Medicare and Medicaid Programs; Electronic Health Record Incentive Program, 44314-44588 [2010-17207]
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Federal Register / Vol. 75, No. 144 / Wednesday, July 28, 2010 / Rules and Regulations
Acronyms
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Centers for Medicare & Medicaid
Services
42 CFR Parts 412, 413, 422, and 495
[CMS–0033–F]
RIN 0938–AP78
Medicare and Medicaid Programs;
Electronic Health Record Incentive
Program
Centers for Medicare &
Medicaid Services (CMS), HHS.
ACTION: Final rule.
AGENCY:
This final rule implements
the provisions of the American
Recovery and Reinvestment Act of 2009
(ARRA) (Pub. L. 111–5) that provide
incentive payments to eligible
professionals (EPs), eligible hospitals
and critical access hospitals (CAHs)
participating in Medicare and Medicaid
programs that adopt and successfully
demonstrate meaningful use of certified
electronic health record (EHR)
technology. This final rule specifies—
the initial criteria EPs, eligible hospitals,
and CAHs must meet in order to qualify
for an incentive payment; calculation of
the incentive payment amounts;
payment adjustments under Medicare
for covered professional services and
inpatient hospital services provided by
EPs, eligible hospitals and CAHs failing
to demonstrate meaningful use of
certified EHR technology; and other
program participation requirements.
Also, the Office of the National
Coordinator for Health Information
Technology (ONC) will be issuing a
closely related final rule that specifies
the Secretary’s adoption of an initial set
of standards, implementation,
specifications, and certification criteria
for electronic health records. ONC has
also issued a separate final rule on the
establishment of certification programs
for health information technology.
DATES: Effective Date: These regulations
are effective on September 27, 2010.
FOR FURTHER INFORMATION CONTACT:
Elizabeth Holland, (410) 786–1309, EHR
incentive program issues.
Edward Gendron, (410) 786–1064,
Medicaid incentive payment issues.
Jim Hart, (410) 786–9520, Medicare fee
for service payment issues.
Bob Kuhl or Susan Burris, (410) 786–
5594, Medicare CAH payment and
charity care issues.
Frank Szeflinski, (303) 844–7119,
Medicare Advantage issues.
SUPPLEMENTARY INFORMATION:
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SUMMARY:
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ARRA American Recovery and
Reinvestment Act of 2009
AAC Average Allowable Cost (of certified
EHR technology)
AIU Adopt, Implement, Upgrade (certified
EHR technology)
CAH Critical Access Hospital
CAHPS Consumer Assessment of
Healthcare Providers and Systems
CCN CMS Certification Number
CFR Code of Federal Regulations
CHIP Children’s Health Insurance Program
CHIPRA Children’s Health Insurance
Program Reauthorization Act of 2009
CMS Centers for Medicare & Medicaid
Services
CPOE Computerized Physician Order Entry
CY Calendar Year
EHR Electronic Health Record
EP Eligible Professional
EPO Exclusive Provider Organization
FACA Federal Advisory Committee Act
FFP Federal Financial Participation
FFY Federal Fiscal Year
FFS Fee-For-Service
FQHC Federally Qualified Health Center
FTE Full-Time Equivalent
FY Fiscal Year
HEDIS Healthcare Effectiveness Data and
Information Set
HHS Department of Health and Human
Services
HIE Health Information Exchange
HIT Health Information Technology
HIPAA Health Insurance Portability and
Accountability Act of 1996
HITECH Health Information Technology for
Economic and Clinical Health Act
HMO Health Maintenance Organization
HOS Health Outcomes Survey
HPSA Health Professional Shortage Area
HRSA Health Resource and Services
Administration
IAPD Implementation Advance Planning
Document
ICR Information Collection Requirement
IHS Indian Health Service
IPA Independent Practice Association
IT Information Technology
MA Medicare Advantage
MAC Medicare Administrative Contractor
MAO Medicare Advantage Organization
MCO Managed Care Organization
MITA Medicaid Information Technology
Architecture
MMIS Medicaid Management Information
Systems
MSA Medical Savings Account
NAAC Net Average Allowable Cost (of
certified EHR technology)
NCQA National Committee for Quality
Assurance
NCVHS National Committee on Vital and
Health Statistics
NPI National Provider Identifier
NPRM Notice of Proposed Rulemaking
ONC Office of the National Coordinator for
Health Information Technology
PAHP Prepaid Ambulatory Health Plan
PAPD Planning Advance Planning
Document
PFFS Private Fee-For-Service
PHO Physician Hospital Organization
PHS Public Health Service
PHSA Public Health Service Act
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PIHP Prepaid Inpatient Health Plan
POS Place of Service
PPO Preferred Provider Organization
PQRI Physician Quality Reporting Initiative
PSO Provider Sponsored Organization
RHC Rural Health Clinic
RHQDAPU Reporting Hospital Quality Data
for Annual Payment Update
RPPO Regional Preferred Provider
Organization
SMHP State Medicaid Health Information
Technology Plan
TIN Tax Identification Number
Table of Contents
I. Background
A. Overview of the HITECH Programs
Created by the American Recovery and
Reinvestment Act of 2009
B. Statutory Basis for the Medicare &
Medicaid EHR Incentive Programs
II. Provisions of the Proposed Regulations
and Response and Analysis of Comments
A. Definitions Across the Medicare FFS,
Medicare Advantage, and Medicaid
Programs
1. Definitions
a. Certified Electronic Health Record (EHR)
Technology
b. Qualified Electronic Health Record
c. Payment Year
d. First, Second, Third, Fourth, Fifth and
Sixth Payment Year
e. EHR Reporting Period
f. Meaningful EHR User
2. Definition of Meaningful Use
a. Considerations in Defining Meaningful
Use
b. Common Definition of Meaningful Use
Under Medicare and Medicaid
c. Stage 1 Criteria for Meaningful Use
3. Sections 4101(a) and 4102(a)(1) of
HITECH Act: Reporting on Clinical
Quality Measures Using EHR by EPs,
Eligible Hospitals and CAHs
a. General
b. Requirements for the Submission of
Clinical Quality Measures by EPs,
Eligible Hospitals and CAHs
c. Statutory Requirements and Other
Considerations for the Selection of
Clinical Quality Measures for Electronic
Submission by EPs, Eligible Hospitals
and CAHs
(1) Statutory Requirements for the
Selection of Clinical Quality Measures
for Electronic Submission by EPs,
Eligible Hospitals and CAHs
(2) Other Considerations for the Selection
of Clinical Quality Measures for
Electronic Submission by EPs, Eligible
Hospitals and CAHs
d. Clinical Quality Measures for EPs
e. Clinical Quality Measures Reporting
Criteria for EPs
f. Clinical Quality Measures for Electronic
Submission by Eligible Hospitals
g. Potential Measures for EPs, Eligible
Hospitals and CAHs in Stage 2 and
Subsequent Years
h. Reporting Method for Clinical Quality
Measures for 2011 and Beginning With
the 2012 Payment Years
(1) Reporting Method for 2011 Payment
Year
(2) Reporting Method Beginning in 2012
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i. Alternative Reporting Methods for
Clinical Quality Measures
j. Reporting Period for Reporting Clinical
Quality Measures
4. Demonstration of Meaningful Use
a. Common Methods of Demonstration in
Medicare and Medicaid
b. Methods for Demonstration of the Stage
1 Criteria of Meaningful Use
5. Data Collection for Online Posting,
Program Coordination, and Accurate
Payments
a. Online Posting
b. Program Election Between Medicare
FFS/MA and Medicaid for EPs
c. Data To Be Collected
6. Hospital-Based Eligible Professionals
7. Interaction With Other Programs
B. Medicare Fee-for-Service Incentives
1. Incentive Payments for Eligible
Professionals
a. Definitions
b. Incentive Payment Limits
c. Increase in Incentive Payment for EPs
Who Predominantly Furnish Services in
a Geographic Health Professional
Shortage Area
d. Form and Timing of Payment
e. Payment Adjustment Effective in CY
2015 and Subsequent Years for EPs Who
Are Not Meaningful Users of Certified
EHR Technology
2. Incentive Payments for Hospitals
a. Definition of Eligible Hospital for
Medicare
b. Incentive Payment Calculation for
Eligible Hospitals
c. Medicare Share
d. Charity Care
e. Transition Factor
f. Duration and Timing of Incentive
Payments
g. Incentive Payment Adjustment Effective
in Federal FY 2015 and Subsequent
Years for Eligible Hospitals Who Are Not
Meaningful EHR Users
3. Incentive Payments for Critical Access
Hospitals
a. Definition of CAHs for Medicare
b. Current Medicare Payment of
Reasonable Cost for CAHs
c. Changes Made by the HITECH Act
d. Incentive Payment Calculation for CAHs
e. Reduction of Reasonable Cost Payment
in FY 2015 and Subsequent Years for
CAHs That Are Not Meaningful EHR
Users
4. Process for Making Incentive Payments
Under the Medicare FFS Program
a. Incentive Payments to EPs
b. Incentive Payments to Eligible Hospitals
c. Incentive Payments to CAHs
d. Payment Accounting Under Medicare
C. Medicare Advantage Organization
Incentive Payments
1. Definitions
a. Qualifying MA Organization
b. Qualifying MA Eligible Professional
c. Qualifying MA-Affiliated Eligible
Hospital
2. Identification of Qualifying MA
Organizations, MA EPs, and MAAffiliated Eligible Hospitals
3. Computation of Incentives to Qualifying
MA Organizations for MA EPs and
Hospitals
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4. Timeframe for Payment
5. Avoiding Duplicate Payment
6. Meaningful User Attestation
7. Posting Information on the CMS Web
site
8. Limitation on Review
9. Conforming Changes
10. Payment Adjustment and Future
Rulemaking
D. Medicaid Incentives
1. Overview of Health Information
Technology in Medicaid
2. General Medicaid Provisions
3. Identification of Qualifying Medicaid
EPs and Eligible Hospitals
a. Overview
b. Program Participation
1. Acute Care Hospitals
2. Children’s Hospitals
c. Medicaid Professionals Program
Eligibility
d. Calculating Patient Volume
Requirements
e. Entities Promoting the Adoption of
Certified EHR Technology
4. Computation of Amount Payable to
Qualifying Medicaid EPs and Eligible
Hospitals
a. Payment Methodology for EPs
(1) General Overview
(2) Average Allowable Costs
(3) Net Average Allowable Costs
(4) Payments for Medicaid Eligible
Professionals
(5) Basis for Medicaid EHR Incentive
Program First Payment Year and
Subsequent Payment Years
(i) Medicaid EP Who Begins Adopting,
Implementing or Upgrading Certified
EHR Technology in the First Year
(ii) Medicaid EP Who Has Already
Adopted, Implemented or Upgraded
Certified EHR Technology and
Meaningfully Uses EHR Technology
b. Payment Methodology for Eligible
Hospitals
c. Alternative and Optional Early State
Implementation To Make Incentive
Payments for Adopting, Implementing or
Upgrading Certified EHR Technology
d. Process for Making and Receiving
Medicaid Incentive Payments
e. Avoiding Duplicate Payment
f. Flexibility To Alternate Between
Medicare and Medicaid EHR Incentive
Programs One Time
g. One State Selection
5. Single Provider Election Repository and
State Data Collection
6. Collection of Information Related to the
Eligible Professional’s National Provider
Identifier (NPI) and the Tax
Identification Number (TIN)
7. Activities Required To Receive Incentive
Payments
a. General Overview
b. Definitions Related to Certified EHR
Technology and Adopting, Implementing
or Upgrading Such Technology
(1) Certified EHR Technology
(2) Adopting, Implementing or Upgrading
c. Other General Terminology
d. Quality Measures
8. Overview of Conditions for States To
Receive Federal Financial Participation
(FFP) for Incentive Payments and
Implementation Funding
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9. Financial Oversight, Program Integrity
and Provider Appeals
III. Collection of Information Requirements
A. ICRs Regarding Demonstration of
Meaningful Use Criteria (§ 495.8)
B. ICRs Regarding Participation
Requirements for EPs, Eligible Hospitals,
and Qualifying CAHs (§ 495.10)
C. ICRs Regarding Identification of
Qualifying MA Organizations, MA–EPs
and MA-Affiliated Eligible Hospitals
(§ 495.202)
D. ICRs Regarding Incentive Payments to
Qualifying MA Organizations for MA–
EPs and Hospitals (§ 495.204)
E. ICRs Regarding Meaningful User
Attestation (§ 495.210)
F. ICRs Regarding Incentive Payments to
Qualifying MA Organizations for MAEligible Professionals and Hospitals
(§ 495.220)
G. ICRs Regarding Process for Payments
(§ 495.312)
H. ICRs Regarding Activities Required To
Receive an Incentive Payment
(§ 495.314)
I. ICRs Regarding State Monitoring and
Reporting Regarding Activities Required
To Receive an Incentive Payment
(§ 495.316)
J. ICRs Regarding State Responsibilities for
Receiving FFP (§ 495.318)
K. ICRs Regarding Prior Approval
Conditions (§ 495.324)
L. ICRs Regarding Termination of Federal
Financial Participation (FFP) for Failure
To Provide Access to Information
(§ 495.330)
M. ICRs Regarding State Medicaid Agency
and Medicaid EP and Hospital Activities
(§ 495.332 Through § 495.338)
N. ICRs Regarding Access to Systems and
Records (§ 495.342)
O. ICRs Regarding Procurement Standards
(§ 495.344)
P. ICRs Regarding State Medicaid Agency
Attestations (§ 495.346)
Q. ICRs Regarding Reporting Requirements
(§ 495.348)
R. ICRs Regarding Retroactive Approval of
FFP With an Effective Date of February
18, 2009 (§ 495.358)
S. ICRs Regarding Financial Oversight and
Monitoring Expenditures (§ 495.362)
T. ICRs Regarding Appeals Process for a
Medicaid Provider Receiving Electronic
Health Record Incentive Payments
(§ 495.366)
IV. Regulatory Impact Analysis
A. Overall Impact
B. Regulatory Flexibility Analysis
C. Small Rural Hospitals
D. Unfunded Mandates Reform Act
E. Federalism
F. Anticipated Effects
G. HITECH Impact Analysis
H. Accounting Statement
I. Background
A. Overview of the HITECH Programs
Created by the American Recovery and
Reinvestment Act of 2009
The American Recovery and
Reinvestment Act of 2009 (ARRA) (Pub.
L. 111–5) was enacted on February 17,
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Federal Register / Vol. 75, No. 144 / Wednesday, July 28, 2010 / Rules and Regulations
2009. Title IV of Division B of ARRA
amends Titles XVIII and XIX of the
Social Security Act (the Act) by
establishing incentive payments to
eligible professionals (EPs), eligible
hospitals, and critical access hospitals
(CAHs), and Medicare Advantage
Organizations to promote the adoption
and meaningful use of interoperable
health information technology (HIT) and
qualified electronic health records
(EHRs). These provisions, together with
Title XIII of Division A of ARRA, may
be cited as the ‘‘Health Information
Technology for Economic and Clinical
Health Act’’ or the ‘‘HITECH Act.’’ These
incentive payments are part of a broader
effort under the HITECH Act to
accelerate the adoption of HIT and
utilization of qualified EHRs.
On January 13, 2010 we published a
proposed rule (75 FR 1844), entitled
‘‘Medicare and Medicaid Programs;
Electronic Health Record Incentive
Program’’ to implement the provisions of
ARRA that provide incentive payments
to EPs, eligible hospitals, and CAHs
participating in Medicare and Medicaid
programs that adopt and successfully
demonstrate meaningful use of ‘‘certified
EHR technology,’’ and incentive
payments to certain Medicare
Advantage Organizations for their
affiliated EPs and eligible hospitals that
meaningfully use certified EHR
technology. Through this final rule, we
are developing the incentive programs
which are outlined in Division B, Title
IV of the HITECH Act. This final rule
sets forth the definition of ‘‘meaningful
use of certified EHR technology.’’
Section 13101 of the HITECH Act
adds a new section 3000 to the Public
Health Service Act (PHSA), which
defines ‘‘certified EHR technology’’ as a
qualified EHR that has been properly
certified as meeting standards adopted
under section 3004 of the PHSA. CMS
and ONC have been working closely to
ensure that the definition of meaningful
use of certified EHR technology and the
standards for certified EHR technology
are coordinated. In the interim final rule
published on January 13, 2010 (75 FR
2014) entitled ‘‘Health Information
Technology: Initial Set of Standards,
Implementation Specifications, and
Certification Criteria for Electronic
Health Record Technology,’’ ONC
defined the term ‘‘certified EHR
technology,’’ identified the initial set of
standards and implementation
specifications that such EHR technology
would need to support the achievement
of the proposed meaningful use Stage 1,
as well as the certification criteria that
will be used to certify EHR technology.
ONC is also issuing a final rule on the
standards, implementation
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specifications, and certification criteria
elsewhere in this issue of the Federal
Register.
In a related proposed rule published
on March 10, 2010, (75 FR 11328)
entitled ‘‘Proposed Establishment of
Certification Programs for Health
Information Technology’’ ONC proposed
the establishment of two certification
programs for purpose of testing and
certifying health information
technology. In the June 24, 2010 Federal
Register (75 FR 36157), ONC published
a final rule to establish a temporary
certification program whereby the
National Coordinator would authorize
organizations to test and certify
complete EHRs and EHR Modules, and
plans to issue a separate final rule to
establish a permanent certification
program to replace the temporary
certification program. Specifically, this
final rule will ensure that the definition
of meaningful use of certified EHR
technology does not require EPs, eligible
hospitals, and CAHs to perform
functions for which standards have not
been recognized or established.
Similarly, the functionality of certified
EHR technology should enable and
advance the definition of meaningful
use.
We urge those interested in this final
rule to also review the ONC interim
final rule on standards and
implementation specifications for
certified EHR technology and the related
final rule as well as the final rule on the
establishment of a temporary
certification program. Readers may also
visit https://healthit.hhs.gov and https://
www.cms.hhs.gov/Recovery/11_
HealthIT.asp#TopOfPage for more
information on the efforts at the
Department of Health and Human
Services (HHS) to advance HIT
initiatives.
B. Statutory Basis for the Medicare &
Medicaid EHR Incentive Programs
Section 4101(a) of the HITECH Act
adds a new subsection (o) to section
1848 of the Act. Section 1848(o) of the
Act establishes incentive payments for
demonstration of meaningful use of
certified EHR technology by EPs
participating in the original Medicare
program (hereinafter referred to as the
Medicare Fee-for-Service (FFS)
program) beginning in calendar year
(CY) 2011. Section 4101(b) of the
HITECH Act also adds a new paragraph
(7) to section 1848(a) of the Act. Section
1848(a)(7) of the Act provides that
beginning in CY 2015, EPs who do not
demonstrate that they are meaningful
users of certified EHR technology will
receive an adjustment to their fee
schedule for their professional services
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of 99 percent for 2015 (or, in the case
of an eligible professional who was
subject to the application of the
payment adjustment under section
1848(a)(5) of the Act, 98 percent for
2014), 98 percent for 2016, and 97
percent for 2017 and each subsequent
year. Section 4101(c) of the HITECH Act
adds a new subsection (l) to section
1853 of the Act to provide incentive
payments to certain Medicare
Advantage (MA) organizations for their
affiliated EPs who meaningfully use
certified EHR technology and meet
certain other requirements, and requires
a downward adjustment to Medicare
payments to certain MA organizations
for professional services provided by
any of their affiliated EPs who are not
meaningful users of certified EHR
technology, beginning in 2015. Section
1853(l) of the Act also requires us to
establish a process that ensures that
there are no duplicate payments made
to MA organizations under section
1853(l) of the Act and to their affiliated
EPs under the FFS EHR incentive
program established under section
1848(o)(1)(A) of the Act.
Section 4102(a) of the HITECH Act
adds a new subsection (n) to section
1886 of the Act. Section 1886(n) of the
Act establishes incentives payments for
demonstration of meaningful use of
certified EHR technology by subsection
(d) hospitals, as defined under section
1886(d)(1)(B) of the Act, participating in
the Medicare FFS program beginning in
Federal fiscal year (FFY) 2011. Section
4102(b)(1) of the HITECH Act amends
section 1886(b)(3)(B) of the Act to
provide that, beginning in FY 2015,
subsection (d) hospitals that are not
meaningful users of certified EHR
technology will receive a reduced
annual payment update for their
inpatient hospital services. Section
4102(a)(2) of the HITECH Act amends
section 1814(l) of the Act to provide an
incentive payment to critical access
hospitals (CAHs) who meaningfully use
certified EHR technology based on the
hospitals’ reasonable costs for the
purchase of certified EHR technology
beginning in FY 2011. In addition,
section 4102(b)(2) of the HITECH Act
amends section 1814(l) of the Act to
provide for a downward payment
adjustment for hospital services
provided by CAHs that are not
meaningful users of certified EHR
technology for cost reporting periods
beginning in FY 2015. Section 4102(c)
of the HITECH Act adds a new
subsection (m) to section 1853 of the
Act to provide incentive payments to
qualifying MA organizations for certain
affiliated hospitals that meaningfully
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use certified EHR technology to make a
downward adjustment to payments to
certain MA organizations for inpatient
hospital services provided by its
affiliated hospitals that are not
meaningful users of certified EHR
technology beginning in FY 2015.
Section 1853(m) of the Act also requires
us to establish a process that ensures
that there are no duplicate payments
made to MA organizations under section
1853(m) of the Act and to their affiliated
hospitals under the FFS EHR incentive
program established under section
1886(n) of the Act.
Section 4103 of the HITECH Act
provides for implementation funding for
the EHR incentives program under
Medicare.
Section 4201 of the HITECH Act
amends section 1903 of the Act to
provide 100 percent Federal financial
participation (FFP) to States for
incentive payments to certain eligible
providers participating in the Medicaid
program to purchase, implement,
operate (including support services and
training for staff) and meaningfully use
certified EHR technology and 90 percent
FFP for State administrative expenses
related to the program outlined in
1903(t) of the Act. Section 4201(a)(2) of
the HITECH Act adds a new subsection
(t) to section 1903 of the Act to establish
a program with input from the States to
provide incentives for the adoption and
subsequent meaningful use of certified
EHR technology for providers
participating in the Medicaid program.
II. Provisions of the Proposed Rule and
Analysis of and Responses to Public
Comments
We proposed to add a new part 495
to title 42 of the Code of Federal
Regulations to implement the provisions
of Title IV of Division B of ARRA
providing for incentive payments to
EPs, eligible hospitals, CAHs and
certain Medicare Advantage
organizations for the adoption and
demonstration of meaningful use of
certified EHR technology under the
Medicare program or the Medicaid
program.
The HITECH Act creates incentives
under the Medicare Fee-for-Service
(FFS), Medicare Advantage (MA), and
Medicaid programs for EPs, eligible
hospitals and CAHs to adopt and
demonstrate meaningful use of certified
EHR technology, and payment
adjustments under the Medicare FFS
and MA programs for EPs, eligible
hospitals, and CAHs who fail to adopt
and demonstrate meaningful use of
certified EHR technology. The three
incentive programs contain many
common elements and certain
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provisions of the HITECH Act encourage
avoiding duplication of payments,
reporting, and other requirements,
particularly in the area of demonstration
of meaningful use of certified EHR
technology. Eligible hospitals and CAHs
may participate in both the Medicare
program and the Medicaid program,
assuming they meet each program’s
eligibility requirements, which vary
across the two programs. In certain
cases, the HITECH Act has used nearly
identical or identical language in
defining terms that are used in the
Medicare FFS, MA, and Medicaid
programs, including such terms as
‘‘hospital-based EPs’’ and ‘‘certified EHR
technology.’’ For these reasons, we seek
to create as much commonality between
the three programs as possible and have
structured this final rule, as we did the
proposed rule, based on the premise by
beginning with those provisions that cut
across the three programs before moving
on to discuss the provisions specific to
Medicare FFS, MA and Medicaid.
The incentive payments are available
to EPs which are non-hospital-based
physicians, as defined in section 1861(r)
of the Act, who either receive
reimbursement for services under the
Medicare FFS program or have an
employment or contractual relationship
with a qualifying MA organization
meeting the criteria under section
1853(l)(2) of the Act; or healthcare
professionals meeting the definition of
‘‘eligible professional’’ under section
1903(t)(3)(B) of the Act as well as the
patient-volume and non-hospital-based
criteria of section 1903(t)(2)(A) of the
Act and eligible hospitals which are
subsection (d) hospitals as defined
under subsection 1886(d)(1)(B) of the
Act that either receive reimbursement
for services under the Medicare FFS
program or are affiliated with a
qualifying MA organization as described
in section 1853(m)(2) of the Act; critical
access hospitals (CAHs); or acute care or
children’s hospitals described under
section 1903(t)(2)(B) of the Act.
A. Definitions Across the Medicare FFS,
MA, and Medicaid Programs
a. Certified Electronic Health Record
(EHR) Technology
Under all three EHR incentive
programs, EPs, eligible hospitals, and
CAHs must utilize ‘‘certified EHR
technology’’ if they are to be considered
eligible for the incentive payments. In
the Medicare FFS EHR incentive
program this requirement for EPs is
found in section 1848(o)(2)(A)(i) of the
Act, and for eligible hospitals and CAHs
in section 1886(n)(3)(A)(i) of the Act. In
the MA EHR incentive program this
requirement for EPs is found in section
1853(l)(1) of the Act, and for eligible
hospitals and CAHs, in section
1853(m)(1) of the Act. In the Medicaid
EHR incentive program this requirement
for EPs and Medicaid eligible hospitals
is found throughout section 1903(t) of
the Act, including in section
1903(t)(6)(C) of the Act. Certified EHR
technology is a critical component of
the EHR incentive programs, and the
Secretary has charged ONC, under the
authority given to her in the HITECH
Act, with developing the criteria and
mechanisms for certification of EHR
technology. Therefore, we finalize our
proposal to use the definition of
certified EHR technology adopted by
ONC. ONC issued an interim final rule
with comment for the standards and
certification criteria for certified EHR
technology at the same time our
proposed rule was issued. After
reviewing the comments they received
and to address changes made in this
final rule, ONC will be issuing a final
rule in conjunction with this final rule.
When we refer to the ONC final rule, we
are referring to this final rule titled
Title IV, Division B of ARRA
establishes incentive payments under
the Medicare and Medicaid programs
for certain professionals and hospitals
that meaningfully use certified EHR
technology, and for certain MA
organizations whose affiliated EPs and
hospitals meaningfully use certified
EHR technology. We refer to the
incentive payments made under the
original Medicare program to EPs,
eligible hospitals, and CAHs as the
Medicare FFS EHR incentive program,
the incentive payments made to
qualifying MA organizations as the MA
EHR incentive program, and the
incentive payments made under
Medicaid to eligible professionals and
eligible hospitals as the Medicaid EHR
incentive program. When referring to
the Medicare EHR incentive program,
we are generally referring to both the
Medicare FFS EHR and the MA EHR
incentive programs.
1. Definitions
Sections 4101, 4102, and 4201 of the
HITECH Act use many identical or
similar terms. In this section of the
preamble, we discuss terms for which
we are finalizing uniform definitions for
the Medicare FFS, MA, and Medicaid
EHR incentive programs. These
definitions are set forth in part 495
subpart A of the regulations. For
definitions specific to an individual
program, the definition is set forth and
discussed in the applicable EHR
incentive program section.
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‘‘Health Information Technology: Initial
Set of Standards, Implementation
Specifications, and Certification Criteria
for Electronic Health Record
Technology. When we refer to the ONC
IFR, we are referring to the interim final
rule with comment period published in
the Federal Register on January 13,
2010.
Comment: Several commenters asked
for clarification on the definition of
certified EHR technology. Currently,
hospitals utilize multiple systems to
operate electronically. For example,
some electronic operating systems feed
EHR data and some systems pull EHR
data. Data from the two systems are then
extracted and manipulated to create a
quality measure calculation. The
commenters’ inquired as to how these
systems can continue to be utilized even
though, independently, these systems
will not meet all certification standards.
Some commenters expressed concern
the ONC IFR did not include generation
of the data needed to demonstrate
meaningful use as a certification
requirement and that certified EHR
technology requirements should also
include compliance with HIPAA
standards as well as all relevant state
statutes for the state or states where it
is installed. Commenters recommended
various approaches to defining certified
technology especially in the early stages
of the program. Some suggestions
included, grandfathering existing
systems for a period of three years as
long as the provider could meet specific
meaningful use objectives while
requiring all upgrades to existing
systems to be certified, allowing all EHR
products certified by the Certification
Commission for Health Information
Technology (CCHIT) at the criteria
established for 2008 or later be deemed
as meeting Stage 1 certification
requirements or alternatively CMS
provide a process that can verify
compliance of required features at no
cost to providers or vendors as is done
now with Enterprise Data Interchange
(EDI) claims processing. Some
commenters also offered other thoughts
on potential unintended consequences
of defining the EHR certification
software process to include certifying
agencies that charge for the process. The
commenters believed this could result
in continued new and revised
requirements to justify the certifying
entities’ existence and increase its
revenue.
Response: We have referred those
comments to ONC who addresses them
in their final rule.
We are adopting the ONC definition
of certified EHR technology at 45 CFR
170.102 in this final rule.
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b. Qualified Electronic Health Record
In order for an EHR technology to be
eligible for certification, it must first
meet the definition of a Qualified
Electronic Health Record. This term was
defined by ONC in its in its IFR and
finalized by ONC in their final rule, and
we are finalizing our proposal to use the
definition of qualified electronic health
record adopted by ONC in their final
rule to be published concurrently with
this rule.
Comment: We received a few
comments on the definition of qualified
EHR technology. Commenters expressed
concerns regarding perceived gaps in
defining an EHR as qualified such as a
lack of the requirement for a narrative
text for physicians (also known as
progress note). Another comment
requested further clarification regarding
the requirement for a qualified EHR to
‘‘capture and query information relevant
to health care quality’’ and ‘‘exchange
electronic health information with and
integrate such information from other
sources.’’ For example, some might
believe that these requirements apply
strictly to information contained within
the EHR or closed proprietary hospital
systems and not to information that
would have to be obtained from outside
the four walls of the practice or the
extended (but closed) system.
Response: We have referred those
comments to ONC who addresses them
in their final rule.
We are adopting the ONC definition
of Qualified Electronic Health Record at
45 CFR 170.102.
c. Payment Year
As discussed in the proposed rule,
under section 1848(o)(1)(A)(i) of the Act
the Medicare FFS EHR incentive
payment is available to EPs for a
‘‘payment year.’’ Section 1848(o)(1)(E) of
the Act defines the term ‘‘payment year’’
as a year beginning with 2011. While
the Act does not use the term, ‘‘payment
year,’’ for the Medicaid EHR incentive
program, it does use the term ‘‘year of
payment’’ throughout section 1903(t) of
the Act, for example, at sections
1903(t)(3)(C), 1903(t)(4)(A), and
1903(t)(6)(C) of the Act. For all EPs in
the Medicare and Medicaid EHR
incentive programs, we are proposing a
common definition for both ‘‘payment
year’’ and ‘‘year of payment,’’ as ‘‘any
calendar year beginning with 2011’’ at
§ 495.4. In the proposed rule, we
explained that this definition, which is
consistent with the statutory definition
of ‘‘payment year’’ under Medicare FFS,
would simplify the EHR incentive
programs for EPs. As discussed later in
this preamble, EPs will have the
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opportunity to participate in either the
Medicare or Medicaid incentive
programs, and once an EP has selected
a program, they are permitted to make
a one-time switch from one program to
the other. A common definition will
allow EPs to more easily understand
both incentive programs, and inform
their decisions regarding participation
in either program.
Under section 1886(n)(1) of the Act,
the Medicare FFS EHR incentive
payment is available to eligible
hospitals and CAHs for a ‘‘payment
year.’’ Section 1886(n)(2)(G) of the Act
defines the term ‘‘payment year’’ as a
fiscal year beginning in 2011. As
hospitals are paid based on the 12month Federal fiscal year, we interpret
the reference to a ‘‘fiscal year’’ means the
fiscal year beginning on October 1 of the
prior calendar year and extending to
September 30 of the relevant year.
Again, for the Medicaid EHR incentive
program, the HITECH Act uses the term,
‘‘year of payment’’ (see section
1903(t)(5)(D)(ii) of the Act), rather than
‘‘payment year.’’ For the same reasons
expressed in the proposed rule and
summarized above for proposing a
common definition of ‘‘payment year’’
for EPs, and because hospitals will have
the opportunity to simultaneously
participate in both the Medicare and
Medicaid EHR incentive programs, we
propose a common definition of
‘‘payment year’’ and ‘‘year of payment’’
for both programs.
For purposes of the incentive
payments made to eligible hospitals and
CAHs under the Medicare FFS, MA and
Medicaid EHR incentive programs, we
proposed to define payment year and
year of payment at § 495.4, consistent
with the statutory definition, as ‘‘any
fiscal year beginning with 2011.’’
Comment: A commenter asked CMS
to identify the first possible payment
year for EPs, and hospitals and CAHs.
Response: The first payment year for
EPs is any calendar year (CY) beginning
with CY 2011 and for eligible hospitals
and CAHs is any fiscal year (FY)
beginning with 2011.
Comment: The majority of
commenters favored our definition of
‘‘payment year’’ based on the different
existing fiscal periods for eligible
professionals and hospitals. Additional
support was received from some
commenters whom explained that they
participated in performance-based
initiatives, which define a payment year
the same as the proposed rule.
Response: After consideration of the
public comments received, we are
adopting our proposed definition of
‘‘payment year’’ in the Medicare and
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Medicaid EHR incentive programs as
described above.
Comment: The majority of comments
received regarding the definition of a
payment year asked whether payment
years must be consecutive for an EP or
eligible hospital to receive all years of
incentive payments.
Response: In the proposed rule, we
defined the second, third, fourth, fifth,
and sixth payment year, respectively, to
mean ‘‘the second, third, fourth, fifth,
and sixth calendar or Federal fiscal year,
respectively, for which an EP or eligible
hospital receives an incentive payment.’’
However, section 1848(o)(1)(E) of Act
defines the second through fifth
payment years for an EP as each
successive year immediately following
the first payment year for such
professional for the Medicare FFS and
MA EHR incentive programs. Similarly,
section 1886(n)(2)(G)(ii) of the Act
defines the second through fourth
payment years for an eligible hospital or
CAH as requiring the years to be
‘‘successive’’ and ‘‘immediately
following’’ the prior year. This
requirement, that each payment year
‘‘immediately follow’’ the prior year,
means that every year subsequent to the
first payment year is a payment year
regardless of whether an incentive
payment is received by the EP, eligible
hospital or CAH. For example, if a
Medicare EP receives an incentive in CY
2011, but does not successfully
demonstrate meaningful use or
otherwise fails to qualify for the
incentive in CY 2012, CY 2012 still
counts as one of the EP’s five payment
years and they would only be able to
receive an incentive under the Medicare
EHR incentive program for three more
years as CY 2013 would be there third
payment year. In this example, the
maximum incentive payment that
would apply for this Medicare EP not
practicing predominately in a health
professional shortage area (HPSA)
would be $18,000 in 2011, and $8,000
in 2013 as outlined in section
1848(o)(1)(B) of the Act. The EP would
have qualified for a maximum incentive
payment of $12,000 in 2012, but did not
qualify as a meaningful user for this
year. No incentives may be made under
the Medicare EHR incentive program
after 2016.
The same rule, however, does not
apply to the Medicaid EHR incentive
program. For that program, payments
may generally be non-consecutive. If an
EP or eligible hospital does not receive
an incentive payment for a given CY or
FY then that year would not constitute
a payment year. For example, if a
Medicaid EP receives incentives in CY
2011 and CY 2012, but fails to qualify
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for an incentive in CY 2013, they would
still be eligible to receive incentives for
an additional four payment years. For
hospitals, however, starting with FY
2017 payments must be consecutive.
This rule is required by section
1903(t)(5)(D) of the Act, which states
that after 2016, no Medicaid incentive
payment may be made to an eligible
hospital unless ‘‘the provider has been
provided payment * * * for the
previous year.’’ As a result, Medicaid
eligible hospitals must receive an
incentive in FY 2016 to receive an
incentive in FY 2017 and later years.
Starting in FY 2016, incentive payments
must be made every year in order to
continue participation in the program.
In no case may any Medicaid EP or
eligible hospital receive an incentive
after 2021. We have revised our
regulations at § 495.4 to incorporate
these statutory requirements.
Comment: Some commenters
requested that CMS clarify the impact
on EPs when they change practices in
the middle of the incentive payment
program; in other words, if an EP leaves
a practice in year two of the incentive
payment program and goes to another
practice, does that EP forfeit the ability
to continue collecting incentive
payments for years 3 through 5?
Response: A qualifying EP that leaves
one practice for another may still be
eligible to receive subsequent incentive
payments if the EP is a meaningful EHR
user in the new practice. The incentive
payment is tied to the individual EP,
and not to his or her place of practice.
d. First, Second, Third, Fourth, Fifth,
and Sixth Payment Year
In accordance with sections
1848(o)(1)(A)(ii), 1886(n)(2)(E),
1814(l)(3)(A), 1903(t)(4)(B), and
1903(t)(5)(A) of the Act, for EPs, eligible
hospitals, and CAHs that qualify for
EHR incentive payments in a payment
year, the amount of the payment will
depend in part on whether the EP or
hospital previously received an
incentive payment and, if so (for the
Medicare EHR incentive program) when
the EP or hospital received his or her
first payment. We proposed to define
the first payment year to mean the first
CY or Federal fiscal year (FY) for which
an EP, eligible hospital, or CAH receives
an incentive payment. Likewise, we
proposed to define the second, third,
fourth, fifth, and sixth payment year,
respectively, to mean the second, third,
fourth, fifth, and sixth CY or FY,
respectively, for which an EP, eligible
hospital, or CAH receives an incentive
payment.
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Comment: As stated above, many
commenters requested clarification on
non-consecutive payment.
Response: This comment is addressed
above.
Comment: A commenter requested
CMS to clarify the consequences for a
hospital that originally qualified and
received incentive payments the first
year, but in a subsequent year failed to
qualify as a meaningful user of certified
EHR technology.
Response: Meaningful use will be
assessed on a year-by-year basis as we
establish different Stages of meaningful
use criteria for different years. If an EP
or an eligible hospital including a CAH
has failed to demonstrate meaningful
use of certified EHR technology for a
certain payment year, the EP, eligible
hospital, or CAH will not be qualified
for incentive payments for that payment
year. However, upon successful
demonstration as a meaningful EHR
user in subsequent years, an EP, eligible
hospital or CAH may be eligible to
receive an incentive payment. As
discussed above, however, for the
Medicare program, the failure of the
eligible hospital or CAH to demonstrate
meaningful use in the subsequent year,
will affect the total payments that
hospital is eligible to receive, as,
pursuant to the statute, the hospital is
treated as skipping a payment year.
Payment adjustments apply to Medicare
providers who are unable to
demonstrate meaningful use starting in
2015.
Comment: One commenter asked if
CMS could apply the same Medicaid
EP’s first year incentive eligibility
requirements of adopting, implementing
or upgrading to certified EHR
technology to Medicare physicians
instead of demonstration of meaningful
use.
Response: The HITECH Act allows
Medicaid EPs and eligible hospitals to
receive an incentive for the adoption,
implementation, or upgrade of certified
EHR technology in their first
participation year. In subsequent years,
these EPs and eligible hospitals must
demonstrate that they are meaningful
users. There are no parallel provisions
under the Medicare EHR incentive
program that would authorize us to
make payments to Medicare EPs,
eligible hospitals, and CAHs for the
adoption, implementation or upgrade of
certified EHR technology. Rather, in
accordance with sections 1848(o)(2),
1886(n)(3)(A), and 1814(l)(3)(A) of the
Act, Medicare incentive payments are
only made to EPs, eligible hospitals, and
CAHs for the demonstration of
meaningful use of certified EHR
technology.
