EHR Incentives Update

February 1, 2010

Confused about meaningful use and EHR certification? We’ve got the information you need to go confidently into the EHR marketplace. Here’s your guide.


If you’re thinking about purchasing an electronic health record system, you have undoubtedly heard that the federal government is offering financial incentives to help you do that (see “The EHR Stimulus: A Complete Primer”). You’ve also heard that the regulations on what kind of EHR qualifies for the subsidies are not yet finalized. And you probably have questions about the “meaningful use” of that EHR you will have to show to claim the funds.

The good news is that the interim final rules and proposed regulations published in December are unlikely to change significantly when they’re finalized this spring. It’s already clear that to receive federal incentives in 2011, you’ll need an EHR that meets the published requirements for security, privacy, and interoperability. To demonstrate that you are using the EHR meaningfully in that year, you must employ your system to prescribe electronically and be able to exchange data with other providers, submit quality data to CMS or your state (if you’re applying for Medicaid incentives), and make copies of your electronic records available to patients upon request.

All of this is known, yet physicians have not been beating down the doors of software vendors. Until December, they could plausibly argue that they didn’t want to purchase an EHR until they knew what was required. Despite the guarantees that vendors were offering - and continue to offer - some observers say that that uncertainty effectively froze the market.

Now, it appears that other concerns are inhibiting physicians, including the requirement that they invest in EHRs before receiving any subsidies. Some are also worried that they’ll have to spend more on EHRs later as the government raises the ante to qualify for incentives.

Willarda Edwards, an internist and president of the National Medical Association, says, “When I talk to my colleagues, they’re seeing what I’m seeing. I can’t afford to make that initial investment and also be able to keep up with the changes that might be required for interoperability with other systems. That will require me to upgrade, and I can’t afford that.”

At the opposite end of the spectrum, Jeff Kagan, an internist in Newington, Conn., is confident that his three-provider practice will more than recoup the cost of the EHR it plans to buy through tax write-offs and government incentives. The biggest uncertainty at this point, Kagan says, is how much productivity his practice will lose during the EHR transition period - a concern he shares with many other doctors.

Family physician Chris Peine of Eagle, Idaho, is acquiring an EHR to improve his documentation and make his practice more efficient, not because he hopes to win a government subsidy. “I wanted to make the decision based on the needs of my practice and not on the financial incentives offered by the government,” he says. “Because frankly, I’m not sure when or if I’ll get a check for this. If I do, it will be nice. But for now, I’m making my decision based on what’s right for my practice.”

That’s the right reason, says Steven Waldren, MD, director of the Health Information Technology Center of the American Association of Family Physicians. Nevertheless, he strongly urges physicians to buy an EHR as soon as possible if they want to receive the maximum funds available from Uncle Sam - $44,000 per physician from Medicare or $64,000 from Medicaid, if at least 30 percent of revenue comes from the Medicaid program.

“If you want some money to offset the cost of an EHR, it’s going to take you six months to a year from the time you sign a contract until you’re live as a meaningful user, and before that, it will take six months to a year from when you start the search process to signing a contract,” Waldren says. “So if you don’t do that now, you won’t be ready to pull the trigger by 2011.”

Physicians who are ready to take the plunge need information about what’s happening in the market and what the government rules require. Here’s a basic guide to qualifying for federal EHR subsidies under the American Recovery and Reinvestment Act (ARRA).

Meaningful use maze

To refresh your memory, nonhospital-based physicians who use qualified EHRs meaningfully are eligible for government payments from 2011 to 2015, with the incentives diminishing over time. Those who apply after 2011 may also receive some payments, but the total will be less. Physicians who do not demonstrate meaningful use of an EHR by 2015 will have their Medicare payments cut by 1 percent in the first year, 2 percent in 2016, and 3 percent in 2017 and each year thereafter.

Providers can report on their meaningful use of EHRs for any 90-day period during 2011; thereafter, the reporting period for a particular year will be the full calendar year. Incentive payments can begin as early as 2011 and will end after 2016.

Two advisory bodies of the Department of Health and Human Services (HHS), the Health IT Policy Committee and the Health IT Standards Committee, spent most of 2009 devising criteria for meaningful use and certification of qualified EHRs. The meaningful use criteria for 2011 will be easier to meet than the 2013 criteria, which will become more stringent in 2015.

