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

HHS announced today that the government intends to make it easier for healthcare providers to adopt electronic health records (EHRs).  As part of this initiative, HHS decided to extend the deadline for meeting Stage 2 of Meaningful Use until 2014. Via HHS press release:

Under the current requirements, eligible doctors and hospitals that begin participating in the Medicare EHR (electronic health record) Incentive Programs this year would have to meet new standards for the program in 2013. If they did not participate in the program until 2012, they could wait to meet these new standards until 2014 and still be eligible for the same incentive payment. To encourage faster adoption, the Secretary announced that HHS intends to allow doctors and hospitals to adopt health IT this year, without meeting the new standards until 2014.

HHS also trumpeted the results of a CDC survey which found that more than half of U.S. physicians plan to take advantage of the EHR incentive program, and that the rate of EHR adoption doubled between 2008 and 2011, from 17% to 34% among physicians.

Of course, HHS did not comment on how low those numbers are. The fact remains that about two-thirds of U.S. physicians have not adopted electronic health records, and continue to use, in Secretary's words, the same technology as Hippocrates. The Obama administration is relying heavily on Regional Extension Centers and training efforts in order to aid healthcare enterprises in adopting EHRs.

We will update this post with links to any relevant regulations if and/or when HHS publishes them in the Federal Register.

"We Can't Wait: Obama Administration takes new steps to encourage doctors and hospitals to use health information technology to lower costs, improve quality, create jobs," HHS press release (November 30, 2011).

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A survey by Veriphyr, a provider of identity and access intelligence solutions, found that insiders were responsible for over 60% of data breaches of protected health information (PHI). Specifically, 35% of the PHI breaches were due to insiders' snooping into medical records of fellow employees, and 27% due to improper access to records of their friends and relatives.

Over 70% of surveyed entities, which included hospitals and other heathcare providers, reported suffering one or more breaches within the last 12 months. Veriphyr CEO estimated that data breaches cost healthcare organizations almost $6 billion annually, but found that an overwhelming majority of privacy and compliance officers within the surveyed group (79%) felt that they lacked "adequate controls to detect PHI breaches in a timely fashion."

It is worth noting that 45% of breaches in the survey were caused by loss or theft of medical records and/or equipment holding such records. We have recently seen HHS impose a $1 million fine on Massachusetts General Hospital in a case where, it seems, records were lost by an employee due to a simple mistake and with no malice. UCLA Health System also paid a high price for its employees' snooping into medical records of celebrities.

While it is difficult to anticipate or avoid all possible human error, certain best practices - including Board and executive-level support for privacy initiatives, staff training and updated privacy and security policies and procedures, will go a long way to help your organization protect itself from a disastrous and costly data breach.

"Insiders responsible for majority of privacy breaches, survey finds," Healthcare IT News (August 30, 2011).

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The HIT Policy Committee, which advises the Office of the National Coordinator for Health IT in the Department of Health and Human Services, voted 12-5 to approve a significant delay in requiring providers to meet Stage 2 Meaningful Use until 2014.  If finalized by CMS, such delay would be a welcome relief to those providers who qualified for Stage 1 Meaningful Use in 2011 (and therefore would have only a few months to commence Stage 2 Meaningful Use under the current rule).

Via Government Health IT:

The delay is among the stage 2 recommendations that the Health IT Policy Committee approved at its meeting June 8 by an overwhelming vote of 12 to 5.

The original 2013 timeframe does not give vendors enough time to design, develop, and test new functionality and providers to deploy it and report measures for one year, said Dr. Paul Tang, vice chair of the Health IT Policy Committee and chair of its meaningful use work group.

“The only group that would be affected is the early entrants who qualify for stage 1 in 2011 who get put into a bit of predicament in an unintended way,” he said. Tang is also chief medical information officer at the Palo Alto Medical Foundation.

As a result, stage 1 demonstration and attestation would continue through 2013; stage 2 would start in 2014 and stage 3 in 2015. With the revised timing, providers will still receive the same payments as originally planned. Instead of 2013, however, early entrants will have to wait to attest and receive payments for stage 2 in 2014.

You can find and download the Meaningful Use workgroup's recommendations by clicking here.

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According to Healthcareinfosecurity.com, the Office of Civil Rights (OCR) is still working on the final rule regarding the updates to HIPAA and the related HIPAA Privacy and Security Rules mandated by the HITECH Act. Susan McAndrew, deputy director for health information privacy at OCR, stated at a conference in Washington, DC, that such changes will be contained in one omnibus regulation and is expected to be published in a matter of months, if not weeks.

Such omnibus regulation will cover:

• HITECH Act-mandated modifications to the HIPAA privacy, security and enforcement rules. These changes, for example, formalize higher penalties for HIPAA violations and make it clear that business associates must comply with HIPAA. Last December, HHS had indicated in its semi-annual regulatory agenda that the final HIPAA modifications, many of which were issued in preliminary form last year, would be completed by March.
   
• The breach notification rule. An interim final version is already in effect. OCR yanked a proposed final version of the rule last year for further consideration. Some observers speculated that the office may be reconsidering the controversial "harm standard" in the interim final version of the rule, which enables organizations to conduct a risk assessment to determine whether a security incident represents a significant risk of harm and thus merits reporting.
   
• Privacy provisions under the Genetic Information Nondiscrimination Act. These provisions will formalize that using genetic information for insurance underwriting purposes is a privacy violation as well as a non-discrimination violation, McAndrew said.

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HealthNet, a California-based insurer, suffered another major data breach last month. Modern Healthcare reports that HealthNet lost data of almost two million employees, members and healthcare providers, including their medical information, Social Security numbers and other sensitive information. The loss was reportedly caused by a missing server drive from HealthNet's Rancho Cordova, CA data center.  According to the insurance company's press release, HealthNet's IT vendor, IBM, notified HealthNet that it could not locate the drives.

As we noted previously, HealthNet suffered another major data breach in 2009, when the company lost a portable hard drive containing sensitive and protected information on 1.5 million people.  As a result of that breach, HealthNet was sued by then-Connecticut Attorney General Richard Blumenthal, in a first such action under HIPAA, as modified by the HITECH Act.  HealthNet and Connecticut settled this suit in 2010 for $250,000 fine, a $500,000 contingency fund and a corrective action plan aimed at enhancing the security of the data in HealthNet's possession.

In light of HHS stepping up enforcement of HIPAA and HIPAA Privacy and Security Rules, HealthNet will become a likely target of both federal and state investigations; and if such investigations reveal negligence or failure to implement or comply with their own corrective action plan referenced above, the fines could be much more severe than the $250,000 number from the Connecticut settlement in 2010.

