Donald Fordham started off strong. He successfully attested for Stage 1 meaningful use under the Medicare EHR incentive program in 2012, and took the following year off to complete the highest level of certification as a Patient-Centered Medical Home. The family physician in Demorest, Ga., then turned his attention back to meaningful use, ready to roll up his sleeves for Stage 2. But the math didn't work.
"I started looking at what it would require to continue to attest for Stage 2 and, for my practice, it's not really financially logical at all," he says, noting 30 percent of his patients are covered by Medicare. "As a solo practitioner, if it's going to be done, it's got to be done by me. I just don't have the resources."
By his account, none of the other 25 primary-care practices in his community plan to attest for Stage 2 either, which includes higher thresholds for the exchange of relevant health information and patient engagement. "I live in a small town," says Fordham. "Everyone here is a solo practitioner. We're providing the same quality care, but the regulatory burden is so great for meaningful use that when you look at the cost involved it'd be a financial loss to try to continue."
According to Fordham, the reimbursement hit that his practice will take for failure to attest, which he estimates to be $10,000 based on current Medicare billing, will be far less than the cost of meeting all of the criteria for Stage 2 and what is proposed currently for Stage 3, even after incentive payments are factored in. Indeed, eligible professionals who meet all of the requirements can receive incentives of up to $44,000 for the Medicare EHR program over five years, and $63,750 for the Medicaid program over six years.
DOING THE PENALTY MATH
But beginning in 2015, those who are not yet "meaningful users" will be hit with a 1 percent penalty on their Medicare reimbursement, increasing annually to 3 percent in 2017. (That penalty could climb to a maximum of 5 percent after 2018 if fewer than 75 percent of eligible providers are meaningful users under the EHR incentive programs.) For the average family doctor, who receives roughly $100,000 per year in Medicare reimbursement, however, such penalties do not represent a significant downside risk. A 1 percent penalty this year, for example, would amount to a $1,000 loss, a $2,000 loss in 2016, and a $3,000 hit in 2017 — a combined $6,000 in penalties covering $300,000 in reimbursements.
Of the nearly 256,000 eligible providers who are subject to "payment adjustments," in fact, CMS reports that nearly 70 percent will lose less than $2,000 each. Roughly 34 percent will forfeit $250 or less, 21 percent will lose less than $1,000, 14 percent will lose less than $2,000, and 31 percent will experience a loss of greater than $2,000.
CMS has separately indicated it expects it will cost physicians roughly $54,000 to upgrade their EHRs to meet Stage 3 requirements, plus another $10,000 annually in maintenance costs. "Who spends $64,000 to avoid a $10,000 penalty?" asks Fordham.
MAKING A MEANINGFUL EXIT
Fordham is not alone. In the 2015 Physicians Practice Technology Survey, Sponsored by Kareo, nearly 9 percent of respondents said they too would abandon meaningful use after Stage 1 and accept the Medicare penalty.
"Some of the physicians who are opting out are demonstrating their frustration," says Robert Wergin, president of the American Academy of Family Physicians, noting he has anecdotally observed a higher rate of attrition between Stage 1 and Stage 2.
Stage 2 is simply more onerous, requiring providers to report on a total of 20 objectives — 17 core objectives and three menu objectives — as well as nine of 64 approved clinical quality measures (CQMs), during a fixed quarter of the calendar year. The objective requiring the exchange of relevant health information between heterogeneous systems is also largely out of their control, as the EHR in use by their peers may not meet interoperability standards.