Health IT Law Blog : Health IT Law Blog : Post & Schell: Law Firm : HIT & Electronic Health Records

Here are the slides from  our February 25, 2010 Webinar on Meaningful Use.  This webinar was first in a series, and focused on the critical definition of "meaningful use" of "certified EHR technology," as described in proposed regulations released and published by CMS pursuant to the HITECH Act on January 13, 2009.  Steve and I discussed:

• Key policy goals and objectives behind meaningful use

• Measures required to achieve meaningful use

• Structure of incentive payments under Medicare and Medicaid

• Eligibility requirements for professionals and hospitals

Our next webinar, to be held on Thursday March 18, 2010, from 1:00 to 2:00 PM, will focus on how to negotiate software and EHR licensing agreements and other transactional issues with respect to dealing with health IT vendors.

For more information, please contact me at vschick@postschell.com or 202-661-6945.

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On Thursday, February 25, 2010 from 1:00PM to 2:00PM (EST), Steve Fox and yours truly will host a free webinar, the first in a series, which will focus on the critical definition of "meaningful use" of "certified EHR technology," as described in proposed regulations released and published by CMS pursuant to the HITECH Act on January 13, 2009.  We will discuss:

• Key policy goals and objectives behind meaningful use

• Measures required to achieve meaningful use

• Structure of incentive payments under Medicare and Medicaid

• Eligibility requirements for professionals and hospitals

You may view each of these presentations at your desk. There is no charge or limit to the number of people who may listen to each presentation on the same line. Click here to register. After registering, you will receive log-in information by e-mail.

Our next webinar, to be held on Thursday March 18, 2010, from 1:00 to 2:00 PM, will focus on how to negotiate software and EHR licensing agreements and other transactional issues with respect to dealing with health IT vendors.

For more information, please contact me at vschick@postschell.com or 202-661-6945.

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According to American Medical News (AMN), a new report by Manhattan Research states that online communications by physicians have increased by 14% since 2006.  The survey of 1900 physicians found that 39% of physicians use online communication tools such as email, secure messaging, or instant messaging.

Dermatologists lead all other surveyed practices in the volume of online communications, which, according to Girish Munavalli, MD, assistant professor of dermatology at Johns Hopkins University School of Medicine, can be attributed to "a lot of triage calls and calls for clarification of instructions" which come from dermatologists' large patient volumes. "This is perfect for short e-mail communication and reminders," added Dr. Munavalli.

Dermatologists are followed by oncologists, neurologists, endocrinologists, infectious disease specialists, and primary care physicians.

Of course, certain obstacles remain.  Some doctors abstain from using such technology because of liability worries, while many patients prefer in-person meetings because of concerns regarding privacy of their health information.  Still, the report suggests that this increase may be due to the growing comfort level and acceptance of online communication between physicians and patients.  And it may even indicate a larger trend of greater familiarity and use of other health-related technologies, such as EMRs and personal health records.

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HHS Secretary Kathleen Sebelius, appearing with Labor Secretary Hilda Solis, announced the Obama administration will release almost $1 billion set aside in the stimulus bill in order to aid implementation of health information technology.

Secretary Sebelius announced $386 million in grants to advance widespread adoption of EHRs at the state level, including for health information exchanges (HIEs).  HHS also awarded $375 million to 32 nonprofits for Regional Extension Centers which assist providers in updating their medical record systems and train workers on such new technologies.

Secretary Solis announced around $225 million to support 55 job-training programs in 30 states which is expected to train around 15,000 people in the health records technology.

The Obama administration expects to help more than 100,000 health-care providers set up electronic medical records for their patients by 2014.

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Ingenix, the technology unit of United Health Group, and Allscripts-Misys Healthcare Solutions joined Siemens, GE Healthcare and IBM in offering financing for purchasers of electronic medical record technology.   This continues the trend of vendors offering interest-free financing until healthcare providers receive the "meaningful use"  incentive payments or reimbursements under the HITECH Act.