This should also serve as a reminder about the importance of requiring IT vendors to indemnify healthcare providers against such losses. If HealthNet's investigation concludes that IBM and/or its personnel were responsible for this loss, the parties will likely look to their existing contracts and BAA to determine whether IBM will reimburse HealthNet for its costs in relation to this breach.

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New York City's Health and Hospital Corporation notified its patients last week of a loss of electronic files containing personal data, including PHI of some 1.7 million people. Electronic files were stolen while the information management company's van was left unlocked and unattended.

This case should serve as a great reminder to:

• check your existing contracts - including Business Associate Agreements - with HIT and health information management vendors, to see if such agreements contain appropriate clauses indemnifying the provider against costs, losses, fines and other expenses incurred as a result of the vendor's loss or improper disclosure of protected personal data, including PHI;

• make sure that same contracts do not impose a cap on vendor's liability in the event of such breach;

• confirm that you have a proper breach response plan in place (which should include, e.g., where applicable, procedures for notifying patients in foreign languages); if not, bring together management, legal, IT and privacy and security offers to develop such a plan as soon as possible; and

• review your policies and procedures with respect to compliance with the HIPAA Privacy and Security Rules, especially as modified by the HITECH Act.

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 Via Healthcare IT News:

The Spending Reduction Act of 2011 (H.R. 408), introduced on January 24 by Rep. Jim Jordan (R-Ohio), seeks to reduce federal spending by $2.5 trillion over the coming decade. As it does so, it singles out many federal programs for elimination.

Section 302 of the bill, titled "REPEAL OF CERTAIN STIMULUS PROVISIONS," states that "effective on the date of the enactment of this Act, subtitles B and C of title II and titles III through VII of division B of the American Recovery and Reinvestment Act of 2009 (Public Law 111-5) are repealed, and the provisions of law amended or repealed by such provisions of division B are restored or revived as if such provisions of division B had not been enacted."

Since the Medicare and Medicaid EHR Incentive Programs set up under the ARRA/HITECH Act of 2009 fall under division B, it would appear that the $27 billion earmarked for disbursement to healthcare providers to spurring EHR adoption would fall on the chopping block were the bill to ever pass.

For good measure, Jordan's Republican Study Committee also decrees that the enacted legislation would "further prohibit any FY 2011 funding from being used to carry out any provision of the Democrat government takeover of health care, or to defend the health care law against any lawsuit challenging any provision of the act.

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A new study by the Ponemon Institute concluded that data breaches cause enormous losses for U.S. hospitals:  on average, over a two-year period, each hospital will incur about $2 million in losses due to data breaches, which results in $12 billion cumulative loss for all U.S. hospitals.

The study also found that:

• Most healthcare organizations experience undetected breaches of patient data due to lack of preparation and staffing. 71% of healthcare organizations reported having inadequate resources, 52% reported having appropriately trained personnel, and 69% reported having insufficient policies and procedures in place to prevent and quickly detect patient data loss; thus leaving such organizations with little or no confidence in their ability to appropriately secure patient records.

• Protecting patient data is not a priority for 70% of hospitals, with 67% reporting having less than 2 staffers dedicated to privacy and security issues.

• 71% do not believe the new federal regulations pursuant to the HITECH Act have significantly changed the management practices of patient records.

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Government Health IT published a column by Steve Fox and yours truly on the critical role Regional Extension Centers (RECs) can and should play in distributing best practices regarding contracting for health IT systems, including EHRs.  Via Government Health IT:

RECs have the potential to serve as a valuable resource, especially for remote and underserved paper-based primary practices. However, RECs could be doing a disservice to physicians by failing to advise or provide them with essential EMR contract negotiation skills.

With HITECH Act incentives expiring in just a few years, healthcare providers will likely get only one chance to qualify for the full amount of the incentive payments. Thus, successful implementation and operation of an EMR system by the selected health IT vendor becomes critical to each healthcare organization trying to achieve “meaningful use” and take advantage of the incentive program.

In this environment, strong and effective contracts between healthcare providers and health IT vendors is especially significant, because such agreements can provide adequate protections, safeguards and other rights for the provider-customer, in the event a vendor defaults or otherwise fails to perform to the provider’s satisfaction.

You can read the full column by clicking here.

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Our own Steve Fox was interviewed by InformationWeek regarding the essential protections healthcare providers should include in their EHR contracts with health IT  vendors.  In particular, Steve warned providers against simply accepting vendor agreements without carefully reviewing and negotiating the key provision therein. Via InformationWeek:

"Many health IT vendors offer online contacts that prompt the physician to click the 'agree' button. Unfortunately some of these agreements have no warranties and in fact disclaim many standard warranties, so the vendors are selling their products 'as is,' which means if something goes wrong they are not responsible," Fox told InformationWeek after his presentation. "Some contracts even go further and say if a third party, for example the patient, would sue as a result of a problem with the EHR, the physician has to indemnify and defend the vendor even if it was the vendor that caused the problem."

You can read more after the jump, or by clicking here.

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CMS launched a very useful Web site, http://www.cms.gov/EHRIncentiveprograms, providing an overview of the Medicaid and Medicare incentive payment programs established by the HITECH Act.  The site provides up-to-date, detailed information and many important links and "fact sheets" about the incentive programs, including overviews of CMS's final rule on meaningful use, the scope of the incentives program, and a Frequently Asked Questions section.  

It is definitely worth saving or bookmarking this site, so that you can check back in easily for regular updates.

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On August 19, 2009, pursuant to the HITECH Act, the Department of Health and Human Services (HHS) published the interim final regulations regarding breach notification requirements for health care providers and other entities covered by HIPAA. The rule became effective on September 23, 2009. 

During the 60 day public comment period, HHS received 120 comments, after which HHS developed a final rule and submitted it to the Office of Management and Budget for regulatory review on May 14, 2010.  However, on July 27, 2010, HHS issued a statement that they are withdrawing the final rule from OMB:

HHS is withdrawing the breach notification final rule from OMB review to allow for further consideration, given the Department’s experience to date in administering the regulations. This is a complex issue and the Administration is committed to ensuring that individuals’ health information is secured to the extent possible to avoid unauthorized uses and disclosures, and that individuals are appropriately notified when incidents do occur. We intend to publish a final rule in the Federal Register in the coming months.

HHS's withdrawal remains a bit of mystery.  However, Post & Schell's Ed Shay has a couple of thoughts, which you can read after the jump.

