Inside Meaningful Use 2 NPRMs: A difficult balance

By Debra Alligood White
10:31 AM
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The quest for Meaningful Use Stage 2 kicked off once the Centers for Medicare and Medicaid Services and the Office of the National Coordinator for Health Information Technology issued the notices of proposed rulemaking (NPRMs) in late February.

With the NPRMs, CMS and ONC collectively signaled a desire to continue to move healthcare providers and technology innovators closer to the ultimate goals of the HITECH Act. At the same time, some provisions of the NPRMs suggest a dawning recognition that it may take a little longer than originally envisioned to achieve the quality, safety and efficiency gains that proponents believe are possible when healthcare providers are supported in the right way by the right kinds of health information technology tools.

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The NPRMs attempt to strike a difficult balance between sustaining forward momentum toward meaningful goals and ensuring that providers who face greater impediments to EHR adoption have the time, support and incentive to catch up.

Reports from the Front Lines
In order to understand the balance CMS and ONC attempted to strike, it is important to note the context into which CMS and ONC issued the proposed rules. While it is still too early in the meaningful use experience to draw reliable conclusions from the first round of Meaningful Use Stage 1 attestations, the end of 2011 and beginning of 2012 saw the release of a number of statistical reports that revealed some interesting data. The annual survey published in November by the Centers for Disease Control's shows while that there is a wide variation among the states in EHR adoption rates, ranging from a low of 40 percent to as much as 84 percent, overall adoption rates and intent to apply for MU incentives continue to grow among physicians throughout the country. Statistics recently released by the two agencies on attestations under the Medicare Meaningful use stage 1 incentive program also show an increased pace of provider attestations and payments.

Some discernible themes are beginning to emerge from the statistical and anecdotal information available on MU1:

  • The physicians and hospitals that were first to the attestation flag tended to be early adopters of EHR systems that were well along the psychological and physical paths of implementing these systems even before the MU1 gate opened in 2011.
  • On average providers exceeded MU1 thresholds by a wide margin, suggesting that once providers overcame the initial workflow and technical hurdles to meaningfully using EHR systems in one area of their practice or facility or for one type of patient, they faced fewer impediments to propagating that use throughout their practice or facility or for all types of patients.
  • The MU1 menu items relating to patient engagement and health information exchange showed very low rates of attestation, with the two reasons most often cited by providers for why they were not prepared to attest to meaningful use in these areas being the difficulty of revamping internal procedures to incorporate this process and the failure of EHR vendors to provide the necessary product features or technical support.
  • While more physicians are adopting EHRs into their practice, choosing EHRs that are capable of achieving MU1 attestation requirements and expressing an intention ultimately to apply for meaningful use incentives under either the Medicare or Medicaid programs, there are still a significant number of physicians remaining on the sidelines waiting for greater preparedness, certainty or clarity.

CMS and ONC were also facing countervailing political pressures from all directions. On the one hand, politicians and diverse coalitions including health organizations, technology companies and payers have been advocating for a more aggressive push toward health information technology utilization and health information exchange. On the other hand, many groups, especially those representing providers have urged caution—pointing to the medical risks associated with the introduction of unfamiliar, distracting and intrusive technology into the care setting. Consumer groups are arrayed on both sides of the issue, with some raising alarms about the enormous risks to personal health information security posed by e-health initiatives and others demanding a faster pace of implementation in order to hasten the advent of truly coordinated care and greater patient involvement in care decisions.

Lots of Detail, Not a Lot of Surprises
Given this multi-directional tug of war, perhaps the most surprising thing about the 600+ pages of the NPRMs is how few surprises there are in them. CMS and ONC did not signal any huge policy shifts nor propose sweeping changes in requirements. In the CMS rules, which focus on the criteria physicians and hospitals will need to meet in order to receive incentive payments and avoid the penalties that are mandated to begin in 2015, CMS proposes to:

  • Revise to MU1 criteria and metrics to take prospective effect in 2013 or 2014;
  • Enact MU2 criteria that provide for 17 core objectives and 5 menu objectives for physicians and 16 core objectives and 4 menu objectives for hospitals;
  • Raise the bar for MU2 objectives that were included in MU1;
  • Better align clinical quality measure reporting requirements under the meaningful use regime with those existing under other federal programs;
  • Simplify metrics for both stages by consolidating all measures into one of 4 denominators; and
  • Clarify the criteria that will be used to determine whether a physician or hospital is subject to the imposition of penalties.

