EHR Incentive Program: What’s In Store for Year Two?

As the federal government’s electronic health record (EHR) adoption program moves into its second year, MSPs can expect several key developments. But first, here’s the background: The government’s meaningful use program provides financial incentives to healthcare providers who deploy EHRs and meet certain objectives when using them. Last year (2011) marked year-one of the program. The Centers for Medicare & Medicaid Services (CMS), which oversees the program, reported that more than $1.3 billion in Medicare EHR incentive payments were made between May and December 2011. And more than $1.1 billion in Medicaid EHR incentive funds were issued between January 2011 and the end of last year. So what’s next?

MSPs have been reporting opportunities in hosting and application support, training, consulting, and other professional services. Here’s a summary of what’s in store for meaningful use, year two:

1. Rolling Out A New Stage

The EHR objectives hospitals and physicians must meet to receive incentive payments in 2011 and 2012 are known as Stage 1 requirements. Stage 1 established core criteria such as being able to transmit prescriptions electronically. Stage 2 is expected to add new requirements and perhaps expand upon existing requirements. The government is expected to release proposed Stage 2 requirements in the next few weeks and, following a public comment period, issue final rules later this year.

The forthcoming requirements may compel MSPs to tweak their healthcare offerings to keep up with the changing rules.

2.  Revisiting Year One

As MSPs anticipate Stage 2, they also may need to take a step back — depending on where their clients stand with respect to meaningful use. Healthcare providers under the Medicaid side of the program were able to qualify for payments in 2011 on the basis of adopting, implementing or upgrading EHR. In other words, they could get the money without having to meet meaningful use objectives.

But that will not be the case for providers from here on out.

“They must successfully demonstrate meaningful use for subsequent participation years,” according to CMS.

In effect, year two for some providers participating in the Medicaid program will look a lot like year one.

“After the first year, the rule tightened up,” noted Erica Drazen, managing director, Global Institute for Emerging Healthcare Practices at CSC. “This year, they are going to have to meet the requirements for 90 days in order to qualify.”

CMS holds providers to a meaningful use reporting period of 90 consecutive days.

3. Finding Opportunities

Data CMS collected last year may shed some light on where MSPs may find meaningful use-related business this year. CMS identified Florida, Illinois, Kentucky, Louisiana, Michigan, Ohio, Oklahoma, New York, Pennsylvania, Texas, and Wisconsin in the top tier of states in Medicare/Medicaid EHR incentive payments. The complete report is here.

Data from the Department of Health and Human Services, meanwhile, provides insight into the software vendors involved in meaningful use projects. A spreadsheet is available via data.gov . A quick glance shows Epic Systems seeing plenty of activity, but the data reflects quite a range of market participants.