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On July 13, 2010, CMS issued the final rule defining "meaningful use" and establishing the parameters and requirements for eligible professionals, hospitals and other providers to receive incentive payments provided under the HITECH Act for widespread adoption of electronic health records.  According to CMS, the key changes included in the final rule (from the meaningful use NPRM published in the Federal Register on January 13, 2010) include:

• Greater flexibility with respect to eligible professionals and hospitals in meeting and reporting certain objectives for demonstrating meaningful use. The final rule divides the objectives into a “core” group of required objectives and a “menu set” of procedures from which providers may choose any five to defer in 2011-2012. This gives providers latitude to pick their own path toward full EHR implementation and meaningful use.
• An objective of providing condition-specific patient education resources for both EPs and eligible hospitals and the objective of recording advance directives for eligible hospitals, in line with recommendations from the Health Information Technology Policy Committee.
• A definition of a hospital-based EP as one who performs substantially all of his or her services in an inpatient hospital setting or emergency room only, which conforms to the Continuing Extension Act of 2010
• CAHs within the definition of acute care hospital for the purpose of incentive program eligibility under Medicaid.

You can view the PDF of the final rule on Meaningful Use by clicking here.

You can learn more about it from the HHS press release by clicking here.  Also, the New England Journal of Medicine published an excellent summary by Dr. Blumenthal of the changes included in the final rule; you can find this article by clicking here.

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On July 7, 2010, HHS issued a notice of proposed rule making (NPRM) regarding the changes to the HIPAA Privacy, Security and Enforcement Rules, as provided in the HITECH Act, in order "to strengthen the privacy and security protections for health information and to improve the workability and effectiveness of the HIPAA Rules."  Via HHS Press Release:

The proposed modifications to the HIPAA Rules include provisions extending the applicability of certain of the Privacy and Security Rules’ requirements to the business associates of covered entities, establishing new limitations on the use and disclosure of protected health information for marketing and fundraising purposes, prohibiting the sale of protected health information, and expanding individuals’ rights to access their information and to obtain restrictions on certain disclosures of protected health information to health plans. In addition, the proposed rule adopts provisions designed to strengthen and expand HIPAA’s enforcement provisions.

You can view the NPRM by clicking here.

"Notice of Proposed Rulemaking to Implement HITECH Act Modifications," HHS Press Release (July 7, 2010).

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Lincoln Medical and Mental Health Center (LMMHC) in New York suffered a major breach affecting 130,495 of its patients, according to a notice provided to HHS.  The breach occurred when the hospital's contractor, Siemens Medical Solutions USA, shipped seven password-protected, but not encrypted, CDs containing patient information via FedEx; and these CDs were subsequently lost in transit.  Via Bloomberg Business Week:

The CDs were sent by the hospital's billing processor, Siemens Medical Solutions USA, around March 16, but never arrived at their intended destination. They included sensitive health and personal information including Social Security numbers, addresses, dates of birth, health plan numbers, driver's license numbers and even descriptions of medical procedures, the hospital said on a note posted to its Web site.

<...> Siemens is no longer FedExing CDs to Lincoln, the hospital said. It is not aware of any of the data being improperly accessed.

LMMHC's breach should serve as a reminder for all healthcare providers currently negotiating health IT contracts to include proper protections in the event its vendor causes a breach or loss of protected data.  This is particularly crucial in the post-HITECH Act era.  

We always include specific compliance with privacy laws warranties, indemnification clauses and limitation of liability carve-outs for vendor's own negligent acts or omissions which result in a data breach or loss.  LMMHC's example clearly illustrates that providers must insist on such protections -- often, over strenuous objections from vendors -- because, otherwise, providers may be exposed to a wide range of expenses and damages from third-party claims, fines, investigations and breach notification associated with a data breach or loss resulting from vendor's actions.

For more information, please listen to or view the slides from our Webinar on negotiating "must-have" provisions in HIT contracts.

"New York hospital loses data on 130,000 via FedEx," Bloomberg Business Week (June 29, 2010).

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As required in the Patient Protection and Affordable Care Act (PPACA), Center for Medicare and Medicaid Services (CMS) announced this week that it plans to integrate the quality reporting requirements for physicians' Medicare payments with reporting requirements for healthcare providers who achieve meaningful use under the HITECH Act.  Via Healthcare IT News:

Under the Physician Quality Reporting Initiative (PQRI), physicians who participate in Medicare can receive incentives for reporting various quality measures, a select number of which are aimed at those who want to report using EHRs.

Providers who become meaningful users of EHRs, as laid down by the American Recovery and Reinvestment Act (ARRA), will also be eligible for incentive payments. A final rule on that is expected soon.

CMS has requested public comment on how it should integrate the two programs, included within a proposed rule about changes in Medicare physician payments for 2011 CMS expects to publish the proposed rule July 13.

"In an effort to align PQRI with the EHR incentive program, we propose to include many ARRA core clinical quality measures in the PQRI program, to demonstrate meaningful use of EHR and quality of care furnished to individuals," the proposed rule says.

Meaningful use measures that physicians could use for PQRI reporting through electronic health records include such things as blood pressure measurement for hypertension, body mass index screening and prevention care follow up, and drugs to be avoided in the elderly, according to CMS.

You can find a copy of the proposed rule here.

"CMS to two align quality reporting programs," Healthcare IT News (June 29, 2010).

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The number of reported health information breaches is growing rapidly: 32 breaches were reported on the OCR web site from September 2009 to February 2010, but the number almost tripled, to 93 breaches, by June 11, 2010.  Such significant increases in reported breaches may be attributed to the notification and reporting requirements in the HITECH Act, which went into effect this year.  We cannot possibly report or list all of the relevant breaches, but we would like to highlight a few important ones:

• On May 28, 2010, Cincinnati.com reported that “Cincinnati Children's Hospital Medical Center is beefing up its computer security after a laptop computer containing more than 61,000 patient records was stolen.”  Information lost included not only PHI, but also Social Security numbers and even credit card data.  The records on the laptop were password protected, but they were not encrypted.  The hospital reported the breach, hired a consulting company to deal with same, and offered affected individuals ID theft protection at no charge.  The cost of this breach has already been extremely high, but it could be even higher if credit card companies go after Children's Hospital for losses associated with loss of improperly stored credit card information. 

• Five hospitals in California were fined a combined total of $675,000 by the California Department of Public Health for patient privacy violations, failing to prevent unauthorized access to confidential patient medical information of 245 patients, which were improperly accessed by a total of 32 employees.  On June 10, 2010, Press-Enterprise reported that the Community Hospital of San Bernardino was fined by the state of California a total of $325,000 for breaches of more than 200 patient records by two employees in 2009.  Violations were significant, but, considering the fine, far from gruesome.

Please click here to read more.

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On June 7, 2010, Maryland's Lt. Governor Anthony Brown announced that the Office of National Coordinator for Health IT approved Maryland's State Health IT plan, allowing the state to move forward to implement a functional health information exchange (HIE).  According to the Washington Business Journal, ONC will release $25 million in ARRA funds to Maryland, to be used in connection with the state's HIE:

Proponents of the exchange say it will cut costs and improve health care quality by streamlining the transfer of electronic health data between hospitals, physicians and patients.