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After consideration of the public
comments received, we are finalizing
the definitions of First payment year as
proposed. For the Medicare EHR
incentive programs, we are modifying
the definitions of second, third, fourth,
fifth payment year to make clear that
these years are ‘‘each successive year
following the first payment year.’’ For
the Medicaid EHR incentive program,
we included definitions of first, second,
third, fourth, fifth and sixth payment
year that make clear that these are the
years for which payment is received.
The regulations can now be found at
§ 495.4 of our regulations.
e. EHR Reporting Period
In the proposed rule, we proposed a
definition of EHR Reporting Period for
purposes of the Medicare and Medicaid
incentive payments under sections
1848(o), 1853(l)(3), 1886(n), 1853(m)(3),
1814(l) and 1903(t) of the Act. For these
sections, we proposed that the EHR
reporting period would be any
continuous 90-day period within the
first payment year and the entire
payment year for all subsequent
payment years. In our proposed rule, we
did not make any proposals regarding
the reporting period that will be used
for purposes of the payment
adjustments that begin in 2015. We
intend to address this issue in future
rulemaking, for purposes of Medicare
incentive payment adjustments under
sections 1848(a)(7), 1853(l)(4),
1886(b)(3)(B)(ix), 1853(m)(4), and
1814(l)(4) of the Act.
For the first payment year only, we
proposed to define the term EHR
reporting period at § 495.4 of our
regulations to mean any continuous 90day period within a payment year in
which an EP, eligible hospital or CAH
successfully demonstrates meaningful
use of certified EHR technology. The
EHR reporting period therefore could be
any continuous period beginning and
ending within the relevant payment
year. Starting with the second payment
year and any subsequent payment years
for a given EP, eligible hospital or CAH,
we proposed to define the term EHR
reporting period at § 495.4 to mean the
entire payment year. In our discussion
of considerations in defining
meaningful use later in this section we
discuss how this policy may be affected
by subsequent revisions to the
definition of meaningful use.
For the first payment year, we stated
in the proposed rule our belief that
giving EPs, eligible hospitals and CAHs
flexibility as to the start date of the EHR
reporting period is important, as
unforeseen circumstances, such as
delays in implementation, higher than
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expected training needs and other
unexpected hindrances, may cause an
EP, eligible hospital, or CAH to
potentially miss a target start date.
Comment: Some commenters
supported the 90-day reporting period
proposed for the first payment year. One
commenter requested that exceptions,
per the provider request, be considered
individually in cases of compliance for
less than the 90 days (for example, 85
days). Commenters preferred the 90-day
reporting period overall and many
suggested it be used for subsequent
years as well. We also received
comments questioning why Medicaid
providers would need to conform to the
90-day reporting period in order to
adopt, implement or upgrade certified
EHR technology.
Response: We do believe that for
program integrity it is crucial to
maintain a consistent reporting period.
Basing the incentive payments on
meaningful use implies a minimum
level of use in order to receive the
incentive payment. The timeframe is
part of the determination of whether use
is meaningful and therefore requires a
minimum as well. Given the short time
period as compared to the entire year,
we do not believe an exception process
is needed. However, we agree with
commenters that an EHR reporting
period for demonstrating adoption,
implementation or upgrading certified
EHR technology by Medicaid EPs and
eligible hospitals is unnecessary and are
removing it for the final rule in this
instance. Similarly, Medicaid EPs and
eligible hospitals who are demonstrating
meaningful use for the first time in their
second payment year, will have a 90day reporting period to maintain parity
with Medicare providers’ first
meaningful use payment year. We do
not believe that after successfully
demonstrating meaningful use, a 90-day
period is appropriate for subsequent
years. The reasons for using the 90-day
period instead of the full year are based
on potential delays in implementing
certifying EHR technology. Once
certified EHR technology is
implemented these are no longer
applicable.
After consideration of the public
comments received and with the
clarification described above for
adopting, implementing or upgrading,
we are finalizing the 90-day reporting
period for the first payment year based
on meaningful use as proposed for
Medicare EPs, eligible hospitals and
CAHs and full year EHR reporting
periods for subsequent payment years.
For Medicaid EPs and eligible hospitals,
the EHR reporting period will be a 90day period for the first year a Medicaid
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EP or eligible hospital demonstrates
meaningful use and full year EHR
reporting periods for subsequent
payment years.
f. Meaningful EHR User
Section 1848(o)(1)(A)(i) of the Act,
limits incentive payments under the
Medicare FFS EHR incentive program to
an EP who is a ‘‘meaningful EHR user.’’
Similarly, section 1886(n)(1) and 1814(l)
of the Act, limits incentive payments
under the Medicare FFS EHR incentive
program to an eligible hospital or CAH,
respectively, who is a ‘‘meaningful EHR
user.’’ Section 1903(t)(6)(C)(i)(II) of the
Act limits incentive payments for
payment years other than the first
payment year to a Medicaid EP or
eligible hospital who ‘‘demonstrates
meaningful use of certified EHR
technology.’’ We proposed to define at
§ 495.4 the term ‘‘meaningful EHR user’’
as an EP, eligible hospital, or CAH who,
for an EHR reporting period for a
payment year, demonstrates meaningful
use of certified EHR technology in the
form and manner consistent with our
standards (discussed below).
Comment: Several commenters
indicated there is a need to align
measures and programs, to avoid having
to report similar measure standards to
different Federal, State and other
entities.
Response: We concur with the goal of
alignment to avoid redundant and
duplicative reporting and seek to
accomplish this to the extent possible
now and in future rulemaking.
Comment: Several commenters
suggested that CMS considers EPs,
eligible hospitals, and CAHs who are
participating in certain existing
programs as meaningful EHR users. The
commenters contended that the
standards followed by participants in
these programs are equivalent to those
we proposed to adopt for purposes of
demonstrating meaningful use. The
programs recommended by commenters
are—
• Qualified Health Information
Exchange Networks; and
• Medicare Electronic Health Record
Demonstration Program.
Response: We do not agree that
participation in these programs would
be the equivalent to demonstrating
meaningful use in accordance with the
criteria under the EHR incentive
programs. Most of these programs place
a heavy focus on one of the five
priorities of meaningful use discussed
in the next section such as reporting
clinical quality measures or the
exchange of health information, tailored
to the individual program’s goals. For
example, the goal of the Medicare
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Electronic Health Record Demonstration
Program, for example, which was
started in 2009 and pre-dates passage of
the HITECH Act, is to reward delivery
of high-quality care supported by the
adoption and use of electronic health
records in physician small to mediumsize primary care practices. The purpose
of this program is to encourage adoption
and increasingly sophisticated use of
EHRs by small to medium-sized primary
care practices. While this goal is similar
to the overall objective of the HITECH
Act, the requirements for the
demonstration are not as broad-based as
that of the HITECH Act, and payment
incentives are based on the level of use
over the duration of the program, which
will vary by practice. Therefore, it is not
appropriate to deem practices
participating in the EHR Demonstration
as meaningful users for purposes of the
HITECH Act. The HITECH Act also
requires use certified EHR technology as
defined by ONC to qualify for incentive
payments. While CCHIT has certified
EHR technology in the past, the ONC
regulation ‘‘Establishment of the
Temporary Certification Program for
Health Information Technology; Final
Rule’’ (see 75 FR 36157) which
establishes a temporary certifying body
has yet to be established. Where
possible, we have aligned the criteria
required to demonstrate meaningful use
with existing programs like PQRI and
RHQDAPU as discussed in section
II.A.3 of this final rule. After
consideration of the public comments
received, we are finalizing our
definition of a meaningful EHR user as
proposed.
2. Definition of Meaningful Use
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a. Considerations in Defining
Meaningful Use
In sections 1848(o)(2)(A) and
1886(n)(3)(A) of the Act, the Congress
identified the broad goal of expanding
the use of EHRs through the term
meaningful use. In section 1903(t)(6)(C)
of the Act, Congress applies the
definition of meaningful use to
Medicaid eligible professionals and
eligible hospitals as well. Certified EHR
technology used in a meaningful way is
one piece of a broader HIT
infrastructure needed to reform the
health care system and improve health
care quality, efficiency, and patient
safety. HHS believes this ultimate vision
of reforming the health care system and
improving health care quality, efficiency
and patient safety should drive the
definition of meaningful use consistent
with the applicable provisions of
Medicare and Medicaid law.
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In the proposed rule we explained
that in defining meaningful use we
sought to balance the sometimes
competing considerations of improving
health care quality, encouraging
widespread EHR adoption, promoting
innovation, and avoiding imposing
excessive or unnecessary burdens on
health care providers, while at the same
time recognizing the short timeframe
available under the HITECH Act for
providers to begin using certified EHR
technology.
Based on public and stakeholder
input received prior to publishing the
proposed rule, we consider a phased
approach to be most appropriate. Such
a phased approach encompasses
reasonable criteria for meaningful use
based on currently available technology
capabilities and provider practice
experience, and builds up to a more
robust definition of meaningful use,
based on anticipated technology and
capabilities development. The HITECH
Act acknowledges the need for this
balance by granting the Secretary the
discretion to require more stringent
measures of meaningful use over time.
Ultimately, consistent with other
provisions of law, meaningful use of
certified EHR technology should result
in health care that is patient centered,
evidence-based, prevention-oriented,
efficient, and equitable.
Under this phased approach to
meaningful use, we intend to update the
criteria of meaningful use through
future rulemaking. We refer to the initial
meaningful use criteria as ‘‘Stage 1.’’ We
currently anticipate two additional
updates, which we refer to as Stage 2
and Stage 3, respectively. We expect to
update the meaningful use criteria on a
biennial basis, with the Stage 2 criteria
by the end of 2011 and the Stage 3
criteria by the end of 2013. The stages
represent an initial graduated approach
to arriving at the ultimate goal.
• Stage 1: The Stage 1 meaningful use
criteria, consistent with other provisions
of Medicare and Medicaid law, focuses
on electronically capturing health
information in a structured format;
using that information to track key
clinical conditions and communicating
that information for care coordination
purposes (whether that information is
structured or unstructured, but in
structured format whenever feasible);
implementing clinical decision support
tools to facilitate disease and
medication management; using EHRs to
engage patients and families and
reporting clinical quality measures and
public health information. Stage 1
focuses heavily on establishing the
functionalities in certified EHR
technology that will allow for
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continuous quality improvement and
ease of information exchange. By having
these functionalities in certified EHR
technology at the onset of the program
and requiring that the EP, eligible
hospital or CAH become familiar with
them through the varying levels of
engagement required by Stage 1, we
believe we will create a strong
foundation to build on in later years.
Though some functionalities are
optional in Stage 1, as outlined in
discussions later in this rule, all of the
functionalities are considered crucial to
maximize the value to the health care
system provided by certified EHR
technology. We encourage all EPs,
eligible hospitals and CAHs to be
proactive in implementing all of the
functionalities of Stage 1 in order to
prepare for later stages of meaningful
use, particularly functionalities that
improve patient care, the efficiency of
the health care system and public and
population health. The specific criteria
for Stage 1 of meaningful use are
discussed at section II.2.c of this final
rule.
• Stage 2: Our goals for the Stage 2
meaningful use criteria, consistent with
other provisions of Medicare and
Medicaid law, expand upon the Stage 1
criteria to encourage the use of health IT
for continuous quality improvement at
the point of care and the exchange of
information in the most structured
format possible, such as the electronic
transmission of orders entered using
computerized provider order entry
(CPOE) and the electronic transmission
of diagnostic test results (such as blood
tests, microbiology, urinalysis,
pathology tests, radiology, cardiac
imaging, nuclear medicine tests,
pulmonary function tests, genetic tests,
genomic tests and other such data
needed to diagnose and treat disease).
For the final rule, we elaborate on our
plans for Stage 2. We expect that stage
two meaningful use requirements will
include rigorous expectations for health
information exchange, including more
demanding requirements for eprescribing and incorporating structured
laboratory results and the expectation
that providers will electronically
transmit patient care summaries to
support transitions in care across
unaffiliated providers, settings and EHR
systems. Increasingly robust
expectations for health information
exchange in stage two and stage three
will support and make real the goal that
information follows the patient. We
expect that Stage 2 will build upon
Stage 1 by both altering the expectations
of the functionalities in Stage 1 and
likely adding new functionalities which
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are not yet ready for inclusion in Stage
1, but whose provision is necessary to
maximize the potential of EHR
technology. As discussed later in this
final rule, we are making some
objectives of the Stage 1 of meaningful
use optional and other required. We will
consider every objective that is optional
for Stage 1 to be required in Stage 2 as
well as revaluate the thresholds and
exclusions of all the measures both
percentage based and those currently a
yes/no attestation. Additionally, we may
consider applying the criteria more
broadly to all outpatient hospital
settings (not just the emergency
department).
• Stage 3: Our goals for the Stage 3
meaningful use criteria are, consistent
with other provisions of Medicare and
Medicaid law, to focus on promoting
improvements in quality, safety and
efficiency leading to improved health
outcomes, focusing on decision support
for national high priority conditions,
patient access to self management tools,
access to comprehensive patient data
through robust, patient-centered health
information exchange and improving
population health.
We did not include regulatory
provisions for Stage 2 or Stage 3 in our
proposal and with one exception
discussed under the CPOE objective, we
are not finalizing Stage 2 or Stage 3
requirements at this time. However, we
plan to build upon Stage 1 by increasing
the expectations of the functionalities in
Stage 1 and adding new objectives for
Stage 2. In our next rulemaking, we
currently intend to propose that every
objective in the menu set for Stage 1 (as
described later in this section) be
included in Stage 2 as part of the core
set. While allowing providers flexibility
in setting priorities for EHR
implementation takes into account their
unique circumstances, we maintain that
all the objectives are crucial to building
a strong foundation for health IT and to
meeting the statutory objectives of the
Act. In addition, as indicated in our
proposed rule, we anticipate raising the
threshold for these objectives in both
Stage 2 and 3 as the capabilities of HIT
infrastructure increases. For Stage 2, we
intend to review the thresholds and
measures associated with all Stage 1
objectives considering advances in
technology, changes in standard
practice, and changes in the
marketplace (for example, wider
adoption of information technology by
pharmacies) and propose, as
appropriate, increases in these
requirements.
We recognize that the thresholds
included in the final regulation are
ambitious for the current state of
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technology and standards of care.
However, we expect the delivery of
health care to evolve through the
inception of the HITECH incentive
programs and implementation of the
Affordable Care Act prior to finalizing
Stage 2. Furthermore, data collected
from the initial attestations of
meaningful use will be used to ensure
that the thresholds of the measures that
accompany the objectives in Stage 2 are
continue to aggressively advance the use
of certified EHR technology. Finally, we
continue to anticipate redefining our
objectives to include not only the
capturing of data in electronic format
but also the exchange (both
transmission and receipt) of that data in
increasingly structured formats. As
appropriate, we intend to propose the
addition of new objectives to capture
new functions that are necessary to
maximize the potential of EHR
technology, but were not ready for Stage
1. For instance, we would consider
adding measures related to CPOE orders
for services beyond medication orders.
The intent and policy goal for raising
these thresholds and expectations is to
ensure that meaningful use encourages
patient-centric, interoperable health
information exchange across provider
organizations.
We will continue to evaluate the
progression of the meaningful use
definition for consistency with the
HITECH ACT and any future statutory
requirements relating to quality
measurement and administrative
simplification. As the purpose of these
incentives is to encourage the adoption
and meaningful use of certified EHR
technology, we believe it is desirable to
account for whether an EP, eligible
hospital or CAH is in their first, second,
third, fourth, fifth, or sixth payment
year when deciding which definition of
meaningful use to apply in the
beginning years of the program. The HIT
Policy Committee in its public meeting
on July 16, 2009 also voiced its approval
of this approach. However, such
considerations are dependent on future
rulemaking, so for this final rule Stage
1 criteria for meaningful use are valid
for all payments years until updated by
future rulemaking.
We proposed that Medicare EPs,
eligible hospitals, and CAHs whose first
payment year is 2011 must satisfy the
requirements of the Stage 1 criteria of
meaningful use in their first and second
payment years (2011 and 2012) to
receive the incentive payments. We
anticipate updating the criteria of
meaningful use to Stage 2 in time for the
2013 payment year and therefore
anticipate for their third and fourth
payment years (2013 and 2014), an EP,
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eligible hospital, or CAH whose first
payment year is 2011 would have to
satisfy the Stage 2 criteria of meaningful
use to receive the incentive payments.
We proposed that Medicare EPs, eligible
hospitals, and CAHs whose first
payment year is 2012 must satisfy the
Stage 1 criteria of meaningful use in
their first and second payment years
(2012 and 2013) to receive the incentive
payments. We anticipate updating the
criteria of meaningful use to Stage 2 in
time for the 2013 payment year and
anticipate for their third payment year
(2014), an EP, eligible hospital, or CAH
whose first payment year is 2012 would
have to satisfy the Stage 2 criteria of
meaningful use to receive the incentive
payments. We discussed in the
proposed rule that Medicare EPs,
eligible hospitals, and CAHs whose first
payment year is 2013 must satisfy the
Stage 1 criteria of meaningful use in
their first payment year (2013) to receive
the incentive payments. We anticipate
updating the criteria of meaningful use
to Stage 2 in time for the 2013 payment
year and therefore anticipate for their
second payment year (2014), an EP,
eligible hospital, or CAH whose first
payment year is 2013 would have to
satisfy the Stage 2 criteria of meaningful
use to receive the incentive payments.
We discussed in the proposed rule that
Medicare EPs, eligible hospitals, and
CAHs whose first payment year is 2014
must satisfy the Stage 1 criteria of
meaningful use in their first payment
year (2014) to receive the incentive
payments. In the proposed rule, we
discussed the idea that alignment of
stage of meaningful use and payment
year should synchronize for all
providers in 2015, and requested
comment on the need to create such
alignment. After reviewing public
comment on this issue, our goal remains
to align the stages of meaningful use
across all providers in 2015. However,
we acknowledge the concerns regarding
the different Medicare and Medicaid
incentive timelines, as well as concerns
about whether Stage 3 would be
appropriate for an EP’s, eligible
hospital’s or CAH’s first payment year at
any point in the future and believe the
issue needs additional review and
discussion before we lay out a clear path
forward for 2015 and beyond. Therefore,
we have decided to remove language in
the final rule discussing our possible
directions for any year beyond 2014. We
will address the years beyond 2014 in
later rulemaking. Table 1 outlines how
we anticipate applying the respective
criteria of meaningful use in the first
years of the program, and how we
anticipate applying such criteria for
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engage in rulemaking to adopt the
criteria that will accompany Stages 2
and 3 of meaningful use, stakeholders
should wait for those rulemakings to
determine what will be required for
those Stages and should not view the
discussions in this preamble or final
rule as binding the agency to any
specific definition for those future
stages.
Please note that each of the EHR
incentive programs has different rules
regarding the number of payment years
available, the last year for which
incentives may be received, and the last
payment year that can be the first
payment year for an EP, eligible
hospital, or CAH. The applicable
payment years and the incentive
payments available for each program are
also discussed in section II.C. of this
final rule for the Medicare FFS EHR
incentive program, in section II.D. of
this final rule for the MA EHR incentive
program, and in section II.E. of this final
rule for the Medicaid EHR incentive
program.
Comment: Numerous commenters
noted that it is inappropriate to align the
Medicaid EHR incentive payment
program with the Medicare program due
to the lack of penalties in the Medicaid
program and due to the option for
Medicaid providers to participate in
their first year by adopting,
implementing, or upgrading certified
EHR technology.
Response: This was not the only
reason for having all EPs, eligible
hospitals, and CAHs align by 2015.
However, as we are not addressing
stages of meaningful use beyond 2014 in
this final rule, potential alignment is not
discussed. We will reconsider this
comment in future rulemaking.
The stages of criteria of meaningful
use and how they are demonstrated are
described further in this final rule and
will be updated in subsequent
rulemaking to reflect advances in HIT
products and infrastructure. We note
that such future rulemaking might also
include updates to the Stage 1 criteria.
We invited comment on our
alignment between payment year and
the criteria of meaningful use
particularly in regards to the need to
create alignment across all EPs, eligible
hospitals, and CAHs in all EHR
incentive programs in 2015.
Comment: Many commenters
requested that if there continued to be
a year where all EPs, eligible hospitals
and CAHs must meet the same stage of
meaningful use that that year be 2017,
rather than 2015 as we had discussed in
the proposed rule. These commenters
asserted that EPs, eligible hospitals, and
CAHs whose first payment year is after
2011 might not have sufficient time to
reach the Stage 3 of meaningful use
criteria by 2015. Some commenters
pointed out that while the HITECH Act
states that 2015 is the first year of
payment adjustments, it provides for
escalation of the payment adjustments
so that they do not reach their full levels
until 2017.
Response: As we explained in the
proposed rule, equity in the level of
meaningful use across all EPs, eligible
hospitals, and CAHs subject to the
payment adjustment was not the only
reason for our plan that all EPs, eligible
hospitals, and CAHs satisfy the Stage 3
criteria for either the Medicare or
Medicaid EHR incentive programs. The
achievement of many of the ultimate
goals of meaningful use of certified EHR
technology are dependent on a critical
mass of EPs, eligible hospitals, and
CAHs all being meaningful EHR users.
Exchange of health information is most
valuable when it is so robust that it can
be relied upon to provide a complete or
nearly complete picture of a patient’s
health. For example, robust Stage 3
meaningful use by an EP does not assist
that EP in avoiding ordering a
duplicative test, if the EP with
information on the original test is only
a Stage 1 meaningful EHR user and is
not yet exchanging that information.
This dependency is key to the need to
get to Stage 3 for all providers. Another
reason for alignment at Stage 3 in 2015
is that many of the barriers to
functionalities of EHRs that exist today
as may no longer exist in 2015. The
existence of these barriers today is one
of the primary reasons for having a
staged approach as opposed to requiring
more robust meaningful use at the
beginning of the program. Providers,
developers of EHRs, government and
non-governmental organizations are all
working to remove these barriers. We
believe it is likely there will be success
in removing many of these barriers,
which would make many of the
compromises made in Stage 1 no longer
necessary by 2015. However, due to the
many comments on alignment starting
in 2015 and our plan to engage in
additional more rounds of rulemaking,
we are removing discussion of actual
alignment between the first payment
year of an EP, eligible hospital, or CAH
and the Stage of meaningful use they
will be expected to meet for all years
after 2014. Our policies for 2015 and
subsequent years will be determined
through future rulemaking.
Comment: Several commenters
requested that CMS base the payment
adjustments on Stage 1 of meaningful
use regardless of the EP, eligible
hospital, or CAH’s prior participation in
the incentive program.
Response: We thank commenters for
the thoughtful comments received, and
will take their input into consideration
when in future rulemaking when we
consider whether to require that EPs,
eligible hospitals, and CAHs satisfy the
stage 3 definition of meaningful use in
order to avoid reduced payments under
Medicare for their professional services
and inpatient hospital services
beginning 2015. We reiterate, however,
that in this final rule we are only
adopting criteria that we expect will
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subsequent payment years, through
2014. Please note that nothing in this
discussion restricts us from requiring
additional stages of meaningful use
(beyond stage 3) through future
rulemaking. In addition, as we expect to
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apply in 2011 and 2012. We have also
outlined the expected progression of
stages of meaningful use criteria until
2014. However, we are not in this rule
finalizing regulations that address the
meaningful use standards that apply in
2015 and thereafter.
Comment: Numerous commenters
requested that we specifically propose
objectives and measures for Stage 2 and
3. We also received recommendations
on what those objectives and, in rare
cases, measures should be. We
discussed some of these objectives in
the proposed rule and discuss them
again in this final rule in section II.d.
Others are highly related to existing
objectives, while still others were not
discussed in any way in the proposed
rule. The suggested objectives and
measures for Stages 2 and 3 include the
following:
• Use of evidence-based order sets.
• Electronic medication
administration record (eMAR).
• Bedside medication administration
support (barcode/RFID).
• Record nursing assessment in EHR.
• Record nursing plan of care in EHR.
• Record physician assessment in
EHR.
• Record physician notes in EHR.
• Multimedia/Imaging integration.
• Generate permissible discharge
prescriptions electronically.
• Contribute data to a PHR.
• Record patient preferences
(language, etc).
• Provide electronic access to patientspecific educational resources.
• Asking patients about their
experience of care.
Response: With one exception
discussed under the CPOE objective, we
continue to believe that finalizing
specific objectives and measures for
later stages is inappropriate. One of the
greatest benefits of the phased stage
approach is the ability to consider the
impact and lessons of the prior stage
when formulating a new stage. Many
commenters supported our discussion
of later stages for this very reason. In
addition, we do not believe it is
appropriate to finalize objectives for any
stage of meaningful use that were not
specifically discussed in the proposed
rule, as doing so would deprive the
public the opportunity to comment on
the objective in question. Nevertheless,
we thank commenters for the thoughtful
comments received, and expect to take
their input into consideration when in
future rulemaking we consider
additional or revised criteria and
measures to adopt for the stage 2 and
stage 3 definitions of meaningful use.
Comment: A commenter indicated
that attestation is an insufficient means
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to hold providers accountable for the
expenditure of public funds and to
protect against fraud and abuse.
Response: We likewise are concerned
with the potential fraud and abuse.
However, Congress for the HITECH Act
specifically authorized submission of
information as to meaningful use
through attestation. CMS is developing
an audit strategy to ameliorate and
address the risk of fraud and abuse.
b. Common Definition of Meaningful
Use Under Medicare and Medicaid
Under sections 1848(o)(1)(A)(i),
1814(l)(3)(A), and 1886(n)(1) of the Act,
an EP, eligible hospital or CAH must be
a meaningful EHR user for the relevant
EHR reporting period in order to qualify
for the incentive payment for a payment
year in the Medicare FFS EHR incentive
program. Sections 1848(o)(2)(A) and
1886(n)(3)(A) of the Act provide that an
EP and an eligible hospital shall be
considered a meaningful EHR user for
an EHR reporting period for a payment
year if they meet the following three
requirements: (1) Demonstrates use of
certified EHR technology in a
meaningful manner; (2) demonstrates to
the satisfaction of the Secretary that
certified EHR technology is connected
in a manner that provides for the
electronic exchange of health
information to improve the quality of
health care such as promoting care
coordination, in accordance with all
laws and standards applicable to the
exchange of information; and (3) using
its certified EHR technology, submits to
the Secretary, in a form and manner
specified by the Secretary, information
on clinical quality measures and other
measures specified by the Secretary.
The HITECH Act requires that to receive
a Medicaid incentive payment in the
initial year of payment, an EP or eligible
hospital may demonstrate that they have
engaged in efforts to ‘‘adopt, implement,
or upgrade certified EHR technology.’’
Details, including special timeframes,
on how we define and implement
‘‘adopt, implement, and upgrade’’ are in
section II.D.7.b.2 of this final rule. For
subsequent payment years, or the first
payment year if an EP or eligible
hospital chooses, section
1903(t)(6)(C)(i)(II) of the Act, prohibits
receipt of an incentive payment, unless
‘‘the Medicaid provider demonstrates
meaningful use of certified EHR
technology through a means that is
approved by the State and acceptable to
the Secretary, and that may be based
upon the methodologies applied under
section 1848(o) or 1886(n).’’ (Sections
1848(o) and 1886(n) of the Act refer to
the Medicare EHR incentive programs
for EPs and eligible hospitals/CAHs
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respectively.) Under section 1903(t)(8)
of the Act to the maximum extent
practicable, we are directed to avoid
duplicative requirements from Federal
and State governments to demonstrate
meaningful use of certified EHR
technology. Provisions included at
section 1848(o)(1)(D)(iii) of the Act also
contain a Congressional mandate to
avoid duplicative requirements for
meaningful use, to the extent
practicable. Finally, section 1903(t)(8) of
the Act allows the Secretary to deem
satisfaction of the requirements for
meaningful use of certified EHR
technology for a payment year under
Medicare to qualify as meaningful use
under Medicaid.
We stated in the proposed rule that
we believe that given the strong level of
interaction on meaningful use
encouraged by the HITECH Act, there
would need to be a compelling reason
to create separate definitions for
Medicare and Medicaid. We declared in
the proposed rule that we had found no
such reasons for disparate definitions in
our internal or external discussions. To
the contrary, stakeholders have
expressed strong preferences to link the
Medicare and Medicaid EHR incentive
programs wherever possible. Hospitals
are entitled to participate in both
programs, and we proposed to offer EPs
an opportunity to switch between the
Medicare and Medicaid EHR incentive
programs. Therefore, we proposed to
create a common definition of
meaningful use that would serve as the
definition for EPs, eligible hospitals and
CAHs participating in the Medicare FFS
and MA EHR incentive program, and
the minimum standard for EPs and
eligible hospitals participating in the
Medicaid EHR incentive program. We
clarified that under Medicaid this
proposed common definition would be
the minimum standard. We proposed to
allow States to add additional objectives
to the definition of meaningful use or
modify how the existing objectives are
measured; the Secretary would not
accept any State alternative that does
not further promote the use of EHRs and
healthcare quality or that would require
additional functionality beyond that of
certified EHR technology. See section
II.D.8. of this final rule for further
details.
For hospitals, we proposed to exercise
the option granted under section
1903(t)(8) of the Act and deem any
Medicare eligible hospital or CAH who
is a meaningful EHR user under the
Medicare EHR incentive program and is
otherwise eligible for the Medicaid
incentive payment to be classified as a
meaningful EHR user under the
Medicaid EHR incentive program. This
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is applicable only to eligible hospitals
and CAHs, as EPs cannot
simultaneously receive an incentive
payment under both Medicare and
Medicaid.
We solicited comments as to whether
there are compelling reasons to give the
States additional flexibility in creating
disparate definitions beyond what was
proposed. In addition, if commenting in
favor of such disparate definitions, we
also asked interested parties to comment
on whether the proposal of deeming
meeting the Medicare definition as
sufficient for meeting the Medicaid
definition remains appropriate under
the disparate definitions. This is
applicable only to hospitals eligible for
both the Medicare and Medicaid
incentive programs. Furthermore, if a
State has CMS-approved additional
meaningful use requirements, hospitals
deemed as meaningful users by
Medicare would not have to meet the
State-specific additional meaningful use
requirements in order to qualify for the
Medicaid incentive payment.
Comment: Most commenters believe
that States should not be allowed the
option to add to or change the
meaningful use requirements for the
Medicaid EHR incentive program. The
commenters’ main reason for
standardizing the meaningful use
requirements for both Medicare and
Medicaid is to eliminate administrative
burden on both providers and EHR
vendors to accommodate programming
and reporting using different technical
specifications for the same or similar
measures.
Response: After consideration of the
comments received, we are finalizing
the provisions regarding possible
differences in the definition of
meaningful use between Medicare and
Medicaid with the following revisions.
We believe that over time the option to
add to or change the floor definition of
meaningful use might represent an
important policy tool for States and
therefore CMS plans to review and
adjudicate these requests over the
duration of the program. For Stage 1 of
meaningful use, we have revised the
definition of meaningful use in response
to the many comments and are requiring
an overall lower bar and an approach
that is more flexible. On the other hand,
we wish to support the ability for States
to reinforce their public health priorities
and goals based upon their existing
public health infrastructure and
maturity. For that reason, we, for Stage
1, will only entertain States’ requests to
tailor the Stage 1 meaningful use
definition as it pertains specifically to
public health objectives and data
registries. For purposes of the Medicaid
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EHR incentive program during Stage 1
of meaningful use, these are limited to:
Objective: Generate lists of patients by
specific conditions to use for quality
improvement, reduction of disparities,
research, or outreach.
Measure: Generate at least one report
listing patients of the EP or eligible
hospital with a specific condition.
Example: Generate lists of patients
with the following conditions:
depression, diabetes, obesity, etc. This
would not be for reporting to the State
but to draw EPs’ or eligible hospitals’
attention in order to better manage their
patient population. States would also be
permitted to request CMS approval to
include this in the core set for all EPs
and/or eligible hospitals.
Objective: Capability to submit
electronic data to immunization
registries of Immunization Information
Systems and actual submission in
accordance with applicable law and
practice.
Measure: Performed at least one test
of certified EHR technology’s capacity to
submit electronic data to immunization
registries and follow up submission if
the test is successful (unless none of the
immunization registries to which the EP
or eligible hospital submits such
information have the capacity to
received the information electronically).
Example: State could point to a
specific immunization registry that
supports standards-based transmission
of data and dictate how that information
is transmitted. States would also be
permitted to request CMS approval to
include this objective in the core list for
all EPs and eligible hospitals. The
justification for this request in their
State Medicaid HIT Plan, should
address any potential barriers for
providers in achieving this objective.
Objective: Capability to submit
electronic data on reportable (as
required by state or local law) lab results
to public health agencies and actual
submission in accordance with
applicable law and practice.
Measure: Performed at least one test
of certified EHR technology’s capacity to
submit electronic data on reportable lab
results to public health agencies and
follow-up submission if the test is
successful (unless none of the public
health agencies to which an eligible
hospital submits such information have
the capacity to receive the information
electronically).
Example: State could specify the
standards-based means of transmission
and/or the destination of this data.
States would also be permitted to
request CMS approval to include this
objective in the core list for all and
eligible hospitals. The justification for
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this request in their State Medicaid HIT
Plan, should address any potential
barriers for providers in achieving this
objective.
Objective: Capability to submit
electronic syndromic surveillance data
to public health agencies and actual
transmission according to applicable
law and practice.
Measure: Performed at least one test
of certified EHR technology’s capacity to
submit electronic syndromic
surveillance data to public health
agencies and follow-up submission if
the test is successful (unless none of the
public health agencies to which an EP
or eligible hospital submits such
information have the capacity to receive
the information electronically).
Example: State could specify the
standards-based means of transmission
and/or the destination of this data.
States would also be permitted to
request CMS approval to include this
objective in the core list for all EPs and
eligible hospitals. The justification for
this request in their State Medicaid HIT
Plan, should address any potential
barriers for providers in achieving this
objective.
We reiterate that we will not approve
any requests that would require EHR
functionality above and beyond that
included in the ONC EHR certification
criteria as finalized for Stage 1 of
meaningful use.
Comment: Several commenters
requested that CMS affirm the ability of
States to require additional meaningful
use criteria for all eligible professionals
and hospitals (pursuant to §§ 495.316(a),
495.316(d)(2)), regardless of whether
those entities were deemed eligible
through Medicare.
Response: Section 1903(t)(8) provides
authority for the Secretary to ‘‘deem
satisfaction of requirements for * * *
meaningful use for a payment year
under title XVIII to be sufficient to
qualify as meaningful use under
[1903(t)].’’ We continue to believe that
allowing deeming ensures that hospitals
eligible for both programs are able to
focus on only one set of measures,
without requiring duplication of effort
or confusion regarding meaningful use
standards. Thus, hospitals eligible for
both Medicare and Medicaid incentive
payments will be deemed for Medicaid
if they have met the meaningful use
definition through Medicare, even if a
State has an approved State-specific
definition of meaningful use. States
cannot withhold a Medicaid EHR
incentive payment from dually eligible
hospitals if they have met all the
eligibility criteria for Medicaid, and
have met the Medicare definition for
meaningful use.
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Because of this comment, we are
revising section § 495.4 of our
regulations to indicate that eligible
hospitals who are meaningful users
under the Medicare EHR incentive
payment program are deemed as
meaningful users under the Medicaid
EHR incentive payment program, and
need not meet additional criteria
imposed by the State. While this is not
a new requirement, it was not
previously listed in regulations.
Comment: A commenter asked that
CMS adopt and affirm the deeming
approach in its final rule and ensure
that the regulatory language reflects this
approach.
Response: We agree and have
included in the final rule regulation
language that hospitals that are
meaningful users under the Medicare
EHR Incentive Program are deemed
meaningful users under the Medicaid
EHR Program.
Comment: Several commenters
requested that CMS not deem hospitals
having met the meaningful use
requirements for the Medicare EHR
Incentive Payment, as having fulfilled
the meaningful use requirements for the
State’s Medicaid EHR Incentive
Payment. The commenters noted that if
a State sought for acute care hospitals to
participate in their statewide health
information exchange and yet those
hospitals did not have to do so in order
to qualify for both the Medicare and
Medicaid EHR Incentive Payments, then
they would have no motivation to do so.
The commenters would like acute care
hospitals eligible for both the Medicare
and Medicaid EHR Incentive Program to
have to comply with any State-specific
meaningful use requirements, in
addition to the Medicare floor
definition.
Response: In consideration of the
comments received, CMS adopts its
proposed preamble language about
deeming hospitals and adds the
corresponding regulation text. This is
necessary for Stage 1 of meaningful use
in particular, where we believe it is
crucial to prevent additional burden on
providers and foster eligible hospitals’
path to successful EHR adoption and
meaningful use. In addition, as already
noted, for Stage 1, we will not entertain
States’ requests to alter the floor
definition of meaningful use as codified
in this final rule except for specific
public health objectives. That thereby
reduces the possible differences
between the Medicare and Medicaid
definitions of meaningful use. As part of
Stage 2 of meaningful use, CMS might
consider States requests to tailor
meaningful use as it pertains to health
information exchange, for example.
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Further details about this policy option
will be included in future rulemaking
and subject to public comment.
c. Stage 1 Criteria for Meaningful Use
In the proposed rule we proposed that
to qualify as a meaningful EHR user for
2011, EPs, eligible hospitals or CAHs
must demonstrate that they meet all of
the objectives and their associated
measures as set forth in proposed
§ 495.6. We further proposed and
finalize in this final rule that except
where otherwise indicated, each
objective and its associated measure
must be satisfied by an individual EP as
determined by unique National Provider
Identifiers (NPIs) and an individual
hospital as determined by unique CMS
certification numbers (CCN).
Discussion of Whether an EP, Eligible
Hospital or CAH Must Meet All Stage 1
Meaningful Use Objectives and Their
Associated Measures
Comment: Commenters almost
unanimously said that requiring an EP,
eligible hospital or CAH to meet all of
the objectives and their associated
measures in order to qualify as a
meaningful EHR user was too ambitious
given the current state of EHR
technology, adoption levels, the
timeline for certification of EHR
technologies, the realities of
implementing EHR technology and the
timeline proposed for Stage 1 of
meaningful use in our proposed rule.
Most of the commenters suggested
alternatives that they believed would
support the health care policy priorities
of Stage 1. Several different alternatives
were proposed. The first alternative
would be to require a specified
percentage of the Stage 1 meaningful
use objectives and associated measures,
with an EP, eligible hospital or CAH free
to select which of the objectives and
associated measures it would satisfy.
For example under our proposed
objectives and associated measures, if
an EP were required to meet 20 percent,
then an EP would be considered a
meaningful EHR user if he or she
satisfied any five of the proposed
twenty–five objectives and associated
measures. Most commenters suggesting
this alternative envisioned that later
stages of meaningful use would require
that EPs, eligible hospitals, and CAHs
satisfy a higher of the percentage of the
objectives and associated measures. For
example if 20 percent of the objectives
and associated measures were required
for Stage 1, then 50 percent might be
required in Stage 2.