The most important thing to realize about meaningful use is that nobody can guarantee you will satisfy those requirements. While many vendors include such guarantees in their contracts - and one vendor, athenahealth, even says that if you don’t receive government money, it will refund up to six months’ worth of EHR payments - the fact is that it’s up to you to learn how to use the EHR and do what’s required. On the other hand, if you don’t have an EHR that can enable you to meet the government criteria, you won’t achieve meaningful use, no matter what you do.


Some vendors say that the functionality of their EHRs already meets or exceeds the meaningful use criteria. But it’s a good idea to know what those are before choosing a product. There are two sources for that information, both available online, which should be considered together: CMS’ Notice of Proposed Rulemaking on the EHR incentive programs and the Office of the National Coordinator of Health IT’s Interim Final Rule on standards and EHR certification. The certification criteria for qualified EHRs mirror the meaningful use requirements, which are summarized in a grid starting on page 103 of the Notice of Proposed Rulemaking (NPRM). Physicians who are going to apply for Medicaid incentives should be aware that the Medicare meaningful use criteria are the floor for what states will require, but individual states may add other requirements.

CMS’ document also includes a list of quality measures that combine metrics from CMS’ Physician Quality Reporting Initiative (PQRI) and the National Quality Forum. These include outcomes measures such as the percentage of diabetic patients with HbA1c under control and with blood pressure under control. To gather information like this, you need some kind of analytical program within your EHR, and maybe also a disease registry that keeps track of which patients need certain services and when they need them. The latter type of functionality will also help you meet two other requirements: compile lists of patients by their conditions and send reminders to at least half of patients over 50 years old for follow-up and preventive care.

In 2011, you’ll also have to use clinical decision support tools, such as drug interaction alerts, and maintain up-to-date lists of problems, medications, and allergies. You will have to prescribe electronically 75 percent of the time; you or your staff will have to record patient demographics, vital signs, and smoking status. And at least 50 percent of lab results must be incorporated into your EHR in structured form, meaning that they must be received electronically through lab interfaces.

However, you will not have to use the EHR to enter progress notes in the typical pick-box format. While that may change in the future, says National Coordinator of Health IT David Blumenthal, right now having physicians enter their progress notes electronically is not necessary to meet the objectives of meaningful use. (Of course, you must still document visits, but you can dictate, type, or use voice recognition software.)

You will be required to give patients access to a portion of their electronic health records, including lab results and medication, problem, and allergy lists. One way to do that is to transfer the data to a personal health record (PHR) that’s part of a patient Web portal. (An increasing number of EHR vendors offer such portals.) For purposes of interoperability, all qualified EHRs must also have the ability to generate and receive either a clinical summary known as the Continuity of Care Document (CCD) or a similar format called the Continuity of Care Record (CCR). Either of these could be printed out for patients, sent to them online, or transferred to their PHR.

The requirement that your system must be able to exchange clinical data with other providers presents additional challenges. In 2011 and 2012, you will have to prescribe electronically, receive some lab results, and transfer clinical summaries as part of referrals. Sending electronic prescriptions to pharmacies is not hard to do, because the Surescripts network already connects practices with the majority of pharmacies if their EHRs allow that. Lab interfaces are trickier, says Waldren, because they’re all different and labs won’t necessarily pay for them. Your local hospital, likewise, may not pay for interfaces to its lab and other systems unless you belong to a sizeable group. A vendor will usually charge extra for writing its side of the interface.

Multiple EHR certifying bodies

In a simpler time, the Certification Commission on Health Information Technology (CCHIT) was the only certification game in town. But no more. HHS has decided that there should be multiple certification bodies to ensure that the big software vendors will have less influence on the process. So far, just one organization - the Fort Worth, Texas-based Drummond Group - has emerged to challenge CCHIT, but more may follow.

To signify that an EHR is qualified for government subsidies, CCHIT and its rivals will have to certify that it meets the criteria established by HHS. But the criteria in the interim final rule are related only to meaningful use requirements, which are a subset of EHR functionality. So CCHIT is offering 2011 certification to vendors selling comprehensive EHRs that meet certain functional criteria as well as the government requirements.

“We think a lot of [EHR] buyers need and want the extra assurance,” states CCHIT chair Mark Leavitt.