The Chesapeake Regional Information System for our Patients, the nonprofit tasked with implementing the exchange, has already begun work with $10 million in state money. The federal approval leaves the plan's funding "fully unrestricted," said CRISP Program Director Scott Afzal, allowing them to broaden the goals of the exchange and engage more hospitals. Much of their work lies in finding health care providers to sign on to the exchange when there is no state or federal legal requirement to do so, according to Afzal.

'We have to show a value proposition to connect,' he said.

The project is estimated to cost roughly $20 million, although it will be scoped to available funding.

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Allscripts and Eclipsys announced a $1.3 billion merger, which some analysts tout as a match "made in heaven" due to Allscripts's strength in the ambulatory space and Eclipsys's strength on the acute side.  The merger is expected to be completed in four to six months; the combined company will have around 5,500 employees.  The merger will also pose some challenges for the combined entity, with some customers worrying that the merger will distract management from dealing with existing issues.  However, analysts believe that Allscripts's smooth merger with Misys in 2008 is a good sign that this merger with Eclipsys will succeed.

Both companies are looking to capitalize on the projected exponential growth in adoption of health IT, in part due to the incentives created by ARRA.  According to the Congressional Budget Office, adoption of electronic health records by physician practices is expected to increase from 12% in 2011 to 90% by 2019. 

This merger is yet another sign of future consolidation in the healthcare industry, both on the vendor side, and on the provider side, as enterprises try to minimize costs and maximize revenue in the ever-changing and often uncertain business environment.

"Allscripts-Eclipsys: 'A match made in heaven' - mostly," Healthcare IT News (June 10, 2010).

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A new survey by the Ponemon Institute, an organization dedicated to advancing responsible information and privacy management practices, found that almost all surveyed organizations did not substantially comply with HIPAA, including as modified by the HITECH Act.  The survey was conducted in November 2009, but, according to Ponemon, the results are not supposed to have changed much. 

Ponemon Institute's survey of 77 healthcare organizations, including 42 covered entities and 35 business associates, found (via BNA):

• 27 percent of the health care organizations had not started and were “barely aware” of what was required;
• 32 percent of the organizations were waiting for more details;
• 14 percent of organizations surveyed had a plan but were waiting for more details on the requirements;
• 21 percent of the organizations surveyed were just beginning to act on becoming compliant;
• 79 percent of organizations do not regularly have the required independent assessment or audit of their program to determine adequacy; and
• 57 percent reported having known deficiencies for privacy or security.

You can find the full survey here.

"Study Finds Majority of Health Care Entities Not Compliant with HIPAA, HITECH Provisions," BNA Health IT Law & Industry Report (May 24, 2010).

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According to Health Data Management, Susan McAndrew, deputy director for privacy at the Department of Health and Human Services’ Office for Civil Rights (OCR) announced at a recent conference that OCR added investigators to 10 regional offices in order to boost enforcement of HIPAA privacy and security rules. 

On August 3, 2009, HHS Secretary Kathleen Sebelius transferred the responsibility for HIPAA Security Rule enforcement from CMS to OCR, which is now tasked with enforcement of both the HIPAA Security Rule and the HIPAA Privacy Rule.

While the transition from CMS to OCR "took longer than expected," Ms. McAndrew believes that OCR is finally in a position to increase enforcement efforts in order to realize the privacy and security initiatives enacted last year pursuant to the HITECH Act.

We’re hoping to move security to the forefront and make it a real partner with privacy in our enforcement... [and] that with additional feet on the ground, we’ll be able to do many more security cases as the year moves forward.

"OCR Boosting Security Enforcement," Health Data Management (May 12, 2010).

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Courtesy of the American Health Lawyers Association:

On April 15, 2010, President Barack Obama signed into law the "Continuing Extension Act of 2010" (Public Law 111-157). Section 5 of the Act contains "EHR Clarification" provisions which amend the definition of "hospital based eligible professional" that was created under the American Recovery and Reinvestment Act of 2009 (ARRA). As background, ARRA created incentives for the adoption and meaningful use of certified electronic health record (EHR) technology. However, the ARRA additions to the Social Security Act (42 U.S.C. 1395w-4) contained a limitation providing, in part, that no incentive payments would be made for these hospital-based eligible professionals.

This term was originally defined to include any professional who furnishes substantially all of the relevant services in a hospital "setting (whether inpatient or outpatient)."1 The new EHR Clarification provisions amend the ARRA definition/exclusion to only apply to a professional who furnishes substantially all of the relevant services in a hospital "in-patient or emergency room setting."2 The effect of this amended definition is that physicians practicing in an outpatient hospital setting are not excluded from and are now eligible to participate in the ARRA Medicare/Medicaid incentive programs.

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HealthImaging.com reported yesterday that a Connecticut radiologist, previously affiliated with the Griffin Hospital in Derby, Conn. "accessed patient radiology reports on the hospital's PACS using the passwords of other radiologists and an employee within the radiology department. The passwords were obtained and/or used without their knowledge." From HealthImaging.com:

From the investigation conducted by Griffin, it appears the radiologist who gained unauthorized access scanned the PACS directory listings of 957 patients who had radiology studies performed at Griffin during the period and selected and downloaded the image files of 339 of these patients.

On and after Feb. 26, Griffin received inquiries on behalf of patients regarding unsolicited contact by the physician who offered to perform professional services at another area hospital despite the patients' interest in having those services provided at Griffin. The inquiries prompted the investigation that revealed unauthorized intrusions into Griffin's PACS and, thereby, the breach of protected patient health information.

This should serve as a reminder for healthcare providers regarding maintaining the safeguards necessary to prevent wrongful access to patient data.  For example, and there is no indication that this is what occurred in this case, clinicians and other hospital staff should not keep their system passwords on sticky notes next to or on their monitors.  Even if you believe that everyone in your office is fully trustworthy, you never know who can get a hold of such restricted information as usernames and passwords.  The reputational and financial damage to your organization could be very substantial; and your contract with the PACS system vendor is unlikely to indemnify or protect you from such losses.

"Radiologist breaches data, images of nearly 1,000 patients via PACS," HealthImaging.com (March 31, 2010).

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• Javelin Strategy & Research survey found over 275,000 cases of medical identity theft in 2009, with an average price tag greater than $12,000 per incident.  This is twice as many cases as in 2008.  Keeping health information safe is going to be of paramount importance in the next decade, especially considering the steep rise in use of electronic health records. According to Computerworld.com (citing a study by IDC, a research firm), "about a quarter of all Americans -- 77 million people -- already have an EHR, up from 14% from in 2009." By 2015, experts believe the number will reach up to 60%, partially due to the transformation of the health IT industry by the HITECH Act.