After a fixed percentage, the
suggestion next favored by commenters,
including the HIT Policy Committee and
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MedPAC, was to divide the meaningful
use objectives into two categories, a
‘‘core set’’ of objectives and ‘‘menu set’’
of objectives. To be a considered a
meaningful user under this approach, an
EP, eligible hospital, or CAH would be
required to satisfy (1) all core set of
objectives, and (2) a specified
percentage of the menu set of objectives,
with the EP, eligible hospital, or CAH
free to select which of the menu set of
objectives it would satisfy. For example,
if five objectives were in the core set all
EPs, eligible hospitals, and CAHs would
have to meet those objectives. If twenty
objectives were in the menu set, then
EPs, eligible hospitals, and CAHs would
not have to meet one or more of those
objectives. Commenters varied widely
as to which objectives should be
included in the core set of objectives, as
well as the percentage of menu set
objectives an EP, eligible hospital, or
CAH must satisfy.
Some commenters suggested that we
simply reduce the number of objectives
required for Stage 1 of meaningful use.
Recommendations in this regard varied
from reducing the required objectives to
only just a few (the lowest number being
three), limiting the required objectives
to only to those objectives that affect
health outcomes of individual patients,
to targeted elimination of a few
objectives.
Finally, some commenters suggested
that we eliminate all of the measures
associated with the Stage 1 meaningful
use objectives and only require that EPs,
eligible hospitals, and CAHs attest that
they have attempted to meet each of the
objectives.
Response: After reviewing the
comments, we agree that requiring that
EPs, eligible hospitals, and CAHs satisfy
all of the objectives and their associated
measures in order to be considered a
meaningful EHR user would impose too
great a burden and would result in an
unacceptably low number of EPs,
eligible hospitals, and CAHs being able
to qualify as meaningful EHR users in
the first two years of the program. In
considering an alternative approach, we
have sought to develop an alternative
that is responsive to some degree to all
the concerns raised by the commenters.
We have tried to reduce the
requirements both in number required
and in the thresholds of the associated
measures and provide some flexibility
as well. At the same time, however, we
must be mindful of the relevant
statutory requirements. Sections 1848
(o)(2)(A) and 1886(n)(3) of the Act,
specify three requirements for
meaningful use: (1) Use of certified EHR
technology in a meaningful manner (for
example, electronic prescribing); (2) that
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the certified EHR technology is
connected in a manner that provides for
the electronic exchange of health
information to improve the quality of
care; and (3) that, in using certified EHR
technology, the provider submits to the
Secretary information on clinical quality
measures and such other measures
selected by the Secretary. We believe
that each EP, eligible hospital, and CAH
must meet at least one objective within
each of the three requirements for
meaningful use. We are concerned that
if we were to give EPs, eligible
hospitals, and CAHs full discretion to
select which meaningful use objectives
they will satisfy, some providers would
not choose one or more objectives
within each of the three statutory
requirements for meaningful use.
Furthermore, we are concerned that
affording EPs, eligible hospitals, and
CAHs such flexibility as to which
meaningful use objectives to meet
would delay many of the goals outlined
for meaningful use in section II.a.2. of
this final rule. If in choosing what
objectives to defer, one provider chooses
to focus on improving processes to
improve healthcare quality, another
chooses to focus on being able to
exchange health information and yet
another on engaging patients and
families it is possible that we would fail
to accomplish any of these goals at a
population level. For these reasons, we
do not believe it would be appropriate
to afford providers the unlimited
flexibility to select which of the
meaningful use objectives they will
meet. Rather, as explained below, we
believe providers at a minimum should
have to satisfy a core set of objectives in
order to qualify as meaningful EHR
users.
Similarly, while we agree that merely
reducing the number of objectives
would make meaningful use easier to
achieve for most providers, we believe
that this reduction does not afford the
same flexibility to all providers to
account for their individual difficulties
in meeting meaningful use that some of
the other alternatives do as allowing a
provider to choose certain objectives to
defer. Due to any number of
circumstances such as EHR adoption
level, availability of health information
exchange network, size of practice or
hospital, etc., an objective that is easy
for one EP to achieve might be very
difficult for another EP. Under this
alternative, no allowance is made for
those differences. Finally, we disagree
that meaningful use should be limited to
improving the health outcomes of
individual patients. There are
significant gains that meaningful use
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can achieve in the areas of public
health, privacy and security,
engagement of patients and their
families and efficiency of care that may
not improve health outcomes, but have
significant other benefits such as
engaging patients more fully in
decisions affecting their health and
reducing costs through increased
efficiency of care. We believe that all of
these have a significant impact on
health outcome priorities. Therefore, we
do not categorically reduce the number
of objectives for Stage 1 definition of
meaningful use. We consider requests to
defer an objective to later stages of the
meaningful use criteria or eliminate a
specific objective below in our
discussion of each objective.
Comment: Another alternative that
was recommended by a significant
number of commenters was that we base
the incentive payment amount on the
number of stage 1 meaningful use
objectives satisfied by an EP or eligible
hospital, with those satisfying more
objectives eligible for a higher incentive
payment amount. While some
commenters varied in the specifics or
did not provide specifics, generally we
take this to mean that if an EP, eligible
hospital, or CAH met half of the
objectives then they would receive half
of the incentive payment they would
have received had they met all the
objectives.
Response: The HITECH Act does not
give us the authority to award partial
payments. As discussed elsewhere in
this final rule, sections 1848(o)(1)(A) of
the Act specifies the payment incentive
amount to which an EP who is a
meaningful EHR user is entitled.
Similarly, section 1886(n)(2) of the Act
sets forth a formula for calculation of
incentive payment amount to which an
eligible hospital that is a meaningful
EHR user is entitled. Similarly, section
1814(l)(3)(A) of the Act sets forth a
formula for calculation of incentive
payment amount to which an eligible
hospital that is a meaningful EHR user
is entitled. Similarly, section
1903(t)(4)(B) of the Act sets parameters
for determining the Medicaid EHR
incentive for Medicaid EP. None of
these parameters are related to
meaningful use. Similarly, section
1903(t)(5)(A) of the Act sets forth a
formula for calculation of the incentive
payment amount to which a Medicaid
eligible hospital is entitled. As we do
not have the authority to alter these
statutory formulas for calculating the
incentive payment amounts under
Medicare and Medicaid, we cannot pro
rate the incentive payment amount
based on the number of meaningful use
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objectives satisfied by an EP, eligible
hospital, or CAH.
After consideration of the public
comments received, we are establishing
a core set of objectives with associated
measures and a menu set of objectives
with associated measures. In order to
qualify as a meaningful EHR user, an
EP, eligible hospital, or CAH must
successfully meet the measure for each
objective in the core set and all but five
of the objectives in the menu set. With
one limitation, an EP, eligible hospital,
or CAH may select any five objectives
from the menu set to be removed from
consideration for the determination of
qualifying as a meaningful EHR user.
Further discussion of the objectives,
including additional details about their
inclusion in the core set, can be found
at each objective.
We believe that establishing both a
core and a menu set adds flexibility and
allows the minimum statutory set to be
met. In determining the objectives to
include in the core set, we looked at all
comments, especially those of the HIT
Policy Committee and other
commenters who recommended some
required and optional elements. The
HITECH Act requires the use of health
information technology in improving
the quality of health care, reducing
medical errors, reducing health
disparities, increasing prevention and
improving the continuity of care among
health care settings. In defining the core
set of meaningful use objective, we
believe the most crucial aspect to
consider is meeting the three statutory
guidelines provided in the HITECH Act
and discussed in section II.A.2.a of this
final rule. Second is to identify those
objectives that are most crucial to laying
the foundation for obtaining value from
meaningful use of certified EHR
technology. Third, we believe that
meaningful use should be patientcentered so we focus on getting the most
value to the patient. We believe the
recommendation of the HIT Policy
Committee accomplishes third criteria,
but falls short of the first and second. To
accomplish the first criteria, we add the
objective of submitting clinical quality
measures to CMS or the States and the
objective of exchanging key clinical
information among providers of care
and patient authorized entities. To
accomplish the second, we add several
additional objectives to the core set of
measures as critical elements pertinent
to the management of patients. We have
received a number of comments in
support of these particular measures as
critical to the management of patients
(maintaining an up-to-date problem list,
active medication list, active allergy list,
smoking history and incorporate clinical
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lab tests into EHR as structured data) in
comparison to other requirements. The
addition of two other functional
objectives (drug-drug and drug-allergy
features) as core measures are for
improved patient-safety. All of the listed
elements are integral to the initial or ongoing management of a patient’s current
or future healthcare. While each
element is important in the management
of patients in and of itself, the aggregate
of the elements elevates the importance
of clinical information to not only the
primary provider but for all members of
the interdisciplinary team involved in
the patient’s care. The HITECH Act
statutorily requires the use of health
information technology in improving
the quality of health care, reducing
medical errors, reducing health
disparities, increasing prevention, and
improving the continuity of care among
health care settings. These core set of
measures are also foundational and
aligned with each other. For example,
electronic copies of health information
given to patient will be useless if it does
not contain basic information such as a
problem list, medication list or allergy
list. Exchange of information to other
members of the health care team across
settings will depend on having
structured data of these elements.
Therefore, in support of the HITECH Act
in meeting the statutory requirements,
we have expanded the core set of
measures to include these fundamental
elements to improve patient care. Below
we list the objectives included in the
core set of meaningful use objectives.
—Use CPOE
—Implement drug to drug and drug
allergy interaction checks
—E-Prescribing (EP only)
—Record demographics
—Maintain an up-to-date problem list
—Maintain active medication list
—Maintain active medication allergy
list
—Record and chart changes in vital
signs
—Record smoking status
—Implement one clinical decision
support rule
—Report CQM as specified by the
Secretary
—Electronically exchange key clinical
information
—Provide patients with an electronic
copy of their health information
—Provide patients with an electronic
copy of their discharge instructions
(Eligible Hospital/CAH Only)
—Provide clinical summaries for
patients for each office visit (EP Only)
—Protect electronic health information
created or maintained by certified
EHR
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In addition, achieving Stage 1
meaningful use means demonstration of
progress in each of the five healthcare
outcome priorities outlined in the
proposed rule and discussed again later
in this section. Only one of these
priorities is not represented in the core
set, population and public health. As we
have discussed in this section we do not
want any priority to be overlooked due
to the flexibility we have added to Stage
1 of meaningful use; therefore, all EPs
and hospitals must choose at least one
of the population and public health
measures to demonstrate as part of the
menu set. This is the only limitation
placed on which five objectives can be
deferred from the menu set.
Discussion on Whether Certain EP,
Eligible Hospital or CAH Can Meet all
Stage 1 Meaningful Use Objectives
Given Established Scopes of Practice
In the proposed rule, we specifically
encouraged comments on whether
certain providers may have difficulty
meeting one or more of the objectives
due to their provider type or chosen
specialties
Comment: We received many
comments, both general and specific,
that certain providers or specialists may
not be able to comply with certain
objectives because they are beyond the
scope of their licensing authority or
because they are outside the scope of
their standard of practice. For example,
chiropractors do not have prescribing
authority and thus may not make use of
an EHR technology’s e-prescribing
function and rheumatologists may not
require information on vital signs.
While comments on this potential nonapplicability primarily focused on EPs,
we did receive comments that some
objectives may not be relevant to
smaller or specialized eligible hospitals
as well.
Response: We believe the division of
the meaningful use objectives into a
core set and a menu set may minimize
the impact of including among the
meaningful use objectives one or more
objectives that certain providers or
specialists may be unable to satisfy as
the EP, eligible hospital, or CAH can
defer five objectives from the menu set.
However, if the EP, eligible hospital or
CAH has an insurmountable barrier to
meeting an objective in the core set or
a significant number in the menu set
then the problem remains. For example,
without any consideration on an EP,
eligible hospital or CAH’s capability to
meet the measure associated with a core
objective any EP that could not order
medications requiring a prescription
would not be able to become a
meaningful EHR user as e-prescribing is
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a core set objective. Similarly, any
eligible hospital or CAH that did not
have any requests for electronic copy of
discharge instructions would not be able
to become a meaningful EHR user. In
addition, if this were to occur for a
significant number of menu set
objectives, the flexibility for the EP,
eligible hospital, or CAH to use the five
objectives to account for other concerns
such as implementation struggles or
workflow process redesign would be
curtailed. To account for this
possibility, we have modified each
objective and measure to indicate when
there is an option for an EP, eligible
hospital, or CAH to report that the
objective/measure is inapplicable to
them, because they have no patients or
no or insufficient number of actions that
would allow calculation of the
meaningful use measure. This will
allow an EP, eligible hospital, or CAH
to qualify as a meaningful EHR user
without being required to meet
objectives we have specified as
potentially inapplicable. We note that
the exclusions to meaningful use
objectives/measures are specific to each
objective/measure. In our discussion of
each specific objective/measure (which
occurs later in this preamble), we have
identified specific exclusions where
they exist. Providers wishing to claim
that an objective/measure is
inapplicable to them would need to
meet the criteria of such an exception.
After consideration of the public
comments received, we have identified,
for each meaningful use objective,
whether the EP, eligible hospital, or
CAH may attest that they did not have
any patients or insufficient actions on
which to base a measurement of a
meaningful use for the EHR reporting
period. For objectives in the core set,
such an attestation would remove the
objective from consideration when
determining whether an EP, eligible
hospital, or CAH is a meaningful EHR
user. In other words, the EP, eligible
hospital, or CAH could satisfy the core
set objectives by satisfying all remaining
objectives included in the core set. For
objectives in the menu set, such an
attestation would also remove the
objective from consideration when
determining whether an EP, eligible
hospital, or CAH is a meaningful EHR
user. For example, if for one objective
included in the menu set an EP attests
that he or she did not have any patients
or insufficient actions during the EHR
reporting period on which to base a
measurement of a meaningful use
objective, rather than satisfy 5 of the 10
meaningful use objectives included in
the menu set for EPs, the EP need only
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satisfy 4 of the 9 remaining meaningful
use objectives included in the menu set
for EPs
EPs Practicing in Multiple Practices
Another situation where flexibility
may be needed in order for an EP to
become a meaningful EHR user is the
situation where an EP may provide care
in multiple practices or multiple
locations. We proposed a policy to
account for EPs practicing in multiple
practices and settings. We discussed in
the proposed rule that we believe it is
unlikely for an EP to use one record
keeping system for one patient
population and another system for
another patient population at one
location. We are concerned about the
application of the measures associated
with the meaningful use objectives for
EPs who see patients in multiple
practices or multiple locations. If an EP
does not have certified EHR technology
available at each location/practice
where they see patients it could become
impossible for the EP to successfully
become a meaningful EHR user based on
the measures associated with the
meaningful use objectives. We do not
seek to exclude EPs who meaningfully
use certified EHR technology when it is
available because they also provide care
in another practice where certified EHR
technology is not available. Therefore,
we proposed that all measures be
limited to actions taken at practices/
locations equipped with certified EHR
technology. A practice is equipped if
certified EHR technology is available at
the beginning of the EHR reporting
period for a given geographic location.
Equipped does not mean the certified
EHR technology is functioning on any
given day during the EHR reporting
period. Allowances for downtime and
other technical issues with certified
EHR technology are made on an
objective-by-objective basis as discussed
later in this section. We are concerned
that seeing a patient without certified
EHR technology available does not
advance the health care policy priorities
of the definition of meaningful use. We
are also concerned about possible
inequality of different EPs receiving the
same incentive, but using certified EHR
technology for different proportions of
their patient population. We believe that
an EP would have the greatest control of
whether certified EHR technology is
available in the practice in which they
see the greatest proportion of their
patients. We proposed that to be a
meaningful EHR user an EP must have
50 percent or more of their patient
encounters during the EHR reporting
period at a practice/location or
practices/locations equipped with
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certified EHR technology. An EP for
who does not conduct 50 percent of
their patient encounters in any one
practice/location would have to meet
the 50 percent threshold through a
combination of practices/locations
equipped with certified EHR
technology. For example, if the EP
practices at both a Federally Qualified
Health Center (FQHC) and within his or
her individual practice, we would
include in our review both of these
locations and certified EHR technology
would have to be available at the
location where the EP has at least 50
percent of their patient encounters.
Comment: Some commenters
recommended that 50 percent or more
of the patient encounters must occur at
the practice location that receives the
incentive payment.
Response: As discussed in section
II.A.4 of this final rule, an EP may
assign their incentive payment to other
practices. We do not believe that
limiting practices and EPs to only
considering the location that receives an
incentive payment provides advantages
to the program. The requirement
suggested by commenters would
potentially cause some EPs not to meet
the 50 percent threshold even if through
a combination of practices they may use
certified EHR technology for far more
than 50 percent of their patient
encounters.
Comment: Some commenters
requested clarification of our proposed
statement ‘‘Therefore, we proposed that
all measures be limited to actions taken
at practices/locations equipped with
certified EHR technology’’
Response: We mean this statement to
be that as long as an EP has certified
EHR technology available for 50 percent
or more of their patient encounters
during the EHR reporting period they
only have to include those encounters
where certified EHR technology is
available at the start of the EHR
reporting period. We discuss the
measures later in this section of the final
rule, but an illustrative example would
be the objective of maintain an up-todate problem list. The measure
associated with this objective is ‘‘More
than 80% of all unique patients seen by
the EP or admitted to the eligible
hospital’s or CAH’s inpatient or
emergency department (POS 21 or 23)
have at least one entry or an indication
that no problems are known for the
patient recorded as structured data.’’
Therefore, if an EP only practices at one
location or has certified EHR technology
available at all practice locations then
the denominator would be all unique
patients seen during the EHR reporting
period. However, if an EP practices at
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multiple locations and only has certified
EHR technology for 80 percent of their
patient encounters, then the
denominator is only those unique
patients seen at locations where
certified EHR technology is available.
We reiterate that this is not to account
for certified EHR technology downtime,
Certified EHR technology is available at
a location if it is available at the start of
the EHR reporting period regardless of
its actual availability for any given day
during the EHR reporting period.
After consideration of the comments
received, we are finalizing this
requirement as proposed.
Discussion of the Burden Created by the
Measures Associated With the Stage 1
Meaningful Use Objectives
Comment: Many commenters
expressed concerns about the
difficulties of capturing the
denominators for the measures that are
expressed as percentages. They pointed
out that the formulas in the proposed
rule would require providers to conduct
labor-intensive counts of paper
documents such as prescriptions or
laboratory results in order to compute
the denominators of the percentage
based measures. Some commenters
suggested that we adopt alternative
measurement mechanisms, for example
establishing simple counts of electronic
occurrences, while others proposed that
denominators be computed utilizing
only data collected in the certified EHR
technology.
Response: We acknowledge that the
percentage-based measures, as
expressed in the proposed rule, would
create a reporting burden for EPs,
eligible hospitals, and CAHs, and we
examined a number of alternatives that
potentially reduce the burden of
reporting.
In the proposed rule, we discussed
the option of counts instead of
percentages and due to comments
received have reassessed this option in
the final rule. This approach clearly has
the advantage of simplifying the
process. For example, rather than
counting the number of prescriptions
transmitted electronically and then
dividing by the total number of
prescriptions, the EP would simply
need to count the number of
electronically transmitted prescriptions
until a benchmark number is passed. If
the benchmark number is exceeded,
then the provider meets the measure.
However, there are several shortcomings
to this approach. First, we received little
input from commenters as to where the
benchmark numbers for the various
objectives should be set and any
benchmark set now would not benefit
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from public comment without
significantly delaying the Medicare and
Medicaid EHR incentive programs. (One
exception was that a number of
commenters suggested using the PQRI
measure for e-prescribing, which is the
generation of at least one eRx associated
with a patient visit on 25 or more
unique events during the reporting
period.) Setting the limit too high would
disadvantage small providers, since they
would have smaller patient populations,
while setting the limit too low would
create requirements for larger providers
that would be so limited as to be
meaningless. A larger provider could
implement the functionality for a much
shorter period than the EHR reporting
period and meet the count. In either
case, it would be difficult to establish a
trajectory in later stages that would
result in meaningful progress being
made by both small and large providers.
We then assessed the option of
limiting the occurrences counted in the
denominator to those included in the
provider’s certified EHR technology. As
an example, if an EP captures 1,000
prescriptions as structured data in
certified EHR technology, and
electronically transmits 500 of these
prescriptions, the EP’s certified EHR
technology generated score would be 50
percent. This approach does simplify
the computation process, since this
approach does not have to take into
account whether some prescriptions
were not included or included as
unstructured data in the certified EHR
technology. However, it does not
demonstrate the extent to which the
provider has used the certified EHR
technology. For example, a provider that
has captured only 10 prescriptions in
the certified EHR technology as
structured data, but writes 1,000
prescriptions because the provider
achieved only a limited use of their
certified EHR technology would also
score 50 percent by electronically
transmitting only 5 prescriptions
according to an automatic report from
the certified EHR technology. Again,
this methodology does not lead
providers toward an upward trajectory
of both certified EHR technology
deployment and accomplishment of
meaningful use.
We selected a third option, which we
believe addresses the shortcomings of
the second option while still preserving
much of the simplicity of that approach.
In our approach, we focus on those
measures whose denominator is not
based on all patients, but rather a subset
of patients or actions such as the
ordering of a lab test or the recording of
a patient’s request for an electronic copy
of their discharge instructions. We
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believe that it is reasonable to require an
EP, eligible hospital, or CAH to know
how many unique patients they care for
in the EHR reporting period and
therefore maintain that denominator
where it applies. The maintenance of
measures using the patient as the
denominator as encompassing all
patients ensures a certain level of
utilization of certified EHR technology
by the EP, eligible hospital, or CAH. If
a measure encompassing all patients has
a threshold of 80 percent, then at least
80 percent of the patients’ records must
be maintained using certified EHR
technology otherwise the EP, eligible
hospital or CAH could not possibly
meet the threshold. We note a number
of measures included in the core set
(such as ‘‘Record Demographics’’ and
‘‘Maintain an Up-to-Date Problem List’’)
require an analysis of all unique
patients, and not just patients whose
records are maintained in certified EHR
technology As discussed later the
thresholds for maintaining an up-to-date
problem list, medication list and
medication allergy list are set at 80
percent. We believe these thresholds
will create a baseline that ensures that
EPs, eligible hospitals and CAHS are
maintain a minimum percentage of
patient records in certified EHR
technology, and allows the provider
community to advance toward the
longer-term objective of capturing all
patient data in certified EHR
technology. For those measures that
focus on the recording of actions or
subset of patients to generate the
denominator, we limit the measures to
the information for patients whose
records are maintained in certified EHR
technology. We offer the following
examples that relate to the e-prescribing
and the provision of electronic copy of
a patient’s health information:
E-Prescribing Example: An EP orders
1,000 prescriptions for patients whose
records are maintained in their certified
EHR technology and 500 of those are
transmitted electronically. The EP’s
denominator is 1,000 prescriptions, the
numerator is 500 prescriptions, and
their score is 50 percent. If the EP
captures all 1,000 prescriptions as
structured data the calculation could be
automated by the certified EHR
technology. If the EP does not capture
all 1,000 prescriptions as structured
data than more manual review may be
required. We would define ‘‘records
maintained in the certified EHR
technology’’ to include any patient for
which sufficient data was entered in the
certified EHR technology to allow the
record to be saved, and not rejected due
to incomplete data. This may be a more
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limited set of data, but an EP, eligible
hospital, or CAH would still have to
have sufficient information in certified
EHR technology to meet the measures
associated with Stage 1 of meaningful
use. For example, an EP might be able
to save a record with just a patient’s
name, but as the record would lack any
information this patient would count in
the denominator, but not the numerator
for many objectives. Electronic Copy of
a Patient’s Health Information Provided
upon Request Example: An EP
maintains 1,000 patient records in their
certified EHR technology. Of those
patients, fifty make requests for
electronic copies of their health
information. The EP provides all of the
electronic copies within three business
days. The denominator is 50, the
numerator is 50, and the EP’s percentage
is 100 percent. If the EP captures
requests for information as structured
data, the calculation could be automated
by the certified EHR technology. If the
EP does not capture all the requests as
structured data then more manual
review may be required. We will likely
revisit the methodology in Stage 2,
where we would expect that at least
basic EHR functionality has been
implemented throughout the provider
enterprise.
After consideration of public
comments, we are limiting the following
objectives and their associated measures
to patients whose records are
maintained using certified EHR
technology. Specific information on
how to determine inclusion in the
denominator and numerator is
discussed in the full discussion of each
objective later in this final rule.
• Use CPOE
• Generate and transmit permissible
prescriptions electronically (eRx)
• Record and chart changes in vital
signs
• Record smoking status for patients
13 years old or older
• Record advance directives for
patients 65 years old or older
• Incorporate clinical lab-test results
into certified EHR technology as
structured data
• Provide patients with an electronic
copy of their health information
(including diagnostic test results,
problem list, medication lists,
medication allergies), upon request
• Provide patients with an electronic
copy of their discharge instructions at
time of discharge, upon request
• Provide clinical summaries for
patients for each office visit
• Send reminders to patients per
patient preference for preventive/
follow-up care
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• Perform medication reconciliation
at relevant encounters and each
transition of care
• Provide summary care record for
each transition of care and referral
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Discussion on Meaningful Use
Relationship to Certified EHR
Technology
Comment: We received several
comments requesting more specific
information of how certified EHR
technology will accomplish meaningful
use. Some commenters expressed
concern that patient clinical outcome
measurement and improvement was not
addressed explicitly in the requirements
of certified EHR technology, but rather
the requirements focused data entry and
provision of data electronically.
Response: One of the main purposes
of certifying EHR technology is to
provide the EP, eligible hospital, or
CAH with confidence that the
technology will not be the limiting
factor in the achievement of meaningful
use. As such, all questions of how or
will certified EHR technology be able to
accomplish meaningful use broadly or
at a specific objective level are best
answered by ONC. CMS and ONC have
worked closely since the enactment of
the HITECH Act to ensure certification
fully supports meaningful use. We
explicitly link each meaningful use
objective to certification criteria for
certified EHR technology. The
capabilities and standards that are
certified are those that are used to meet
the Stage 1 objectives of meaningful use.
This way we ensure that certified EHR
technology can accomplish meaningful
use and meaningful use has the
intended consequences of improving the
healthcare priorities that make up
meaningful use.
Discussion on the Relationship Between
a Stage 1 Meaningful Use Objective and
Its Associated Measure
Comment: Many commenters pointed
out gaps between what they believed
were the anticipated results from an
objective and the results that are
measured by the associated measure. A
particular concern of some of these
commenters is cases where the
certification criteria supports the
measure, but in their view fell short of
supporting the objective.
Response: In the proposed rule, we
attempted to draw a clear distinction
between the objective and the associated
measure. The objectives represent a
wide range of activities some of which
are commonplace for EPs, eligible
hospitals, and CAHs using EHRs today,
while others are ambitious goals even
for the most sophisticated EHR user of
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today. For some objectives, all aspects of
the objective are within the control of
the EP, eligible hospital, or CAH. Other
objectives rely on electronic exchange
with partners or external infrastructure
over which EPs, eligible hospitals and
CAHs may have little influence and no
control. We have attempted to
accommodate these differences when
we select the Stage 1 measure for a
given objective. The measure more
accurately reflects our view of what is
feasible for Stage 1 than the objective
itself. The certification criteria
necessarily reflect more on the measure
than the objective, as full compliance
with an objective is beyond the scope of
what can be accomplished for a
significant number of EPs, eligible
hospitals or CAHs in our timeframe for
Stage 1. This rationale was our assertion
in the proposed rule as the justification
for measures that represent less than full
achievement of their objective. This is
further supported by some of the
comments received although for any
given objective the comments
addressing that objective were a small
fraction of the total number of
comments received and views on how
much a measure should allow for less
than full achievement varied widely
among those commenting. Although we
received over 2,000 public comments,
the number of specific comments
addressing an individual objective were
relatively small ranging from 40 to 200.
We reviewed those comments and made
specific changes to measures in the
discussion of each objective. We
reiterate that achievement of the
measure always equates to achievement
of the objective for Stage 1 of
meaningful use. We also reiterate that
certified EHR technology will always be
able to support achievement of the
measure by including the necessary
functionalities. However, as with any
technology, certified EHR technology is
only as good as the information it
contains and getting information into
certified EHR technology is heavily
dependent on processes developed by
the EP, eligible hospital, or CAH. It is
for this reason that all measures, even
those for objective whose aspects are
fully under the control of the EP,
eligible hospital, or CAH, represent less
than full fulfillment of the objective to
varying degrees. As stated, for
demonstrating meaningful use and any
follow up review by CMS or the States,
successfully meeting the associated
measure always equates to successfully
meeting the objective. Updated
information on the associated measures
including the numerator, denominator,
thresholds and exclusions are as
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discussed in the following section. More
detailed specifications and guidance on
calculating the measures will be issued
soon after the publication of this final
rule.
As we described in the proposed rule,
in discussing the objectives that
constitute the Stage 1 criteria of
meaningful use, we adopted a structure
derived from recommendations of the
HIT Policy Committee of grouping the
objectives under care goals, which are in
turn grouped under health outcomes
policy priorities. We believe this
structural grouping provides context to
the individual objectives; however, the
grouping is not itself an aspect of
meaningful use. The criteria for
meaningful use are based on the
objectives and their associated
measures.
We will now review the comments for
each objective and measure and make
changes to our original proposal or
finalize as proposed.
(1) Objectives and Their Associated
Measures
The HIT Policy Committee identified
as its first health outcomes policy
priority improving quality, safety,
efficiency and reducing health
disparities. The HIT Policy Committee
also identified the following care goals
to address this priority:
• Provide access to comprehensive
patient health data for patient’s
healthcare team.
• Use evidence-based order sets and
CPOE.
• Apply clinical decision support at
the point of care.
• Generate lists of patients who need
care and use them to reach out to those
patients.
• Report information for quality
improvement and public reporting.
As we explained in the proposed rule,
for the last care goal, the HIT Policy
Committee proposed the goal as ‘‘Report
to patient registries for quality
improvement, public reporting, etc.’’ We
have modified this care goal, because
we believe that patient registries are too
narrow a reporting requirement to
accomplish the goals of quality
improvement and public reporting. We
note that the HIT Policy Committee’s
recommended objectives include the
reporting of quality measures to CMS.
We do not believe that CMS would
normally be considered a ‘‘patient
registry’’. We also removed the phrase
‘‘etc.’’ We believe that the level of
ambiguity created by ‘‘etc’’ is not
appropriate for Federal regulations.
NPRM EP Objective: Use CPOE.
NPRM Eligible Hospital Objective: Use
CPOE for orders (any type) directly
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entered by the authorizing provider (for
example, MD, DO, RN, PA, NP).
In the proposed rule, we described
CPOE as entailing the provider’s use of
computer assistance to directly enter
medical orders (for example,
medications, consultations with other
providers, laboratory services, imaging
studies, and other auxiliary services)
from a computer or mobile device. The
order is also documented or captured in
a digital, structured, and computable
format for use in improving safety and
organization. We said that for Stage 1
criteria, it will not include the
electronic transmittal of that order to the
pharmacy, laboratory, or diagnostic
imaging center.
Comment: A majority of commenters
recommended that EPs, eligible
hospitals, and CAHs be allowed to defer
CPOE for varying lengths of time
ranging from 2012 to 2017. The
commenters cited various reasons for
deferment including that CPOE is an
advanced clinical function that typically
is the last process to be implemented
due to the need to build the entire
infrastructure to support the CPOE
process. Other commenters noted an
increased burden as if the orders cannot
be transmitted, then duplicate paper
orders will have to be produced which
can lead to patient safety risks.
Commenters also noted that CPOE
appears in the latter stages of the
Certification Commission for Healthcare
Information Technology (CCHIT) EHR
implementation process. A minority,
but significant number of comments
encouraged CMS to maintain CPOE for
2011. Those commenters in favor of
retaining CPOE in 2011 believed that
CPOE is a basic EHR feature that should
be a standard offering of a certified EHR
technology and is critical to improving
quality of care through audit trails and
alerting of delinquent order and/or
delinquent deferred orders.
Response: We have determined that
CPOE should be included in the core set
of measures for Stage 1 in order to
advance meaningful use. CPOE is a
foundational element to many of the
other objectives of meaningful use
including exchange of information and
clinical decision support. Many
commenters, including several
physician associations, the HIT Policy
Committee and members of Congress
through their endorsement of the HIT
Policy Committee’s recommendation,
recommended that CPOE be required in
Stage 1. CPOE has been a major
initiative of US hospitals for over a
decade and is a foundational
functionality to many of the activities
that further the health care policy
priorities of meaningful use. For
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example, entering a medication order
using CPOE allows the EHR to provide
feedback on whether the medication
may have adverse reactions with other
medications the patient is taking.
Another benefit of CPOE is that greatly
simplifies the workflow process of
inputting information into certified EHR
technology in a structured way to
populate the patient record.
Comment: Several commenters asked
that we further specify who could enter
the order using CPOE. Some
commenters stated that only the
ordering provider should be permitted
to enter the order. These commenters
stated that the ordering professional
needs to be presented with clinical
decision support at the time of entry
and that the relay of an order to another
individual is a source of potential error.
Other commenters recommended that
any licensed healthcare professional or
indeed any individual (licensed or not)
who receives the order from the
ordering provider be permitted to
perform the CPOE. The most common
argument presented by these
commenters is that this is currently how
CPOE is handled in practice and a shift
to entry by only the ordering provider
would be too disruptive to workflow.
Response: We agree with those
commenters who recommend allowing
any licensed healthcare professional to
enter orders using CPOE. We further
refine this recommendation to be that
any licensed healthcare professional can
enter orders into the medical record per
state, local and professional guidelines.
While we understand that this policy
may decrease opportunities for clinical
decision support and adverse
interaction, we believe it balances the
potential workflow implications of
requiring the ordering provider to enter
every order directly, especially in the
hospital setting. We disagree with
commenters that anyone should be
allowed to enter orders using CPOE.
This potentially removes the possibility
of clinical decision support and advance
interaction alerts being presented to
someone with clinical judgment, which
negates many of the benefits of CPOE.
Comment: We received requests for
clarification of this objective and what
types of orders would meet this
requirement.
Response: Our intent in the proposed
rule was to capture orders for
medications, laboratory or diagnostic
imaging.
However, after careful consideration
of the comments, we are adopting an
incremental approach by only requiring
medication orders for Stage 1. First, this
supports the objectives of e-prescribing,
drug-drug and drug-allergy checks.
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Second, this requirement will improve
patient-safety because of the alignment
of ordering medications in a structured
data format will enable providers to
create registries of patients for potential
medical recalls, participate in
surveillance for potential sentinel
events and life-threatening side effects
of new medications. Third, other
measures involving transitions of care
documents and summary of care
document will require the entry of an
active medication list. After
consideration of the public comments
received, we are finalizing the
meaningful use objective for EPs at
495.6(d)(1)(i) and for eligible hospitals,
and CAHs at 495.6(f)(1)(i) as ‘‘Use CPOE
for medication orders directly entered
by any licensed healthcare professional
who can enter orders into the medical
record per state, local and professional
guidelines’’.
NPRM EP Measure: CPOE is used for
at least 80 percent of all orders.
NPRM Eligible Hospital or CAH
Measure: For eligible hospitals, CPOE is
used for 10 percent of all orders.
In the proposed rule under CPOE, we
discussed several concepts related to
any associated measure of any objective
that relies on a percentage calculation.
These are the use of a percentage versus
a count; setting a threshold for measures
not requiring the electronic exchange of
information; EPs practicing in multiple
locations, some of which may not have
certified EHR technology available, and
the patient population to which the
measure would apply. All except the
last of these received extensive
comments and are addressed in
comment and response sections earlier
in this section. In the proposed rule, we
said that we would base the measures
associated with the objectives on both
the Medicare/Medicaid patient
population and all other patients as
well. We said that we believe it is
unlikely that an EP would use one
record keeping system for one patient
population and another system for
another patient population at one
location and that requiring reporting
differences based on payers would
actually increase the burden of meeting
meaningful use. We received very few
comments on this aspect of our
proposed rule and those that were
received were generally supportive of
this proposal. Therefore, we are
finalizing the policy that all meaningful
use measures be calculated based on the
eligible provider’s entire patient
population (except where otherwise
noted).
Comment: Nearly every commenter
who commented on CPOE objected to
our proposal to limit this measure to the
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inpatient department (Place of Service
Code 21) for the eligible hospital or
CAH. Commenters stated that this
limitation was inappropriate given the
manner in which hospitals use EHR
technology. To account for current
practice, the commenters recommended
the measures be expanded to include
the emergency department (ED) (POS
23). Other reasons cited by commenters
were that orders begin in the ED and
remain open as the patient transitions to
inpatient (for example, infusions),
transitioning from paper documentation
in the ED to electronic for subsequent
care is unsafe as it can result in missed
information, and/or transcription errors
as the initial allergies and medications
are entered into the system, significant
data collection occurs in the ED that
would not be included in the system,
the exclusion of the ED creates
disincentives to adoption and that the
ED is a hybrid of temporal and
functional services that are neither
purely ambulatory nor inpatient.
Response: We agree with the
commenters, and therefore are
expanding this objective and its
associated measure to the emergency
room (POS 23). More information on
place of service codes is available at
https://www.cms.gov/
PlaceofServiceCodes/. Furthermore,
given the revision to the HITECH Act
that changed hospital based eligible
professionals to include only the setting
of inpatient and emergency departments
and all of the benefits of integration of
these two departments spelled out by
commenters we will adopt both
departments when considering the
measure of eligible hospitals or CAHs
unless we find there are unique
circumstances of an objective and its
associated measure that would preclude
the inclusion of the emergency
department for meaningful use. This
change does not affect the incentive
payment calculation described in
section II.B. of this final rule
Comment: We received several
recommendations from commenters that
the requirement of a percentage
measurement for determining whether
an EP, eligible hospital or CAH meets
this objective should be replaced with a
numerical count for CPOE and many
other measures associated with
percentage thresholds. The two main
reasons given for switching to numerical
counts are the burden of calculating the
percentage if it cannot be done
automatically using certified EHR
technology and the assertion that if an
EP, eligible hospital, or CAH does
something a specific number of times it
can be assumed that it is done often
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enough to constitute meeting the
objective for Stage 1 of meaningful use.
Response: We have previously
discussed the merits of a percentage
based measure over a count based
measure earlier in this section under the
discussion of the burden created by the
measures associated with the Stage 1
meaningful use objectives. However, we
do try to seek a balance reducing the
burden on providers while still ensuring
the progression of meaningful use of
certified EHR technology. In the next
comment/response, we discuss changes
to this measure that respond to concerns
regarding burden.
Comment: Many commenters
representing EPs as well as other
commenters recommended lowering the
CPOE threshold for EPs. Those
commenters representing EPs generally
recommended parity with eligible
hospitals at 10 percent, while other
commenters recommending a reduction
generally recommended 50 percent.
Response: With CPOE, we had a
unique situation of disparate thresholds
between EPs and hospitals. This was
due to recommendations prior to the
proposed rule by the HIT Policy
Committee. Eligible hospitals were
granted an even lower threshold for this
particular requirement. The reason
given for this recommendation was that
CPOE is one of the last functionalities
to be implemented in the hospital
setting. Commenters point out that
holds true for EPs as well. As discussed
above, given the limitations we are
placing on the numerator and
denominator for calculating the CPOE
percentage, we no longer see a
compelling reason to maintain disparate
thresholds for the EPs and the eligible
hospital/CAH.
Comment: Commenters have
suggested that our proposal to count an
action per unique patients could be
applied to the measure for CPOE as well
through a revised measure of ‘‘[a]t least
10% of unique patients seen by the EP
or admitted to the eligible hospital or
CAH have at least one order entered
using CPOE.’’ Commenters also pointed
to CPOE as an example of a case where
adequate lead time is necessary to
implement certified EHR technology.