CCHIT is also certifying incomplete EHRs or non-EHR products for components of HHS’ certification and meaningful use requirements. The government is open to this approach. The interim final rule specifies that a provider can use either a complete EHR or a combination of “EHR modules” to satisfy the meaningful use criteria.

“To support meaningful use, you don’t need what CCHIT currently certifies as a comprehensive EHR,” says Waldren. “You don’t need all those functions.” Of course, if you have multiple products, they must all work together smoothly, and it will be difficult to collect quality data unless your EHR allows you to document vital signs, medications, problems, and lab results in discrete, searchable categories.

CCHIT forecasts that any EHR that receives its comprehensive 2011 certification will meet government standards, and it promises to recertify products at no cost for any criteria the government adds later on. Greg DeBor, a health IT consultant with CSC, says he believes that even products certified by CCHIT in 2009 will suffice. And Bruce Kleaveland, a Seattle-based consultant, says that buying a certified product from a vendor with a good track record poses a very low risk for physicians.

Regional extension centers

Some vendors believe there will be a sudden rush of orders after the final rules are published, as physicians scramble to get EHRs in time to qualify for the incentives. Leading firms such as Allscripts and Sage Software are ramping up to accommodate the expected demand. For example, Sage, which makes the Medical Manager and Intergy systems, recently added classroom training to its Web-based and onsite programs to stretch its resources further. Nevertheless, Lindy Benton, Sage’s chief operating officer, acknowledges that there is a shortage of technical personnel to provide training and implementation. In addition, vendors are not equipped to offer basic support services to a large volume of small practices, although Sage has a distributor network that can bear some of that burden, Benton says.

Glen Tullman, CEO of Allscripts, says he expects many hospital systems to provide implementation and support services to small practices. He cites the North Shore LIJ healthcare system on Long Island, N.Y., which has offered to supplement the government subsidies with its own financial and technical aid for community physicians that buy an Allscripts EHR. But a recent survey indicated that only a small percentage of hospitals nationwide are moving in this direction.

The ARRA legislation also calls for the creation of health IT regional extension centers to help physicians implement EHRs. Each of the HITRECs, as they are known, will have to help 1,000 primary-care doctors achieve meaningful use over a two-year period to get its full government grant. Altogether, the HITRECs are eligible for up to $598 million in government funds.


The government plans to fund about 70 HITRECs. The first group of 30 awards were expected to be announced in late January and the remainder in March. DeBor says he believes that applicants for the HITREC grants will probably include regional health information exchanges (RHIOs), Medicare-contracted quality improvement organizations, state agencies, and locally dominant healthcare systems. For example, the New Mexico Health Information Collaborative, a statewide health information exchange, intends to operate a HITREC in conjunction with the New Mexico Medical Review Organization, a quality improvement organization, and the New Mexico Primary Care Association.

Unfortunately, the HITRECs are going to have the same limitation that the software vendors have: not enough trained technicians on the ground. Charlie Jarvis, vice president of healthcare services and government relations for NextGen, says, “There’s a tremendous shortage in the workforce. The government has talked conceptually about that but hasn’t really addressed it.”

In November 2009, the Office of the National Coordinator of Health Information Technology (ONC) announced that it would provide $70 million to 70 community colleges to establish six-month, non-degree training programs for health IT technicians. In addition, ONC is offering $10 million for the development of course materials. But it is unclear whether this program, funded for two years, will be able to train enough people rapidly enough to make a real difference in helping practices implement EHRs by 2011.

The HITRECs could hire consultants to put on mass training sessions for small practices, Jarvis notes. But he and other experts agree that there’s still a certain amount of work that has to be done individually with each practice.

“If the market moved as quickly as the government wanted it to, you would have chaos,” Jarvis says, “because the government has underestimated the amount of change that’s required within any physician office when it becomes automated. And it’s not something that will go away because you put a few thousand dollars in front of doctors. It takes more than money: it’s time, it’s effort, it’s education, and it’s cultural change. These things don’t happen overnight.”

Ken Terry is a New Jersey-based freelance writer and the author of the book “Rx for Health Care Reform.” He can be reached at physicianspractice@cmpmedica.com.

This article originally appeared in the February 2010 issue of Physicians Practice.