• In its comments to CMS regarding the meaningful use NPRM, College of Healthcare Information Management Executives (CHIME) insisted that the present "all or nothing" approach to achieving meaningful use is going to prevent significant numbers of eligible providers from receiving any incentive payments under the HITECH Act.  According to American Medical News:

Among CHIME's suggestions: a gradual implementation process that would allow physicians to qualify for incentives by achieving 25% of meaningful use objectives by 2011, 50% by 2013, 75% by 2015, and 100% by 2017.

'Without an approach that rewards progress or provides sufficient time, organizations with limited resources will likely have little chance of qualifying for payments, thus widening the 'digital divide' in the country,' CHIME wrote.

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Last Thursday, March 18, 2010, from 1:00PM to 2:00PM (EDT), Post & Schell hosted the second webinar in a series examining the effects of meaningful use and other HITECH Act regulations on the healthcare industry. 

The webinar focused on identifying and negotiating the essential elements of HIT agreements, particularly in light of the HITECH Act and related HHS regulations regarding "meaningful use" of "certified EHR technology." Post & Schell's Steve Fox and Vadim Schick, along with Jim Oakes, Principal at Health Care Information Consultants, discussed:

• Warranty, limitation of liability and privacy and security provisions in HIT contracts
• Structuring payments to correspond with certain achievement milestones
• Acceptance testing procedures
• Provisions specific to vendor-financing transactions
• ASP / SaaS models of software licensing

If you missed the presentation, you can listen to the podcast here. You can also view the slides from our presentation here.

This webinar was the second in a series devoted to structuring vendor-provider agreements in the post-HITECH Act world. If you missed our first webinar, A Lawyer's Take on "Meaningful Use," you can still view the slides from that presentation here.

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In a much-anticipated move, the Office of Civil Rights (OCR) within the Department of Health and Human Services has issued an update regarding delays of certain HITECH provisions, while confirming enforcement of others.  Via OCR press release:

OCR will implement important privacy and security provisions of the Health Information Technology for Economic and Clinical Health (HITECH) Act through notice and comment rulemaking, as required by the Administrative Procedure Act. These provisions include: business associate liability; new limitations on the sale of protected health information, marketing, and fundraising communications; and stronger individual rights to access electronic medical records and restrict the disclosure of certain information. OCR continues work on a Notice of Proposed Rulemaking (NPRM) regarding these provisions. Although the effective date (February 17, 2010) for many of these HITECH Act provisions has passed, the NPRM and the final rule that follows will provide specific information regarding the expected date of compliance and enforcement of these new requirements.

However, interim final rules implementing HITECH Act provisions in two areas have already been issued and are currently in effect: enforcement and breach notification. New civil money penalty amounts apply to HIPAA Privacy and Security Rule violations occurring after February 17, 2009. Covered entities and business associates must comply now with breach notification obligations for breaches that are discovered on or after September 23, 2009. OCR announced previously that it would use its enforcement discretion not to impose fiscal sanctions with regard to breaches discovered before February 22, 2010. Since that date has passed, OCR will enforce the Breach Notification Interim Final Rule, including with the possible imposition of sanctions, as it does with the HIPAA Privacy and Security Rule requirements.

You can find about more here.

"HITECH Act Rulemaking and Implementation Update," OCR Press Release (March 18, 2010).

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As if foreshadowing our upcoming webinar on negotiating EHR license agreements in the post-HITECH world, For the Record interviewed our own Steve Fox on this very subject in its February 15, 2010 cover story:

Steve Fox, senior partner and chair of the IT group at the law firm Post & Schell, says such strategies will be critical to an implementation’s ultimate success. For instance, he says vendors’ guarantees that their platform will meet meaningful use thresholds should be discounted.

“I’d be surprised if [satisfying] the final regulations will be achieved by a vendor doing anything,” he says. “Ultimately, it will be up to individual physicians’ offices or provider organization to achieve meaningful use, and in order to do it, they will need that vendor’s help. I have to laugh when I see those guarantees, ‘If you buy our product, you’ll achieve meaningful use,’ because nobody can make that claim. On the other hand, the failure of the vendor’s product can cause you to fail to achieve meaningful use. That’s why it is so important that you have tight provisions in the contract saying that whatever you want that vendor’s product to achieve, it will meet those particular objectives.

“Many vendors use the phrase ‘We don’t know what we don’t know’ as a way to say they can’t try to comply with future regulations, but our position is if you are in the HIT arena, you have to agree up front to comply with whatever they are,” he adds.

 

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On Thursday, March 18, 2010, from 1:00PM to 2:00PM (EDT), Post & Schell will host the next webinar in a series examining the effects of meaningful use and other HITECH Act regulations on the healthcare industry. 

This webinar will focus on identifying and negotiating the essential elements of HIT agreements, particularly in light of the HITECH Act and related HHS regulations regarding "meaningful use" of "certified EHR technology." Post & Schell's Steve Fox and Vadim Schick, along with Jim Oakes, Principal at Health Care Information Consultants, will discuss:

• Warranty, limitation of liability and privacy and security provisions in HIT contracts
• Structuring payments to correspond with certain achievement milestones
• Acceptance testing procedures
• Provisions specific to vendor-financing transactions
• ASP / SaaS models of software licensing

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

This webinar is second in a series devoted to structuring vendor-provider agreements in the post-HITECH Act world. If you missed our first webinar, A Lawyer's Take on "Meaningful Use," you can still view the slides from that presentation here.

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As of February 22, 2010, HHS is expected to begin enforcing the new breach notification requirements created by the privacy and security provisions within the HITECH Act.  Although such requirements went into effect last fall, HHS gave covered entities and business associates a few months to adapt to the new rules.  That enforcement delay is now over, and, perhaps in a related move, on February 23, 2010, HHS's Office of Civil Rights, pursuant to the HITECH Act, posted a list of organizations which reported breaches of unsecured protected health information affecting 500 or more individuals on OCR's web site.  This should serve as a good reminder to providers and HIT vendors alike to be keenly aware of the new regulations on breach notification.

The HITECH Act required a covered entity that “accesses, maintains, retains, modifies, records, stores, destroys, or otherwise holds, uses, or discloses unsecured protected health information” to notify each individual “whose unsecured protected health information has been, or is reasonably believed by the covered entity to have been, accessed, acquired, or disclosed” due to the breach.  Business associates who discover a breach must notify the covered entity. 

By regulation published in the Federal Register on August 24, 2009, HHS added a rather controversial  "harm threshold" to this requirement:  covered entities and business associates are required to notify the affected individual, the HHS, and, in some cases, the media, if such breach poses a significant risk of harm to the individual.  This "harm threshold" essentially requires the organization which discovers a breach to undergo a risk assessment test to determine whether a breach would cause "significant harm" to the affected person.

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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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Joy Pritts, a researcher and faculty member at Georgetown University's Health Policy Institute, was named as the first Chief Privacy Officer for the Office of National Coordinator for Health IT.  This position was created pursuant to a provision in ARRA, last year's economic stimulus legislation.