Response: At the heart of this new
basis for this measure is the assumption
that every patient would have at least
one order that could be entered using
CPOE. We believe this is a reasonable
assumption for EPs, eligible hospitals
and CAHs. According to analysis of
25,665 office-based visits in the 2005
National Ambulatory Medical Care
Survey, 31 percent of visits included a
new medication order, and 44 percent
included at least one refill; 66 percent
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44333
had any type of medication order.
However, whether a medication order is
appropriate for every practice could
vary significantly by scope of practice;
therefore, for the final rule, we are
further limiting the denominator to
patients with at least one medication
listed in their medication list. We
believe that this limitation will reduce
providers’ burden as compared to
accounting for all orders. To further
reduce the burden on providers, we also
will limit the numerator to unique
patients with at least one medication
order entered using CPOE. Because we
have reduced provider burden by
limiting the denominator and numerator
as discussed above, we believe that a
corresponding increase in the CPOE
threshold is appropriate for hospitals
and CAHs. For stage 1, we are finalizing
a threshold for CPOE of 30 percent for
EPs, eligible hospitals, and CAHS. We
believe this relatively low threshold, in
combination with the limitation to only
medication orders, will allow hospitals
and EPs to gain experience with CPOE.
However, as providers gain greater
experience with CPOE, we believe it is
reasonable to expect greater use of the
function. As explained above, we also
believe CPOE is foundational to many
other objectives of meaningful use. For
these reasons, we believe it is
reasonable to expect providers to move
to a 60 percent threshold at Stage 2 of
meaningful use. Thus, for this measure,
we are finalizing, for Stage 2 of
meaningful use, that EPs, eligible
hospitals and CAHs must meet a 60
percent threshold for CPOE. Therefore,
we are finalizing a Stage 2 measure for
CPOE at § 495.6(h) for EPs and § 495.6(i)
for eligible hospitals and CAHs as ‘‘More
than 60 percent of all unique patients
with at least one medication in their
medication list seen by the EP or
admitted to the eligible hospital’s or
CAH’s inpatient or emergency
department (POS 21 or 23) during the
EHR reporting period have at least
medication one order entered using
CPOE’’.
Comment: We received several
comments asking for clarification of the
term unique patient in response to
various objectives.
Response: In the proposed rule, we
state, ‘‘the reason we propose to base the
measure on unique patients as opposed
to every patient encounter, is that a
problem list would not necessarily have
to be updated at every visit.’’ To further
describe the concept of ‘‘unique patient’’
we mean that if a patient is seen by an
EP or admitted to an eligible hospital’s
or CAH’s inpatient or emergency
department (POS 21 or 23) more than
once during the EHR reporting period
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then for purposes of measurement they
only count once in the denominator for
the measure. All the measures relying
on the term ‘‘unique patient’’ relate to
what is contained in the patient’s
medical record. Not all of this
information will need to be updated or
even be needed by the provider at every
patient encounter. This is especially
true for patients whose encounter
frequency is such that they would see
the same provider multiple times in the
same EHR reporting period. Measuring
by every patient encounter places an
undue burden on the EPs, eligible
hospitals and CAHs and may have
unintended consequences of affecting
the provision of care to patients merely
to comply with meaningful use. Given
the emphasis placed on the reporting
burden by commenters as described in
the beginning of this section, we believe
that our concerns about the burden of
measurement were well founded. We
also continue to believe that the use of
patient encounters could have
unintended consequences on the
provision of care by providers.
Comment: Some commenters asked
whether the CPOE objective and
associated measure require transmission
of the order. Most of these commenters
were opposed to such transmission in
Stage 1 for various reasons such as the
cost of developing interfaces between
EHRs and laboratory and radiology
service providers, the volume of
transmissions would outpace the
capacity to connect, HIE infrastructure
is not yet mature enough and the lack
of the requirement for non-eligible
entities to participate (for example,
laboratory vendors, pharmacies). Some
commenters supported the inclusion of
the transmission of the order as they
believed this would provide better
outcomes than if the transmission was
not required.
Response: In the proposed rule, we
stated, ‘‘For Stage 1 criteria, we propose
that it will not include the electronic
transmittal of that order to the
pharmacy, laboratory, or diagnostic
imaging center.’’ While a few
commenters recommended that this
objective be changed to require
transmission, given the large opposition
to the objective and measure as
proposed and the reasons commenters
presented against transmission, it would
not be responsive to the vast majority of
commenters to expand this objective
beyond our proposal. We agree with the
commenters that said the HIE
infrastructure is still being developed in
most parts of the country. Furthermore,
we note that in the hospital setting,
most medication orders would not
require transmission outside of the
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certified EHR technology of the hospital.
For EPs, we already address
transmission of the medication order in
a separate objective for e-prescribing.
Therefore, we finalize the proposal that
the transmission of the order is not
included in the objective or the
associated measure for Stage 1.
After consideration of the public
comments received, we are modifying
the meaningful use measure for EPs at
495.6(d)(1)(ii) of our regulations and for
eligible hospitals, and CAHs at
§ 495.6(f)(1)(ii) of our regulations to
‘‘More than 30 percent of all unique
patients with at least one medication in
their medication list seen by the EP or
admitted to the eligible hospital’s or
CAH’s inpatient or emergency
department (POS 21 or 23) during the
EHR reporting period have at least
medication one order entered using
CPOE’’.
We further specify that in order to
meet this objective and measure, an EP,
eligible hospital, or CAH must use the
capabilities Certified EHR Technology
includes as specified and standards at
45 CFR 170.304(a) for EPs and 45 CFR
170.306(a) for eligible hospitals and
CAHs. The ability to calculate the
measure is included in certified EHR
technology. Thus, for example, an EP,
eligible hospital or CAH must use a
certified functionality in entering the
medication order, and could not use a
functionality that has been added by the
EHR vendor, but that is outside the
scope of the certification. We believe
this rule is necessary to ensure that the
EP, eligible hospital, or CAH is actually
making meaningful use of ‘‘certified’’
EHR technology, and is not using noncertified technology. In addition,
requiring providers to use
functionalities that are certified will
ensure the interoperability of
information maintained in the EHR as
providers will be able to operate
according to consistent standards. We
believe this standardization and
consistency is key to realizing the goal
of using EHR technology to improve
health care.
As noted previously in this section
under our discussion of the burden
created by the measures associated with
the Stage 1 meaningful use objectives,
the only patients that are included in
the denominator are those patients
whose records are maintained using
certified EHR technology.
To calculate the percentage, CMS and
ONC have worked together to define the
following for this objective:
• Denominator: Number of unique
patients with at least one medication in
their medication list seen by the EP or
admitted to an eligible hospital’s or
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CAH’s inpatient or emergency
department (POS 21 or 23) during the
EHR reporting period
• Numerator: The number of patients
in the denominator that have at least
one medication order entered using
CPOE.
• Threshold: The resulting percentage
must be more than 30 percent in order
for an EP, eligible hospital or CAH to
meet this measure.
Exclusion: If an EP’s writes fewer than
one hundred prescriptions during the
EHR reporting period they would be
excluded from this requirement as
described previously in this section in
our discussion whether certain EP,
eligible hospital or CAH can meet all
Stage 1 meaningful use objectives given
established scopes of practices. We do
not believe that any eligible hospital or
CAH would have less than one hundred
prescriptions written for patients
admitted to their inpatient and
emergency departments during the EHR
reporting period.
NPRM EP/Eligible Hospital Objective:
Implement drug-drug, drug-allergy,
drug-formulary checks
In the proposed rule, we did not
elaborate on this objective.
Comment: Many commenters
requested clarification as to what
formulary the checks would be
conducted against.
Response: Ideally, this check would
be performed against any formulary that
may affect the patient’s welfare, inform
the provider as to the best drug to
prescribe or provide the patient and
provider information on the drug’s cost
to both the patient and any third party
payer. We recognize, however, that not
every available third party payer,
pharmacy benefit management,
preferred drug list is standardized and
made available for query through
certified EHR technology. As we cannot
through this regulation impose such a
requirement on every developer of a
formulary, we do not require that an EP/
eligible hospital/CAH would have to
accommodate every formulary in their
implementation. However, at a
minimum an EP/eligible hospital/CAH
must have at least one formulary that
can be queried. This may be an
internally developed formulary or an
external formulary. The formularies
should be relevant for patient care
during the prescribing process. To
further address this, we expect that this
measure will be expanded to be counted
on a transactional basis for future stages.
Comment: Commenters suggested
separating the objective into one
objective for the clinical checks (drugdrug and drug-allergy) and a second
objective for the administrative check
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(drug-formulary). The rationale stated
for the division was that clinical
measures are focused on preventing
medication errors versus encouraging
consideration of cost when prescribing
medications. In addition, the two types
involve connections to different kinds of
resources (drug safety information
versus formulary information).
Response: We agree that these should
be separate objectives for the reasons
stated by the commenters and split them
accordingly.
Comment: We received comments
that these functions were really part of
CPOE and electronic prescribing.
Commenters most commonly noted that
the drug formulary is part of electronic
prescribing, as is currently the case
under the Medicare e-Prescribing
program.
Response: While we agree that the
drug-drug, drug-allergy, drug-formulary
checks, CPOE, e-prescribing meaningful
use objectives all serve the same broader
goal of ensuring accurate ordering and
prescribing that takes into account all
available information about the patient
the functions and their readiness for
Stage 1 of meaningful use are distinct.
In terms of functions, CPOE and eprescribing could be performed without
the drug to drug, drug-allergy or drugformulary checks. Similarly, it is not
necessary for CPOE or e-Prescribing to
take place in order for a drug to drug
allergy check to occur. In terms of
readiness and ability to measure
progress for Stage 1 of meaningful use,
CPOE and e-prescribing both are
percentage based measures of a distinct
activity that creates a record even in
today’s EHR’s and paper patient records.
The viewing and consideration of
information presented to the provider
on possible drug interactions is not a
similarly distinct activity and does not
currently create a record. So while the
goal of these functionalities is similar,
we believe drug-drug, drug-allergy,
drug-formulary checks create unique
concerns for implementation and
demonstration of meaningful use, and
therefore we maintain them as separate
objectives.
Comments: Several commenters
expressed concern of ‘‘alert fatigue’’
occurring with drug-drug interaction
checks. Alert fatigue or otherwise
known as ‘‘pop-up’’ fatigue is a
commonly perceived occurrence with
electronic medical records and clinical
decision support tools in which alerts
are presented to the user when a
potential safety issue is identified by the
system (for example, drug to drug
interaction). The alerts, while beneficial
in some cases, can result in a type of
‘‘fatigue’’ whereby the provider, after
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receiving too many alerts, begins to
ignore and/or override the alerts.
Receiving too many alerts can result in
slowing the provider down rendering
the alert useless. Commenters
recommended some changes to the
objective and associated measure to
mitigate the risk of ‘‘alert fatigue’’ such
as limiting the checks for interactions to
only the most critical medications or
allowing for adjustment of risk levels
rather than an on/off functionality.
Response: We recognize ‘‘alert fatigue’’
is a potential occurrence with drug-drug
and drug-allergy checks. However,
meaningful use seeks to utilize the
capabilities of certified EHR technology
and any means to address alert fatigue
requires a critical evaluation of each
alert. We believe this is beyond the
scope of the definition of meaningful
use. We believe these checks are
valuable and improve patient care and
therefore do not remove them to address
alert fatigue.
Comment: Commenters recommended
food allergies be included in the drugallergy check as some drugs contain
ingredients that are contraindicated in
individuals with certain allergies.
Response: We certainly agree that
some allergies other than drug can
interact with drugs; however, as we
stated under our discussion of the
objective ‘‘Medication Allergy List’’, the
ability to identify other types of allergies
in a useful way are not yet available to
the extent necessary to require them in
Stage 1 of meaningful use. This
certainly does not preclude any EP,
eligible hospital, or CAH from working
with the designers of their certified EHR
technology to include this functionality.
Comment: A commenter requested
clarification as to whether the drugdrug, drug-allergy and drug-formulary
checks are required for contrast media
and imaging agents used by radiologists.
Response: We do not link the checks
to specific drugs or agents. However, we
note that is common practice in
radiology to identify a patient’s past
drug and food allergies and take
appropriate interventions if necessary.
Therefore, the drug-drug, drug-allergy
and drug-formulary checks would be
appropriate prior to administration of
contrast media and imaging agents to
patients.
After consideration of the public
comments received, we are finalizing
the meaningful use objective for EPs at
§ 495.6(d)(2)(i) and for eligible hospitals
and CAHs at § 495.6(f)(2)(i) as
‘‘Implement drug-drug and drug-allergy
checks.’’ We include this objective in the
core set as it is integral to the initial or
on-going management of a patient’s
current or future healthcare and would
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give providers the necessary
information to make informed clinical
decisions for improved delivery of
patient care.
In addition, we are finalizing the
meaningful use objective at for EPs at
§ 495.6(e)(1)(i) and for eligible hospitals
and CAHs at § 495.6(g)(1)(i) of our
regulations as ‘‘Implement drugformulary checks.’’
NPRM EP/Eligible Hospital Measure:
The EP/eligible hospital/CAH has
enabled the drug-drug, drug-allergy, and
drug-formulary check functionality
In the proposed rule we discussed
that the capability of conducting
automated drug-drug, drug-allergy, and
drug-formulary checks is included in
the certification criteria for certified
EHR technology. This automated check
provides information to advise the EP,
eligible hospital, or CAH’s decisions in
prescribing drugs to a patient. The only
action taken by the EP, eligible hospital,
or CAH is to consider this information.
Many current EHR technologies have
the option to disable these checks and
the certification process does not
require the removal of this option.
Therefore, in order to meet this
objective, an EP, eligible hospital, or
CAH would be required to enable this
functionality and ensure they have
access to at least one drug formulary.
While this does not ensure that an EP,
eligible hospital or CAH is considering
the information provided by the check,
it does ensure that the information is
available.
After consideration of the public
comments received on the objective, we
believe the measure as proposed
requires more clarity on the length of
time for which the functionality must be
enabled, which we clarify to be the
entire EHR reporting period. Therefore,
we are modifying the meaningful use
measure for ‘‘Implement drug-drug and
drug-allergy checks for the entire EHR
reporting period’’ for EPs at
§ 495.6(d)(2)(ii) and for eligible
hospitals and CAHs at § 495.6(f)(2)(ii) of
our regulations to ‘‘The EP/eligible
hospital/CAH has enabled this
functionality for the entire EHR
reporting period.’’
We further specify that in order to
meet this objective and measure, an EP,
eligible hospital, or CAH must use the
capabilities Certified EHR Technology
includes as specified and standards at
45 CFR 170.302(a). The ability to
calculate the measure is included in
certified EHR technology.
As this objective only requires that
functionalities of certified EHR
technology be enabled, we do not
believe that any EP, eligible hospital or
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CAH would need an exclusion for this
objective and its associated measure.
After consideration of the public
comments received on the objective, we
are modifying the meaningful use
measure for ‘‘Implement drug-formulary
checks’’ for EPs at § 495.6(e)(1)(ii) and
for eligible hospitals and CAHs at
§ 495.6(g)(1)(ii) of our regulations to
‘‘The EP/eligible hospital/CAH has
enabled this functionality and has
access to at least one internal or external
formulary for the entire EHR reporting
period.’’
We further specify that in order to
meet this objective and measure, an EP,
eligible hospital, or CAH must use the
capabilities Certified EHR Technology
includes as specified and standards at
45 CFR 170.302(b). The ability to
calculate the measure is included in
certified EHR technology.
The consideration of whether a drug
is in a formulary or not only applies
when considering what drug to
prescribe. Therefore, we believe that any
EP who writes fewer than one hundred
prescriptions during the EHR reporting
period should be excluded from this
objective and associated measure as
described previously in our discussion
of whether certain EP, eligible hospital
or CAH can meet all Stage 1 meaningful
use objectives given established scopes
of practices.
NPRM EP/Eligible Hospital Objective:
Maintain an up-to-date problem list of
current and active diagnoses based on
ICD–9–CM–CM or SNOMED CT®
In the proposed rule, we described the
term ‘‘problem list’’ as a list of current
and active diagnoses as well as past
diagnoses relevant to the current care of
the patient.
Comment: Several commenters noted
that the coding of problem lists at the
point of care is outside the normal
workflow process and would be
disruptive.
Response: We did not and do not
intend that coding of the diagnosis be
done at the point of care. This coding
could be done later and by individuals
other than the diagnosing provider.
Comment: Commenters suggested
including ICD–10–CM, the Diagnostic
and Statistical Manual of Mental
Disorders and explicitly allowing
subsets of SNOMED CT®.
Response: We have removed the
references to specific standards, as we
believe specifying the relevant
standards falls within the purview of
ONC. For ONC’s discussion of this
functionality and the relevant standards
including response to the above
comment, we refer readers to ONC’s
final rule.
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After consideration of the public
comments received, we are modifying
the meaningful use objective for EPs at
§ 495.6(d)(3)(i) and for eligible hospitals
at § 495.6(f)(3)(i) of our regulations to
‘‘Maintain an up-to-date problem list of
current and active diagnoses’’.
We include this objective in the core
set as it is integral to the initial or ongoing management of a patient’s current
or future healthcare and would give
providers the necessary information to
make informed clinical decisions for
improved delivery of patient care.
NPRM EP/Eligible Hospital Measure:
At least 80 percent of all unique patients
seen by the EP or admitted to the
eligible hospital or CAH have at least
one entry or an indication of none
recorded as structured data.
In the proposed rule, we introduced
the concept of ‘‘unique patients’’ in the
discussion of this objective. We received
many comments requesting clarification
of this term and address those in the
comment and response section under
our discussion of the CPOE measure.
Comment: A few commenters stated
that ‘‘None’’ is not a clinically relevant
term and should be replaced with no
known problem or no problem.
Response: Our intent is not to dictate
the exact wording of the specific value.
Rather we are focused on the overall
goal of making a distinction between a
blank list because a patient does not
have known problems and a blank list
because either no inquiry of the patient
has been made, or problems have been
recorded through other means. As long
as the indication accomplishes this goal
and is structured data, we do not believe
it is necessary to prescribe the exact
terminology, thus leaving that level of
detail to the designers and users of
certified EHR technology.
Comment: Commenters requested
clarification of the term ‘‘up-to-date’’.
Response: The term ‘‘up-to-date’’
means the list is populated with the
most recent diagnosis known by the EP,
eligible hospital, or CAH. This
knowledge could be ascertained from
previous records, transfer of information
from other providers, or querying the
patient. However, not every EP has
direct contact with the patient and
therefore has the opportunity to update
the list. Nor do we believe that an EP,
eligible hospital, or CAH should be
required through meaningful use to
update the list at every contact with the
patient. There is also the consideration
of the burden that reporting places on
the EP, eligible hospital, or CAH. The
measure, as finalized, ensures the EP,
eligible hospital, or CAH has a problem
list for patients seen during the EHR
reporting period, and that at least one
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piece of information is presented to the
EP, eligible hospital, or CAH. The EP,
eligible hospital, or CAH can then use
their judgment in deciding what further
probing or updating may be required
given the clinical circumstances.
Comment: Commenters stated that
this measure should be replaced with
either a simple attestation of yes, the
problem list exists or the percentage of
the measure should be replaced with a
count. Alternatively, that the percentage
should be maintained, but that the
threshold should be lowered.
Commenters generally supported this
lowering of the threshold for one or all
of the following reasons: It may require
a change in traditional workflow;
implementation and rollout of certified
EHR technology creates unforeseeable
system downtimes, complications, and
the required clinical classification
systems are not geared toward clinical
information.
Response: For reasons discussed
earlier in this section under our
discussion of the burden created by the
measures associated with the Stage 1
meaningful use objectives, we believe a
percentage is a more appropriate
measure than those suggested by
comments. As this objective relies solely
on a capability included as part of
certified EHR technology and is not, for
purposes of Stage 1 criteria, reliant on
the electronic exchange of information,
we believe it is appropriate to set a high
percentage threshold. In the proposed
rule, we set the percentage required for
successful demonstration at 80 percent.
Though full compliance (that is, 100
percent) is the ultimate goal, 80 percent
seemed an appropriate standard for
Stage 1 meaningful use as it creates a
high standard, while still allowing room
for technical hindrances and other
barriers to reaching full compliance. We
proposed 80 percent for every measure
with a percentage that met the criteria
of relying solely on a capability
included as part of certified EHR
technology and are not, for purposes of
Stage 1 meaningful use criteria, reliant
on the electronic exchange of
information. Commenters generally
agreed with this alignment; however,
they disagreed that 80 percent
sufficiently allows for ‘‘technical
hindrances and other barriers’’.
Commenters have highlighted numerous
barriers towards successfully meeting an
80 percent threshold including
technical barriers, barriers to
implementation, applicability to all
patients and all provider types eligible
for the EHR incentives, patient
requested exclusions and others. We
address some of these with specific
exclusions from the measure as
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discussed previously in this section
under our discussion of whether certain
EP, eligible hospital or CAH can meet
all Stage 1 meaningful use objectives
given established scopes of practices.
Although some technical issues exist,
recording an up-to-date problem list
remains largely within the individual
provider’s control and does not rely to
a large degree on some external sender
or receiver of structured electronic
health data. In addition, there is a
standard of practice for collecting the
elements required for an up-to-date
problem list. Although the commenters
may be right that some clinical
workflow needs to change, that is an
integral part of meaningful use of EHRs.
Although we do not expect all clinical
workflow to adapt in Stage 1, there is an
expectation that the clinical workflow
necessary to support the Stage 1 priority
of data capture and sharing will be in
place in order to effectively advance
meaningful use of EHRs. In addition,
given the wide range of activities that
must occur for meaningful use, we
believe that most EPs, eligible hospitals
and CAHs will have fully rolled out the
capabilities required by this objective
and the others with an 80 percent
threshold prior to the start of the EHR
reporting period thereby reducing the
likelihood of unexpected system
downtime and other implementation
complications.
For situations in which there is an
existing standard of practice and
complying is fundamentally within the
provider’s control and where the
objective relies solely on a capability
included as part of certified EHR
technology and is not, for purposes of
Stage 1 criteria, reliant on the electronic
exchange of information, for the final
rule, we adopt, the reasonably high
threshold of 80 percent. We believe
existing infrastructure and expectations
support this relatively high target. This
foundational step of structured data
capture is a prerequisite for many of the
more advanced functionalities (for
example, clinical decision support,
clinical quality measurement, etc.) for
which a solid evidence base exists for
improved quality, safety and efficiency
of care. Without having most of a
provider’s up-to-date problem lists in
structured, electronic data, that provider
will have major challenges in building
more advanced clinical processes going
forward.
For other situations, where the
objective may not be fundamentally
within the provider’s control and is not
an existing standard of practice, but
where objective continues to rely solely
on a capability that is included as part
of certified EHR technology and is not
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reliant on electronic exchange of
information, we are setting the
percentage at 50 percent. This was the
most commonly recommended
percentage for these objectives that rely
solely on a capability included as part
of certified EHR technology and do not
rely on the electronic exchange of
information.
After consideration of the public
comments received, we are modifying
the meaningful use measure for EPs at
§ 495.6(d)(3)(i) and for eligible hospitals
at § 495.6(f)(3)(i) of our regulations to
‘‘More than 80 percent of all unique
patients seen by the EP or admitted to
the eligible hospital’s or CAH’s
inpatient or emergency departments
(POS 21 or 23) have at least one entry
or an indication that no problems are
known for the patient recorded as
structured data’’.
We further specify that in order to
meet this objective and measure, an EP,
eligible hospital, or CAH must use the
capabilities Certified EHR Technology
includes as specified and standards at
45 CFR 170.302(c). The ability to
calculate the measure is included in
certified EHR technology.
To calculate the percentage, CMS and
ONC have worked together to define the
following for this objective:
• Denominator: Number of unique
patients seen by the EP or admitted to
an eligible hospital’s or CAH’s inpatient
or emergency department (POS 21 or 23)
during the EHR reporting period.
• Numerator: The number of patients
in the denominator who have at least
one entry or an indication that no
problems are known for the patient
recorded as structured data in their
problem list.
• Threshold: The resulting percentage
must be more than 80 percent in order
for an EP, eligible hospital, or CAH to
meet this measure.
We do not believe that any EP,
eligible hospital, or CAH would be in a
situation where they would not need to
know at least one active diagnosis for a
patient they are seeing or admitting to
their hospital. Therefore, there are no
exclusions for this objective and its
associated measure.
NPRM EP Objective: Generate and
transmit permissible prescriptions
electronically (eRx).
Comment: Some commenters
requested clarification of the term
‘‘permissible prescription.’’
Response: As discussed in the
proposed rule, the concept of only
permissible prescriptions refers to the
current restrictions established by the
Department of Justice on electronic
prescribing for controlled substances in
Schedule II. (The substances in
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Schedule II can be found at https://
www.deadiversion.usdoj.gov/schedules/
orangebook/e_cs_sched.pdf). Any
prescription not subject to these
restrictions would be permissible. We
note that the Department of Justice
recently released a notice of proposed
rulemaking that would allow the
electronic prescribing of these
substances; however, given the already
tight timeframe for Stage 1 of
meaningful use we are unable to
incorporate any final changes that may
result from that proposed rule.
Therefore, the determination of whether
a prescription is a ‘‘permissible
prescription’’ for purposes of the eRx
meaningful use objective should be
made based on the guidelines for
prescribing Schedule II controlled
substances in effect when the notice of
proposed rulemaking was published on
January 13, 2010. We define a
prescription as the authorization by an
EP to a pharmacist to dispense a drug
that the pharmacist would not dispense
to the patient without such
authorization. We do not include
authorizations for items such as durable
medical equipment or other items and
services that may require EP
authorization before the patient could
receive them. These are excluded from
the numerator and the denominator of
the measure.
Comment: Some commenters
recommended combining this objective
and measure with other meaningful use
objectives such as CPOE or the drugdrug, drug-allergy, drug-formulary
checks
Response: We addressed these
comments under our discussion of the
CPOE objective.
After consideration of the public
comments received, we are finalizing
the meaningful use objective at
495.6(d)(4)(i) as proposed.
We have also included this objective
in the core set. Section 1848(o)(2)(A)(i)
of the Act specifically includes
electronic prescribing in meaningful use
for eligible professionals. This function
is the most widely adopted form of
electronic exchange occurring and has
been proven to reduce medication
errors. We included this objective in the
core set based on the combination of the
maturity of this objective, the proven
benefits and its specific mention as the
only example provided in the HITECH
Act for what is meaningfully using
certified EHR technology.
NPRM EP Measure: At least 75
percent of all permissible prescriptions
written by the EP are transmitted
electronically using certified EHR
technology.
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In the proposed rule, we said that
while this measure does rely on the
electronic exchange of information
based on the public input previously
discussed and our own experiences
with e-prescribing programs, we believe
this is the most robust electronic
exchange currently occurring and
proposed 75 percent as an achievable
threshold for the Stage 1 criteria of
meaningful use. Though full compliance
(that is, 100 percent) is the ultimate
goal, 75 percent seemed an appropriate
standard for Stage 1 meaningful use as
it creates a high standard, while still
allowing room for technical hindrances
and other barriers to reaching full
compliance.
Comment: A majority of commenters
commenting on this measure believe the
75 percent threshold is too high. Several
issues were raised to explain why the
commenters believe the threshold is too
high. The first is that barriers to eprescribing exist at the pharmacies and
they must be brought into the process to
ensure compliance on the receiving end.
The second represents the most
common barrier cited by commenters
and that is patient preference for a paper
prescription over e-prescribing. A
patient could have this preference for
any number of reasons cited by
commenters such as the desire to shop
for the best price (especially for patients
in the Part D ‘‘donut hole’’), the ability
to obtain medications through the VA,
lack of finances, indecision to have the
prescription filled locally or by mail
order and desire to use a manufacturer
coupon to obtain a discount. Other
barriers mentioned by individual
commenters were the limited
functionality of current e-prescribing
systems such as the inability to
distinguish refills from new orders.
Suggestions for addressing these
difficulties were either to lower the
threshold (alternatives recommended
ranged from ten to fifty percent) or
replacing the percentage with a
numerical count of 25 to align with the
2010 Medicare e-Prescribing program.
Of the comments received that
requested a specific lower threshold,
about half of them suggested a 50
percent threshold, and about half
suggested a threshold of 25 percent to
30 percent.
Response: We are finalizing the use of
a percentage threshold for the reasons
discussed previously in this section
under our discussion of the burden
created by the measures associated with
the Stage 1 meaningful use objectives. In
the proposed rule, we pointed out that
we ‘‘believe this is the most robust
electronic exchange currently occurring’’
to justify a high threshold of 75 percent
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given that this objective relies on
electronic exchange. While we continue
to believe this is the case, two particular
issues raised by commenters caused us
to reconsider our threshold. The first is
the argument to include pharmacies in
the Medicare and Medicaid EHR
incentive programs to ensure
compliance on the receiving end. Nonparticipation by pharmacies was
presented by commenters as a major
barrier to e-Prescribing. The second is
patient preference for a paper
prescription. In regards to the first
argument, we do not have the ability to
impose requirements on pharmacies
through the HITECH legislation.
However, prescriptions transmitted
electronically have been growing at an
exponential rate. The number of
prescriptions sent electronically
increased by 181 percent from 2007 to
2008 according to comments received.
The number of pharmacies is also
increasing rapidly. Yet this growth is
uneven across the country and we wish
to accommodate all EPs and do lower
the threshold based on this argument. In
regards to the second argument, we also
have neither the ability nor the desire to
limit patient preference. We considered
allowing an EP to exclude from the
denominator those instances where a
patient requested a paper prescription.
However, the burden of tracking when
this occurs, the disincentive it would
create for EPs to work with patients on
establishing a relationship with a
pharmacy and the hindrance to moving
forward with e-prescribing lead us to
address this through further reduction
of the threshold as opposed to an
exclusion. To address these concerns we
are lowering the threshold for the eprescribing measure to 40 percent. As
pointed out by commenters,
e-prescribing it is not yet standard of
practice and there may be important
external barriers beyond the provider’s
control. In particular, for e-prescribing,
providers are dependent upon an
external receiver of electronic health
data, and there are significant variations
depending on where the provider
practices.
After consideration of the public
comments received, we are modifying
the meaningful use measure at
§ 495.6(d)(4)(ii) of our regulations to
‘‘More than 40 percent of all permissible
prescriptions written by the EP are
transmitted electronically using
certified EHR technology’’.
We further specify that in order to
meet this objective and measure, an EP,
eligible hospital, or CAH must use the
capabilities Certified EHR Technology
includes as specified and standards at
45 CFR 170.304(b). The ability to
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calculate the measure is included in
certified EHR technology.
As noted previously in this section
under our discussion of the burden
created by the measures associated with
the Stage 1 meaningful use objectives,
the prescriptions in the denominator are
only those for patients whose records
are maintained using certified EHR
technology.
To calculate the percentage, CMS and
ONC have worked together to define the
following for this objective:
• Denominator: Number of
prescriptions written for drugs requiring
a prescription in order to be dispensed
other than controlled substances during
the EHR reporting period.
• Numerator: The number of
prescriptions in the denominator
generated and transmitted
electronically.
• Threshold: The resulting percentage
must be more than 40 percent in order
for an EP, eligible hospital, or CAH to
meet this measure.
As addressed in other objectives and
in comment response, this objective and
associated measure do not apply to any
EP who writes fewer than one hundred
prescriptions during the EHR reporting
period, as described previously in this
section under our discussion of whether
certain EP, eligible hospital or CAH can
meet all Stage 1 meaningful use
objectives given established scopes of
practices.
NPRM EP/Eligible Hospital Objective:
Maintain active medication list.
Comment: Commenters requested
clarification of the term ‘‘active
medication list.’’
Response: We define an active
medication list as a list of medications
that a given patient is currently taking.
After consideration of the public
comments received, we are finalizing
this objective for EPs at § 495.6(d)(5)(i)
and for eligible hospitals and CAHs at
§ 495.6(f)(4)(i) of our regulations as
proposed.
We include this objective in the core
set as it is integral to the initial or ongoing management of a patient’s current
or future healthcare and would give
providers the necessary information to
make informed clinical decisions for
improved delivery of patient care.
NPRM EP/Eligible Hospital Measure:
At least 80 percent of all unique patients
seen by the EP or admitted by the
eligible hospital have at least one entry
(or an indication of ‘‘none’’ if the patient
is not currently prescribed any
medication) recorded as structured data.
As with the objective of maintaining
a problem list, we clarify that the
indication of ‘‘none’’ should distinguish
between a blank list that is blank
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because a patient is not on any known
medications and a blank list because no
inquiry of the patient has been made. As
long as the indication accomplishes this
goal and is structured data, we do not
believe it is necessary to prescribe the
exact terminology, preferring to leave
that level of detail to the designers and
users of certified EHR technology.
Comment: Commenters stated that the
measure should be replaced with a
numerical count or attestation and that
the threshold was too high for reasons
including the lack of current electronic
exchange of information, difficulty
capturing information as structured data
and lack of readiness of HIE
infrastructure.
Response: We are finalizing the use of
a percentage for the reasons discussed
previously in this section under our
discussion of the burden created by the
measures associated with the Stage 1
meaningful use objectives. For the same
reasons we explained under the
discussion of up-to-date problem list,
medication list is a functionality for
which there is an existing standard of
practice, it is foundational data capture
function to make more advanced
clinical processes possible, and
complying is fundamentally within the
provider’s control. Therefore, we
maintain the reasonably high threshold
of 80 percent because the existing
infrastructure and expectations support
this target.
Comment: Commenters requested
clarification as to whether the measure
is limited to patients seen during the
EHR reporting period.
Response: Yes, the measure applies to
all unique patients seen by the EP or
admitted to the eligible hospital’s or
CAH’s inpatient or emergency
departments (POS 21 or 23) during the
EHR reporting period.
Comment: A few commenters
expressed concern regarding the
requirement that the entry must be
recorded as ‘‘structured data.’’ The
commenters state that there may not be
a code for over the counter,
homeopathic or herbal products and
that would penalize the provider even
though the data is collected and
recorded.
Response: The distinction between
structured data and unstructured data
applies to all types of information.
Structured data is not fully dependent
on an established standard. Established
standards facilitate the exchange of the
information across providers by
ensuring data is structured in the same
way. However, structured data within
certified EHR technology merely
requires the system to be able to identify
the data as providing specific
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information. This is commonly
accomplished by creating fixed fields
within a record or file, but not solely
accomplished in this manner. For
example, in this case for it to be
structured, if the patient is on aspirin,
then that information should be in the
system so that it can be automatically
identified as a medication and not as an
order, note, or anything else. An
example of unstructured data would be
the word aspirin, but no ability of the
system to identify it as a medication.
Comment: A few commenters pointed
out their current health information
system vendor does not utilize RxNorm
as its standard.
Response: This is a certification issue
best addressed in the ONC final rule.
We therefore have referred these
comments to ONC for their
consideration.
Comment: We received comments
suggesting that this requirement could
create additional privacy/security
concerns for patients who do not want
all physicians and their clinical staff to
have access to their entire medication
history. Examples provided included
antidepressant, antipsychotic or erectile
dysfunction medications.
Response: We are only concerned
with medications that are known to the
provider through querying the patient,
their own records and the transfer of
records from other providers.
Meaningful use cannot address
situations where the information is
withheld from the EP, eligible hospital,
or CAH by the patient or by other
providers. We understand that some
patients would prefer not to have their
entire medical history available to all
physicians and clinical staff. We also
understand that laws in some states
restrict the use and disclosure of
information (including that related to
medication) that may reveal that a
patient has a specific health condition
(for example, HIV). Recording data in a
structured manner will facilitate the
implementation of these preferences
and policies in an electronic
environment. It is easier to identify and
potentially withhold specific data
elements that have been recorded in a
structured format than information
recorded as free text.
After consideration of the public
comments received, we are modifying
the meaningful use measure for EPs at
§ 495.6(d)(5)(ii) and for eligible
hospitals at § 495.6(f)(4)(ii) of our
regulations to ‘‘More than 80 percent of
all unique patients seen by the EP or
admitted to the eligible hospital’s or
CAH’s inpatient or emergency
departments (POS 21 or 23) have at least
one entry (or an indication that the
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44339
patient is not currently prescribed any
medication) recorded as structured
data’’.
We further specify that in order to
meet this objective and measure, an EP,
eligible hospital, or CAH must use the
capabilities Certified EHR Technology
includes as specified and standards at
45 CFR 170.302(d). The ability to
calculate the measure is included in
certified EHR technology.
To calculate the percentage, CMS and
ONC have worked together to define the
following for this objective:
• Denominator: Number of unique
patients seen by the EP or admitted to
an eligible hospital’s or CAH’s inpatient
or emergency departments (POS 21 or
23) during the EHR reporting period. A
definition of unique patient is discussed
under the objective of CPOE.
• Numerator: The number of patients
in the denominator who have a
medication (or an indication that the
patient is not currently prescribed any
medication) recorded as structured data.
• Threshold: The resulting percentage
must be more than 80 percent in order
for an EP, eligible hospital, or CAH to
meet this measure. Detailed discussion
of the more than 80 percent threshold
can be found under the objective of
maintaining an up-to-date problem list.
We do not believe that any EP, eligible
hospital or CAH would be in a situation
where they would not need to know
whether their patients are taking any
medications. Therefore, there are no
exclusions for this objective and its
associated measure.
NPRM EP/Eligible Hospital Objective:
Maintain active medication allergy list.
Comment: We received comments
that limiting this list to medication
allergies instead of all allergies was not
consistent with efficient workflow and
that all allergies should be housed in the
same location within the EHR.
Commenters also highlighted that lack
of knowledge of other allergies such as
latex and food allergies could lead to
significant harm to the patient.
Response: We agree that information
on all allergies, including nonmedication allergies, provide relevant
clinical quality data. However, while we
agree that collecting all allergies would
be an improvement, current medication
allergy standards exists in a structured
data format that may be implemented in
Stage 1. We hope to expand this
measurement to include all allergies as
the standards evolve and expand to
include non-medication allergies. We
believe EP/eligible hospitals/CAHs
should continue to document all
allergies, regardless of origin, consistent
with standard of care practice for that
EP/eligible hospital/CAH. We encourage
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them to work with the designers of their
certified EHR technology to make this
documentation as efficient and
structured as possible.
Comment: A commenter inquired
why the Substance Registration System
Unique Ingredient Identifier (UNII) was
not indicated for use until 2013 yet the
measure requires the information to be
recorded as structured data.
Response: Any standards for the
structured vocabulary for medication
allergies or other aspects of meaningful
use are included in ONC final rule.
Structured data does not require an
established standard as discussed under
the objective of maintaining a
medication list.
Comment: We received a few
comments requesting a definition of
‘‘allergy.’’
Response: We adopt the commonly
held definition of an allergy as an
exaggerated immune response or
reaction to substances that are generally
not harmful. The definition is derived
from Medline Plus, a service of the U.S.
National Library of Medicine and the
National Institutes of Health.
After consideration of the public
comments received, we are finalizing
the meaningful use objective for EPs at
495.6(d)(6)(i) and for eligible hospitals
and CAHs at 495.6(f)(5)(i) as proposed.
We include this objective in the core
set as it is integral to the initial or ongoing management of a patient’s current
or future healthcare and would give
providers the necessary information to
make informed clinical decisions for
improved delivery of patient care.
NPRM EP/Eligible Hospital Measure:
At least 80 percent of all unique patients
seen by the EP or admitted to the
eligible hospital have at least one entry
(or an indication of ‘‘none’’ if the patient
has no medication allergies) recorded as
structured data.