While such offers may provide a solution to some of the credit and financing woes facing the healthcare industry, healthcare providers should be acutely aware of the many potential pitfalls and related issues inherent in vendor-financed deals, including: (1) additional pressure from vendors to accept their standard contractual terms and conditions, rather than engaging in full-blown contract negotiations, because vendors have much more leverage if they are also the creditor in the transaction; (2) failing to obtain necessary warranties and representations from vendors that their systems will comply with all relevant requirements under ARRA and the HITECH Act and will permit the provider to achieve meaningful use; (3) dealing with problems that may arise if either the vendor’s product fails to achieve applicable certification (e.g., CCHIT), is not “accepted” by the provider after completion of acceptance testing or the product does not enable the provider to achieve “meaningful use” in a timely manner, as well as a host of other issues.

Steve Fox and yours truly explore the issues around vendor financing of EHR system purchases in the latest issue of the Journal of Health Information Management, where we suggest recommended courses of action for healthcare providers considering acquiring HIT systems, including EMRs, by using vendor financing options.  A complimentary PDF copy of the article is available here.
 

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CMS released a proposed rule pursuant to the HITECH Act which includes the much-anticipated definition of Meaningful Use of Certified EHR technology.  You can find the full text here.*

HHS has also released an interim final rule with a request for comments to adopt an initial set of standards, implementation specifications, and certification criteria, as required by section 3004(b)(1) of the Public Health Service Act. This interim final rule represents the first step in an incremental approach to adopting standards, implementation specifications, and certification criteria to enhance the interoperability, functionality, utility, and security of health information technology and to support its meaningful use. The certification criteria adopted in this initial set establish the capabilities and related standards that certified electronic health record (EHR) technology will need to include in order to, at a minimum, support the achievement of the proposed meaningful use Stage 1 (beginning in 2011) by eligible professionals and eligible hospitals under the Medicare and Medicaid EHR Incentive Programs.  You can find this interim rule here.*

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On the eve of HHS releasing the much-anticipated definition of "meaningful use," health IT divisions of GE and Siemens revealed new financing options for purchases of their EMR and other HIT products.

On December 16, 2009, Siemens followed IBM and GE in offering "a series of flexible financing solutions to help healthcare providers pursue meaningful use objectives and meet [HITECH Act] deadlines <...>  Featuring zero-percent interest terms for qualified customers, the solutions enable organizations to defer up-front payments associated with their technology investment while meeting criteria for future government incentive monies."

According to Fierce Healthcare:

To provide the greatest possible range of choices for customers, Siemens offers solutions from Siemens Financial Services, Inc. as well as from selected partners, including IBM Global Financing and 3-D Financial Services. These options allow customers to choose a customized financing solution that matches their individual technology acquisition roadmaps, business strategies, financial profiles, and technology needs. <...>

By bridging the gap between the project implementation and the receipt of ARRA incentive, Siemens will be providing its customers an option which allows them to optimize their cash flow while maximizing return on investment.

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The new science of personalized medicine, a new report on the $232 billion personalized medicine industry by PriceWaterhouseCoopers, anticipates an annual 11% growth in this market.  Health IT and telemedicine are among the key drivers for personalized medicine. 

According to Healthcare IT News, the report's findings include:

• The core diagnostic and therapeutic segment of the market – made up primarily of pharmaceutical, medical device and diagnostics companies – is estimated at $24 billion and expected to grow by 10 percent annually, reaching $42 billion by 2015.
• The personalized medical care portion of the market – including telemedicine, health information technology and disease management services offered by traditional health and technology companies – is estimated at $4 billion to $12 billion and could grow to more than $100 billion by 2015 if telemedicine takes off.
• The related nutrition and wellness market – including retail, complementary and alternative medicines offered by consumer products, food and beverage, leisure and retail companies – is estimated at $196 billion and projected to grow 7 percent annually to more than $290 billion by 2015.

You can find the full report here.

"IT helps drive $232B personalized medicine market," Healthcare IT News (December 8, 2009).

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The New York Times reported on a new study led by Dr. Ashish Jha of the Harvard School of Public Health and Catherine M. DesRoches of Massachusetts General Hospital which found only marginal benefits to hospitals using electronic health records in terms of reducing costs and improving the quality of care.

The new study placed hospitals into three groups: those with full-featured electronic health records, those with more basic ones, and those without computerized records. It then looked at their performance on federally approved quality measures in the care of conditions like congestive heart failure and pneumonia, and in surgical infection prevention.