In her new position, Ms. Pritts will advise Dr. Blumenthal on forming policies on privacy, security and data stewardship of electronic health information, as well as coordinate similar efforts on state, federal and international levels.

Ms. Pritts is a graduate of Oberlin College and Case Western Reserve University School of Law.  She has testified before Congress on data privacy issues, and served as a member of Technical Advisory Panel for the multi-state Health Information Security and Privacy Collaborative (HISPC) and on the board of the National Governors Association’s State Alliance for e-Health.

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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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There is little doubt that the healthcare industry must prepare for a growing number of - and expanding costs associated with - data breaches, particularly for breaches of protected health information.  Here are just a few notable reports on this subject:

• Infosecurity.com reported on a striking increase in attempts to hack into healthcare organizations, while the rate of hacking in other economic sectors remained flat:  "the last quarter of [2009] saw an average of 13 400 attempts to hack healthcare organizations, compared to an average of 6,500 in the first nine months."  According to researchers at SecureWorks, which produced the graph above, healthcare organizations are particularly vulnerable to such attacks because they "have to provide access to many external networks and web applications so as to stay connected with their patients, employees, insurers and business partners. This increases their risk to cyber attacks."

• Cnet News reported on similar findings by the Ponemon Institute, whose survey concluded that "Data breaches at U.S. companies attributed to malicious attacks and botnets doubled from 2008 to 2009 and cost substantially more than breaches caused by human negligence or system glitches."  The cost per compromised record involving a criminal act averaged $215, about 40% higher than breaches from negligence and 30% higher than those from glitches, the Ponemon survey found.

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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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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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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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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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On September 15, 2009, the HIT Standards Committee endorsed a set of privacy and security standards for electronic health record systems. 
These standards will be recommended to Dr. David Blumenthal, the National Coordinator for Health Information Technology, as a basis for establishing the privacy and security criteria for, inter alia, "certified EHR technology" as defined under the HITECH Act.  Eligible healthcare providers must meet the criteria for "meaningful use" of "certified EHR technology" in order to qualify for significant incentives available under the HITECH Act.

The committee’s Privacy and Security Workgroup included access control, authentication, authorization and transmission of health data among the requirements that electronic health record systems must include by 2011 in order to meet the definition of "certified EHR technology."   Specifically for 2011, the Standards Committee approved the Workgroup's recommendation to require certified products to provide the capabilities necessary to support the HIPAA and ARRA security and privacy requirements and best practices for “meaningful use.”  The endorsed privacy and security standards will become more rigorous in 2013 and 2015.

You can find the spreadsheet of endorsed privacy and security standards here.

You can also view the presentation from the Workgroup here.

"Federal panel okays EHR security, privacy standards," Government Health IT (September 15, 2009).

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On August 19, 2009, pursuant to the HITECH Act, the Department of Health and Human Services (HHS) published the interim final regulations regarding breach notification requirements for health care providers and other entities covered by HIPAA. 

According to the HHS press release:

The regulations, developed by the HHS Office for Civil Rights (OCR), require health care providers and other HIPAA covered entities to promptly notify affected individuals of a breach, as well as the HHS Secretary and the media in cases where a breach affects more than 500 individuals. Breaches affecting fewer than 500 individuals will be reported to the HHS Secretary on an annual basis. The regulations also require business associates of covered entities to notify the covered entity of breaches at or by the business associate.

You can find the text of the regulation here.

Stay tuned for more analysis of this important set of regulations on this blog. The interim final regulations are effective 30 days after publication in the Federal Register and include a 60-day public comment period. 

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Via Government Health IT:

The federal Health IT Policy Committee today endorsed recommendations that would leave the Certification Commission for Health IT in the short term as the sole organization authorized to certify health IT systems that qualified for funding under the economic stimulus plan. More certifying organizations would be added later.

Certification of electronic health record systems that met federal criteria for “meaningful use” of health IT could start as early as October, members of the Department of Health and Human Services’ Health IT Policy Committee said at the August 14th meeting.

Under the plan, CCHIT would provide a preliminary stamp of approval that health IT systems were HHS-qualified or certified until a final meaningful use regulation is published at the end of the year, said Marc Probst, chief information office of Intermountain Healthcare and co-chairman of the Committee’s certification work group.

Preliminary certification is meant to give providers and vendors enough certainty to proceed with planning, designing and purchasing systems in 2010. The HHS certification-qualification would mean that a provider purchasing the systems would be eligible for Medicare and Medicaid incentive payments under the stimulus law beginning in 2011.

"CCHIT will be sole health IT certifier, for now," Government Health IT (August 14, 2009).

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The State of Maryland awarded $10 million to support the Chesapeake Regional Information System for our Patients (CRISP), a newly created health information technology exchange organization.  Some of  the biggest players in Maryland's health care industry, including Johns Hopkins, MedStar and the University of Maryland Medical System are going to participate in CRISP. 

According to the Baltimore Business Journal:

Funding will come from the hospitals that will receive a slight increase in the prices they can charge patients and federal stimulus money.

The news comes as health care officials and lawmakers champion electronic medical records as a way of reducing health care costs. They argue that electronic medical records will reduce costs by hopefully eliminating unnecessary tests and reducing errors by allowing doctors to quickly access patients’ medical records.

State health insurers plan to provide incentives to hospitals, which include a lump sum payment or increased reimbursement, to adopt electronic health records.

"Maryland awards $10M for health IT exchange," Baltimore Business Journal (August 5, 2009).

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The New York Times reported on Americans' growing concern regarding commercial use of their personal health information, especially the use of re-identified prescription drugs information for marketing purposes.  

The article points out correctly that the Recovery Act of 2009 (ARRA) included a few key changes to the present privacy regime, which would make it more difficult for pharmacies and data mining companies to use patient information for marketing or fundraising purposes.  While the new law (and the upcoming applicable HHS regulations sanctioned by ARRA) will close a few loopholes in the current medical privacy regime, data mining companies like IMS Health and Verispan do not seem to be overly worried about these new developments:

The law won’t shut down the medical data mining industry, but there will be more restrictions on using private information without patients’ consent and penalties for civil violations will be increased. Government agencies are still writing new regulations called for in the law.  <...>

IMS Health reported operating revenue of $1.05 billion in the first half of 2009, down 10.6 percent from the period a year earlier. [An IMS representative] said he did not expect growing awareness of privacy issues to affect the business.

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The New York Times reported today on the growing threat posed to patients and consumers by medical identity theft.  The article rightfully notes that this threat may only become more prominent with the widespread adoption of electronic health records technology championed by the Obama Administration. 