Comment: Multiple commenters
noted that ‘‘none’’ is not a typical value
to describe the absence of allergies in
medical documentation and should be
replaced with ‘‘no known allergies
(NKA),’’ ‘‘no known drug allergies
(NKDA)’’ or ‘‘no known medication
allergies (NKMA).’’
Response: Our intent is not to dictate
the exact wording of the specific value.
Rather we are focused on the overall
goal of making a distinction between a
blank list that is blank because a patient
does not have known allergies and a
blank list because no inquiry of the
patient has been made or no information
is available from other sources. As long
as the indication accomplishes this goal
and is structured data, we do not believe
it is necessary to prescribe the exact
terminology, preferring to leave that
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level of detail to the designers and users
of certified EHR technology.
Comment: Given that the measure is
only a one time check for a single entry,
one commenter questioned whether this
measure truly constitutes maintenance
of an ‘‘active’’ list.
Response: We agree that this measure
does not ensure that every patient under
the care of every EP, eligible hospital, or
CAH has an active or up-to-date
medication list. However, not every EP
comes in contact with the patient, and
therefore has the opportunity to update
the list. Nor do we believe that an EP,
eligible hospital, or CAH should be
required through meaningful use to
update the list at every contact with the
patient. There is also the consideration
of the burden that reporting places on
the EP, eligible hospital, or CAH. The
measure as finalized ensures that the
EP, eligible hospital, or CAH has not
ignored having a medication allergy list
for patients seen during the EHR
reporting period and that at least one
piece of information on medication
allergies is presented to the EP, eligible
hospital, or CAH. The EP, eligible
hospital, or CAH can then use their
judgment in deciding what further
probing or updating may be required
given the clinical circumstances at
hand. Therefore, we are maintaining the
measure of a one-time check for a single
entry.
Comment: Several commenters
recommended eliminating the
percentage measurement and allowing
the provider to attest that active
medication lists are maintained in the
certified EHR technology.
Response: We are retaining a
percentage for the reasons discussed
previously in this section under our
discussion of the burden created by the
measures associated with the Stage 1
meaningful use objectives. For the same
reasons we explained under the
discussion of up-to-date problem list,
medication-allergy list is a functionality
for which there is an existing standard
of practice, it is foundational data
capture function to make more
advanced clinical processes possible,
and complying is fundamentally within
the provider’s control. Therefore, we
maintain the reasonably high threshold
of 80 percent because the existing
infrastructure and expectations support
this target.
After consideration of the public
comments received, we are modifying
the meaningful use measure for EPs at
§ 495.6(d)(6)(ii) and for eligible
hospitals at § 495.6(f)(5)(ii) of our
regulations to ‘‘More than 80 percent of
all unique patients seen by the EP or
admitted to the eligible hospital’s or
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Frm 00028
Fmt 4701
Sfmt 4700
CAH’s inpatient or emergency
departments (POS 21 or 23) have at least
one entry (or an indication that the
patient has no known medication
allergies) recorded as structured data’’.
We further specify that in order to
meet this objective and measure, an EP,
eligible hospital, or CAH must use the
capabilities Certified EHR Technology
includes as specified and standards at
45 CFR 170.302(e). The ability to
calculate the measure is included in
certified EHR technology.
To calculate the percentage, CMS and
ONC have worked together to define the
following for this objective:
• Denominator: Number of unique
patients seen by the EP or admitted to
an eligible hospital’s or CAH’s inpatient
or emergency departments (POS 21 or
23) during the EHR reporting period.
The definition of ‘‘a unique patient’’ is
provided under the objective of CPOE.
• Numerator: The number of unique
patients in the denominator who have at
least one entry (or an indication that the
patient has no known medication
allergies) recorded as structured data in
their medication allergy list.
• Threshold: The percentage must be
more than 80 percent in order for an EP,
eligible hospital, or CAH to meet this
measure. Detailed discussion of the
rationale more than 80 percent
threshold can be found at under the
objective of maintain an up-to-date
problem list.
We do not believe that any EP,
eligible hospital or CAH would be in a
situation where they would not need to
know whether their patients have
medication allergies and therefore do
not establish an exclusion for this
measure.
NPRM EP Objective: Record the
following demographics: Preferred
language, insurance type, gender, race
and ethnicity, and date of birth.
NPRM Eligible Hospital Objective:
Record the following demographics:
Preferred language, insurance type,
gender, race and ethnicity, date of birth,
and date and cause of death in the event
of mortality.
In the proposed rule, we noted that
race and ethnicity codes should follow
current federal standards published by
the Office of Management and Budget
(https://www.whitehouse.gov/omb/
inforeg_statpolicy/#dr). We maintain
that proposal for the final rule.
Comment: Some commenters
requested clarification of whether all of
the demographics are required and
under what circumstances no indication
might be acceptable. Examples of
acceptable circumstances from
commenters include patient
unwillingness to report, language
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barriers, and requirement to report
ethnicity and/or race contrary to some
state laws.
Response: In general, we do require
that all demographic elements that are
listed in the objective be included in a
patient’s record in certified EHR
technology. However, we do not desire,
nor could we require, that a patient
provide this information if they are
otherwise unwilling to do so. Similarly,
we do not seek to preempt any state
laws prohibiting EPs, eligible hospitals,
or CAHs from collecting information on
a patient’s ethnicity and race. Therefore
if a patient declines to provide the
information or if capturing a patient’s
ethnicity or race is prohibited by state
law, such a notation entered as
structured data would count as an entry
for purposes of meeting the measure.
Comment: Several commenters asked
for clarity on the definition of preferred
language. Commenters also indicated
that standards are in development (ISO
639 and ANSIX12N Claim/Reporting
Transaction). Some commenters also
requested that we include the
requirement that the EP, eligible
hospital or CAH also communicate with
the patient in their preferred language.
Response: Preferred language is the
language by which the patient prefers to
communicate. This is just a record of
the preference. We do not have the
authority under the HITECH Act to
require providers to actually
communicate with the patient in his or
her preferred language, and thus do not
require EPs, eligible hospitals, and
CAHs to do so in order to qualify as a
meaningful EHR user as suggested by
some commenters. In regards to
standards, those would be adopted
under the ONC final rule.
Comment: Some commenters also
requested clarity on the definition of
race and ethnicity. Some commenters
noted an Institute of Medicine report
entitled ‘‘Race, Ethnicity and Language
Data: Standardization for Health Care
Quality Improvement’’, which makes
recommendations for how to ask
questions to collect information and
builds on the OMB Standards for
language, race and ethnicity. Some
commenters were also concerned about
situations where the available choices
were not granular enough, did not
properly account for mixed race and
ethnicity, and when the patient did not
know their ethnicity.
Response: In the proposed rule, we
said that EPs, eligible hospitals and
CAHs, should use the race and ethnicity
codes that follow current federal
standards published by the Office of
Management and Budget (https://
www.whitehouse.gov/omb/inforeg
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_statpolicy/#dr). We continue to believe
that these standards should be applied
for purposes of implementing the Stage
1 meaningful use objectives, but will
consider whether alternative standards
or additional clarification would be
appropriate for future stages of
meaningful use criteria. We believe it is
beyond the scope of the definition of
meaningful use to provide additional
definitions for race and ethnicity
beyond what is established by OMB. In
regards to patients who do not know
their ethnicity, EPs, eligible hospitals,
and CAHs should treat these patients
the same way as patients who decline to
provide the race or ethnicity, that is,
they should identify in the patient
record that the patient declined to
provide this information.
Comment: Some commenters
requested additional clarity on
insurance type and others
recommended the elimination of
insurance type due to the complexity of
insurance coverage, the function of the
EHR as a medical tool and not a
financial one, the volatility of this
information due to patients frequently
changing plans and concerns that
information on a patient’s insurance
status will have a possible behavioral
influence on the providers if this
information were presented.
Response: Classifying insurance
involves two distinctions—the source of
coverage and insurance design. Source
of coverage refers to the type of funding,
such as public, private or self-pay. The
design of the insurance program, such
as health maintenance program (HMO),
preferred provider organization (PPO),
high-deductible consumer directed
plan, fee-for-service, etc. Although not
specified in the proposed rule, by
insurance type we were referring to the
first distinction—the source of funding
for the insurance. We found two
initiatives that could provide clarity on
type. The first is the ‘‘Source of Payment
Typology’’ developed by the Public
Health Data Standards Consortium
(https://www.phdsc.org/standards/payertypology.asp). The consortium is
currently in the process of working with
States to implement this typology. The
other initiative is established in the
Uniform Data Set (UDS) collected by
HRSA (https://www.hrsa.gov/datastatistics/health-center-data/
index.html). The information in the
UDS contains several caveats, however,
that make it difficult to be used by all
EPs, eligible hospitals and CAHs, and it
does not accommodate patients with
multiple types of insurance such as
those dually eligible for Medicare and
Medicaid or for those with both
Medicare and MediGap coverage. Many
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44341
EHRs that currently report on HRSA
UDS Insurance Type standards account
for multiple types of insurance by
maintaining separate Reporting
Insurance Groups and deriving the
Insurance Type data from the primary
insurance company on the encounter
and mappings to that Insurance Type
Reporting Group. This information is
documented at the patient demographic
level or the patient encounter/progress
note. Given the complexity of defining
insurance type and attributing it to
patients in an agreed upon way, we are
eliminating ‘‘insurance type’’ from this
meaningful use objective.
Comment: A minority of commenters
commenting on this objective
recommended that CMS remove cause
of death from the objective for eligible
hospitals. The most common rationale is
that the coroner or medical examiner
officially determines cause of death
when the case is referred to them. By
law, the hospital cannot declare a cause
of death in these cases.
Response: When a patient expires, in
the routine hospital workflow, a
clinician evaluates the patient to
pronounce the patient’s death. The
clinician typically documents in the
patient’s chart, the sequence of events
leading to the patient’s death, conducts
the physical exam and makes a
preliminary assessment of the cause of
death. We are requiring that eligible
hospitals record in the patient’s EHR the
clinical impression and preliminary
assessment of the cause of death, and
not the cause of death as stated in any
death certificate issued by the
Department of Health or the coroner’s
office.
Comment: A few commenters
requested inclusion of Advanced
Directives under this objective as
recommended by the HIT Policy
Committee.
Response: We discuss advance
directives separately in this final rule
under its own objective.
Comment: Several commenters
recommended requiring the submission
of the demographic data to CMS.
Response: Stage 1 of meaningful use
seeks to ensure certified EHR
technology has the capability to record
demographic information and that those
capabilities are utilized. We believe the
information recorded for this measure is
for provider use in the treatment and
care of their patients and therefore
should not be submitted to CMS at this
time.
Comment: Commenters suggested
requiring the use of the demographic
data from this measure to stratify
clinical quality measure reporting and
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the generation of reports for patient
outreach and quality initiatives.
Response: While we encourage all
providers and EHR developers to work
together to develop reporting from the
EHR system for use in the improvement
of population and public health, for
purposes of becoming a meaningful EHR
user in Stage 1, we only require the
recording of the specified
demographics.
After consideration of the public
comments received, we are modifying
meaningful use objective at
§ 495.6(d)(7)(i) of our regulations for EPs
to ‘‘Record the following demographics:
Preferred language, gender, race and
ethnicity, and date of birth’’.
After consideration of the public
comments received, we are modifying
meaningful use objective at
§ 495.6(f)(6)(i) of our regulations for
eligible hospitals and CAHs to ‘‘Record
the following demographics: Preferred
language, gender, race and ethnicity,
date of birth, and date and preliminary
cause of death in the event of mortality
in the eligible hospital or CAH’’.
We include this objective in the core
set as it is integral to the initial or ongoing management of a patient’s current
or future healthcare, recommended by
the HIT Policy Committee and would
give providers the necessary
information to make informed clinical
decisions for improved delivery of
patient care.
NPRM EP/Eligible Hospital Measure:
At least 80 percent of all unique patients
seen by the EP or admitted to the
eligible hospital have demographics
recorded as structured data.
Comment: Commenters said that this
should be replaced with a count or
attestation or alternatively that the
threshold was too high.
Response: We are maintaining a
percentage for the reasons discussed
previously in this section under our
discussion of the burden created by the
measures associated with the Stage 1
meaningful use objectives. However, we
do reduce the threshold to over 50
percent as this objective meets the
criteria of relying solely on a capability
included as part of certified EHR
technology and is not, for purposes of
Stage 1 criteria, reliant on the electronic
exchange of information. In contrast to
our discussion of maintaining an up-todate problem list/medication list/
medication allergy list, we believe that
some demographic elements (especially
race, ethnicity and language) are not as
straightforward to collect as objective
data elements and therefore the
standard of practice for demographic
data is still evolving. As we believe this
measure may not be within current
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standard of practice, we are adopting
the lower threshold of 50 percent (rather
than 80 percent).
After consideration of the public
comments received, we are modifying
the meaningful use measure for EPs at
§ 495.6(d)(7)(ii) and for eligible
hospitals at § 495.6(f)(6)(ii) of our
regulations to ‘‘More than 50 percent of
all unique patients seen by the EP or
admitted to the eligible hospital’s or
CAH’s inpatient or emergency
department (POS 21 or 23) have
demographics recorded as structured
data’’.
We further specify that in order to
meet this objective and measure, an EP,
eligible hospital, or CAH must use the
capabilities Certified EHR Technology
includes as specified and standards at
45 CFR 170.304(c) for EPs and 45 CFR
170.304(b) for eligible hospitals and
CAHs. The ability to calculate the
measure is included in certified EHR
technology.
To calculate the percentage, CMS and
ONC have worked together to define the
following for this objective:
• Denominator: Number of unique
patients seen by the EP or admitted to
an eligible hospital’s or CAH’s inpatient
or emergency departments (POS 21 or
23) during the EHR reporting period. A
unique patient is discussed under the
objective of CPOE.
• Numerator: The number of patients
in the denominator who have all the
elements of demographics (or a specific
exclusion if the patient declined to
provide one or more elements or if
recording an element is contrary to state
law) recorded as structured data.
• Threshold: The resulting percentage
must be more than 50 percent in order
for an EP, eligible hospital or CAH to
meet this measure. Most EPs and all
eligible hospitals and CAHs would have
access to this information through direct
patient access. Some EPs without direct
patient access would have this
information communicated as part of
the referral from the EP who identified
the service as needed by the patient.
Therefore, we did not include an
exclusion for this objective and
associated measure.
NPRM EP/Eligible Hospital Objective:
Record and chart changes in the
following vital signs: height, weight and
blood pressure and calculate and
display body mass index (BMI) for ages
2 and over; plot and display growth
charts for children 2–20 years, including
BMI.
In the proposed rule, we described
why we included growth charts in this
objective. The reason given was that
BMI was not a sufficient marker for
younger children.
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Comment: Over two thirds of the
commenters commenting on this
objective expressed concern about the
applicability of the listed vital signs to
all provider types and care settings.
Response: While this objective could
be met by receiving this information
from other providers or non-provider
data sources, we recognize that the only
guaranteed way for a provider to obtain
this information is through direct
patient interaction and that this
information is not always routinely
provided from the EP ordering a service
because of a direct patient interaction.
EPs who do not see patients 2 years or
older would be excluded from this
requirement as described previously in
this section under our discussion of
whether certain EP, eligible hospital or
CAH can meet all Stage 1 meaningful
use objectives given established scopes
of practices. We would also allow an EP
who believes that measuring and
recording height, weight and blood
pressure of their patients has no
relevance to their scope of practice to so
attest and be excluded.
Comment: Several commenters stated
this objective should be removed in
favor of clinical quality measures
addressing BMI and blood pressure as
these measures serve the same purpose
and to require both is to require
duplicative reporting.
Response: We disagree that these two
measures serve the same purpose and
therefore that the measure should be
eliminated in favor of clinical quality
measures addressing BMI and blood
pressure. The objective included here
seeks to ensure that information on
height, weight and blood pressure and
the extractions based on them are
included in the patient’s record.
Furthermore, the objective seeks to
ensure that the data is stored in a
structured format so that it can be
automatically identified by certified
EHR technology for possible reporting
or exchanging. We also note that the
clinical quality measure focuses on a
smaller subset of the patient population.
After consideration of the public
comments received, we are finalizing
the objective for EPs at 495.6(d)(8)(i)
and for eligible hospitals and CAHs at
495.6(f)(7)(i) as proposed.
We include this objective in the core
set as it is integral to the initial or ongoing management of a patient’s current
or future healthcare and would give
providers the necessary information to
make informed clinical decisions for
improved delivery of patient care.
NPRM EP/Eligible Hospital Measure:
For at least 80 percent of all unique
patients age 2 and over seen by the EP
or admitted to the eligible hospital,
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record blood pressure and BMI;
additionally, plot growth chart for
children age 2 to 20.
Comment: Commenters suggested
replacement of the percentage
measurement with a count or attestation
or alternatively that that the threshold
was too high.
Response: We are retaining a
percentage for the reasons discussed
previously in this section under our
discussion of the burden created by the
measures associated with the Stage 1
meaningful use objectives. However, we
did reduce the threshold from 80
percent to greater than 50 percent as this
objective meets the criteria of relying
solely on a capability included as part
of certified EHR technology and is not,
for purposes of Stage 1 criteria, reliant
on the electronic exchange of
information. In addition, in contrast to
the measures associated with
maintaining an up-to-date problem list,
an active medication list, and an active
medication-allergy list, we believe that
for many specialties, the current
practice on vital signs may not be as
well-established. We believe there may
not be the same level of consensus
regarding the relevance to patient care
of vital signs for many specialties and
the frequency with which such vital
signs should be collected. Thus, for this
measure, we adopt a percentage of 50
percent, rather than 80 percent.
Comment: Commenters requested
clarification of the frequency and
methods of recording the vital signs
included in the measure.
Response: As discussed in the
objective, the EP/eligible hospital/CAH
is responsible for height, weight and
blood pressure so we will focus our
discussion on those items. First, we do
not believe that all three must be
updated by a provider at every patient
encounter nor even once per patient
seen during the EHR reporting period.
For this objective we are primarily
concerned that some information is
available to the EP/eligible hospital/
CAH, who can then make the
determination based on the patient’s
individual circumstances as to whether
height, weight and blood pressure needs
to be updated. The information can get
into the patient’s medical record as
structured data in a number of ways.
Some examples include entry by the EP/
eligible hospital/CAH, entry by someone
on the EP/eligible hospital/CAH’s staff,
transfer of the information electronically
or otherwise from another provider or
entered directly by the patient through
a portal or other means. The measure
hinges on access of the information.
Therefore, any EP/eligible hospital/CAH
that sees/admits the patient and has
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access to height, weight and blood
pressure information on the patient can
put that patient in the numerator.
Comment: Some commenters
requested clarification regarding the role
of both the EP/eligible hospital/CAH
and the certified EHR technology for the
calculation of BMI and the plotting and
displaying of growth charts. Other
commenters recommended the
exclusion of growth charts for certain
patients and care settings. Another
commenter also expressed the desire for
the exclusion of growth charts for
patients over the age of 18, inpatient
care settings and more specifically, nonpediatric inpatient care settings.
Response: We believe a clarification is
in order about which of the listed vital
signs are data inputs to be collected by
the EP/eligible hospital/CAH and which
are calculations made by the certified
EHR technology. The only information
required to be inputted by the provider
is the height, weight and blood pressure
of the patient. The certified EHR
technology will calculate BMI and the
growth chart if applicable to patient
based on age. As this requirement
imposes no duty or action on the
provider, we see no reason to limit its
availability to any EP, eligible hospital,
or CAH based on setting or other
consideration. Concerns on presentation
and interface are best left to designers of
certified EHR technology and users.
Finally, as certified EHR technology is
able to automatically generate BMI and
the growth chart if height and weight
are entered as structured data we see no
reason to include BMI and growth chart
in the measure. We therefore will limit
the final measure to data requiring
provider data entry points.
Comment: A few commenters
suggested that ‘‘reported height’’ by the
patient should be acceptable when
measurement is not appropriate such as
in the case of severe illness.
Response: We agree and would allow
height self-reported by the patient to be
used.
After consideration of the public
comments received, we are modifying
the meaningful use measure for EPs at
495.6(d)(8)(ii) and for eligible hospitals
§ 495.6(f)(7)(ii) of our regulations to ‘‘For
more than 50 percent of all unique
patients age 2 and over seen by the EP
or admitted to eligible hospital’s or
CAH’s inpatient or emergency
department (POS 21 or 23), height,
weight and blood pressure are recorded
as structured data’’.
We further specify that in order to
meet this objective and measure, an EP,
eligible hospital, or CAH must use the
capabilities Certified EHR Technology
includes as specified and standards at
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45 CFR 170.302(f). The ability to
calculate the measure is included in
certified EHR technology.
As noted previously in this section
under our discussion of the burden
created by the measures associated with
the Stage 1 meaningful use objectives,
the percentage is based on patient
records that are maintained using
certified EHR technology. To calculate
the percentage, CMS and ONC have
worked together to define the following
for this objective:
• Denominator: Number of unique
patients age 2 or over seen by the EP or
admitted to an eligible hospital’s or
CAH’s inpatient or emergency
department (POS 21 or 23) during the
EHR reporting period. A unique patient
is discussed under the objective of
CPOE.
• Numerator: The number of patients
in the denominator who have at least
one entry of their height, weight and
blood pressure are recorded as structure
data.
• Threshold: The resulting percentage
must be more than 50 percent in order
for an EP, eligible hospital, or CAH to
meet this measure. As addressed in
other objectives and in comment
response, an EP who sees no patients 2
years old or younger would be excluded
from this requirement as described
previously in this section under our
discussion of whether certain EP,
eligible hospital or CAH can meet all
Stage 1 meaningful use objectives given
established scopes of practices. We
would also allow an EP who believes
that all three vital signs of height,
weight and blood pressure have no
relevance to their scope of practice to so
attest and be excluded. However, we
believe this attestation and exclusion
from recording height, weight, and
blood pressure does not hold for other
patient specific information collection
objectives, like maintaining an active
medication allergy list. We do not
believe that any EP would encounter a
situation where the patient’s active
medication and allergy list is not
pertinent to care and therefore would be
outside of the scope of work for an EP.
We believe the exclusion based on EP
determination of their scope of practice
for the record vital signs objective, as
written in Stage 1, should be studied for
relevance in further stages. We do not
believe eligible hospitals or CAHs
would ever only have a patient
population for patients 2 years old or
younger or that these vital signs would
have no relevance to their scope of
practice. Therefore, we do not include
an exclusion for eligible hospitals or
CAHs.
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NPRM EP/Eligible Hospital Objective:
Record smoking status for patients 13
years old or older
In the proposed rule, we explained
that we believe it is necessary to add an
age restriction to this objective as we do
not believe this objective is applicable
to patients of all ages and there is no
consensus in the health care community
as to what the appropriate cut off age
may be. We encouraged comments on
whether this age limit should be
lowered or raised. We received many
comments on the age limit and address
them below.
Comment: Several commenters
requested a different age limitation.
Commenters suggested ages anywhere
between 5 years old up to 18 years old.
Response: For the purposes of this
objective and for meaningful use, our
interest is focused on when a record of
smoking status should be in every
patient’s medical record. Recording
smoking status for younger patients is
certainly not precluded. We do believe
there would be situations where an EP/
eligible hospital/CAH’s knowledge
about other risk factors would indicate
that they should inquire about smoking
status if it is unknown for patients
under 13 years old. However, in order
to accurately measure and thereby
assure meaningful use, for this objective
we believe that the age limit needs to be
high enough so that the inquiry is
appropriate for all patients. Therefore,
we are maintaining the age limitation at
13 years old or older.
Comment: Some commenters
suggested expanding smoking status to
any type of tobacco use.
Response: While we agree that an
extended list covering other types of
tobacco use may provide valuable
insight for clinical care for certified EHR
technology ONC has adopted the CDC’s
NHIS standard recodes for smoking
status. This will provide a standard set
of questions across providers and
standardize the data. The extended list
does not make the collection of multiple
survey questions clear. For example, a
patient may be a current tobacco user as
well as a smoker. For these reason in
Stage 1 we will use the standards
adopted by ONC for certified EHR
technology at 45 CFR 170.302(g). For
future stages, we will review this
measure for possible inclusion of other
questions. This is a minimum set. We
do not intend to limit developers of EHR
technology from creating more specific
fields or to limit EPs/eligible hospitals/
CAHs from recording more specific
information.
Comment: We also received
comments requesting that second-hand
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smoking be included in the objective for
children and adolescents.
Response: Including second-hand
smoking introduces much more
variability into the objective as to what
constitutes a level of exposure and
difficulty in measuring it successfully
with different age limits to different
aspects. For instance, how much
exposure is acceptable for a given age
and how is such exposure determined?
How would these differing requirements
be accounted for by certified EHR
technology? As with the change from
smoking status to tobacco use, we
believe this introduces an unacceptable
level of complexity for Stage 1 of
meaningful use. For Stage 1 of
meaningful use we are not adding
second hand smoke exposure to this
objective. However, we remind EPs,
eligible hospitals and CAHs that nothing
about the criteria for meaningful use
prevents them from working with their
EHR developer to ensure that their EHR
system meets their needs and the needs
of their patient population. We
encourage all EPs, eligible hospitals and
CAHs to critically review their
implementation in light of their current
and future needs both to maximize their
own value and to prepare for future
stages of meaningful use.
Comment: We received comments
asking at what frequency the
information must be recorded and
whether the information can be
collected by support staff.
Response: We clarify that this is a
check of the medical record for patients
13 years old or older. If this information
is already in the medical record
available through certified EHR
technology, we do not intend that an
inquiry be made every time a provider
sees a patient 13 years old or older. The
frequency of updating this information
is left to the provider and guidance is
provided already from several sources
in the medical community. The
information could be collected by any
member of the medical staff.
Comment: We received a number of
comments recommending either
removing this objective to record
smoking status from the HIT
functionality objectives or removing the
smoking measure from the core clinical
quality measures as these measures
serve the same purpose and to require
both is to require duplicative reporting.
Response: We disagree that these two
measures serve the same purpose and
therefore only one should be included.
The objective included here seeks to
ensure that information on smoking
status is included in the patient’s
record. Furthermore, that the
information is stored in a structured
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format so that it can automatically be
identified by certified EHR technology
as smoking status for possible reporting
or exchanging. We also note that the
clinical quality measure only focuses on
patients 18 years or older, while the
objective focuses on patients 13 years or
older. In addition, many quality
measures related to smoking are
coupled with follow-up actions by the
provider such as counseling. We
consider those follow-up actions to be
beyond the scope of what we hope to
achieve for this objective for Stage 1 of
meaningful use.
After consideration of the public
comments received, we are finalizing
the meaningful use objective for EPs at
§ 495.6(d)(9)(i) and for eligible hospitals
at § 495.6(f)(8)(i) of our regulations as
proposed.
We include this objective in the core
set as it is integral to the initial or ongoing management of a patient’s current
or future healthcare and would give
providers the necessary information to
make informed clinical decisions for
improved delivery of patient care.
NPRM EP/Eligible Hospital Measure:
At least 80 percent of all unique patients
13 years old or older seen by the EP or
admitted to the eligible hospital have
‘‘smoking status’’ recorded.
In the proposed rule, discussion of
this measure referenced other sections
exclusively.
Comment: We received comments
recommending alternative thresholds
for this measure. Commenters provided
thresholds ranging from anything
greater than zero to 60 percent in stage
1.
Response: In the proposed rule, we
established a consistent threshold for
measures not requiring the exchange of
information. For the final rule, (other
than up-to-date problem list, active
medication list and active medicationallergy list), we have lowered the
threshold associated with these
measures to 50 percent. In our
discussion of the objective, we noted
many concerns by commenters over the
appropriate age at which to inquire
about smoking status. There were also
considerable differences among
commenters as to what the appropriate
inquiry is and what it should include.
Due to these concerns, we do not
believe this objective and measure fit
into the threshold category described
under up-to-date problem lists and
therefore we adopt a 50 percent (rather
than an 80 percent) threshold for this
measure. After consideration of the
public comments received, we are
modifying the meaningful use measure
for EPs at § 495.6(d)(9)(ii) and for
eligible hospitals at § 495.6(f)(8)(ii) of
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our regulations to ‘‘More than 50 percent
of all unique patients 13 years old or
older seen by the EP or admitted to the
eligible hospital’s or CAH’s inpatient or
emergency departments (POS 21 or 23)
have smoking status recorded as
structured data’’.
We further specify that in order to
meet this objective and measure, an EP,
eligible hospital, or CAH must use the
capabilities Certified EHR Technology
includes as specified and standards at
45 CFR 170.302(g). The ability to
calculate the measure is included in
certified EHR technology.
As noted previously in this section
under our discussion of the burden
created by the measures associated with
the Stage 1 meaningful use objectives,
the percentage is based on patient
records that are maintained using
certified EHR technology.
To calculate the percentage, CMS and
ONC have worked together to define the
following for this objective:
• Denominator: Number of unique
patients age 13 or older seen by the EP
or admitted to an eligible hospital’s or
CAH’s inpatient or emergency
departments (POS 21 or 23) during the
EHR reporting period. A unique patient
is discussed under the objective of
maintaining an up-to-date problem list.
• Numerator: The number of patients
in the denominator with smoking status
recorded as structured data.
• Threshold: The resulting percentage
must be more than 50 percent in order
for an EP, eligible hospital, or CAH to
meet this measure. As addressed in
other objectives, EPs, eligible hospitals
or CAHs who see no patients 13 years
or older would be excluded from this
requirement as described previously in
this section under our discussion of
whether certain EP, eligible hospital or
CAH can meet all Stage 1 meaningful
use objectives given established scopes
of practices. Most EPs and all eligible
hospitals and CAHs would have access
to this information through direct
patient access. Some EPs without direct
patient access would have this
information communicated as part of
the referral from the EP who identified
the service as needed by the patient.
Therefore, we did not include an
exclusion based on applicability to
scope of practice or access to the
information for this objective and
associated measure.
NPRM EP/Eligible Hospital Objective:
Record advance directives.
In the proposed rule, we discussed
this objective, but did not propose it as
a requirement for demonstrating
meaningful use, for a number of reasons,
including: (1) It was unclear whether
the objective would be met by
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indicating that an advance directive
exists or by including the contents of
the advance directive; (2) the objective
seems relevant only to a limited and
undefined patient population when
compared to the patient populations to
which other objectives of Stage 1 of
meaningful use apply; and (3) we
believe that many EPs would not record
this information under current
standards of practice. Dentists,
pediatricians, optometrists,
chiropractors, dermatologists, and
radiologists are just a few examples of
EPs who would require information
about a patient’s advance directive only
in rare circumstances.
Comment: We received several
comments including a comment from
the HIT Policy Committee that we
should include advance directives in
the final rule. The HIT Policy
Committee clarified that this would be
an indication of whether a patient has
an advanced directive. Furthermore,
they recommend limiting this measure
to patients 65 and older. We received
other comments that said this should be
a requirement for eligible hospitals.
Other commenters reported that having
this information available for the patient
would allow eligible hospitals to make
decisions that were better aligned with
the patient’s expressed wishes.
Response: In the proposed rule, we
said that confusion as to whether this
objective would require an indication of
the existence of an advanced directive
or the contents of the advance directive
itself would be included in certified
EHR technology was one of the reasons
for not including the objective in Stage
1 of meaningful use. We expressed
concerns that the latter would not be
permissible in some states under
existing state law. As commenters have
clarified that advance directives should
be just an indication of existence of an
advance directive and recommended a
population to apply the measure to, we
reinstate this objective for eligible
hospitals and CAHs. We believe that the
concern over potential conflicts with
state law are alleviated by limiting this
to just an indication. We also believe
that a restriction to a more at risk
population is appropriate for this
measure. By restricting the population
to those 65 years old and older, we
believe we focus this objective
appropriately on a population likely to
most benefit from compliance with this
objective and its measure. This objective
is in the menu set so if an eligible
hospital or CAH finds they are unable
to meet it then can defer it. However, we
believe many EPs would not record this
information under current standards of
practice. Dentists, pediatricians,
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optometrists, chiropractors,
dermatologists, and radiologists are just
a few examples of EPs who would only
require information about a patient’s
advance directive in rare circumstances.
For other meaningful use objectives, we
have focused our exclusions on rare
situations, which would not be the case
for this objective. Therefore, we do not
include this objective for EPs.
After consideration of the public
comments received, we are including
this meaningful use objective for eligible
hospitals and CAHs at § 495.6(g)(2)(i) of
our regulations as ‘‘Record whether a
patient 65 years old or older has an
advanced directive as structured data ’’.
NPRM EP/Eligible Hospital Measure:
N/A.
While we did not receive specific
percentage recommendations from
commenters, this objective is the
recording of a specific data element as
structured data in the patient record.
This is identical to other objectives with
established measures such as, recording
vital signs, recording demographics and
recording smoking status. Therefore, we
adopt the measure format and the lower
threshold (50 percent) from those
objectives. We also believe that this
information is a level of detail that is
not practical to collect on every patient
admitted to the eligible hospital’s or
CAH’s emergency department, and
therefore, have limited this measure
only to the inpatient department of the
hospital.
In the final rule, this meaningful use
measure for eligible hospitals at
§ 495.6(g)(2)(ii) of our regulations: ‘‘More
than 50 percent of all unique patients 65
years old or older admitted to the
eligible hospital’s or CAH’s inpatient
department (POS 21) have an indication
of an advance directive status recorded
as structured data’’.
We further specify that in order to
meet this objective and measure, an EP,
eligible hospital, or CAH must use the
capabilities Certified EHR Technology
includes as specified and standards at
45 CFR 170.306(h). The ability to
calculate the measure is included in
certified EHR technology.
As noted previously in this section
under our discussion of the burden
created by the measures associated with
the Stage 1 meaningful use objectives,
the percentage is based on patient
records that are maintained using
certified EHR technology.
To calculate the percentage, CMS and
ONC have worked together to define the
following for this objective:
• Denominator: Number of unique
patients age 65 or older admitted to an
eligible hospital’s or CAH’s inpatient
department (POS 21) during the EHR
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reporting period. A unique patient is
discussed under the objective of CPOE.
• Numerator: The number of patients
in the denominator with an indication
of an advanced directive entered using
structured data.
• Threshold: The resulting percentage
must be more than 50 percent in order
for eligible hospital or CAH to meet this
measure. An exclusion, as described
previously in this section under our
discussion of whether certain EP,
eligible hospital or CAH can meet all
Stage 1 meaningful use objectives given
established scopes of practices, would
apply to an eligible hospital or CAH
who admits no patients 65 years old or
older during the EHR reporting period.
NPRM EP/Eligible Hospital Objective:
Incorporate clinical lab-test results into
EHR as structured data.
In the proposed rule, we defined
structured data as data that has a
specified data type and response
categories within an electronic record or
file. We have revised that definition for
the final rule as discussed below.
Comment: Some commenters
requested clarification on what
constitutes structured data.
Response: The distinction between
structured data and unstructured data
applies to all types of information.
Structured data is not fully dependent
on an established standard. Established
standards facilitate the exchange of the
information across providers by
ensuring data is structured in the same
way. However, structured data within
certified EHR technology merely
requires the system to be able to identify
the data as providing specific
information. This is commonly
accomplished by creating fixed fields
within a record or file, but not solely
accomplished in this manner.
After consideration of the public
comments received, we finalize the
meaningful use objective or EPs at
§ 495.6(e)(2)(i) and eligible hospitals
and CAHs at § 495.6(g)(3)(i) as
proposed.
NPRM EP/Eligible Hospital Measure:
At least 50 percent of all clinical lab
tests results ordered by the EP or by an
authorized provider of the eligible
hospital during the EHR reporting
period whose results are either in a
positive/negative or numerical format
are incorporated in certified EHR
technology as structured data.
In the proposed rule, we identified
this objective and associated measure as
dependent on electronic exchange and
therefore requiring special consideration
in establishing the threshold. We said
that we are cognizant that in most areas
of the country, the infrastructure
necessary to support such exchange is
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still being developed. Therefore, we
stated our belief that 80 percent is too
high a threshold for the Stage 1 criteria
of meaningful use. As an alternative, we
proposed 50 percent as the threshold
based on our discussions with EHR
vendors, current EHR users, and
laboratories. We then invited comment
on whether 50 percent is feasible for the
Stage 1 criteria of meaningful use.
Finally, we indicated that we anticipate
raising the threshold in future stages of
meaningful use as the capabilities of
HIT infrastructure increase. We received
several comments on the
appropriateness of this 50 percent
threshold and discuss them in the
comment and response section below.
Comment: Commenters requested
clarification as to whether the measure
includes only electronic exchange of
information with a laboratory or if it
also includes manual entry.
Response: We encourage every EP,
eligible hospital and CAH to utilize
electronic exchange of the results with
the laboratory based on the certification
and standards criteria in the 45 CFR
170.302(h). If results are not received in
this manner, then they are presumably
received in another form such as fax,
telephone call, mail, etc. These results
then must be incorporated into the
patient’s medical record in some way.
We encourage that this way use
structured data; however, that raises the
concerns about the possibility of
recording the data twice; for example
scanning the results and then entering
the results as structured data.
Telephoned results could be entered
directly. We also recognize the risk of
entry error, which is why we highly
encourage the electronic exchange of the
results with the laboratory, instead of
manual entry through typing, option
selecting, scanning or other means.
Reducing the risk of entry error is one
of the primary reasons we lowered the
measure threshold for Stage 1 during
which providers are changing their
workflow processes to accurately
incorporate information into EHRs
through either electronic exchange or
manual entry. However, for this
measure, we do not limit the EP, eligible
hospital or CAH to only counting
structured data received via electronic
exchange, but count in the numerator all
structured data. By entering these
results into the patient’s medical record
as structured data, the EP, eligible
hospital or CAH is accomplishing a task
that must be performed regardless of
whether the provider is attempting to
demonstrate meaningful use or not. We
believe that entering the data as
structured data encourages future
exchange of information.
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Comment: A majority of commenters
commenting on this measure believe the
proposed 50 percent threshold is too
high. Suggestions for alternative
thresholds ranged from more than zero
to eighty percent. Some commenters
suggested that the percentage
calculation be replaced with a numeric
count.
Response: We are finalizing a
percentage calculation for the reasons
discussed previously in this section
under our discussion of the burden
created by the measures associated with
the Stage 1 meaningful use objectives.
We based the 50 percent threshold in
the proposed rule on our discussions
with EHR vendors, current EHR users,
and laboratories and specifically
requested comment on whether the 50
percent threshold was feasible. While
only a small number of commenters
commented on this objective, those that
did were overwhelming in favor of
either a count or a lower threshold. EPs
especially were concerned with our
inability to impose any requirements on
laboratory vendors. Based on the
comments received, we have modified
our assessment of the current
environment for incorporating lab
results into certified EHR technology,
and believe that a threshold lower than
fifty percent is warranted. We want to
create a threshold that encourages, but
does not require, the electronic
exchange of this information and
commenters indicated that 50 percent
was too high given the current state of
electronic exchange of lab results.
Therefore, we lower the threshold to 40
percent.
Comment: Commenters requested
clarification on what types of
laboratories could generate the lab
results.
Response: The focus of this objective
is to get as many lab results as possible
into a patient’s electronic health record
as structured data. Limiting the
objective to a specific type of laboratory
would not further this objective so
therefore we leave it open to all lab tests
and laboratories.
Comment: Several commenters
expressed concern regarding the
financial burden of establishing lab
interfaces, especially for smaller
hospitals and practices.