In the heart failure category, for example, the hospitals with advanced electronic records met best-practice standards 87.8 percent of the time; those with basic computer records, 86.7 percent; and those without, 85.9 percent. The differences in other categories were similarly slender.

Reducing the length of hospital stays, according to many experts, should be a big money-saving payoff from electronic health records — as better care aided by technology translates into less time spent in hospitals. For hospitals with full-featured digital records, the average length of stay was 5.5 days; for those with basic computer records, 5.7 days; and those without, 5.7 days.

The upside, if any? Dr. Karen Bell, a former HHS official, was not surprised by the findings and hopes that the real benefits will be achieved after use of EMRs is much more widespread:

'There will be no clear answers on the overall payoff from the wider use of electronic health records until we get further along, five years or more, said Dr. Bell, [now a] senior vice president for health information technology services at Masspro, a nonprofit group. “But that doesn’t mean we shouldn’t go forward.'

"Little Benefit Seen, So Far, in Electronic Patient Records," New York Times (November 16, 2009).

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Our collaborator and friend James Oakes, a Principal at Health Care Information Consultants, LLC in Baltimore, Md., authored a wise and timely call for action for healthcare providers hoping to capitalize on the incentive payments for meaningful use of certified EHR technology included in the HITECH Act. 

The article, appearing in BNA's Health IT Law & Industry Report, argues that even though the HHS has yet to produce final regulations defining such key HITECH Act terms as "meaningful use" and "certified EHR technology," healthcare providers should not wait any longer to begin planning for the transition from paper to digital records, or the likely required updates to existing EHR systems:

Given the uncertainty surrounding these issues, a number of providers have elected to delay any action towards selecting and implementing an electronic health record (EHR) for their institution until answers are made available, reasoning that they want to know as much as possible before committing to a direction. However, providers who take this path may put themselves at risk for forfeiting eligibility for ARRA funds at all, given the time to execute and implement systems.

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A study conducted by the Commonwealth Fund, published in this month's issue of Health Affairs, found that physicians in the United States significantly lag behind their colleagues in Western Europe, Australia and New Zealand in several categories, including rates of adoptions of electronic medical records.  This study of more than 10,000 primary care physicians in 11 countries found that only 46% of U.S. doctors use electronic medical records, compared with almost universal EMR use among doctors in Australia (95%), Italy (94%), the Netherlands (99%), New Zealand (97%), Norway (97%), Sweden (94%), and the United Kingdom (96%).  Among other HIT-related findings, the study concluded that:

<...> among the seven countries with near-universal EMRs, the majority of physicians reported electronic access to lab results, yet fewer than half of Dutch, Norwegian, and U.K. doctors can order tests electronically. Across countries, most doctors with EMRs reported electronic clinical notes, routine electronic prescribing, and computerized alerts about potential problems with drug doses or interactions (except in Norway). Answers varied for other functions.

Decision support appears generally less well developed. Computerized reminders for treatment guidelines, tracking laboratory tests, and prompts to provide patients with test results were the least frequently reported, including in countries with multifunctional capacity. Notably, the seven countries with near-universal EMRs have succeeded in spreading multifunctional capacity to smaller as well as larger practices. Their national policies and standards have supported spread of multifunctional capacity. In contrast, U.S. multifunctional capacity remains concentrated in larger practices. Half of U.S. practices with high-function capacity were associated with integrated care systems such as Kaiser.

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By popular demand, here is the video of David Pogue's report on the Obama Administration's efforts to digitize patient records in the U.S. 

Watch CBS News Videos Online

"Charting a New Course," CBS News (September 13, 2009).

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David Pogue, a reporter for the New York Times, posted the transcript of his interview with Dr. David Blumenthal, National Coordinator for Health IT. Mr. Pogue interviewed Dr. Blumenthal for a CBS news report on digitization of healthcare in America (the video is available after the jump).

Here are some highlights from the interview:

On current state of health IT in the US:

We found that about 17 percent of physicians in 2008 had adopted an electronic health record, and about ten percent of hospitals. <...> The rest is paper. It's basically the same system that physicians have used since Hippocrates, which is writing on some piece of paper.