According to the Times, over 250,000 Americans are victims of medical identity theft each year, and this number does not include those who are not yet aware that they are victims of such identity theft.  The article profiled one case of medical identity theft, that of Brandon Sharp, a 37-year-old manager at an oil and gas company in Houston:

In Mr. Sharp’s case, someone got hold of his name and Social Security number and used them to receive emergency medical services, which many hospitals are obliged to provide whether or not a person has insurance. Mr. Sharp still does not know whether he fell victim to one calamitous perp who ended up in several emergency rooms or a ring of accident-prone conspirators.

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Healthcare IT News reports that a new study projects that the market for electronic health records related equipment and software will reach $1.6 billion in 2013, which is almost three times more than last year's value.  EHR market was estimated at $575 million in 2008.  ARRA is, of course, the main reason for such a steady rise in market value:

Driven by the growing use of EMRs in hospitals and physician offices, this segment of the patient monitoring market will grow 23.3 percent annually through 2013, notes the report, "High-Tech Patient Monitoring Systems Markets (Remote and Wireless Systems, Data Processing, EMR Data Transfer)."

Increased use of EMRs and high-tech patient monitoring systems is a key piece of President Barack Obama's plan to fix the ailing healthcare system, the report notes, because they have the potential to improve patient outcomes and satisfaction, provide cost savings and more efficient use of healthcare resources and reduce hospitalizations.

Full article here.

"Market for EMRs pegged at $1.6 billion by 2013", Healthcare IT News (June 4, 2009).

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The National Committee on Vital and Health Statistics (NCVHS) held a public meeting on April 28-29, 2009 in Washington, DC to help define and clarify the term “meaningful use” with respect to such term's use under the HITECH Act.  

NCVHS provided a summary report of  "the themes elaborated upon by the over 100 stakeholders who provided oral and written testimony" during the hearing.  The report is merely a digest of testimony, and does not include commentary or recommendations from NCVHS.

You can find the full report here.

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On May 19, 2009, Governor O'Malley of Maryland signed into law a bill requiring private insurance companies to offer healthcare providers financial incentives to adopt healthcare information technology (HIT), while establishing penalties for those providers who do not bring an electronic medical records system on line by 2015.  According to the Baltimore Sun,

The stimulus money went to Medicare and Medicaid, which are to give it to doctors who adopt electronic medical records. But because Medicare and Medicaid account for less than half of payments to many providers, state Health Secretary John Colmers said, private insurers are now being enlisted to add incentive, beginning in 2011.

The bill allows insurers to choose among several forms of inducement - increased reimbursements, lump-sum payments or in-kind services - so long as it has a monetary value.

"The goal here in Maryland was to assure that all of the payers pull their oars in the same direction," Colmers said. "There is a great promise in electronic health records, but the greatest promise comes when it's done in a coordinated fashion, across all of the payers.

The new law also requires Maryland to develop "a health information exchange, a computer network that would link all of Maryland's physicians, hospitals, medical laboratories and pharmacies. It could be linked with those of other states to create [a] national network."

"Bill pushes doctors to computerize records", The Baltimore Sun, May 19, 2009.

Maryland General Assembly HB706 "Electronic Health Records - Regulation and Reimbursement"

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On May 15, 2009, the U.S. Department of Health and Human Services (HHS) released Recovery Act implementation plans:

HHS is moving quickly and carefully to award Recovery Act funds in an open and transparent manner that will achieve the objectives of each ARRA program. Implementation plans provide detailed information regarding the goals, funding, contracts competition, contract type, and accountability mechanisms.

HHS and the Office of National Coordinator for Health IT (ONC) released two such implementation plans aimed specifically at accelerating the adoption of health information technology pursuant to the HITECH Act:  the Recovery Act Implementation Plan for Medicare and Medicaid incentives, and the accompanying Implementation Plan from the ONC.

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The Washington Post provides an interesting behind-the-scenes account of how the funds for electronic health records adoption were included into the American Recovery and Reinvestment Act of 2009, commonly known as the stimulus bill.  Health Information and Management System Society (HIMSS) played a crucial role in this lobbying effort.  According to the Post:

[HIMSS] had worked closely with technology vendors, researchers and other allies in a sophisticated, decade-long campaign to shape public opinion and win over Washington's political machinery.

You can read the whole article here.

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Steve Fox was interviewed in this month's Cover Story "The Big Push", in For the Record, a biweekly  magazine for health information management professionals, regarding the incentives and challenges of EHR adoption.  On incentives included in the HITECH Act, Steve argued that:

“it’s almost crazy not to adopt EHRs because we’re talking about a significant amount of money ... From my discussions with hospitals and other physicians, the consensus seems to be that leaving that large sum on the table would just be foolish. Some hospitals I’ve spoken with are anticipating this will bring in millions.”

Steve also identified interoperability as a crucial goal for EHR systems:

“Trying to encourage not just adoption of EHRs but having them all interconnected is definitely the next step and perhaps even the definition of success in the end ... Hospitals need to be connected with one another or the EHRs are not being used to their full potential. Take Philadelphia, for instance. There are a lot of hospitals there but almost no connectivity among them. If a patient has his records at one hospital but gets taken to a different hospital, there’s no way to access his records, even if they do have an EHR in place.”

You can read the full article here.

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From HHS:

On April 17, 2009, HHS issued guidance specifying the technologies and methodologies that render protected health information unusable, unreadable, or indecipherable to unauthorized individuals, as required by the Health Information Technology for Economic and Clinical Health (HITECH) Act passed as part of American Recovery and Reinvestment Act of 2009 (ARRA). This guidance was developed through a joint effort by OCR, the Office of the National Coordinator for Health Information Technology (ONC), and the Centers for Medicare and Medicaid Services (CMS).

This guidance relates to two forthcoming breach notification regulations – one to be issued by HHS for covered entities and their business associates under the Health Insurance Portability and Accountability Act of 1996 (HIPAA) (Sec. 13402 of HITECH) and one to be issued by the Federal Trade Commission (FTC) for vendors of personal health records and other non-HIPAA covered entities (Sec. 13407 of HITECH). HITECH requires these regulations to be published within 180 days of enactment. If the entities subject to the regulations apply the technologies and methodologies specified in the guidance to secure information, they will not be required to provide the notifications required by the regulations in the event the information is breached.

The Guidance can be viewed (in PDF) here.

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Healthcare Informatics Editor-in-Chief Anthony Guerra recently talked with our own Steve Fox and fellow Post & Schell partner Edward Shay about the substance of the HITECH Act and what this new legislation means for healthcare providers. The interview appears under the "Online Exclusives" section of the Healthcare Informatics Web site.

Healthcare Informatics recently published Part III and Part IV of the interview on its Web site.