Response: The ability to exchange
information is a critical capability of
certified EHR technology. Exchange
between lab and provider and provider
to provider of laboratory results reduces
errors in recording results and prevents
the duplication of testing. Therefore, we
continue to include this objective
within Stage 1 of meaningful use
although as noted above the measure
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does not rely on the electronic exchange
of information between the lab and the
provider.
Comment: We received comments
requesting a listing of laboratory tests
with results that are in a numerical or
positive/negative format.
Response: We consider it impractical
to develop an exhaustive list of such
tests. Moreover, we believe further
description of these tests is unnecessary.
It should be self-evident to providers
when a test returns a positive or
negative result or a result expressed in
numeric characters. In these case, the
results should be incorporated into a
patient’s EHR as structured data.
Comment: Several commenters
pointed out that many current EHR
vendors do not support the use of
LOINC® codes and there is no federal
regulatory requirement for labs to
transmit using this code set or for that
matter, any structured code set.
Response: Standards such as LOINC®
codes are included in the ONC final
rule. However, this measure requires
incorporation of lab test results as
structured data, but does not include a
requirement for transmission or
electronic receipt of the results using
certified EHR technology.
After consideration of the public
comments received, we are modifying
the meaningful use measure for EPs at
§ 495.6(e)(2)(ii) and eligible hospitals at
§ 495.6(g)(3)(ii) of our regulations to
‘‘More than 40 percent of all clinical lab
tests results ordered by the EP or by an
authorized provider of the eligible
hospital or CAH for patients admitted to
its inpatient or emergency department
(POS 21 or 23) during the EHR reporting
period whose results are in either in a
positive/negative or numerical format
are incorporated in certified EHR
technology as structured data’’.
We further specify that in order to
meet this objective and measure, an EP,
eligible hospital, or CAH must use the
capabilities Certified EHR Technology
includes as specified and standards at
45 CFR 170.302(h). The ability to
calculate the measure is included in
certified EHR technology.
As noted previously in this section
under our discussion of whether certain
EP, eligible hospital or CAH can meet
all Stage 1 meaningful use objectives
given established scopes of practices,
the percentage is based on labs ordered
for patients whose records are
maintained using certified EHR
technology.
To calculate the percentage, CMS and
ONC have worked together to define the
following for this objective:
• Denominator: Number of lab tests
ordered during the EHR reporting
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period by the EP or authorized
providers of the eligible hospital or CAH
for patients admitted to an eligible
hospital’s or CAH’s inpatient or
emergency department (POS 21 & 23)
whose results are expressed in a
positive or negative affirmation or as a
number.
• Numerator: The number of lab test
results whose results are expressed in a
positive or negative affirmation or as a
number which are incorporated as
structured data.
• Threshold: The resulting percentage
must be more than 40 percent in order
for an EP, eligible hospital, or CAH to
meet this measure.
If an EP orders no lab tests whose
results are either in a positive/negative
or numeric format during the EHR
reporting period they would be
excluded from this requirement as
described previously in this section
under our discussion of whether certain
EP, eligible hospital or CAH can meet
all Stage 1 meaningful use objectives
given established scopes of practices.
We do not believe any eligible hospital
or CAH would order no lab tests whose
results are either in a positive/negative
or numeric format during the EHR
reporting period.
NPRM EP/Eligible Hospital Objective:
Generate lists of patients by specific
conditions to use for quality
improvement, reduction of disparities,
research, and outreach.
Comment: A few commenters
recommended eliminating this
requirement because they believe it is
redundant of clinical quality reporting.
Response: We disagree that this is
redundant of clinical quality reporting.
Clinical quality reporting does not
guarantee usability for all the purposes
in the objective. One example of such a
use is a provider could not only
generate list of patients with specific
conditions, but could stratify the output
using other data elements in the
certified EHR technology that are
entered as structured data. The lists
could also be utilized at an aggregate
level for purposes of research into
disparities, which could result in
targeted outreach efforts.
Comment: Some commenters
requested that if we finalize our
proposal to only require one report that
we change the ‘‘and’’ in the objective to
‘‘or’’.
Response: We are finalizing our
measurement of only requiring one
report for Stage 1 of meaningful use and
will change ‘‘and’’ to ‘‘or’’. However, we
note that all measures will be
reconsidered in later stages of
meaningful use and multiple reports
could be required in those stages.
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Comment: We received a few
comments requesting the removal of the
terms ‘‘reduction of disparities’’ and
‘‘outreach’’ as there are no actionable
items or measures associated with the
term. We also received comments that
the measurement should include the
requirement that the lists be stratified by
race, ethnicity, preferred language, and
gender for initiatives targeted at
reducing disparities.
Response: We disagree that actions to
reduce disparities or conduct outreach
could not be guided by this report,
especially if stratified and aggregated
reports of many providers are combined
within large organizations or among
organizations. While we do not require
such stratification or aggregation or
specify specific uses, that does not
preclude them.
Comment: Some commenters
requested clarification of the term
specific condition.
Response: Specific conditions are
those conditions listed in the active
patient problem list.
After consideration of the public
comments received, we are modifying
the meaningful use objective for EPs at
§ 495.6(e)(3)(i) and for eligible hospitals
at § 495.6(g)(4)(i) of our regulations to
‘‘Generate lists of patients by specific
conditions to use for quality
improvement, reduction of disparities,
research, or outreach’’.
NPRM EP/Eligible Hospital Measure:
Generate at least one report listing
patients of the EP or eligible hospital
with a specific condition.
In the proposed rule, we said that an
EP or eligible hospital is best positioned
to determine which reports are most
useful to their care efforts. Therefore, we
do not propose to direct certain reports
be created. However, in order to ensure
the capability can be utilized we
proposed to require EPs and hospitals to
attest to the ability of the EP or eligible
hospital to create a report listing
patients by specific condition and to
attest that they have actually done so at
least once. We received comments on
this and address them and any revisions
to the proposed rule in the comment
and response section below.
Comment: Commenters requested
clarification that only one report per
EHR reporting period is required to
meet the measure.
Response: Yes, only one report in
required for any given EHR reporting
period. The report could cover every
patient whose records are maintained
using certified EHR technology or a
subset of those patients at the discretion
of the EP, eligible hospital or CAH.
Comment: A few commenters
suggested the measure should be
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expanded to require submission of the
report to CMS or the States or to the
local health department.
Response: Submission raises many
questions about what types of
information can be sent to different
entities, how the information is used,
patient consent for sending the
information, and many of the issues,
which add considerable complexity to
this meaningful use objective.
Therefore, we are not requiring
submission of the report to CMS, the
States or local health departments for
Stage 1 of meaningful use. We do note
that this is one of the objectives for
which a State can submit modifications
to CMS for approval.
Comment: Several commenters
requested a list of condition categories,
a model report or the core data elements
required to satisfy the measure.
Response: As stated in the rule, we
believe an EP, eligible hospital, or CAH
is best positioned to determine which
reports are most useful to their care
efforts. Therefore, we do not propose to
direct certain reports be created.
Comment: For eligible hospitals,
commenters stated that the analysis of
patient data is derived from postdischarge coding of diagnosis and
procedures and not problem lists.
Response: We do not specify that the
list is limited to being generated from
the data problem list; rather, for the
definition of conditions we refer
providers to those conditions contained
in the problem list.
Comment: One commenter stated that
for privacy and confidentiality reasons,
patients should be allowed to opt out of
any provider outreach initiatives.
Response: Stage 1 of meaningful use
does not require the submission of these
reports to other entities; rather, we
require that the provider generate these
reports for their own use. We therefore
do not believe the generation of such
reports raises privacy and
confidentiality concerns. We
understand, however, that some patients
may have concerns about such lists
being exchanged with others and will
consider such concerns should future
meaningful use requirements focus on
exchange of these reports.
After consideration of the public
comments received, we are finalizing
the meaningful use measure for EPs at
§ 495.6(e)(3)(ii) and for eligible hospitals
and CAHs at § 495.6(g)(4)(ii) of our
regulations as proposed.
We further specify that in order to
meet this objective and measure, an EP,
eligible hospital, or CAH must use the
capabilities Certified EHR Technology
includes as specified and standards at
45 CFR 170.302(i). The ability to
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calculate the measure is included in
certified EHR technology.
As this measure relies on data
contained in certified EHR technology
the list would only be required to
include patients whose records are
maintained using certified EHR
technology as discussed previously in
this section under our discussion of the
burden created by the measures
associated with the Stage 1 meaningful
use objectives.
We do not believe anything included
in this objective or measure limit any
EP, eligible hospital or CAH from
completing the measure associated with
this objective, therefore, we do not
include an exclusion.
NPRM EP Objective: Report
ambulatory quality measures to CMS
(or, for EPs seeking the Medicaid
incentive payment, the States).
Specific comments on the quality
measures are discussed in section II.A.3
of this final rule.
We are finalizing this meaningful use
objective at § 495.6(d)(10)(i) of our
regulations ‘‘Report ambulatory clinical
quality measures to CMS (or, for EPs
seeking the Medicaid incentive
payment, the States)’’ to better align
with the descriptions in section II.A.3.
In response to our revised
requirements for meeting meaningful
use, we are including this objective in
the core set. Section 1848 (o)(2)(A)(iii)
of the Act specifically includes
submitting clinical quality measures in
meaningful use for EPs. Section
1903(t)(6)(D) of the Act also anticipates
that the demonstration of meaningful
use may include quality reporting to the
States for the Medicaid program.
NPRM Eligible Hospital Objective:
Report ambulatory quality measures to
CMS (or, for eligible hospitals seeking
the Medicaid incentive payment, the
States).
We make a technical correction to this
objective from the proposed rule to
ensure that it is clear to the public that
we were referring to hospital quality
measures.
Specific comments on the quality
measures are discussed in section II.A.3
of this final rule.
After consideration of the public
comments received, we are finalizing
this meaningful use objective at
§ 495.6(d)(9)(i) to account for our
technical correction and to better align
with the descriptions in section II.A.3 as
‘‘Report hospital clinical quality
measures to CMS (or, for eligible
hospitals seeking the Medicaid
incentive payment, the States)’’.
In response to our revised
requirements for meeting meaningful
use, we are including this objective in
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the core set. Section 1886 (n)(3)(A)(iii)
of the Act specifically includes
submitting clinical quality measures in
meaningful use for eligible hospitals
and CAHs. Section 1903(t)(6)(D) of the
Act also anticipates that the
demonstration of meaningful use may
include quality reporting to the States
for the Medicaid program.
NPRM EP Measure: For 2011, an EP
would provide the aggregate level data
for the numerator, denominator, and
exclusions through attestation as
discussed in section II.A.3 of this final
rule. For 2012, an EP would
electronically submit the measures that
are discussed in section II.A.3. of this
final rule.
Specific comments on the quality
measures themselves are discussed in
section II.A.3 of this final rule.
After consideration of the public
comments received, we are finalizing
this meaningful use objective at
§ 495.6(d)(10)(ii) as proposed.
NPRM Eligible Hospital Measure: For
2011, an eligible hospital or CAH would
provide the aggregate level data for the
numerator, denominator, and exclusions
through attestation as discussed in
section II.A.3 of this final rule. For 2012,
an eligible hospital or CAH would
electronically submit the measures as
discussed in section II.A.3. of this final
rule. Specific comments on the quality
measures are discussed in section II.A.3
of this final rule. After consideration of
the public comments received, we are
finalizing this meaningful use objective
at 495.6(f)(9)(ii) as proposed.
NPRM EP Objective: Send reminders
to patients per patient preference for
preventive/follow-up care.
In the proposed rule, we described
patient preference as the patient’s
choice between internet based delivery
or delivery not requiring internet access.
We are revising that description based
on comments as discussed below.
Comment: Commenters have pointed
out that requirements to accommodate
reasonable requests by individuals to
receive communications by means other
than the means preferred by the
provider already exist under HIPAA at
45 CFR 164.522(b).
Response: As we stated in the
proposed rule, patient preference refers
to the patient’s preferred means of
transmission of the reminder from the
provider to the patient, and not
inquiries by the provider as to whether
the patient would like to receive
reminders. In the proposed rule, we had
proposed that patient preference be
limited to the choice between internet
based or non-internet based. In order to
avoid unnecessary confusion and
duplication of requirements, EPs meet
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the aspect of ‘‘per patient preference’’ of
this objective if they are accommodating
reasonable requests as outlined in 45
CFR 164.522(b), which are the guidance
established under HIPAA for
accommodating patient requests.
After consideration of the public
comments received, we are finalizing
the meaningful use objective at
§ 495.6(e)(4)(i) of our regulations as
proposed.
NPRM EP Measure: Reminder sent to
at least 50 percent of all unique patients
seen by the EP or admitted to the
eligible hospital that are 50 and over.
For the final rule, we are changing the
measure to recognize that this is an EP
only objective. Therefore, we make the
technical correction of striking ‘‘or
admitted to the eligible hospital’’.
Comment: Commenters indicated that
‘‘practice management systems’’ or
‘‘patient management systems’’ are
commonly used for this function and
that integrating them into certified EHR
technology would be expensive and
time consuming for little value in
return.
Response: While we disagree with
commenters who suggest there is little
to no value in having information about
reminders sent to patients available
across all the systems used by the
provider, we do not assert that such
integration of systems must be in place
to meet this measure. ONC provides for
a modular approach that would allow
these systems to be certified as part of
certified EHR technology.
Comment: Some commenters pointed
out that many patients seen during an
EHR reporting period will not be sent a
reminder during that same period.
Commenters said this is especially true
for the 90-day EHR reporting period, but
for some services could be true of the
full year EHR reporting period as well.
Other commenters also pointed out that
reminders are not limited to the older
population and that children especially
may require many reminders on
immunizations.
Response: We agree with commenters
that many patients not seen during the
EHR reporting period would benefit
from reminders. As the action in this
objective is the sending of reminders,
we base the revised measure on that
action. This focus is supported by
numerous public comments, including
those by the HIT Policy Committee.
Therefore, we are changing the
requirement to account for all patients
whose records are maintained using
certified EHR technology regardless of
whether they were seen by the EP
during the EHR reporting period. This
greatly expanded denominator caused
us to reconsider both our threshold and
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the age limit. In order to increase the
probability that a patient whose records
are maintained in certified EHR
technology will be eligible for a
reminder we change the age limit of the
population to 65 years old or older or
5 years old or under. We believe that
older patient populations are more
likely to have health statuses that will
indicate the need for reminders to be
sent and this segment of the population
is have higher rates of chronic diseases
which will require coordination in
preventive care such as vaccine
reminders. Likewise, the 5 years old and
under population will require a
multitude of childhood vaccinations
such as influenza and will benefit from
reminders. However, we do not believe
that changing the age limit of the
affected population will result in 50
percent of every patient whose records
maintained in certified EHR technology
requiring a reminder during the EHR
reporting period. This is especially true
for the first payment year when the EHR
reporting period is only 90 days. We are
also concerned about the variability
among specialists’ scopes of practice
that may affect the number of patients
in the denominator for which a
reminder is appropriate. Therefore, we
lower the threshold to 20 percent. The
EP has the discretion to determine the
frequency, means of transmission and
form of the reminder limited only by the
requirements of 45 CFR 164.522(b) and
any other applicable federal, state or
local regulations that apply to them.
After consideration of the public
comments received, we are modifying
the meaningful use measure at
§ 495.6(e)(4)(ii) to ‘‘More than 20 percent
of all patients 65 years or older or 5
years old or younger were sent an
appropriate reminder during the EHR
reporting period’’.
We further specify that in order to
meet this objective and measure, an EP
must use the capabilities Certified EHR
Technology includes as specified and
standards at 45 CFR 170.304(d). The
ability to calculate the measure is
included in certified EHR technology.
As noted previously in this section
under our discussion of the burden
created by the measures associated with
the Stage 1 meaningful use objectives,
the denominator is based on patients
whose records are maintained using
certified EHR technology.
To calculate the percentage, CMS and
ONC have worked together to define the
following for this objective:
• Denominator: Number of unique
patients 65 years old or older or 5 years
older or younger.
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44349
• Numerator: The number of patients
in the denominator who were sent the
appropriate reminder.
• Threshold: The resulting percentage
must be more than 20 percent in order
for an EP to meet this measure.
As addressed in other objectives and
in comment responses, if an EP has no
patients 65 years old or older or 5 years
old or younger with records maintained
using certified EHR technology that EP
is excluded from this requirement as
described previously in this section
under our discussion of whether certain
EP, eligible hospital or CAH can meet
all Stage 1 meaningful use objectives
given established scopes of practices.
NPRM EP/Eligible Hospital Objective:
Document a progress note for each
encounter. In the proposed rule, we
discussed this objective, but did not
propose it for Stage 1 of meaningful use.
We noted our belief that documentation
of progress notes is a medical-legal
requirement and a component of basic
EHR functionality, and is not directly
related to advanced processes of care or
improvements in quality, safety, or
efficiency.
Comment: We received a limited
number of comments regarding our
decision not to include documentation
of progress notes as an objective. The
commenters generally fell into three
categories: Those who supported
inclusion of this objective in the final
rule, those who supported its inclusion
only if certain caveats are met and those
who supported our proposal not to
include it as an objective for Stage 1 of
meaningful use. Concerns raised by
those supporting the inclusion of this
objective included the possibility that
an EP may keep paper progress notes in
conjunction with use of certified EHR
technology as prescribed by Stage 1 of
meaningful use and that such a choice
by EPs would create the possibility of
handwriting illegibility, loss of
information and reduced access to
health information by both patients and
other providers. Another concern raised
is that if the objective is not included in
the criteria for the definition of
meaningful use designers of EHR
technology will not include the function
in their products. The advocates in the
second category agree with the above,
but only support inclusion with certain
caveats. Some of these caveats include
preserving the option of transcription,
voice recognition software, and direct
entry by an EP or any combination of
these. Another caveat is that progress
notes not be required to be entered as
structured data. The third category
supports exclusion of progress notes as
an objective for two fundamentally
different reasons. Some commenters
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supported exclusion because they
believe that the volume of objectives
was already too high for Stage 1 of
meaningful use and therefore opposed
anything that would increase the
volume.
Other commenters agree with our
proposal that progress notes is already
a fundamental part of current EHR
products and did not represent a move
that advances the use of EHRs.
Response: We predicated our
discussion in the proposed rule on the
assumption that progress notes are a
component of basic EHR functionality.
We still believe this is the case and have
not received evidence to the contrary.
However, we failed to clearly articulate
the ramifications of our belief. Our view
continues to be that an EP who
incorporates the use of EHRs into a
practice and complies with meaningful
use criteria is unlikely to maintain
separate paper progress notes outside of
the EHR system. We believe that the
potential disruption in workflow of the
efforts to merge paper progress notes
with the other records in certified EHR
technology in order to have a complete
medical record far outweighs the burden
of electronically capturing progress
notes. Moreover, we continue to believe
this is a highly unlikely scenario. As
with any meaningful use objective, it is
important to have clear, definitive
definitions. However, our observations
of discussions held in public forums by
the medical community and review of
literature have led us to conclude that
it not possible to provide a clear,
definitive definition of a progress note
at this time. We note that commenters
recommending the documentation of a
progress note be included as an
objective did not attempt to define the
term. Nor did commenters suggest an
associated measure. We continue to
believe that there is insufficient need
and upon review believe there is
insufficient consensus regarding the
term progress note to include this
objective for Stage 1 of meaningful use.
After consideration of the public
comments received, we do not include
this meaningful use objective in the
final rule.
NPRM EP/Eligible Hospital Measure:
N/A.
NPRM EP Objective: Implement five
clinical decision support rules relevant
to specialty or high clinical priority,
including for diagnostic test ordering,
along with the ability to track
compliance with those rules.
NPRM Eligible Hospital Objective:
Implement 5 clinical decision support
rules related to a high priority hospital
condition, including diagnostic test
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ordering, along with the ability to track
compliance with those rules.
First, we make a technical correction.
On page 1856 of the proposed rule, we
described this objective for eligible
hospitals as ‘‘Implement five clinical
decision support rules relevant to
specialty or high clinical priority,
including for diagnostic test ordering,
along with the ability to track
compliance with those rules.’’ The
underlined language was
inappropriately carried over from the EP
objective in this instance and in the
regulation text. The table contained our
intended language of ‘‘Implement 5
clinical decision support rules related to
a high priority hospital condition,
including diagnostic test ordering, along
with the ability to track compliance
with those rules.’’ Many commenters
pointed this discrepancy out to us and
we appreciate their diligence.
Comment: Nearly half of the
commenters mentioning clinical
decision support suggested that the term
needed additional clarification. Some
commenters said that the term was too
vague and open to interpretation while
others said it was too specific. Other
commenters provided recommendations
on what a clinical decision support rule
should mean or which elements it
should include. These were evidencebased medicine templates, decision
trees, reminders, linked online
resources, scientific evidence, and
consensus.
Response: In the proposed rule, we
described clinical decision support as
HIT functionality that builds upon the
foundation of an EHR to provide
persons involved in care processes with
general and person-specific information,
intelligently filtered and organized, at
appropriate times, to enhance health
and health care. We purposefully used
a description that would allow a
provider significant leeway in
determining the clinical decision
support rules that are more relevant to
their scope of practice and benefit their
patients in the greatest way. In the
proposed rule, we asked providers to
relate the rules they select to clinical
priorities and diagnostic test ordering.
We do not believe that adding a more
limiting description to the term clinical
decision support would increase the
value of this objective. We believe that
this determination is best left to the
provider taking into account their
workflow and patient population.
Comment: Several commenters
objected to the requirement of five
clinical decision support rules when the
HIT Policy Committee only
recommended one. Others disagreed
with our proposed assertion that most
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EPs would report on at least five clinical
quality measures from section II.A.3 of
the proposed rule and eligible hospitals
will all report on at least five.
Response: We accept the argument
that there is value in focusing initial
CDS efforts on a single CDS rule in
order to get it right the first time and lay
the foundation for future, broader CDS
implementation. This will help to
prevent the unintended negative
consequences associated with poorly
implemented CDS systems when
providers have attempted to do too
much too soon.
We agree that the appropriate balance
is to require some degree of meaningful
use of CDS in Stage 1 without
overburdening providers with too many
areas to focus on at once. Since CDS is
one area of health IT in which
significant evidence exists that it can
have a substantial positive impact on
the quality, safety and efficiency of care
delivery, it is important that it be
included as a core objective with this
more limited expectation. That
requirement will assure that all
meaningful users have taken the first
steps in CDS implementation but allow
them to focus as necessary on a single
high-priority area at the outset in order
to ensure that they can devote the
appropriate level of attention to their
first CDS priority. We anticipate that
this will set the foundation for much
more expansive CDS support in the near
future.
Comment: A commenter inquired if
modification of the clinical decision
support tool negates the EHR’s
certification status.
Response: We believe this is a
question on certification status and is
outside of the scope of this rule. ONC
discusses what would affect Certified
EHR Technology’s certified status in
their final rule (75 FR 36157) entitled
‘‘Establishment of the Temporary
Certification Program for Health
Information Technology’’.
After consideration of the public
comments received, we are modifying
the meaningful use objective for EPs at
495.6(d)(11)(i) to ‘‘Implement one
clinical decision support rule relevant
to specialty or high clinical priority
along with the ability to track
compliance with that rule.’’
After consideration of public
comments received, we are modifying
the meaningful use objective for eligible
hospitals and CAHs at § 495.6(f)(10)(i) of
our regulations as ‘‘Implement one
clinical decision support rule related to
a high priority hospital condition along
with the ability to track compliance
with that rule.’’
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We believe that clinical decision
support is one of the most common
tools that uses the information collected
as structured data included in the core
set and therefore also include clinical
decision support in the core as the
information needed to support it are
already included in the core set.
NPRM EP/Eligible Hospital Measure:
Implement five clinical decision
support rules relevant to the clinical
quality metrics the EP/Eligible Hospital
is responsible for as described further in
section II.A.3. of this final rule.
In the proposed rule, we said that
clinical decision support at the point of
care is a critical aspect of improving
quality, safety, and efficiency. Research
has shown that decision support must
be targeted and actionable to be
effective, and that ‘‘alert fatigue’’ must be
avoided. Establishing decision supports
for a small set of high priority
conditions, ideally linked to quality
measures being reported, is feasible and
desirable. Meaningful use seeks to
ensure that those capabilities are
utilized.
Comment: Commenters, both in the
requests for clarification of the term
clinical decision support and explicitly
in response to this measure, expressed
concern about the linkage to a particular
quality measure.
Response: We agree that such linkage
puts constraints on the provider and
eliminates many types of clinical
decision support rules that may be
beneficial. Therefore, we revise this
measure to require that at least one of
the five rules be related to a clinical
quality measure, assuming the EP,
eligible hospital or CAH has at least one
clinical quality measure relevant to their
scope of practice. However, we strongly
encourage EPs, eligible hospitals and
CAHs to consider the clinical quality
measures as described in section II.A.3
when deciding which additional rules
to implement for this measure.
Comment: Several commenters,
including the HIT Policy Committee,
recommended that we focus at least one
clinical decision support rule on
efficiency of care.
Response: In light of decision to limit
the objective to one clinical decision
support rule, we do not believe that it
is appropriate to further to link that rule
to specific requirements and therefore
give the EP, eligible hospital or CAH
discretion on what to focus the clinical
decision support rule used to satisfy this
measure.
Comment: A few commenters asked
for clarification of how the ‘‘* * * with
the ability to track compliance with
those rules’’ language of the proposed
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objective for clinical decision support
rules relates to the associated measures.
Response: While an integral part of
the objective and certified EHR
technology, we did not include this
aspect of the objective in the measure
for Stage 1 of meaningful use. An EP,
eligible hospital, or CAH is not required
to demonstrate to CMS or the States its
compliance efforts with the CDS
recommendations or results for Stage 1
either at initial attestation or during an
subsequent review of that attestation.
After consideration of the public
comments received, we are modifying
the meaningful use measure for EPs at
§ 495.6(e)(11)(ii) and for eligible
hospitals and CAHs at § 495.6(g)(10)(ii)
to ‘‘Implement one clinical decision
support rule.
We further specify that in order to
meet this objective and measure, an EP,
eligible hospital, or CAH must use the
capabilities Certified EHR Technology
includes as specified and standards at
45 CFR 170.304(e) for EPs and 45 CFR
170.306(c). The ability to calculate the
measure is included in certified EHR
technology.
Given the added flexibility added to
this measure in the final rule, we do not
believe that any EP, eligible hospital, or
CAH would be in a situation where they
could not implement one clinical
decision support rules as described in
the measure. Therefore, there are no
exclusions for this objective and its
associated measure.
NPRM EP/Eligible Hospital Objective:
Submit claims electronically to public
and private payers.
Comment: Over three quarters of
those commenting on this objective
recommended that it be eliminated for
various reasons. The majority of the
other commenters requested a
modification. Reasons given are:
—Electronic claims submission is
already covered under HIPAA;
—Electronic claims submission is not
part of traditional EHR technology;
—Billing systems would have to be
certified adding to cost and burden of
compliance with meaningful use even
though when electronic claims
submission for Medicare is already in
place for all by the very smallest of
providers;
—Electronic claims submission falls
outside of the scope of the statutory
mandate given by Congress to
implement the HITECH legislation to
improve care delivery through broad
scale adoption and utilization of
Electronic Health Record
technologies. This function does not
impact the quality of care delivered
and relies on product components
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that are traditionally part of practice
management systems;
—Private payers may customize the
HIPAA-recognized standard
transactions, which limits the ability
of practices to obtain accurate
information prior to receiving an
Explanation of Benefits based on the
actual services provided and negates
many of the benefits of having
standardized transactions;
—Workers’ compensation and auto
insurers do not accept electronic
claims; and
—Many providers use clearinghouses
and they requested that the burden of
electronic submission be shifted to
the clearinghouse.
Response: In our proposed rule, we
specifically cite that the existence of
standard transactions available under
HIPAA for submitting claims as a reason
for including this objective as a
meaningful use objective for Stage 1. We
also disagree that this objective is
outside the scope of meaningful use as
defined by the HITECH legislation. The
HITECH legislation states the Secretary
shall seek to improve not only health
care quality, but also the use of
electronic health records. In addition,
we note that sections 1848(o)(2)(A) and
1886(n)(3)(A) of the Act provide that to
be considered a meaningful EHR user,
an EP, eligible hospital, or CAH must
demonstrate use of certified EHR
technology in a meaningful manner as
defined by the Secretary. In the
Medicaid context, any demonstration of
meaningful use must be ‘‘acceptable to
the Secretary’’ under 1903(t)(6). We
believe this language gives us broad
discretion to require the use of certified
EHR technology in a manner that not
only improves health care quality, but
results in gains in efficiency, patient
engagement and enhances privacy and
security. Under the broad definition of
electronic health record established by
ONC in their final rule, electronic
exchange of eligibility information and
claims submission could certainly
improve the use of electronic health
records.
We believe that inclusion of
administrative simplification in
meaningful use is an important longterm policy goal for several reasons.
First, administrative simplification can
improve the efficiency and reduce
unnecessary costs in the health care
system as a whole; the small percentage
of paper claims submitted represent a
disproportionate administrative cost for
health plans; the reconciliation of
billing charges for services not eligible
for payment creates a significant burden
for providers, health plans, and most
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significantly, for patients. Second, the
integration of administrative and
clinical information systems is
necessary to support effective
management and coordinated care in
physician practices. The ability to
leverage clinical documentation in
support of appropriate charge capture
(for example, for preventive counseling,
or immunizations provided), the ability
to link lists of patients needing clinical
reminders with patient contact
information, the ability to stratify
quality measures by patient
demographic factors (for example, race/
ethnicity) and insurer status (for
example, Medicare beneficiaries), are
examples.
In addition, there are important
benefits to the inclusion of
administrative transactions in criteria
and standards for the certification of
EHR technologies. The option of
modular certification provides an
opportunity for eligible professionals
and hospitals to use practice
management systems or clearinghouses
that provide these functions as
components of their certified EHR
technologies. However, we recognize
there is not current agreement as to
which systems constitute an EHR and
that many entities may view their
billing system to be outside their EHR
and that the vendors of some practice
management systems that provide these
functionalities in doctors’ offices today
may not be prepared to seek
certification for these legacy products in
2010/2011. We also recognize that the
introduction of the X12 5010 standards
in January 2012 would further
complicate the certification process for
stage 1. We also acknowledge that we do
not have the ability to impose additional
requirements on third-party payers or
clearinghouses to participate in this
exchange beyond what is required by
HIPAA. Based on these considerations,
we are not including this objective in
the final rule for Stage 1 of meaningful
use.
However, the introduction of these
new X12 5010 standards, and the
coming introduction of ICD–10 in 2013
provides an opportunity for change in
Stage 2 of meaningful use. In order to
meet these and other administrative
simplification provisions, most
providers will have to upgrade their
practice management systems or
implement new ones. This provides an
important opportunity to achieve
alignment of capabilities and standards
for administrative transactions in EHR
technologies with the administrative
simplification provisions that the
Affordable Care Act provides for health
plans and health plan clearinghouses.
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We therefore intend to include
administrative transactions as a part of
Stage 2 of meaningful use, and expect
providers and vendors to take this into
consideration in their decisions leading
up to 2013.
Comment: Commenters focusing on
how meaningful use would translate
into the Medicare Advantage program
said that the measure of checking
eligibility electronically and submitting
claims electronically for 80 percent of
patients seen would not be possible.
They explained that for most of their
visits, there is no insurance company
with which to check, and there is no
insurance company to whom to submit
claims. They described themselves as a
capitated system and for most of the
patient visits, the concept of checking
eligibility and submitting claims in not
relevant.
Response: This comment illustrates
the difficulties in adopting FFS
Medicare meaningful use measures for
qualifying MA organizations, MAaffiliated hospitals and MA EPs. For
purposes of determining meaningful use
in a Medicare Advantage environment,
we agree that submitting claims
electronically is not a useful standard in
a capitated environment where virtually
all patients are members of the same
insurance plan.
After consideration of the public
comments received, we are not
finalizing the objective ‘‘Submit claims
electronically to public and private
payers’’.
NPRM EP/Eligible Hospital Measure:
At least 80 percent of all claims filed
electronically by the EP or the eligible
hospital.
We received many comments on the
difficulty in calculating this measure.
However, as all measures are tied to
objectives and we do not finalize this
objective we also do not finalize the
measure.
NPRM EP/Eligible Hospital Objective:
Check insurance eligibility
electronically from public and private
payers.
Comment: Over three quarters of
those commenting on this objective
recommended that it be eliminated for
various reasons. Some of the most
common reasons for elimination are:
—Electronic eligibility checks are
already covered under HIPAA;
—Electronic eligibility checks are not
part of traditional EHR technology;
—Billing and practice management
systems that are used for electronic
eligibility checks would have to be
certified as certified EHR technology
adding to cost and burden;
—Electronic eligibility checks is outside
of the scope of the mandate given by
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Congress to implement the HITECH
legislation in such a way as to
improve care delivery through broad
scale adoption and utilization of
Electronic Health Record
technologies. This function does not
impact the quality of care delivered
and relies on product components
that are traditionally part of practice
management systems;
—Information returned on typical
electronic eligibility checks is of little
use to providers—as responses are
usually a yes/no answer on coverage,
but not the specificity of coverage;
—The current poor adoption rate of the
use of electronic eligibility
verification is indicative of the
deficiencies in current methods;
—Once eligibility checking becomes
easy to use and reliable, no incentive
will be required as providers will
adopt the process readily;
—Payers do not guarantee their
eligibility results;
—Many payers are still not in
compliance with the HIPAA 270/271
electronic eligibility standard.
Therefore the objective should only be
required if compliance with the
standard by health plans can be
guaranteed; and
—Private payers may customize the
HIPAA-recognized standard
transactions, which limits the ability
of practices to obtain accurate
information prior to receiving an
Explanation of Benefits based on the
actual services provided and negates
many of the benefits of having
standardized transactions.
Response: In our proposed rule, we
specifically cite the existence of the
standard transaction for eligibility
checks available under HIPAA as an
enabling factor for the inclusion this
objective. As with the electronic claims
submission objective discussed above,
we disagree that this objective is outside
the scope of meaningful use as defined
by the HITECH legislation. The HITECH
legislation requires the Secretary to seek
to improve not only health care quality,
but also the use of electronic health
records. Under the broad definition of
electronic health record established by
ONC in their final rule, electronic
exchange of eligibility information
could certainly improve the use of
electronic health records. However, we
recognize there is not current agreement
as to which systems constitute an EHR
and that many entities may view their
practice management system to be
outside their EHR. We also acknowledge
that we do not have the ability to
impose additional requirements on
third-party payers to participate in this
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exchange beyond what is required by
HIPAA. Third-party payers can provide
simple yes/no responses, modify the
standard transactions and do not have to
guarantee their results. We agree with
commenters that this significantly
devalues the results of this objective.
However, we do believe that as
electronic records and exchange based
on this and considerations that
commenters nearly universally
considered this to not be a function of
EHR, we are not including this objective
in the final rule for Stage 1 of
meaningful use. However, we do believe
that inclusion of a robust system to
check insurance eligibility
electronically is an important long term
policy goal for meaningful use of
certified EHR technology and we intend
to include this objective as well as
electronic claims submission Stage 2.
After consideration of the public
comments received, we are not
finalizing the objective to ‘‘Check
insurance eligibility electronically from
public and private payers’’ or any
modification thereof. Given that we are
not finalizing the objective, we also are
not finalizing the associated EP and
eligible hospital/CAH measures.
The second health outcomes policy
priority identified by the HIT Policy
Committee is to engage patients and
families in their healthcare. The
following care goal for meaningful use
addresses this priority:
• Provide patients and families with
timely access to data, knowledge, and
tools to make informed decisions and to
manage their health.
As explained in the proposed rule, we
do not intend to preempt any existing
Federal or State law regarding the
disclosure of information to minors,
their parents, or their guardians in
setting the requirements for meaningful
use. For this reason, we defer to existing
Federal and State laws as to what is
appropriate for disclosure to the patient
or their family. For purposes of all
objectives of the Stage 1 criteria of
meaningful use involving the disclosure
of information to a patient, a disclosure
made to a family member or a patient’s
guardian consistent with Federal and
State law may substitute for a disclosure
to the patient.
Comment: Several commenters
requested that all objectives under the
health care policy priority be combined,
as they are redundant.
Response: We disagree that they are
redundant and believe each serves a
unique purpose. We will more fully
describe those purposes in the
discussion of each objective.
NPRM EP Objective: Provide patients
with an electronic copy of their health
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information (including diagnostics test
results, problem list, medication lists,
allergies) upon request.
NPRM Eligible Hospital Objective:
Provide patients with an electronic copy
of their health information (including
diagnostic test results, problem list,
medication lists, allergies, discharge
summary, procedures), upon request
The purpose of this objective is to
provide a patient’s health information to
them electronically and in a human
readable format and in accordance with
the standards specified in the ONC final
rule subject to its availability to the
provider electronically and any
withholding under regulations related to
the HIPAA Privacy Act at 45 CFR
164.524, Access of individuals to
protected health information.
In the proposed rule, we indicated
that electronic copies may be provided
through a number of secure electronic
methods (for example, personal health
record (PHR), patient portal, CD, USB
drive). We have changed this
description in response to comments to
that when responding to patient
requests for information, the EP, eligible
hospital, or CAH should accommodate
patient requests in accordance with 45
CFR 164.524, Access of individuals to
protected health information. The
objective provides additional criteria for
meeting meaningful use concerning the
electronic copy or provision of
information that the EP, eligible hospital
or CAH maintains in or can access from
the certified EHR technology and is
maintained by or on behalf of the EP,
eligible hospital or CAH.
Comment: We received requests for
clarification that only information that
the EP, eligible hospital, or CAH has
available electronically must be
provided to the patient.
Response: Yes, we limit the
information that must be provided
electronically to that information that
exists electronically in or accessible
from the certified EHR technology and
is maintained by or on behalf of the EP,
eligible hospital or CAH. We believe it
is impractical to require information
maintained on paper to be transmitted
electronically. Furthermore, given the
other criteria of Stage 1 of meaningful
use, we believe sufficient information
will be available through certified EHR
technology, especially given the
inclusion of many of the foundational
objectives that were included in the core
set.
Comment: Commenters pointed out
that the HIPAA Privacy Rule permits
licensed healthcare professionals to
withhold certain information if its
disclosure would cause substantial
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harm to the patient or another
individual.
Response: As previously discussed for
patient preference, we do not seek to
conflict with or override HIPAA through
meaningful use requirements. Therefore,
an EP, eligible hospital, or CAH may
withhold information from the
electronic copy of a patient’s health
information in accordance with the
regulations at 45 CFR 164.524, Access of
individuals to protected health
information.
Comment: Commenters requested
clarification of the term ‘‘health
information’’ or alternatively a list of
elements required to satisfy the
objective.
Response: Subject to the withholding
described above, an EP, eligible
hospital, or CAH should provide a
patient with all of the health
information they have available
electronically. At a minimum, this
would include the elements listed in the
ONC final rule at 45 CFR 170.304(f) for
EPs and 45 CFR 170.306(d) for eligible
hospitals and CAHs as required for EHR
technology to become certified.
Comment: Several commenters
indicated that a provider should be
allowed to charge a fee for providing an
electronic copy of a patient’s health
information.
Response: We do not have the
authority under the HITECH Act to
regulate fees in this manner. Rather, the
charging of fees for this information is
governed by the HIPAA Privacy Rule at
45 CFR 164.524(c)(4) (which only
permits HIPAA covered entities to
charge an individual a reasonable, costbased fee for a copy of the individual’s
health information). We would expect
these costs to be very minimal
considering that the ability to generate
the copy is included in certified EHR
technology. Additional clarification on
the fee that a HIPAA covered entity may
impose on an individual for an
electronic copy of the individual’s
health information will be addressed in
upcoming rulemaking.
