The ARRA Meaningful Use Matrix, the associated financial incentives, the challenges and the issues have been at the forefront and have been hashed and rehashed. Bottom line to this is ARRA will increase HIT adoption and use, at a price. From a hospital perspective there can be millions in incentives, for independent physicians up to $44K (in some cases more) per physician. I would like to take a few minutes to focus on the physician side of things.
ARRA defines the parameters necessary for an independent physician to get their $44K via the Meaningful Use Matrix. The challenge is that many smaller practices just do not have the wherewithal to choose, deploy and maintain a practice-based EMR. What do they do? Look to the Stark Law, specifically the Safe harbor clause. For a little background - in 1989, Congress created rules regarding physician self-referral to entities providing Medicare-covered clinical laboratory services. In 1993, Congress expanded this well beyond the clinical laboratory services to a myriad of “designated health services” – the foundation of the Stark Law. (For some trivia, the Stark Law is named after Pete Stark (D-CA), the Congressman who introduced and strongly supported it.) Basically the Stark Law forbids/prohibits a physician or their immediate family who have a financial interest, including compensation, investment or ownership, with an entity from referring patients to that entity for “designated health services” covered by the Medicare program, unless an exception is available. The Stark law provides for a raft of penalties for violation ranging from sanctions, exclusions and financial penalties. In October 2006, Congress passed the Stark Safe Harbor legislation that provides hospitals an exception to the restrictions of the Stark and Anti-Kickback laws. This exception allows hospitals to donate “Items & services necessary and used predominantly to create, maintain, transmit, or receive EMRs” to community or affiliated physicians. In other words, Stark Safe Harbor enables hospitals to provide EMR items and services to physicians, as long as there were no volume or value of referrals, or other business between the parties that drove the donation. In addition, the Stark Safe Harbor requires that ePrescribing be included and explicitly prohibits a hospital from donating physician office equipment or replacing an existing EHR. The quid pro quo - the receiving providers must contribute 15% of the donor’s cost for the items and services provided and at the hospitals discretion may be required to contribute a larger amount. The Stark Safe Harbor exception ends December 31, 2013.
ARRA and Stark Safe Harbor have a very interesting synergy. The synergy is not crystalline in its clarity since there is some blurring around ARRA’s definition of hospital-based physicians (a physician who furnishes substantially all of their services in a hospital setting (whether inpatient or outpatient) and who uses hospital facilities and equipment, including qualified EHRs). This blurriness does not preclude leveraging Safe Harbor exception - it just makes it prudent to thoroughly investigate the physician/hospital arrangements. Luckily CMS estimates that 27% of all physicians will be hospital-based under this definition. Once the physician is assured that they will not be considered hospital-based the synergy is obvious.
I flippantly say the synergy is obvious, and you might be saying to yourself maybe to you. So where do I see this synergy. From a hospital perspective, for ARRA Meaningful Use system upgrades, deployments and expenses will be the order of the day. As part of this expansion, community hospitals could, as part of their community outreach programs, provide their EMR functions to the local practices. This could be accomplished in a standalone mode, or some connected functions. The net for the hospital is their name is better known in the community and the potential to have data that is more integrated when a patient transitions from ambulatory setting to inpatient and vice versa. This data integration has the potential to decrease lengths of stay, improve patient safety, improve patient satisfaction and improve clinical staff satisfaction. Please don’t read this as me touting this approach as a panacea for all the ills of care delivery, it is not – but it does have the potential to dramatically improve care on a community basis.
Now from a physician perspective – their practice gets a Meaningful Use compliant solution at a bargain price and they qualify for their Meaningful Use incentives. It could yield a new EMR with a positive net cash flow, i.e., the Meaningful Use incentives should exceed the cost of the 15% quid pro quo.
In the words of some unknown person far wiser than I – not too shabby, ehhh.
To get unique perspectives on how your care delivery system can maximize its presence in your community and provide a solid workflow and IT infrastructure contact us at Santa Rosa Consulting (http://www.santarosaconsulting.com)
Dale Will
Associate Partner
Santa Rosa Consulting, LLC