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• After what has become a rather typical breach of patient privacy for Southern California, Kaiser Permanente fired fifteen employees (and disciplined eight additional employees) for looking at the medical records of Nadya Suleman, the mother of octuplets commonly referred to as "Octomom".  Previously, similar breaches occurred at UCLA when that medical center's staff leaked celebrities' medical records to the tabloids.  (MercuryNews.com, via AP, March 30, 2009.)
• Wall Street Journal reported last week that HIT stocks, especially smaller companies, like eClinicalWorks (which provide the software component of Wal-Mart's new EHR package) will benefit greatly from the billions of dollars in HIT funding included in the stimulus bill.  Also, in another sure sign of a growing industry, Quality Systems, the maker of the NextGen EHR software, is "beefing up its sales force." ("Stimulus Funds for E-Records Augur Big Windfall for Small Health Firms", Wall Street Journal, March 24, 2009.)

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A battle royal rages on among various Harvard physicians about the effects of a widespread adoption of EHR technology.  In a Wall Street Journal op-ed, two Harvard doctors questioned President Obama's claim that nationwide adoption of EHR technology will save the taxpayers as much as $80 billion annually.   Drs. Groopman and Hartzband call on Mr. Obama to "apply real scientific rigor to fix our health-care system rather than rely on elegant exercises in wishful thinking."  

However, three other Harvard physicians, including Geek Doctor John Halamka, published a Letter to the Editor in response to the Groopman/Hartzband Op-Ed, claiming that the latter did not present a full or accurate picture of the positive effects of widespread adoption of EHR technology.  In part, Drs. Halamka, Bates and Middleton claim that:

The electronic health record represents a transformational change in healthcare, and will enable an array of improvements—although it will not necessarily result if implemented badly. The electronic record is to the paper record as the automobile was to the horse and buggy. No one will want to go back.

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Healthcare Informatics Editor-in-Chief Anthony Guerra recently talked with our own Steve Fox and fellow Post & Schell partner Edward Shay about the substance of the HITECH Act and what this new legislation means for healthcare providers.  The interview appears under the "Online Exclusives" section of the Healthcare Informatics Web site. 

In Part I and Part II of the interview, Steve and Ed discuss the incentives for hospitals and physician practices included in the HITECH Act; new regulations to be promulgated by HHS Secretary under this Act; and what actions hospitals and physician practices should be considering at this time in order to qualify for the incentive payments under the Act.

Part III is coming soon, and we will update this entry when it is published on Healthcare-Informatics.com. 
 

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The HITECH Act includes a number of provisions regarding confidentiality, privacy and security of protected health information, which significantly affect both the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and the HIPAA Privacy and Security Rules. The Act provides for different enforcement dates for nearly each of the provisions, but some of them already gone into effect upon ARRA’s enactment on February 17, 2009. Furthermore, the Act mandates the HHS Secretary to promulgate regulations regarding various privacy and security provisions, thereby delaying enforcement until the completion of the rule-making process. Consequently, there is still much uncertainty regarding the new privacy and security regime, as established by this Act.
Some of the most significant changes include:

• New breach notification requirements for covered entities. The Act requires covered entities to notify individuals in writing if their protected health information (PHI) is disclosed, lost or otherwise compromised. The notices must be given within sixty (60) days of discovering the breach; if the breach involves 500 or more individuals, the covered entity must also inform HHS and “prominent media outlets serving a state or a jurisdiction.” There are also “temporary” breach notification requirements for commercial personal health record vendors, such as Google Health, Microsoft Vault and Revolution Health; however, Google Health has claimed that the Act’s provisions do not apply to Google. We will have to await the final regulations to see if they remove any ambiguity in this area.
• Business Associates are now subject to HIPAA. Third-party administrators, health information technology vendors, benefit providers and consultants are now directly subject to certain specified HIPAA privacy and security rules and regulations. (Please note that this change in particular may require a review of existing Business Associate Agreements as well as revision of any new BAA's entered into.)

MORE after the jump.

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HHS may award grants to eligible institutions “to carry out demonstration projects to develop academic curricula integrating certified EHR technology in the clinical education of health professionals.” Eligible institutions are limited to:

• a school of medicine, osteopathic medicine, dentistry, or pharmacy, a graduate program in behavioral or mental health, or any other graduate health professions school;
• a graduate school of nursing or physician assistant studies;
• a consortium of two or more schools described above; or
• an institution with a graduate medical education program in medicine, osteopathic medicine, dentistry, pharmacy, nursing, or physician assistance studies.

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Physician practices are eligible to receive up to $44,000 per physician for meaningful use of certified EHR technology (as described here*):

• Up to $18,000 for the first year (dropping to $15,000 if first year is not 2011 or 2012); $12,000 for the second year; $ $8,000 in year 3, $4,000 in year 4 and $2,000 in year 5.  (See table after the jump.)
• There will be no incentive payments for practices establishing their meaningful EHR use after 2014 (e.g., beginning 2015).
• Meaningful EHR use by physicians will be further defined by regulations, but at a minimum, includes the use of e-prescribing and participation in “the electronic exchange of health information to improve the quality of health care, such as promoting care coordination,” i.e., HIEs or RHIOs.
• For the electronic exchange of health information to improve the quality of health care, such as promoting care coordination.
• There is a 10% premium for physicians with practices in under-serviced areas.
• However, if a physician practice does not achieve meaningful EHR status by 2015, Medicare reimbursement fees will be reduced by 1% in 2015, 2% in 2016, 3% in 2017 and beyond; and the Secretary will have the right to reduce fees by 5% starting in 2018 for those practices where meaningful EHR use is under 75%.

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Each eligible hospital (a “subsection (d) hospital,” as defined under 42 U.S.C. §1395ww(d)(1)(B)) which does not include psychiatric hospitals, rehabilitation hospitals, children’s hospitals or long term care hospitals) that achieves "meaningful" EHR use may qualify to receive from Medicare an amount equal to the product of the following formula:

Initial Amount
($2 million plus additional amounts calculated in accordance with each hospital’s Medicare discharges)

X

Medicare Share
(roughly, a hospital’s share of Medicare discharges over total discharges)

X

Transition Factor:

Year 1 – 100%
Year 2 – 75%
Year 3 – 50%
Year 4 – 25%
Year 5 – 0%

“Meaningful users” are hospitals or physician practices able to demonstrate that one’s EHR technology is connected in a way that improves the quality of health care through reported results on clinical quality and other measures selected by the Secretary. Meaningful EHR use includes quality reporting and may be demonstrated by attestation, survey response, appropriate claims or quality reporting, or such other manner as the Secretary specifies.  Of course, the question remains as to how HHS will define “meaningful” use, and we will just have to wait until the end of this year to find out. The concern is that if HHS raises the bar too high, it will exclude hospitals who will be unable to achieve it within a reasonable time.

“Certified EHR technology” will be technology that is certified by an independent body recognized by the Secretary as meeting standards for such technology established by the Secretary by rulemaking before Dec. 31, 2009.

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