Comment: Commenters pointed out
that the general term ‘‘allergies’’ is
inconsistent with other objectives of
Stage 1 and with the capabilities
mandated by certification under the
ONC IFR, which address only
medication allergies.
Response: As we have stated on
several other objectives, we encourage
all EPs, eligible hospitals, and CAHs to
work with their EHR technology
designers to make capabilities most
relevant to their individual practices of
care. However, we have maintained that
at a minimum the capabilities that are
part of certification should be included
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and those should be the basis for
meaningful use so we do modify this
objective to medication allergies to align
it with other objectives and certification.
After consideration of the public
comments received, we are modifying
the meaningful use objective for EPs at
§ 495.6(d)(12)(i) of our regulations to
‘‘Provide patients with an electronic
copy of their health information
(including diagnostics test results,
problem list, medication lists,
medication allergies) upon request’’ and
for eligible hospitals and CAHs at
§ 495.6(f)(11)(i) of our regulations to
‘‘Provide patients with an electronic
copy of their health information
(including diagnostic test results,
problem list, medication lists,
medication allergies, discharge
summary, procedures), upon request’’.
We include this objective in the core
set as it is integral to involving patients
and their families in their provision of
care and was recommended by the HIT
Policy Committee for inclusion in the
core set.
NPRM EP/Eligible Hospital Measure:
At least 80 percent of all patients who
request an electronic copy of their
health information are provided it
within 48 hours.
In the proposed rule, we pointed out
that all patients have a right under
ARRA to an electronic copy of their
health information. We said that our
purpose for including it in meaningful
use was to ensure that this requirement
in met in a timely fashion. We also said
that providing patients with an
electronic copy of their health
information demonstrates one of the
many benefits health information
technology can provide and we believe
that it is an important part of becoming
a meaningful EHR user. We received
requests for clarifications on what must
be provided and in what timeframe. We
address those requests in the comment
and response section below. We note
here that participation in the Medicare
and Medicaid EHR incentive programs
is voluntary. Nothing in the Stage 1
criteria of meaningful use supersedes or
exempts an EP, eligible hospital or CAH
from complying with otherwise
applicable requirements to provide
patients with their health information.
Comment: An overwhelming majority
of commenters commenting on this
objective indicated that the 48-hour
time frame is too short and inconsistent
with the HIPAA Privacy Rule.
Response: We discuss the reasoning
for the time frame in the proposed rule.
We state that this measure seeks to
ensure that a patient’s request is met in
a timely fashion. Providing patients
with an electronic copy of their health
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information demonstrates one of the
many benefits health information
technology can provide. We also believe
that certified EHR technology will
provide EPs, eligible hospitals, and
CAHs more efficient means of providing
copies of health information to patients,
which is why we proposed that a
request for an electronic copy be
provided to the patient within 48 hours.
In the final rule, we further point out
that this objective is limited to health
information maintained and provided
electronically while HIPAA can require
the retrieval, copying and mailing of
paper documents. For this reason, we do
not believe the timeframes under this
meaningful use objective and the
HIPAA Privacy Rule must be aligned.
However, we appreciate that the 48hour timeframe may be burdensome for
some providers, particularly for those
providers who do not operate 24/7. We
therefore are lengthening the timeframe
to three business days. Business days
are defined as Monday through Friday
excluding federal or state holidays on
which the EP, eligible hospital, or CAH
or their respective administrative staffs
are unavailable. As an example if a
patient made a request for an electronic
copy of their health information on
Monday then the EP, eligible hospital,
or CAH would have until the same time
on Thursday to provide the information
assuming there were no intervening
holidays. If provision of the copy
involves the mailing of physical
electronic media, then it would need to
be mailed on the Thursday.
Comment: Some commenters believed
the 80 percent threshold was too high or
introduced examples of extraordinary
circumstances such as natural disasters
or system crashes that would indicate a
lower threshold is needed to
accommodate them.
Response: We reduce the threshold to
over 50 percent as this objective meets
the criteria of relying solely on a
capability included as part of certified
EHR technology and is not, for purposes
of Stage 1 criteria, reliant on the
electronic exchange of information, as
explained under our discussion of the
objective of maintain an up-to-date
problem list. As this is a relatively new
capability that was not available to
either providers or patients before the
introduction of EHRs, we do not believe
it meets the same standard of practice as
maintaining an up-to-date problem list
and therefore adopt a threshold of 50
percent (rather than 80 percent).
Comment: We received comments
that were concerned about the reporting
burden of this requirement.
Response: We believe that as long as
the request by the patient is accurately
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recorded in the certified EHR
technology then the certified EHR
technology should be able to calculate
the measure. Recording patient requests
for certain actions should be part of the
expectations of meaningful use of
certified EHR technology. If the EP,
eligible hospital, or CAH records the
requests using certified EHR technology,
certified EHR technology will be able to
assist in calculating both the numerator
and denominator. If the requests are
recorded by another means at the choice
of the provider, the provider would be
responsible for determining the
denominator.
Comment: Commenters inquired if
third-party requests for information are
included in the denominator.
Response: Only specific third party
requests for information are included in
the denominator. As we stated in the
opening discussion for this health care
priority, providing the copy to a family
member or patient’s authorized
representative consistent with federal
and state law may substitute for a
disclosure of the information to the
patient and count in the numerator. A
request from the same would count in
the denominator. All other third party
requests are not included in the
numerator or the denominator.
Comment: Commenters inquired if
asking the patient to register for their
own personal health record (PHR)
satisfies the intent of the objective.
Response: EPs, eligible hospitals and
CAHs are to provide the information
pursuant to the reasonable
accommodations for patient preference
under 45 CFR164.522(b). To be included
in this measure, the patient has already
requested an electronic method. While
having a third party PHR certainly
would be one method, assuming the
provider could populate the PHR with
all the information required to meet this
objective. The provider should provide
the same level of assistance to the
patient that would be provided as if
they maintained their own patient
portal.
Comments: Comments were received
requesting the format and media for the
provision of the health information.
Response: As this is for use by the
patient, the form and format should be
human readable and comply with the
HIPAA Privacy Rule, as specified at 45
CFR 164.524(c). In addition, efforts
should be made to make it easily
understandable to the patient. The
media could be any electronic form
such as patient portal, PHR, CD, USB
fob, etc. As stated in the previous
response, EPs, eligible hospitals and
CAHs are expected to make reasonable
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accommodations for patient preference
as outlined in 45 CFR 164.522(b).
After consideration of the public
comments received, we are modifying
the meaningful use measure for EPs at
§ 495.6(d)(12)(i) and for eligible
hospitals at § 495.6(f)(11)(i) of our
regulations to ‘‘More than 50 percent of
all patients of the EP or the inpatient or
emergency departments of the eligible
hospital or CAH (POS 21 or 23) who
request an electronic copy of their
health information are provided it
within 3 business days.’’
We further specify that in order to
meet this objective and measure, an EP,
eligible hospital, or CAH must use the
capabilities Certified EHR Technology
includes as specified and standards at
45 CFR 170.304(f) for EPs and 45 CFR
170.306(d) for eligible hospitals and
CAHs. The ability to calculate the
measure is included in certified EHR
technology.
As the provision of the electronic
copy is limited to the information
contained within certified EHR
technology, this measure is by
definition limited to patients whose
records are maintained using certified
EHR technology as described previously
in this section under our discussion of
the burden created by the measures
associated with the Stage 1 meaningful
use objectives.
To calculate the percentage, CMS and
ONC have worked together to define the
following for this objective:
• Denominator: The number of
patients of the EP or eligible hospital’s
or CAH’s inpatient or emergency
departments (POS 21 or 23) who request
an electronic copy of their electronic
health information four business days
prior to the end of the EHR reporting
period.
• Numerator: The number of patients
in the denominator who receive an
electronic copy of their electronic health
information within three business days.
• Threshold: The resulting percentage
must be more than 50 percent in order
for an EP, eligible hospital, or CAH to
meet this measure. As addressed in
other objectives and in comment
response, if the EP, eligible hospital, or
CAH has no requests from patients or
their agents for an electronic copy of
patient health information during the
EHR reporting period they would be
excluded from this requirement as
described previously in this section
under our discussion of whether certain
EP, eligible hospital or CAH can meet
all Stage 1 meaningful use objectives
given established scopes of practices.
NPRM Eligible Hospital Objective:
Provide patients with an electronic copy
of their discharge instructions and
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procedures at time of discharge, upon
request.
The purpose of this objective is to
provide the option to patients to receive
their discharge instructions
electronically. Discharge instructions
would not necessarily be included in a
copy of health information and it is
unlikely that a patient would request a
copy of their health information at every
discharge. This objective is unique to
eligible hospitals and CAHs.
Comment: We received several
comments suggesting that we eliminate
or clarify the term ‘‘procedures.’’
Response: As we believe the terms
‘‘instructions’’ and ‘‘procedures’’ are
interchangeable as used in this
objective, we are removing the term
‘‘procedures’’ from the objective. We left
this term in the provision of electronic
copy of health information as the term
‘‘instructions’’ is not in that objective.
We clarify that the term ‘‘instructions’’
means any directions that the patient
must follow after discharge to attend to
any residual conditions that need to be
addressed personally by the patient,
home care attendants, and other
clinicians on an outpatient basis.
Comment: Commenters pointed out
that the HIPAA Privacy Rule permits
licensed healthcare professionals to
withhold certain information if its
disclosure would cause substantial
harm to the patient or another
individual.
Response: We reiterate that it is not
our intent for the meaningful use
objectives to conflict or override the
HIPAA Privacy Rule through
meaningful use requirements. Therefore
an EP, eligible hospital, or CAH may
withhold information from the
electronic copy to the extent they are
permitted or required to do so in
accordance with the regulations at 45
CFR 164.524.
Comment: Some commenters
recommended that hospitals should be
required to either provide every patient
an electronic copy of their discharge
instructions or at least inform them of
the option to receive it electronically.
Response: We believe it would be too
burdensome to provide every patient an
electronic copy of his or her discharge
instructions. Furthermore, we anticipate
that many, if not most, patients will
prefer a paper copy during the years of
Stage 1. While we certainly encourage
eligible hospitals to inform their
patients of the option to receive their
discharge instructions electronically, we
do not see requiring this as within the
scope of meaningful use of certified
EHR technology for Stage 1.
Comment: Comments were received
requesting a clarification of the data that
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44355
should be included in the discharge
instructions.
Response: This objective simply refers
to the option of the electronic provision
of instructions that would be provided
to the patient. We believe eligible
hospitals are the appropriate entity to
determine the information that should
be included in the discharge
instructions.
Comment: Comments were received
requesting the format and media for the
discharge instructions.
Response: As this is for use by the
patient, the form and format should be
human readable and comply with the
HIPAA Privacy Rule, as specified at 45
CFR 164.524(c). In addition, efforts
should be made to make it easily
understandable to the patient. The
media could be any electronic form
such as patient portal, PHR, CD, USB
fob, etc. EPs, eligible hospitals and
CAHs are expected to make reasonable
accommodations for patient preference
as outlined in 45 CFR 164.522(b).
After consideration of the public
comments received, we are finalizing
the objective at 495.6(f)(12)(i) of our
regulations as proposed.
We include this objective in the core
set as it is integral to involving patients
and their families in their provision of
care and was recommended by the HIT
Policy Committee for inclusion in the
core set.
NPRM Eligible Hospital Measure: At
least 80 percent of all patients who are
discharged from an eligible hospital and
who request an electronic copy of their
discharge instructions and procedures
are provided it.
Comment: Some commenters believed
the 80 percent threshold was too high or
introduced examples of extraordinary
circumstances that would indicate that
a lower threshold is needed to
accommodate them.
Response: We reduce the threshold to
over 50 percent as this objective meets
the criteria of relying solely on a
capability included as part of certified
EHR technology and is not, for purposes
of Stage 1 criteria, reliant on the
electronic exchange of information.
However, as this is a relatively new
capability that was not available to
either providers or patients before the
introduction of EHRs we do not believe
it meets the same standard of practice as
maintaining an up-to-date problem list
and therefore adopt a threshold of 50
percent (rather than 80 percent).
Comment: Some commenters
expressed concern about the reporting
burden imposed by this requirement.
Response: We believe that as long as
the request by the patient is accurately
recorded in the certified EHR
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technology then the certified EHR
technology should be able to calculate
the measure. We believe that recording
patient requests for certain actions that
involve the use of certified EHR
technology should be part of EPs,
eligible hospitals and CAHs standard
practice. If the eligible hospital or CAH
records the requests using certified EHR
technology, certified EHR technology
will be able to assist in calculating both
the numerator and denominator. If the
requests are recorded by another means
at the choice of the provider, the
provider would be responsible for
determining the denominator.
Comment: Several of the comments
requested clarification of the timeframe
in which the discharge instructions
should be provided to the patient.
Response: As discussed previously,
this objective simply refers to the option
of the electronic provision of
instructions that would be provided to
the patient at the time of discharge.
Therefore, we believe for the
information to be useful to the patient,
the instructions themselves or
instructions on how to access them
electronically should be furnished at the
time of discharge from the eligible
hospital or CAH.
Comment: Some comments expressed
concern that providing an electronic
copy of discharge instructions to the
patient at the time of discharge would
disrupt workflows and lengthen the
discharge process resulting in reduced
bed turnover in emergency departments.
Response: As discussed previously,
this objective simply refers to the option
of the electronic provision of
instructions that would be provided to
the patient at the time of discharge. We
do not believe the provision of an
electronic copy of the discharge
instructions, upon request, at the time of
discharge alters current workflow or
lengthens the discharge process. A
patient could be provided instructions
on how to access an Internet Web site
where they can get the instructions or
asked to provide an e-mail address or
simply be handed electronic media
instead of or in addition to a paper
copy.
After consideration of the public
comments received, we are modifying
the meaningful use measure at
§ 495.6(f)(12)(ii) of our regulations to
‘‘More than 50 percent of all patients
who are discharged 1 from an eligible
1 Please note that although the final rule
meaningful use measures refer to patients
discharged from an emergency department, such
emergency room releases are not eligible hospital
discharges for purpose of determining hospital
payment incentives under section 1886(n) of the
Act. Section 1886(n) payments are only with
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hospital’s or CAH’s inpatient or
emergency department (POS 21 or 23)
and who request an electronic copy of
their discharge instructions are
provided it.’’
We further specify that in order to
meet this objective and measure, an EP,
eligible hospital, or CAH must use the
capabilities Certified EHR Technology
includes as specified and standards at
45 CFR 170.306(e). The ability to
calculate the measure is included in
certified EHR technology.
As with the previous objective, the
provision of the electronic copy of the
discharge summary is limited to the
information contained within certified
EHR technology; therefore this measure
is by definition limited to patients
whose records are maintained using
certified EHR technology as described
previously in this section under our
discussion of the burden created by the
measures associated with the Stage 1
meaningful use objectives.
To calculate the percentage, CMS and
ONC have worked together to define the
following for this objective:
• Denominator: Number of patients
discharged from an eligible hospital’s or
CAH’s inpatient or emergency
department (POS 21 or 23) who request
an electronic copy of their discharge
instructions and procedures during the
EHR reporting period.
• Numerator: The number of patients
in the denominator who are provided an
electronic copy of discharge
instructions.
• Threshold: The resulting percentage
must be more than 50 percent in order
for an EP, eligible hospital, or CAH to
meet this measure.
As addressed in other objectives and
in comment response, if the eligible
hospital or CAH has no requests from
patients or their agents for an electronic
copy during the EHR reporting period
they would be excluded from this
requirement as described previously in
this section under our discussion of
whether certain EP, eligible hospital or
CAH can meet all Stage 1 meaningful
use objectives given established scopes
of practices.
NPRM EP Objective: Provide patients
with timely electronic access to their
health information (including lab
results, problem list, medication lists,
and allergies) within 96 hours of the
information being available to the EP.
In the proposed rule, we described
timely as within 96 hours of the
information being available to the EP
through either the receipt of final lab
results or a patient interaction that
respect to ‘‘inpatient’’ hospital services pursuant to
section 1886(n)(1)(A) of the Act.
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updates the EP’s knowledge of the
patient’s health. We said we judged 96
hours to be a reasonable amount of time
to ensure that certified EHR technology
is up to date and welcomed comment on
if a shorter or longer time is
advantageous. We did receive comments
on the time frame and have revised it as
discussed below in the comment and
response section.
Comment: We received comments
recommending that ‘‘access’’ be clarified
to determine whether this is online
access as indicated in the ONC
certification criteria for certified EHR
technology or just electronic access.
Response: We believe we
inadvertently created confusion by
listing the examples of electronic media
(CD or USB drive) in which this access
could be provided. As many
commenters inferred, it was our
intention that this be information that
the patient could access on demand
such as through a patient portal or PHR.
We did not intend for this to be another
objective for providing an electronic
copy of health information upon
request.
Comment: Several commenters
requested that all objectives included in
the health care policy priority ‘‘engage
patients and their families’’ be
combined, as they are redundant.
Response: We disagree that they are
redundant and believe each serves a
unique purpose. We regret any
confusion created by the inclusion of
CD or USB drive as examples of
electronic media caused in the intent of
this measure. The difference between
electronic access and an electronic copy
is that a patient with electronic access
can access the information on demand
at anytime while a patient must
affirmatively request an electronic copy
from the EP, eligible hospital or CAH at
a specific time and the information in
the copy is current only as of the time
that the copy is transferred from the
provider to the patient.
Comment: Some commenters asserted
that some results and other sensitive
information are best communicated at a
face-to-face encounter.
Response: We agree that there may be
situations where a provider may decide
that electronic access of a portal or
Personal Health Record is not the best
forum to communicate results. Within
the confines of laws governing patient
access to their medical records, we
would defer to EP’s, eligible hospital or
CAH’s judgment as to whether to hold
information back in anticipation of an
actual encounter between the provider
and the patient. Furthermore just as in
the provision of electronic copy, an EP
may withhold information from being
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accessible electronically by the patient
in accordance with regulations at 45
CFR 164.524. Any such withholding
would not affect the EP’s, eligible
hospital’s or CAH’s ability to meet this
objective as that information would not
be included. We do not believe there
would be a circumstance where all
information about an encounter would
be withheld from the patient and
therefore no information would be
eligible for uploading for electronic
access. If nothing else, the information
that the encounter occurred can be
provided. Please note that providers
must comply with all applicable
requirements under the HIPAA Privacy
Rule, including 45 CFR 164.524.
Comment: We received several
comments stating that the time frame of
96 hours is too burdensome for EPs.
Response: While we believe that 96
hours is sufficient, most EPs do not
operate 24/7. Therefore, we will limit
the timeframe to business days, in effect
changing the timeframe from 96 hours
in the proposed rule to four business
days. Business days are defined as
Monday through Friday excluding
federal or state holidays on which the
EP, eligible hospital or CAH or their
respective administrative staffs are
unavailable.
Comment: Commenters pointed out
that allergies is inconsistent with other
objectives of Stage 1 and with the
capabilities mandated by certification
under the ONC final rule.
Response: As we have stated on
several other objectives, we encourage
all EPs, eligible hospitals, and CAHs to
work with their EHR technology
designers to make capabilities as
relevant to their individual practices of
care as possible. However, we maintain
that at a minimum the capabilities that
are part of certification should be
included in certified EHR technology so
we do modify this objective to
medication allergies to align it with
other objectives and certification.
After consideration of the public
comments received, we are modifying
the objective for EPs at § 495.6(d)(6)(i) of
our regulations to ‘‘Provide patients with
timely electronic access to their health
information (including lab results,
problem list, medication lists,
medication allergies) within four
business days of the information being
available to the EP’’.
NPRM EP Measure: At least 10
percent of all unique patients seen by
the EP are provided timely electronic
access to their health information.
In the proposed rule, we said that we
recognize that many patients may not
have internet access, may not be able or
interested to use a patient portal. Health
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systems that have actively promoted
such technologies have been able to
achieve active use by over 30 percent of
their patients, but this may not be
realistic for many practices in the short
term. We received comments on this
justification for the threshold and
requests for clarification, which are
addressed in the comment and response
section below.
Comment: Some commenters
expressed concern about the calculation
of the percentage and expressed the
preference to use an absolute count
instead of a percentage.
Response: We acknowledge there are
unique concerns about calculating this
percentage as it involves determining
the timeliness of the information.
Certified EHR technology would be able
to ascertain the time from when the
information was entered into its system
to when the information was available
for electronic access. As certified EHR
technology can provide the access, any
perceivable delay or requirement for
affirmative action would be built in by
the user to allow for review of the
information before posting. Certified
EHR technology could not be
distinguish the difference in time when
the information was available to the
provider and when it was entered into
certified EHR technology. However, we
see no reasonable way to track this time
frame that does not impose a heavy
burden on the EP. Therefore, for the
measure, we define the four business
days time frame as the time frame when
the information is updated in the
certified EHR technology to when it is
available electronically to the patient,
unless the provider indicates that the
information should be withheld. It is
acceptable for a provider to set an
automated withhold on certain
information at their discretion. As we
have discussed previously in this
section, we do not believe absolute
counts are an adequate substitute for
percentage calculations.
Comment: We received comments
requesting clarification on what data
must be made available.
Response: Certified EHR technology
must be able to make certain data
available according to the ONC final
rule. At a minimum, the data specified
in the ONC final rule at 45 CFR
170.304(g) must be available subject to
the ability of the provider to withhold
it discussed previously.
Comment: Commenters suggested that
some EPs might not have 10 percent of
their patient population who desire or
could utilize such access.
Response: We agree that this is a
possibility. We stated in the proposed
rule that ‘‘we recognize that many
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44357
patients may not have internet access,
may not be able or interested in the use
of a patient portal.’’ Health systems that
have actively promoted such
technologies have been able to achieve
active use by over 30 percent of their
patients. However, this 30 percent
threshold may not be realistic for many
practices in the short term and therefore
serves justification for the 10 percent
threshold. However, the objective and
measure focus on the availability of the
access and the timeliness of the data in
it, not its utilization. Therefore, we
focus on the fact that more than 10
percent of unique patients seen during
the EHR reporting period could access
it and that the information is timely.
The EP is not responsible for ensuring
that 10 percent request access or have
the means to access. However, we
encourage EPs to make the availability
of electronic access known to their
patients.
Comment: A commenter inquired
about the provider’s liability versus the
EHR technology vendor for a security
breach of the system.
Response: Depending on the facts
surround the security breach, the
provider may be liable for a violation
under the HIPAA Privacy and Security
Rules, as well as under any other
applicable federal or state laws.
Additionally, there may be
circumstances where the EHR
technology vendor acted as a business
associate and may potentially have
liability under the HIPAA Privacy and
Security Rules. The issue of business
associate liability under the HIPAA
Privacy and Security Rules will be
addressed in upcoming rulemaking.
After consideration of the public
comments received, we are modifying
the meaningful use measure for EPs at
§ 495.6(d)(6)(ii) of our regulations to ‘‘At
least 10 percent of all unique patients
seen by the EP are provided timely
(available to the patient within four
business days of being updated in the
certified EHR technology) electronic
access to their health information
subject to the EP’s discretion to
withhold certain information’’.
We further specify that in order to
meet this objective and measure, an EP,
eligible hospital, or CAH must use the
capabilities Certified EHR Technology
includes as specified and standards at
45 CFR 170.304(g). The ability to
calculate the measure is included in
certified EHR technology.
To calculate the percentage, CMS and
ONC have worked together to define the
following for this objective:
• Denominator: Number of unique
patients seen by the EP during the EHR
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reporting period. A unique patient is
discussed under the objective of CPOE.
• Numerator: The number of patients
in the denominator who have timely
(available to the patient within four
business days of being updated in the
certified EHR technology) electronic
access to their health information
online.
• Threshold: The resulting percentage
must be at least 10 percent in order for
an EP to meet this measure.
As addressed in other objectives and
in comment response, if an EP neither
orders nor creates any of the
information listed in the ONC final rule
45 CFR 170.304(g) and therefore
included in the minimum data for this
objective during the EHR reporting
period they would be excluded from
this requirement as described
previously in this section under our
discussion of whether certain EP,
eligible hospital or CAH can meet all
Stage 1 meaningful use objectives given
established scopes of practices.
NPRM EP Objective: Provide clinical
summaries for patients for each office
visit.
In the proposed rule, we discussed
why we were basing the objective on
office visits rather than encounters. We
said that we did want encounter to be
construed to mean every time a provider
interacts with the patient. We received
comments requesting that we further
define office visit and address those in
the comment and response section
below. In discussing the measure in the
proposed rule, we also said that the
clinical summary can be provided
through a PHR, patient portal on the
web site, secure email, electronic media
such as CD or USB fob, or printed copy.
The after-visit clinical summary
contains an updated medication list,
laboratory and other diagnostic test
orders, procedures and other
instructions based on clinical
discussions that took place during the
office visit.
Comment: We received requests for
clarification as to what constitutes an
‘‘office visit’’.
Response: An office visit is defined as
any billable visit that includes: (1)
Concurrent care or transfer of care visits,
(2) Consultant visits and (3) Prolonged
Physician Service without Direct (FaceTo-Face) Patient Contact (tele-health). A
consultant visit occurs when a provider
is asked to render an expert opinion/
service for a specific condition or
problem by a referring provider.
Comment: Some commenters believed
the requirement for the provision of a
clinical summary at an office visit
should be linked to the type or purpose
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of the office visit. Samples of the
suggested visits are—
—Level 4 or level 5 evaluation and
management services;
—Visits conducted at the conclusion of
an episode of care;
—Visits conducted at each transition of
care;
—Visits relevant to specific conditions
such as asthma; and
—Provider to patient face-to-face visits.
Response: We believe that a clinical
summary should be provided at all
office visits included in the definition of
office visit as defined in this final rule.
We believe all of the office visits
described in our definition result in the
EP rendering a clinical judgment that
should be communicated to the patient.
Comment: Commenters requested
CMS define ‘‘clinical summary’’ and
offered several specific data elements
that should be included in the
definition such as patient name,
provider name, date of visit, location of
visit, reason for visit, updated
medication list, laboratory orders,
diagnostic orders, patient instructions
based on discussions with the provider
and a nutrition care management plan.
Response: After reviewing the
comments we define clinical summary
as an after-visit summary that provides
a patient with relevant and actionable
information and instructions containing,
but not limited to, the patient name,
provider’s office contact information,
date and location of visit, an updated
medication list and summary of current
medications, updated vitals, reason(s)
for visit, procedures and other
instructions based on clinical
discussions that took place during the
office visit, any updates to a problem
list, immunizations or medications
administered during visit, summary of
topics covered/considered during visit,
time and location of next appointment/
testing if scheduled, or a recommended
appointment time if not scheduled, list
of other appointments and testing
patient needs to schedule with contact
information, recommended patient
decision aids, laboratory and other
diagnostic test orders, test/laboratory
results (if received before 24 hours after
visit), and symptoms.
Comment: Commenters pointed out
that the HIPAA Privacy Rule permits
licensed healthcare professionals to
withhold certain information if its
disclosure would cause substantial
harm to the patient or another
individual.
Response: As the EP is proactively
providing this information to the
patient, 45 CFR 164.524 of the HIPAA
Privacy rule does not apply to this
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situation. However, we still believe that
an EP should be able to withhold
information if its disclosure would
cause substantial harm to the patient or
another individual. Therefore, if in their
judgment substantial harm may arise
from the disclosure of particular
information, an EP may choose to
withhold that particular information
from the clinical summary
Comment: Most commenters noted
that other than ‘‘at the time of the visit’’,
there was no specific time period given
in which to comply with this objective.
If CMS intended ‘‘at the time of the visit’’
to mean before the patient leaves the
building or upon the patient’s request,
neither are possible due to workflow
and review processes. Most commenters
assumed we would associate the 48
hours related to the ‘copy’ requirement
or the 96 hours related to the ‘access’
requirement to address this comment
and stated that both were too short a
period for a clinical visit summary.
Others recommended the 30-day
timeframe for the provision information
set forth under the HIPAA Privacy Rule.
Response: We agree that our proposed
objective lacked specificity about the
time to comply. To provide such
specificity, we adopt the timeframe of
three business days from our objective
of providing electronic health
information to the patient. That is three
business days following the day of the
visit excluding holidays as described in
the providing electronic health
information to the patient objective.
Comment: Several commenters
requested changes to the media through
which this information could be
provided. Differing commenters
recommended eliminating the paper
option, while others recommended only
the paper option.
Response: We believe that more
options give the EP needed flexibility.
The EP could choose any of the listed
means from the proposed rule of PHR,
patient portal on a Web site, secure
email, electronic media such as CD or
USB fob, or printed copy. If the EP
chooses an electronic media, they
would be required to provide the patient
a paper copy upon request. Both forms
can be and should be produced by
certified EHR technology.
Comment: Several commenters
indicated that a provider should be
allowed to charge a fee for providing the
copy.
Response: As this is a proactive
requirement on the part of the EP and
not a response to a request from the
patient, we do not believe it is
appropriate to charge the patient a fee
for this copy. We note that we give the
EP considerable flexibility in the
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manner in which the copy is provided
including the provision of a paper copy.
The only accommodation an EP is
required to make is the provision of a
paper copy that can be automatically
generated certified EHR technology. We
therefore believe that costs of this will
be negligible.
Comment: A number of commenters
expressed concern regarding whether
the current available technology could
produce a summary of the required
information in a standardized format,
the use of clinical nomenclature rather
than lay terms and the fact that some
providers use multiple modules to
document the care of the patient.
Response: We believe it is appropriate
to leave the design of EHR technology
systems and their outputs to the system
developers and the EHR technology
users. However, we note that the
capability to meet this objective is
included in the ONC final rule at 45
CFR 170.304(h) as a criteria for certified
EHR technology and we are confident
that vendors will be able to produce
certified EHR technologies.
After consideration of the public
comments received, we are finalizing
the objective for EPs at § 495.6(d)(13)(i)
of our regulations as proposed.
We include this objective in the core
set as it is integral to involving patients
and their families in their provision of
care and was recommended by the HIT
Policy Committee for inclusion in the
core set.
NPRM EP Measure: Clinical
summaries provided to patients for at
least 80 percent of all office visits.
Comment: Some commenters believed
the threshold was too high or should be
replaced with a numerical count or
attestation.
Response: We reduce the threshold to
over 50 percent as this objective meets
the criteria of relying solely on a
capability included as part of certified
EHR technology and is not, for purposes
of Stage 1 criteria, reliant on the
electronic exchange of information.
Also, as this is a relatively new
capability that was not available to
either providers or patients before the
introduction of EHRs, we do not believe
it meets the same standard of practice as
maintaining an up-to-date problem list
and therefore adopt a threshold of 50
percent (rather than 80 percent).
After consideration of the public
comments received, we are modifying
the meaningful use measure for EPs at
§ 495.6(d)(13)(ii) of our regulation to
‘‘Clinical summaries provided to
patients for more than 50 percent of all
office visits within 3 business days’’.
We further specify that in order to
meet this objective and measure, an EP,
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eligible hospital, or CAH must use the
capabilities Certified EHR Technology
includes as specified and standards at
45 CFR 170.304(h). The ability to
calculate the measure is included in
certified EHR technology.
As with the previous objective, the
provision of the clinical summary is
limited to the information contained
within certified EHR technology;
therefore this measure is by definition
limited to patients whose records are
maintained using certified EHR
technology as described previously in
this section under our discussion of the
burden created by the measures
associated with the Stage 1 meaningful
use objectives.
To calculate the percentage, CMS and
ONC have worked together to define the
following for this objective:
• Denominator: Number of unique
patients seen by the EP for an office
during the EHR reporting period. A
unique patient is discussed under the
objective of using CPOE.
• Numerator: Number of patients in
the denominator who are provided a
clinical summary of their visit within
three business days.
• Threshold: The resulting percentage
must be more than 50 percent in order
for an EP, eligible hospital, or CAH to
meet this measure.
As addressed in other objectives, EPs
who have no office visits during the
EHR reporting period would be
excluded from this requirement as
described previously in this section
under our discussion of whether certain
EP, eligible hospital or CAH can meet
all Stage 1 meaningful use objectives
given established scopes of practices.
NPRM EP/Eligible Hospital Objective:
‘‘Provide access to patient-specific
education resources upon request.’’
In the proposed rule, we discussed
this objective, but did not propose it.
We stated that there was a paucity of
knowledge resources that are integrated
with EHR, and that also are widely
available. We also noted that the ability
to provide education resources in
multiple languages might be limited. We
stated our intent to further explore the
objective in subsequent stages of
meaningful use.
Comment: We received many
comments, including comments from
both the HIT Policy Committee and
MedPAC, to include this measure in the
final rule. These commenters disagreed
with our assertion in the proposed rule
that ‘‘there is currently a paucity of
knowledge resources that are integrated
within EHRs, that are widely available,
and that meet these criteria, particularly
in multiple languages.’’ Specific
examples of the availability of
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knowledge resources integrated with
current EHRs were provided. The HIT
Policy Committee amended their
recommendation in their comments on
the proposed rule to:
—EPs and hospitals should report on
the percentage of patients for whom
they use the EHR to suggest patientspecific education resources.
Other recommended language for the
objective includes:
—Provide patients educational
information that is specific to their
health needs as identified by
information contained in their EHR
technology such as diagnoses and
demographic data, and
—The original HIT Policy Committee
objective of ‘‘Provide access to patientspecific education resources upon
request.’’
Response: We are convinced by
commenters that the availability of
education resources linked to EHRs is
more widely available than we had
indicated in the proposed rule.
Therefore, for the final rule we will
include this objective for the Stage 1 of
meaningful use. We note that the new
recommendation of the HIT Policy
Committee is a hybrid of a measure and
an objective, whereas in developing the
meaningful use criteria we consistently
identify both an objective and
associated measure. However, we agree
with the HIT Policy Committee and
others that the objective and associated
measure should make clear that the EP,
eligible hospital or CAH should utilize
certified EHR technology in a manner
where the technology suggests patientspecific educational resources based on
the information stored in the certified
EHR technology. Therefore, we are
including a revised version of this
objective in the final rule for Stage 1 of
meaningful use.
We also believe it is necessary to state
what level of EP, eligible hospital and
CAH discretion is available when
deciding whether to provide education
resources identified by certified EHR
technology to the patient. Therefore, we
include the phrase ‘‘if appropriate’’,
which allows the EP or the authorized
provider in the eligible hospital or CAH
final decision on whether the education
resource is useful and relevant to a
specific patient.
After consideration of the public
comments received, we are including
this meaningful use objective for EPs at
§ 495.6(e)(6)(i) and eligible hospitals
and CAHs at § 495.6(g)(5)(i) of our
regulations as ‘‘Use certified EHR
technology to identify patient-specific
education resources and provide those
resources to the patient if appropriate’’.
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NPRM EP/Eligible Hospital Measure:
Not applicable.
Comment: CMS received a comment
requesting an 80 percent threshold of
appropriate patients and/or caregivers
receiving patient-specific educational
materials. In addition, the HIT Policy
Committee’s revised objective suggests a
patient based percentage.
Response: As with the addition of the
recording of advance directives, we are
able to relate this measure to one that
is based on patients and can be
accomplished solely using certified EHR
technology. As this objective requires
more than just the recording of
information in certified EHR
technology, we adopt a lower threshold
of 10 percent.
After consideration of the public
comments received, we are including
this meaningful use measure for EPs at
§ 495.6(e)(6)(ii) and eligible hospitals at
§ 495.6(g)(5)(ii) of our regulations as
‘‘More than 10 percent of all unique
patients seen by the EP or admitted to
the eligible hospital’s or CAH’s
inpatient or emergency department
(POS 21 or 23) are provided patientspecific education resources’’.
We further specify that in order to
meet this objective and measure, an EP,
eligible hospital, or CAH must use the
capabilities Certified EHR Technology
includes as specified and standards at
45 CFR 170.302(m). The ability to
calculate the measure is included in
certified EHR technology.
To calculate the percentage, CMS and
ONC have worked together to define the
following for this objective:
• Denominator: Number of unique
patients seen by the EP or admitted to
the eligible hospital’s or CAH’s
inpatient or emergency department
(POS 21 or 23) during the EHR reporting
period. A unique patient is discussed
under the CPOE objective.
• Numerator: Number of patients in
the denominator who are provided
patient education specific resources.
• Threshold: The resulting percentage
must be more than 10 percent in order
for an EP, eligible hospital, or CAH to
meet this measure.
We do not believe that any EP, eligible
hospital, or CAH will not have more
than 10 percent of their patients eligible
to receive patient specific education
resources and therefore do not believe
an exclusion is necessary for this
objective.
The third health outcomes policy
priority identified by the HIT Policy
Committee is to improve care
coordination. The HIT Policy
Committee recommended the following
care goals to address this priority:
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• Exchange meaningful clinical
information among professional health
care team.
NPRM EP Objective: Capability to
exchange key clinical information (for
example, problem list, medication list,
allergies, and diagnostic test results),
among providers of care and patient
authorized entities electronically.
NPRM Eligible Hospital Objective:
Capability to exchange key clinical
information (for example, discharge
summary, procedures, problem list,
medication list, allergies, diagnostic test
results), among providers of care and
patient authorized entities
electronically.
In the proposed rule, we defined the
term ‘‘diagnostic test results ’’ as all data
needed to diagnose and treat disease,
such as blood tests, microbiology,
urinalysis, pathology tests, radiology,
cardiac imaging, nuclear medicine tests,
and pulmonary function tests. We
maintain this description for the final
rule. We said that when the information
was available in a structured format we
expected that it be transferred in a
structured format. However, if it was
unavailable in a structured format, that
the transmission of unstructured data
was permissible. We provide additional
information on structured data in the
comment and response section, but
maintain for the final rule the concept
that the exchange can be of structured
or unstructured data.
Comment: Commenters requested
clarification of the term ‘‘key clinical
information.’’
Response: By ‘‘clinical information’’,
we mean all data needed to diagnose
and treat disease, such as blood tests,
microbiology, urinalysis, pathology
tests, radiology, cardiac imaging,
nuclear medicine tests, and pulmonary
function tests. We leave it to the
provider’s clinical judgment as to
identifying what clinical information is
considered key clinical information for
purposes of exchanging clinical
information about a patient at a
particular time with other providers of
care. The examples we provided in the
proposed rule and the final rule below
are not intended to be exhaustive. ONC
in their final rule provides a minimum
set of information that certified EHR
technology must be able to exchange in
order to be certified. A provider’s
determination of key clinical
information could include some or all of
this information as well as information
not included in the ONC final rule at 45
CFR 170.304(i) for EPs and 45 CFR
170.306(f) for eligible hospitals and
CAHs.
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Comment: Commenters requested
clarification of the term ‘‘patient
authorized entities.’’
Response: By ‘‘patient authorized
entities’’, we mean any individual or
organization to which the patient has
granted access to their clinical
information. Examples would include
an insurance company that covers the
patient, an entity facilitating health
information exchange among providers
or a personal health record vendor
identified by the patient. A patient
would have to affirmatively grant access
to these entities.
Comment: Commenters requested
clarification of the term ‘‘exchange.’’
Response: We expect that this
information, when exchanged
electronically, would be exchanged in
structured electronic format when
available (for example, drug and clinical
lab data). However, where the
information is available only in
unstructured electronic formats (for
example, free text and scanned images),
we would allow the exchange of
unstructured information. We believe
that the electronic exchange of
information is most efficient when it is
exchanged from a provider’s certified
EHR technology to another certified
EHR technology either directly or
through an entity facilitating health
information exchange using structured
data that can be automatically identified
by the receiving system and integrated
into the receiver’s records. However, we
know that much information cannot
currently be, and may never be,
transmitted in the way we just
described.