On reimbursement penalties for those failing to achieve meaningful use by 2015:

From 2011 to 2015, there is a bonus. The Congress has put $45 billion on the table to ease physicians and hospitals into this new world of computerized medicine.After 2015, if you have not adopted, and you see Medicare or Medicaid patients, you may experience a penalty. 2015 is six years off. Six years is plenty of time for physicians to get themselves organized to put a record in place and avoid those penalties.

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According to Modern Healthcare, several HIT vendors, including GE Healthcare, NextGen Healthcare Information Systems, and Athenahealth, will guarantee that their EHR products will meet or "evolve to meet" the federal requirements for "meaningful use," even though such requirements have not been promulgated yet by CMS.  In fact,

Athenahealth recently upped the ante by guaranteeing that, not only will the company's AthenaClinicals Internet-based electronic health-record service meet federal standards, but the doctors who use it will receive a bonus payment for the 2011 program year under the terms of the [HITECH Act].

The HITECH Act provides for a first-year incentive payment of $18,000 for those eligible professionals who achieve meaningful use of certified EHR technology in 2011 or 2012, instead of a first-year payment of $15,000 thereafter.

Some vendors hope that such guarantees will spur activity in the market, persuading some reluctant healthcare providers not to wait until CMS issues its final "meaningful use" regulations next year.  There is also some doubt whether such guarantees apply to each vendor's existing customers or solely to new customers.

However, whenever a healthcare organization enters into an EMR purchase or license agreement, it must obtain strong warranties from the vendor that its product(s) and system will meet the applicable federal requirement standards at time of issuance of such standards, as well as for duration of the applicable license.  "Meaningful use" requirements will likely change over the life of a license, and a vendor's obligation to meet such evolving standards is absolutely essential.  Healthcare providers must also include proper remedies and appropriate carve-outs from vendor's limitation of liability for a vendor's breach of such warranties.

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The New York Times reported last week that the North Shore-Long Island Jewish Health System (North Shore) will offer its 7,000 affiliated (though not employed by North Shore) physicians subsidies for implementing electronic health records.  Interestingly, this subsidy does not include or prevent such physicians from qualifying for the approximately $44,000 in Medicare incentive payments under ARRA. 

North Shore plans to subsidize 50% of the total cost of the EMR system (which uses Dell hardware and Allscripts software) for practices "who simply install electronic health records that can communicate between the doctor's office, labs and hospitals."  However, the health system will subsidize 85% of the total cost of the EMR -- a figure driven, no doubt, by the exceptions to the Stark and Anti-Kickback laws -- for physicians willing to share some of their patient data. 

North Shore is counting on the availability of shared data to reduce the cost of care through reduction of unnecessary tests and medical mistakes.  A recent PriceWaterhouseCoopers (PWC) survey may support North Shore's reasoning.  The survey found broad agreement among healthcare executives with respect to secondary uses of EMR patient data.  Among other findings (discussed after the jump), the PWC survey found that 42% of organizations already using some form of secondary data use achieved cost savings, 29% increased their revenue, and 59% saw improvements in quality of care.

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The last few weeks saw a tremendous amount of activity in the health IT market.  Dell and Xerox were among the companies trying to capitalize on opportunities created by the ARRA incentives and certain market trends, including high demand for HIT products due to the ongoing digitization of the industry and, more generally, the expanding healthcare needs of an aging population in the United States.

Dell is quickly establishing itself as a major player in health IT.  In April 2009, Dell aligned itself with Wal-Mart and eClinical Works to supply hardware for Wal-Mart's new EHR system.  Last month, Dell rolled out its own EHR system aimed at physicians affiliated with hospital practices, with Tufts Medical Center and Memorial Hermann Health Care System among the early adopters. 

Even more significantly, on September 21, 2009, Dell announced its plans to acquire the health IT vendor Perot Systems Corp. for $3.9 billion.  Perot is a major player in the healthcare industry:  about half of Perot's $2.8 billion in annual revenue comes from the healthcare market; and as much as half of the hospitals that outsource their IT are Perot clients.   Perot runs over 3,000 healthcare applications for its clients, though the company does not have a preferred provider arrangement with a specific application vendor.

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