With Meaningful Use, It's All or Nothing

September 18, 2015

To reap the rewards of government incentives in full, practices must fulfill all meaningful use requirements - and potentially survive an audit.

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.

Doctors who practice in underprivileged communities where patients may lack access to computer technology, and specialists (pediatricians and obstetricians) who treat primarily younger (non-Medicare) patients, however, are most challenged by the patient portal requirement. To demonstrate meaningful use in Stage 2, for example, providers must assure that at least 5 percent of their patients view or download their medical records online, and that at least 5 percent of patients must send at least one secure message. "I practice in a Mennonite community so to meet the requirements [for Stage 2] our nurse had to get on the phone and call patients so we could qualify in the last two hours [of his reporting period]," says Wergin.

CMS this year proposed a modification for Stage 2 and Stage 3 requirements to help reduce the reporting burden on providers. For Stage 2, the new rules would reduce the requirement for patients to use technology to electronically download, view, and transmit their medical records from 5 percent of eligible providers to one patient. The proposed simplification for Stage 3 criteria, which when finalized, will take effect starting in 2017, would reduce the 20 objectives to a core of eight that focus on promoting health information exchange and improved outcomes.

READJUST OR RETREAT?

The cost and complexity of demonstrating meaningful use today has come down significantly with the advent of cloud-based computing, says Tom Giannulli, a physician and chief medical information officer for cloud-based EHR provider Kareo. But the black eye many providers endured in the early days of EHR continues to influence decision making. "They've heard from vendors how easy it is, but that's balanced by what they've heard from colleagues - that it's a disaster," says Giannulli, noting one early adopter invested $60,000 in office hardware and couldn't get a claim through for six months. "He went bankrupt because of it. The ramifications of the past still weigh heavily." Successful attestation today, however, can be achieved for far less - as little as $5,000 to $10,000 per provider, per year via cloud-based vendors, with no upfront investment in IT infrastructure. "It's a different world, but the ease of use of cloud-based systems will take time to percolate through the system," he says.

Evan Grossman, vice president of product with athenahealth, a cloud-based EHR that also provides practice management services and a patient portal, says his firm charges subscribers between 3 percent and 8 percent of practice collections. Successful attestation is guaranteed.

But cost is not the only reason why many physicians are opting out. There's also the hassle factor. Some physicians, in fact, have fast-tracked their retirement to avoid the IT costs, penalties, and extensive reporting requirements. "A lot of physicians have cut their careers short," says Giannulli. "They were maybe planning to retire in 10 years, but with all this they're now going to retire in two."

Still others object to the impact attestation can have on doctor-patient interaction. "When you're looking at checking off boxes to get credit for meaningful use, it can take away from physician-patient personal interaction," says Fordham.

As the requirements for meeting meaningful use criteria are currently more rigorous in Stage 2 and Stage 3, Wergin expects a growing percentage of physicians to take the penalty and run. If CMS builds in greater flexibility and relaxes some of its targets, however, he also believes the program can still achieve its stated goals: lower healthcare costs, improved continuity of care, and better patient outcomes.

"I think there is still potential there," he says, noting many AAFP members who have already attested to meaningful use experienced an initial drop in productivity, but says they wouldn't go back. "They'd just like it to work better with office flow," says Wergin. "Simplification would help. I believe we can get there if we can focus on creating a system that helps us take care of our patients better. And isn't that what it's all about?"

Shelly K. Schwartz,a freelance writer in Maplewood, N.J., has covered personal finance, technology, and healthcare for more than 17 years. Her work has appeared on CNBC.com, CNNMoney.com, and Bankrate.com. She can be reached via editor@physicianspractice.com.

This article originally appeared in the September 2015 issue of Physicians Practice.