
  upon the past 3 years
• Secretary shall consult with the state regarding
  Hospital EHR Amount
• Medicaid Share same calculation as the
  Medicare Share except using the number of
  inpatient-bed days for individuals who are
  receiving medical assistance instead of Medicare

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Will It Work?

• Congressional Budget Office estimates 90 of
  doctors and 70 of hospitals will be using EHRs
  within next decade
• AHRC estimates of EHR costs
• Average cost per physician 32,606
• Smaller practices 37,204
• 50 of physician practices 1 to 3 doctors
• 1500 monthly cost for upkeep and training
• Compare costs to incentives, penalties
• Loss of momentum resulting from delay in
  standards for meaningful use, certified EHR
• Impact on quality reporting

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