The ONC rule, which is more focused on the features and functionality that EHRs will have to have in order to maintain their certified status and support the achievement of revised MU1 and new MU2 objectives, largely follows suit.

The NPRMs do, however, provide some instructive guidance about the future direction, pace and duration of the journey to the ultimate goal of meaningful use of health information technology. The proposed rules indicate a continued commitment to, and perhaps even a “doubling down” on, the staged approach to meaningful use implementation. In several places in the NPRMs, mention is made of the fact that much of the existing EHR technology does not support certain of MU2’s new core and menu objectives. CMS draws a clear connection between this observation and its proposal to extend MU1 for an additional year for providers that first attested in 2011. Moreover, there are several other provisions that mention the possibility of exclusions and deferrals from some requirements being made available to physicians and hospitals that face internal and external impediments, such as a lack of access to high speed internet service, to EHR implementation and use. Although by no means explicit, it is difficult to read the NPRMs without sensing a recognition on the part of CMS that the path to meaningful use is likely more than 4 years for most providers. Along similar lines, the one-sentence paragraph (which appears shortly after a table that, for the first time, shows MU1 payment years commencing after 2014) mentioning the possibility of a 4th stage of meaningful use is of particular interest, but unknown significance.

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At the same time, both the ONC and CMS NPRMs indicate that, notwithstanding a lengthened horizon and somewhat modest short-range goals in some of these areas, patient engagement, care coordination, public health reporting and medication reconciliation accomplished through robust health information exchange functionality remain core objectives of the strategy. CMS proposes adjustments to the requirement that providers make patient information available in electronic form that will necessitate the incorporation of patient portals into existing EHR technology and significant changes in provider workflow that will take mandatory effect in 2014. Similarly, the health information exchange requirement, which currently requires only an attempt to share information electronically across organizations, is proposed to be eliminated entirely from MU1 but replaced by the more robust MU2 requirement that health information be electronically exchanged across EHR technologies in actual patient care situations involving transitions between care settings and transitions to home.

One message that came through loudly (if not especially clearly) is that CMS does not propose to back away from the imposition of penalties statutorily mandated to begin in 2015. As difficult as it will be for the next tranche of providers to launch meaningful use and as much coordination with EHR vendors as it will take for those that have already launched to be prepared for MU2 attestation by 2014, come 2015, physicians and hospitals that are not meaningful EHR users can indeed expect to face a reduction in Medicare or Medicaid payments that will ratchet up in each subsequent year.

Preparing for the Long Journey
The overall message of the NPRMs seems to be that CMS and ONC intend simultaneously to stay the course and apply slightly more pressure on the gas pedal, while settling in for a journey—to the ultimate destination of meaningful use of health information technology—that will be a bit longer than they originally envisioned. While there may be minor, and perhaps even major, changes in the details about revised MU1 and new MU2 objectives and necessary technological standards, features and functionality, it would be prudent for providers and EHR vendors to assume that the final rules that emerge this summer will remain consistent with the vision and priorities established in the MU1 rules and reinforced in the MU2 NPRMs.


Debra Alligood White is a partner in the Health Transactions and Policy Group of Manatt, Phelps & Phillips, LLP. Ms. White’s practice focuses on IT and business process outsourcing transactions, technology procurement and joint venture transactions and out-of-court financial and business restructuring in the healthcare, financial services and government contracting industries. She represents health insurance and other clients in structuring and negotiating financing, strategic M&A and commercial transactions, including those relating to health information technology. Her recent engagements include working with a state-designated entity in developing the legal framework and documentation to implement a statewide health information exchange network; assisting a health informatics company to develop template agreements for offering of its care management solutions directed at emerging accountable care organization market; and representing a technology company in restructuring agreement with one of the nation’s largest communications networks for health providers for joint development and marketing of company’s physician practice management system and electronic health records solutions.