Comment: Commenters requested
clarification of the term ‘‘structured
data.’’
Response: This distinction between
structured data and unstructured data
applies to all types of information. We
have previously defined structured data
in this section. To ensure that certified
EHR technology has a certain level of
functionality, ONC at 45 CFR 170.304(i)
for EPs and 45 CFR 170.306(f) for
eligible hospitals and CAHs specified
certain types of information that a
certified EHR technology must be able
to exchange to become certified. ONC
also provided standards to support this
exchange. These standards do not
preclude a vendor of EHR technology
from enabling its product to exchange
additional types of information nor limit
the provider’s discretion (either in
exchanging more or less) in deciding
what information is key and should be
exchanged about a given patient at a
given time.
Comment: Commenters expressed
concern that the exchange of key
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clinical information via certified EHR
systems requires a unique or national
patient identifier to ensure accurate
exchange.
Response: While such an identifier
could facilitate an exchange, it need
only be unique to the parties involved
in the exchange and need not be
national in scope, nor is a specific
unique identifier necessary for
successful exchanges. Many current
health information exchanges have had
success identifying patients by a
combination of several elements of
information without a separate
independent identifier.
Comment: Commenters pointed out
that the general term ‘‘allergies’’ is
inconsistent with other objectives of
Stage 1 and with the capabilities
mandated by certification under the
ONC final rule, which uses the term
‘‘medication allergies’’.
Response: As we have stated on
several other objectives, we encourage
all EPs, eligible hospitals, and CAHs to
work with their certified EHR
technology designers to make
capabilities most relevant to their
individual practices of care. However,
we have maintained that at a minimum
the capabilities that are part of
certification should be included so we
modify the example to change allergies
to medication allergies to align it with
other objectives and certification.
After consideration of the public
comments received, we are modifying
the meaningful use objective for EPs at
§ 495.6(d)(14)(i) of our regulations to
‘‘Capability to exchange key clinical
information (for example, problem list,
medication list, medication allergies,
and diagnostic test results), among
providers of care and patient authorized
entities electronically’’ and for eligible
hospitals and CAHs at § 495.6(f)(13)(i) to
‘‘Capability to exchange key clinical
information (for example, discharge
summary, procedures, problem list,
medication list, medication allergies,
diagnostic test results), among providers
of care and patient authorized entities
electronically’’.
In response to our revised
requirements for meeting meaningful
use, we included this objective in the
core set. Section 1848 (o)(2)(A)(ii) of the
Act specifically includes electronic
exchange of health information in
meaningful use for eligible
professionals.
NPRM EP/Eligible Hospital Measure:
Performed at least one test of certified
EHR technology’s capacity to
electronically exchange key clinical
information.
In the proposed rule, we identified
this objective as reliant on the electronic
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exchange of information. We said that
we are aware that in most areas of the
country, the infrastructure necessary to
support such exchange is still being
developed. Therefore, for the Stage 1
criteria of meaningful use we proposed
that EPs and eligible hospitals test their
ability to send such information at least
once prior to the end of the EHR
reporting period. We proposed that the
testing could occur prior to the
beginning of the EHR reporting period.
We also said that if multiple EPs are
using the same certified EHR technology
in a shared physical setting, the testing
would only have to occur once for a
given certified EHR technology, as we
do not see any value to running the
same test multiple times just because
multiple EPs use the same certified EHR
technology. Finally, we attempted to
define an ‘‘exchange’’ as the clinical
information must be sent between
different clinical entities with distinct
certified EHR technology and not
between organizations that share a
certified EHR. We received many
comments requesting further
clarification on these concepts and we
attempt to provide additional
information in the comment and
response section below.
Comment: Commenters expressed
concern that the receiving entities are
not required to have the same
capabilities as meaningful users of
certified EHR technology.
Response: The HITECH Act does not
provide us the authority to require any
entity (medical provider or otherwise) to
conform to certain standards and
criteria unless they seek to become a
meaningful EHR user. The Act also
limits the entities that are eligible to
become meaningful EHR users. In
developing the associated measure for
this objective, we have ensured that
eligible providers will be able to meet
this objective as long as there is one
other entity with which they can test
their capability. As electronic exchange
is not constrained by distance, we are
confident that every provider seeking to
test their system will be able to find
another entity with which to conduct
such test.
Comment: Commenters asked
whether the test needs to be ‘‘live’’ or if
it could be a ‘‘simulation.’’
Response: As specified in the
proposed rule, this test must involve the
actual submission of information to
another provider of care with distinct
certified EHR technology or other
system capable of receiving the
information.
Comment: Commenters asked
whether the use of ‘‘test’’ or ‘‘dummy’’
data is permissible.
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Response: While the use of test
patient information may increase the
risk that the system will not be testing
to its full capability, given the privacy
and security concerns surrounding the
transmission of actual patient
information we do not require it for the
purposes of a test. Therefore, the use of
test information about a fictional patient
that would be identical in form to what
would be sent about an actual patient
would satisfy this objective.
Comment: Commenters suggested
deferring the measure to a later stage
due to the lack of a mature HIE
infrastructure and/or to emulate the
Health Information and Management
System Society (HIMSS) EMR Adoption
Model.
Response: We agree that many areas
of the country currently lack the
infrastructure to support the electronic
exchange of information. As the goal of
this meaningful use objective is to
ensure that certified EHR technology
has the capability to electronically
exchange key clinical information, we
only require a single test.
After consideration of the public
comments received, we are finalizing
the meaningful use measure at
§ 495.6(d)(14)(ii) and § 495.6(f)(13)(ii) of
our regulations as proposed.
We further specify that in order to
meet this objective and measure, an EP,
eligible hospital, or CAH must use the
capabilities Certified EHR Technology
includes as specified and standards at
45 CFR 170.304(i) for EPs and 45 CFR
170.306(f) for eligible hospitals and
CAHs. The ability to calculate the
measure is included in certified EHR
technology. EPs, eligible hospitals, and
CAHs should attempt to identify one
other entity with whom to conduct a
test of the submission of electronic data.
This test must include the transfer of
either actual or ‘‘dummy’’ data to the
chosen other entity. The testing could
occur prior to the beginning of the EHR
reporting period, but must occur prior to
the end of the EHR reporting period and
every payment year would require its
own, unique test as infrastructure for
health information exchange is expected
to mature over time. Therefore, if an
eligible hospital or CAH were to become
a meaningful EHR user in 2011 for their
first payment year, they would have to
conduct another, unique test to become
a meaningful EHR user in 2012 for their
second payment year. If multiple EPs
are using the same certified EHR
technology in a shared physical setting,
the testing would only have to occur
once for a given certified EHR
technology, as we do not see any value
to running the same test multiple times
just because multiple EPs use the same
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certified EHR technology. To be
considered an ‘‘exchange’’ for this
objective and measure the clinical
information must be sent between
different legal entities with distinct
certified EHR technology or other
system that can accept the information
and not between organizations that
share certified EHR technology. CMS
will accept a yes/no attestation to verify
all of the above for EPs, eligible
hospitals, and CAHs.
As the measure already accounts for
the possibility of a failed test and we are
confident that everyone will be identify
an entity with which to conduct a test,
we do not believe an exception is
required for EPs, eligible hospitals or
CAHs.
NPRM EP/Eligible Hospital Objective:
Perform medication reconciliation at
relevant encounters and each transition
of care.
In the proposed rule, we described
‘‘medication reconciliation’’ as the
process of identifying the most accurate
list of all medications that the patient is
taking, including name, dosage,
frequency and route, by comparing the
medical record to an external list of
medications obtained from a patient,
hospital or other provider. We maintain
this description for the final rule. We
also described ‘‘relevant encounter’’ and
‘‘transition of care’’; however, as we
received comments requested additional
clarification of these terms we address
them in the comment and response
section below.
Comment: Several commenters
requested that this objective be deferred
until it can be conducted using the
exchange of electronic information
between certified EHR technology.
Other commenters believed that the
process is not one for avoiding
medication errors, but a human
workflow process supported by the
EHR, and not an automated EHR
process.
Response: We certainly look forward
to a time when most medication
reconciliation occurs as an automated
process within the EHR reconciling
information that has been exchanged.
However, it is unlikely that an
automated process within the EHR will
fully supplant the medication
reconciliation conducted between the
provider and the patient. In order for
this automated reconciliation process to
occur and be useful, the relevant
structured data exchanged needs to be
as accurate as possible. Requiring
medication reconciliation as part of
meaningful use in Stage 1 lays the
groundwork for future reliable
electronic exchange. We therefore do
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not believe this objective should be
deferred to a later stage.
Comment: Commenters requested
additional clarity of the term ‘‘relevant
encounter.’’ Only a few suggestions on
such clarity were provided by
commenters. Two examples of
commenters’ recommendations are
‘‘when a prescription is generated’’ and
‘‘a significant change in the patient’s
condition that resulted in change in
medication regimen which could
include significant change in dosing of
more than 1 medication, identification
of a new medical condition, decline in
functional status or change in advanced
directive.’’
Response: We finalize our proposal by
defining ‘‘relevant encounter’’ as an
encounter during which the EP, eligible
hospital or CAH performs a medication
reconciliation due to new medication or
long gaps in time between patient
encounters or for other reasons
determined appropriate by the EP,
eligible hospital or CAH. Essentially an
encounter is relevant if the EP, eligible
hospital, or CAH judges it to be so. This
flexibility has implications for the
measure that were not fully considered
in the proposed rule. We will discuss
those below in connection with our
discussion of the associated measure.
Comment: Commenters requested
additional clarity of the term ‘‘transition
of care.’’ A few suggestions were
provided by commenters including
expanding the description to include all
transfers to different settings within a
hospital or revising the definition to
‘‘the movement of a patient from one
setting of care (hospital, ambulatory
primary care practice, ambulatory
specialty care practice, long-term care,
home health, rehabilitation facility) to
another’’.
Response: In the proposed rule we
clarified ‘‘transition of care’’ as the
transfer of a patient from one clinical
setting (inpatient, outpatient, physician
office, home health, rehab, long-term
care facility, etc.) to another or from one
EP, eligible hospital, or CAH (as defined
by CCN) to another. We believe that
different settings within one hospital
using certified EHR technology would
have access to the same information so
reconciliation would not be necessary.
We modify our clarification to account
for some of the revisions provided. We
clarify ‘‘transition of care’’ as the
movement of a patient from one setting
of care (hospital, ambulatory primary
care practice, ambulatory specialty care
practice, long-term care, home health,
rehabilitation facility) to another. We
also clarify that the receiving eligible
hospital or EP would conduct the
medication reconciliation.
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Comment: Some commenters
requested clarification on which EP,
eligible hospital or CAH would conduct
the medication reconciliation. The one
to whom the patient is transferred or the
one who transfers the patient.
Response: When conducting
medication reconciliation during a
transfer of care, we believe that it is the
EP, eligible hospital or CAH that
receives the patient into their care that
should conduct the medication
reconciliation. It is for this provider that
the information is most crucial, as they
will be making the future clinical
judgments regarding the patient.
Therefore, we revise this objective and
its associated measure to reflect this
clarification.
Comment: Commenters requested a
standard list be defined for the process
including prescription and non
prescription medications, herbal
products, dietary supplements,
prescriber, drug name, regimen and
allergies.
Response: We believe the information
included in the process of medication
reconciliation is appropriately
determined by the provider and patient.
After consideration of the public
comments received, we are modifying
the meaningful use objective for EPs at
§ 495.6(e)(7)(i) and for eligible hospitals
and CAHs at § 495.6(g)(6)(i) of our
regulations to ‘‘The EP, eligible hospital
or CAH who receives a patient from
another setting of care or provider of
care or believes an encounter is relevant
should perform medication
reconciliation’’.
NPRM EP/Eligible Hospital Measure:
Perform medication reconciliation for at
least 80 percent of relevant encounters
and transitions of care.
Comment: Commenters believed it
was an unjustifiable burden to record
which encounters were relevant and
which were not given our flexible
definition of ‘‘relevant encounter’’.
Response: We agree that the inclusion
of relevant encounters creates a burden
that one commenter described as ‘‘nonvalue-added work’’. We also believe that
when the EP, eligible hospital, or CAH
identifies the encounter as relevant, it is
unlikely that the EP, eligible hospital, or
CAH would then not carry out the
medication reconciliation. For these
reasons, we are removing relevant
encounters from the measure for this
objective.
Comment: Commenters said the
percent measurements should be
replaced with a numerical count or an
attestation the objective has been met or
the demonstration of the capability by
performing one test of certified EHR
technology’s capacity to present
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providers with patient medication
information that supports the
reconciliation of medications at time of
admission and discharge. Other
commenters stated the proposed 80
percent threshold was too high.
Response: We are maintaining a
percentage for the reasons discussed
previously in this section. However, we
do reduce the threshold to over 50
percent as this objective meets the
criteria of relying solely on a capability
included as part of certified EHR
technology and while not absolutely
reliant on electronic exchange of
information, it does involve the
exchange of information between
providers and therefore we adopt a
threshold of 50 percent (rather than 8
percent).
Comment: Commenters requested we
align this objective with The Joint
Commission National Patient Safety
Goal on medication reconciliation (Goal
8) in order to decrease confusion,
prevent the slowing of adoption of best
practices and match current hospital
reconciliation processes.
Response: CMS understands the
commenters’ concerns regarding
possible confusion if the meaningful use
medication reconciliation requirement
differs from The Joint Commission’s
requirement for those facilities
accredited by that organization.
However, currently there is no finalized
Joint Commission standard as the
Commission is currently in the process
of re-evaluating their National Patient
Safety Goal 8 (Accurately and
completely reconcile medications across
the continuum of care) given the
difficulties that many organizations are
having in meeting the complex
requirements. In the absence of a
definitive Joint Commission standard to
take into consideration, this is not
possible.
Comment: Some commenters
expressed the desire to expand the
scope of the measure to include the
clinical decision making and patient
counseling and education by a
pharmacist.
Response: We believe that is both
beyond the scope of meaningful use as
pharmacists are not eligible
professionals for the EHR incentive
programs and that the provision of
patient counseling is more aligned with
the objectives of clinical quality
measures. Information from the
medication reconciliation could be used
for the basis of clinical decision support
rules, but is not in and of itself a clinical
decision.
After consideration of the public
comments received, we are modifying
the meaningful use measure for EPs at
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§ 495.6(e)(7)(ii) and for eligible hospitals
and CAHs at § 495.6(g)(6)(ii) of our
regulations to ‘‘The EP, eligible hospital
or CAH performs medication
reconciliation for more than 50 percent
of transitions of care in which the
patient is transitioned into the care of
the EP or admitted to the eligible
hospital’s or CAH’s inpatient or
emergency department (POS 21 or 23)’’.
We further specify that in order to
meet this objective and measure, an EP,
eligible hospital, or CAH must use the
capabilities Certified EHR Technology
includes as specified and standards at
45 CFR 170.302(j). The ability to
calculate the measure is included in
certified EHR technology.
As discussed previously in this
section under our discussion of the
burden created by the measures
associated with the Stage 1 meaningful
use objectives, we only include in the
denominator transitions of care related
to patients whose records are
maintained using certified EHR
technology. To calculate the percentage,
CMS and ONC have worked together to
define the following for this objective:
• Denominator: Number of transitions
of care during the EHR reporting period
for which the EP or eligible hospital’s or
CAH’s inpatient or emergency
department (POS 21 to 23) was the
receiving party of the transition.
• Numerator: The number of
transitions of care in the denominator
where medication reconciliation was
performed.
• Threshold: The resulting percentage
must be more than 50 percent in order
for an EP, eligible hospital, or CAH to
meet this measure. If an EP was not on
the receiving end of any transition of
care during the EHR reporting period
they would be excluded as previously
discussed in this section under our
discussion of whether certain EP,
eligible hospital or CAH can meet all
Stage 1 meaningful use objectives given
established scopes of practices. We do
not believe that any eligible hospital or
CAH would be in a situation where they
would not need to know the precise
medications their patients are taking.
NPRM EP/Eligible Hospital Objective:
Provide summary care record for each
transition of care or referral.
In the proposed rule, we pointed out
that this objective was not explicitly
included in the HIT Policy Committee’s
recommended objectives, but that they
did include a measure for the ‘‘percent
of transitions in care for which
summary care record is shared.’’ We said
that we believe that in order for a
measure to be relevant it must
correspond to an objective in the
definition of meaningful use. Therefore,
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we proposed to add this objective in
order to be able to include the
recommended measure. Furthermore,
we add referrals because the sharing of
the patient care summary from one
provider to another communicates
important information that the patient
may not have been able to provide, and
can significantly improve the quality
and safety of referral care, and reduce
unnecessary and redundant testing. We
received support for this inclusion from
commenters and include this objective
in the final rule for the reasons outlined
in the proposed rule. We did receive
comments requesting clarifications
around this objective and address them
in the comment and response section
below.
Comment: We received several
comments that requested clarification as
to the purpose of this objective.
Response: The purpose of this
objective is to ensure a summary of care
record is provided to the receiving
provider when a patient is transitioning
to a new provider or has been referred
to another provider while still
remaining under the care of the referring
provider. If the provider to whom the
referral is made or to whom the patient
is transitioned to has access to the
medical record maintained by the
referring provider then the summary of
care record would not need to be
provided. The most common example
cited by commenters was a referral
during which patient remains an
inpatient of the hospital. Finally, unlike
with medication reconciliation, where
the receiving party of the transfer
conducts the action, the transferring
party would provide the summary care
record to the receiving party.
Comment: Commenters requested
additional clarity of the term ‘‘transition
of care’’. A few suggestions were
provided by the commenters including
expanding the description to include all
transfers to different settings within a
hospital or revising the definition to
‘‘the movement of a patient from one
setting of care (hospital, ambulatory
primary care practice, ambulatory,
specialty care practice, long-term care,
home health, rehabilitation facility) to
another’’.
Response: In the proposed rule we
clarified that the term transition of care
means a transfer of a patient from one
clinical setting (inpatient, outpatient,
physician office, home health, rehab,
long-term care facility, etc.) to another
or from one EP, eligible hospital, or
CAH (as defined by CMS Certification
Number (CCN) to another. We believe
that different settings within a hospital
using certified EHR technology would
have access to the same information so
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providing a clinical care summary
would not be necessary. We further
clarify transition of care as the
movement of a patient from one setting
of care (hospital, ambulatory primary
care practice, ambulatory, specialty care
practice, long-term care, home health,
rehabilitation facility) to another.
Comment: Some commenters
requested clarification on which EP,
eligible hospital or CAH should provide
the summary of care document; the one
to whom the patient is transferred or
referred or the one who transfers or
refers the patient.
Response: We believe that it is the EP,
eligible hospital or CAH that transfers or
refers the patient to another setting of
care or provider that should provide the
summary of care document. It is for this
provider that has the most recent
information on the patient that may be
crucial to the provider to whom the
patient is transferred or referred.
Therefore, we revise this objective and
its associated measure to reflect this
clarification.
Comment: Commenters asked for
clarification on how the summary of
care record should be transferred.
Response: The goal is to get the
summary care record into the next
provider’s possession. While we highly
encourage all EPs, eligible hospitals,
and CAHs to explore ways to
accomplish the transfer using electronic
exchange, we realize that this capability
is still in the development stages.
Therefore, an EP, eligible hospital, or
CAH could send an electronic or paper
copy of the summary care record
directly to the next provider or could
provide it to the patient to deliver to the
next provider, if the patient can
reasonably expected to do so. Certified
EHR technology would be used to
generate the summary of care record and
to document that it was provided to the
patient or receiving provider.
After consideration of the public
comments received, we are modifying
the meaningful use objective for EPs at
§ 495.6(e)(8)(i) and for eligible hospitals
and CAHs at § 495.6(g)(7)(i) of our
regulations to ‘‘The EP, eligible hospital
or CAH who transitions their patient to
another setting of care or provider of
care or refers their patient to another
provider of care should provide
summary care record for each transition
of care or referral’’.
NPRM EP/Eligible Hospital Measure:
Provide summary of care record for at
least 80 percent of transitions of care
and referrals.
Comment: Commenters said that this
should be replaced with a count and
that the threshold was too high.
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Response: We are maintaining a
percentage for the reasons discussed
previously in this section. However, we
do reduce the threshold to over 50
percent as this objective meets the
criteria of relying solely on a capability
included as part of certified EHR
technology and while not absolutely
reliant on electronic exchange of
information, it does involve the
exchange of information between
providers and therefore we adopt a
threshold of 50 percent (rather than 80
percent).
Comment: There were concerns about
the ability of certified EHR technology
to calculate this measure. As long as an
EP, eligible hospital, or CAH records the
order for a referral or transfer as
structured data and a record is made
that the summary care record was
provided then certified EHR technology
will be able to calculate this measure.
After consideration of the public
comments received, we are modifying
the meaningful use measure for EPs at
§ 495.6(e)(8)(ii) and for eligible hospitals
and CAHs at § 495.6(g)(7)(ii) of our
regulations to ‘‘The EP, eligible hospital
or CAH who transitions or refers their
patient to another setting of care or
provider of care provides a summary of
care record for more than 50 percent of
transitions of care and referrals’’.
We further specify that in order to
meet this objective and measure, an EP,
eligible hospital, or CAH must use the
capabilities Certified EHR Technology
included as specified and standards at
45 CFR 170.304(i) for EPs and 45 CFR
170.306(f) for eligible hospitals and
CAHs. The ability to calculate the
measure is included in certified EHR
technology.
As discussed previously in this
section under our discussion of the
burden created by the measures
associated with the Stage 1 meaningful
use objectives, we only include in the
denominator transitions of care and
referrals related to patients whose
records that are maintained using
certified EHR technology. To calculate
the percentage, CMS and ONC have
worked together to define the following
for this objective:
• Denominator: Number of transitions
of care and referrals during the EHR
reporting period for which the EP or
eligible hospital’s or CAH’s inpatient or
emergency department (POS 21 to 23)
was the transferring or referring
provider.
• Numerator: The number of
transitions of care and referrals in the
denominator where a summary of care
record was provided.
• Threshold: The percentage must be
more than 50 percent in order for an EP,
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eligible hospital, or CAH to meet this
measure.
As addressed in other objectives and
in comment response, if an EP does not
transfer a patient to another setting or
refer a patient to another provider
during the EHR reporting period then
they would have a situation of a null
denominator as described would be
excluded from this requirement as
described previously in this section
under our discussion of whether certain
EP, eligible hospital or CAH can meet
all Stage 1 meaningful use objectives
given established scopes of practices.
We do not believe that any eligible
hospital or CAH would be in a situation
where they would never transfer a
patient to another care setting or make
a referral to another provider.
The fourth health outcomes policy
priority identified by the HIT Policy
Committee is improving population and
public health. The HIT Policy
Committee identified the following care
goal to address this priority:
• The patient’s health care team
communicates with public health
agencies.
The goal as recommended by the HIT
Policy Committee is ‘‘communicate with
public health agencies.’’ In the proposed
rule, we explained that we found this
goal to be somewhat ambiguous, as it
does not specify who must
communicate with public health
agencies. We propose to specify ‘‘the
patient’s health care team’’ as the
individuals who would communicate
with public health agencies.
NPRM EP/Eligible Hospital Objective:
Capability to submit electronic data to
immunization registries and actual
submission where required and
accepted.
In the proposed rule, we did not
elaborate on this objective.
Comment: Some commenters
suggested out that not every EP, eligible
hospital, or CAH administers
immunization. Therefore, as proposed,
this objective and its associated measure
would require an EP, eligible hospital,
or CAH to implement and test a
capability that they would not use.
Response: We acknowledge that this
objective is not relevant to all EPs,
eligible hospitals or CAHs. Therefore, in
this final rule, we clarify that this
objective and its associated measure
apply only to EPs, eligible hospitals or
CAHs that administer one or more
immunizations during the EHR
reporting period.
Comment: Some commenters
recommended revising the language of
the immunization objective to be
consistent with the language of the
syndromic surveillance objective by
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replacing ‘‘where required and
accepted’’ with ‘‘according to applicable
law and practice.’’
Response: First, we make a technical
correction. The objective listed for EPs
on page 1858 of the proposed rule listed
this objective as ‘‘Capability to submit
electronic data to immunization
registries and actual submission where
possible and accepted.’’ The objective
was intended to be ‘‘Capability to submit
electronic data to immunization
registries and actual submission where
required and accepted’’ for EPs, eligible
hospitals, and CAHs. It is written as
such in every other instance in the
proposed rule including the regulation
text. Second, in response to the
comment that ‘‘where required and
accepted’’ be replaced with ‘‘according
to applicable law and practice’’, we see
little distinction between the two in
terms of requirement as applicable law
and practice would be the things
imposing a requirement. Therefore, we
adopt the proposed language, but
modify the language slightly to ‘‘in
accordance with applicable law and
practice’’. We do note however, that
applicable law and practice do not
guarantee every receiving entity will be
able to accept it electronically. Our
measure for meeting this objective is
one test of electronic data submission
and if the test is successful follow up
submission to that one entity. We do not
seek to enforce through meaningful use
every law and practice that may require
submission of immunization data. We
also make another consistency change to
the objectives under the health care
policy goal of improving population and
public health. In this objective, we
describe the capability as submitting
electronic data. In the other objectives
under this goal we describe the
capability as providing electronic data.
We believe that functionally these terms
are interchangeable, but to avoid any
confusion we adopt the same term of
‘‘submit’’ electronic data across all three
objectives.
Comment: Some commenters
suggested that the term ‘‘Immunization
Information Systems (IIS)’’ has replaced
the term ‘‘registry’’ and is referred to as
such by the Centers for Disease Control
(CDC).
Response: We modified the objective
to account for both terms. After
consideration of the public comments
received, we are modifying the
meaningful use objective for EPs at
§ 495.6(e)(9)(i) and for eligible hospitals
and CAHs at § 495.6(g)(8)(i) of our
regulations to Capability to submit
electronic data to immunization
registries or Immunization Information
Systems and actual submission in
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accordance with to applicable law and
practice.
NPRM EP/Eligible Hospital Measure:
Performed at least one test of certified
EHR technology’s capacity to submit
electronic data to immunization
registries (unless none of the
immunization registries to which the
EP, eligible hospital, or CAH submits
such information have the capacity to
receive the information electronically).
In the proposed rule, we identified
this as an objective where more
stringent requirements may be
established for EPs and hospitals under
the Medicaid program in states where
this capability exists. This is just one
example of a possible State proposed
modification to meaningful use in the
Medicaid EHR incentive program. This
ability for the States is also included in
our final rule.
Comment: As with the objective of
exchanging key clinical information,
some commenters asked whether the
test needs to be ‘‘live’’ or if it could be
a ‘‘simulation’’. Some commenters
suggested that a simulation where the
ability was tested without being
transmitted to another party should be
sufficient. Others suggested that the test
needs to include transmission or
difficulties in actual sending
information might not be uncovered.
Response: As specified in the
proposed rule, this test must involve the
actual submission of information to a
registry or immunization information
system, if one exists that will accept the
information.
Comment: Commenters asked
whether the use of ‘‘test’’ or ‘‘dummy’’
data is permissible.
Response: While the use of test
patient information may increase the
risk that the system will not be testing
to its full capability, given the privacy
and security concerns surrounding the
transmission of actual patient
information we do not require it for the
purposes of a test. Therefore, the use of
test information about a fictional patient
that would be identical in form to what
would be sent about an actual patient
would satisfy this objective. However,
we note that this is one of the objectives
that a State may modify in accordance
with the discussion in II.A.2.c. of the
proposed rule. Therefore, more stringent
requirements may be established for EPs
and eligible hospitals under the
Medicaid program in states where this
capability exists.
Comment: Commenters expressed
concern about the burden of multiple
requirements for submission from
Federal, State, and local government
agencies or non-governmental registries.
They also raised the issue of lack of
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standardization of means and form of
submission.
Response: Standards for content
exchange and vocabulary are
established in the ONC final rule at 45
CFR 170.302(k). As meaningful use
seeks to utilize certified EHR technology
for purposes of the test and subsequent
submission (if test was successful) these
are the standards that should be
utilized. While we encourage all
providers and registries to work together
to develop efficient, electronic
submission of immunization
information to all registries where it can
be used to improve population and
public health, for purposes of becoming
a meaningful EHR user, we only require
a single test and follow up submission
if that test is successful.
Comment: Commenters suggested
deferring the measure to a later stage
due to the lack of a mature HIE
infrastructure.
Response: We agree that many areas
of the country currently lack the
infrastructure to support the electronic
exchange of information. As meaningful
use seeks to ensure certified EHR
technology has the capability to submit
electronic data to registries, we only
require a single test if a receiving entity
is available and follow up submission
only if that test is successful. If none of
the immunization registries to which
the EP, eligible hospital or CAH submits
information has the capacity to receive
the information electronically, then this
objective would not apply.
Comment: Commenters requested
clarification whether on a failed
attempted test satisfies the criteria of
this measure and whether EPs in a
group setting using identical certified
EHR technology would only need to
conduct a single test, not one test per
EP.
Response: A failed attempt would
meet the measure. We highly encourage
EPs, eligible hospitals, and CAHs to
work with their vendor and the
receiving entity with whom they tested
to identify the source of the failure and
develop remedies, but for Stage 1 of
meaningful use a failed attempt would
meet the requirements. We had
indicated in the proposed rule that only
one test is required for EPs practicing in
a group setting that shares the same
certified EHR technology. We maintain
that proposal for the final rule.
Comment: Commenters recommended
the inclusion of electronically reporting
to other types of registries in addition to
immunization registries such as diseasespecific registries such as the Cystic
Fibrosis Registry.
Response: While we encourage all
providers and registries to work together
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to develop efficient, electronic
submission of information to all
registries where it can be used to
improve population and public health,
for purposes of becoming a meaningful
EHR user, we only require a single test
utilizing immunization data and follow
up submission if that test is successful.
After consideration of the public
comments received, we are modifying
the meaningful use measure for EPs at
§ 495.6(e)(9)(ii) and for eligible hospitals
and CAHs at § 495.6(g)(8)(ii) of our
regulations to ‘‘Performed at least one
test of certified EHR technology’s
capacity to submit electronic data to
immunization registries and follow up
submission if the test is successful
(unless none of the immunization
registries to which the EP, eligible
hospital, or CAH submits such
information have the capacity to receive
the information electronically)’’.
We further specify that in order to
meet this objective and measure, an EP,
eligible hospital, or CAH must use the
capabilities Certified EHR Technology
includes as specified and standards at
45 CFR 170.302(k). The ability to
calculate the measure is included in
certified EHR technology. We require
that an EP, eligible hospital, or CAH
determine if they have given any
immunizations during the EHR
reporting period. Those that have not
given any immunizations during the
EHR reporting period are excluded from
this measure according to the discussion
of whether certain EP, eligible hospital
or CAH can meet all Stage 1 meaningful
use objectives given established scopes
of practices. If they have given
immunizations during the reporting
period, they should then attempt to
locate a registry or IIS with whom to
conduct a test of the submission of
electronic data. This test must include
the transfer of either actual or ‘‘dummy’’
data to the chosen registry or IIS. The
testing could occur prior to the
beginning of the EHR reporting period,
but must occur prior to the end of the
EHR reporting period. EPs in a group
setting using identical certified EHR
technology would only need to conduct
a single test, not one test per EP. If the
test is successful, then the EP, eligible
hospital, or CAH should institute
regular reporting to that entity in
accordance with applicable law and
practice. CMS will accept a yes/no
attestation to verify all of the above for
EPs, eligible hospitals or CAHs that
have administered immunizations
during the EHR reporting period.
NPRM Eligible Hospital Objective:
Capability to provide electronic
submission of reportable (as required by
state or local law) lab results to public
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health agencies and actual submission
where it can be received.
In the proposed rule, we did not
elaborate on this objective.
Comment: A few commenters
requested this objective be applied to
EPs as long as the EHR Certification
requirements are met. A commenter
remarked that electronic submission of
reportable lab results should not put an
additional burden on the providers as
the EHR would be able to automate this
process.
Response: We based the limitation on
the recommendation of the HIT Policy
Committee who in turn went through a
considerable public development
process. We do not believe that burden
of reporting was the only limiting factor
in keeping this objective from being
applied to EPs; therefore, we maintain
our proposal to limit this objective to
eligible hospitals and CAHs. EPs usually
send out lab test to other organizations
on which reporting burdens may fall.
Comment: Commenters requested that
the actual transmission of the
information be required.
Response: In the discussion of the
reporting immunization data objective,
we discussed at length the need to align
the language for the three objectives
included under the health care policy
priority of improve population and
public health, which is one of the five
priorities of the Stage 1 definition of
meaningful use. Our interpretation is
that the three phrases result in the same
outcome, but introduce confusion due
to the varied wordings. As commenters
strongly preferred the phrase ‘‘according
to applicable law and practice’’, we will
so modify this objective. We do note
however that applicable law and
practice does not guarantee every
receiving entity will be able to accept it
electronically. Our measure for meeting
this objective is one test of electronic
data submission and if the test is
successful, a follow up submission to
that one entity. We do not seek to
enforce through meaningful use every
law and practice that may require
submission of lab results.
After consideration of the public
comments received, we are modifying
the meaningful use objective for eligible
hospitals and CAHs at § 495.6(g)(9)(i) of
our regulations to ‘‘Capability to submit
electronic data on reportable (as
required by state or local law) lab results
to public health agencies and actual
submission in accordance with
applicable law and practice’’.
NPRM Eligible Hospital Measure:
Performed at least one test of certified
EHR technology capacity to provide
electronic submission of reportable lab
results to public health agencies (unless
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none of the public health agencies to
which eligible hospital submits such
information have the capacity to receive
the information electronically).
In the proposed rule, we identified
this as an objective where more
stringent requirements may be
established for eligible hospitals under
the Medicaid program in states where
this capability exists. This is just one
example of a possible State proposed
modification to
Comment: Commenters asked
whether the test needs to be ‘‘live’’ or if
it could be a ‘‘simulation’’.
Response: As specified in the
proposed rule, this test must involve the
actual submission of information to a
public health agency, if one exists that
will accept the information.
Comment: Commenters asked
whether the use of ‘‘test’’ or ‘‘dummy’’
data is permissible.
Response: While the use of test
patient information may increase the
risk that the system will not be testing
to its full capability, given the privacy
and security concerns surrounding the
transmission of actual patient
information we do not require it for the
purposes of a test. Therefore, the use of
test information about a fictional patient
that would be identical in form to what
would be sent about an actual patient
would satisfy this objective. However,
we note that this is one of the objectives
that a State may modify as discussed
previously in this section. Therefore,
more stringent requirements may be
established for EPs and eligible
hospitals under the Medicaid program
in states where this capability exists.
Comment: Commenters requested that
one national standard be established for
reporting lab results to public health
agencies.
Response: Standards for content
exchange and vocabulary are
established in the ONC final rule at 45
CFR 170.306(g). While we encourage all
providers and public health agencies to
work together to develop efficient,
electronic submission of reportable lab
results to all public health agencies, for
purposes of becoming a meaningful EHR
user, we only require a single test and
follow up submission if that test is
successful.
Comment: Commenters suggested
deferring the measure to a later stage
due to the lack of a mature HIE
infrastructure and lack of a clear
standard for exchanging biosurveillance data.
Response: We agree that many areas
of the country currently lack the
infrastructure to support the electronic
exchange of information. As meaningful
use seeks to ensure certified EHR
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technology has the capability to submit
electronic data to public health
agencies, we only require a single test if
a receiving entity is available and follow
up submission only if that test is
successful.
After consideration of the public
comments received, we are modifying
the meaningful use measure for eligible
hospitals and CAHs at § 495.6(g)(9)(ii) of
our regulations to ‘‘Performed at least
one test of certified EHR technology’s
capacity to provide electronic
submission of reportable lab results to
public health agencies and follow-up
submission if the test is successful
(unless none of the public health
agencies to which eligible hospital or
CAH submits such information have the
capacity to receive the information
electronically)’’.
We further specify that in order to
meet this objective and measure, an EP,
eligible hospital, or CAH must use the
capabilities Certified EHR Technology
includes as specified and standards at
45 CFR 170.306(g). The ability to
calculate the measure is included in
certified EHR technology. Eligible
hospitals and CAHs should attempt to
identify one public health agency with
whom to conduct a test of the
submission of electronic data. This test
must include the transfer of either
actual or ‘‘dummy’’ data to the chosen
public health agency. The testing could
occur prior to the beginning of the EHR
reporting period, but must occur prior to
the end of the EHR reporting period. If
the test is successful, then the eligible
hospital or CAH should institute regular
reporting to that entity according to
applicable law and practice. CMS will
accept a yes/no attestation to verify all
of the above for eligible hospitals and
CAHs.
NPRM EP/Eligible Hospital Objective:
Capability to provide electronic
syndromic surveillance data to public
health agencies and actual transmission
according to applicable law and
practice.
In the proposed rule, we did not
elaborate on this objective.
Comment: Half of the commenters
commenting on this objective
recommended that the objective be
deferred to Stage 2 or 3 as the objective
is considered expensive, complex and
imposes significant administrative
burdens on EPs, eligible hospitals and
CAHs unless the certified EHR
technologies support the automate,
electronic capture of the requisite data.
Response: The measure for this
objective accounts for the possibility
that such electronic exchange of
syndromic data is not possible.
Standards and certification for certified
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EHR technologies are covered under the
ONC final rule and do support the
automatic identification of the requisite
data and its electronic capture. This
greatly limits the cost, complexity and
burden of this objective.
Comment: Commenters requested that
an actual transmission be required.
Response: In discussing the reporting
immunization data objective, we
focused on the need to align the
language for the three objectives
contained in under the health care
policy priority of improving population
and public health. Our interpretation is
that the three phrases result in the same
outcome, but introduce confusion with
the current language. We adopted the
language from this objective for the
others. We do note however that
applicable law and practice does not
guarantee every receiving entity will be
able to accept it electronically. Our
measure for meeting this objective is
one test of electronic data submission
and if the test is successful, then follow
up submission to that one entity based
on the reporting requirements of that
entity. We do not seek to enforce
through meaningful use every law and
practice that may require submission of
lab results.
Comment: Some commenters
requested a clarification of the term
‘‘public health agencies.’’
Response: A public health agency is
an entity under the jurisdiction of the
U.S. Department of Health and Human
Services, tribal organization, State level
and/or city/county level administration
that serves a public health function.
Comment: Some commenters
recommended that providers be
required to satisfy either electronic
submission to immunization registries
or electronic submission of syndromic
surveillance data to a public health
agency, but not both.
Response: We disagree. We believe
these are fundamentally different types
of information. Each may impose
unique requirements in terms of ability
to exchange information on both the EP,
eligible hospital, or CAH and the
receiving entity. Therefore, a test for one
does not prove or disprove the ability to
exchange information for the other.
After consideration of the public
comments received, we are modifying
the meaningful use objective for EPs at
§ 495.6(e)(10)(i) and eligible hospitals
and CAHs at § 495.6(g)(10(i) of our
regulations to ‘‘Capability to submit
electronic syndromic surveillance data
to public health agencies and actual
submission in accordance with
applicable law and practice.’’
NPRM EP/Eligible Hospital Measure:
Performed at least one test of certified
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EHR technology’s capacity to provide
electronic syndromic surveillance data
to public health agencies (unless none
of the public health agencies to which
an EP, eligible hospital, or CAH submits
such information have the capacity to
receive the information electronically).
In the proposed rule, we identified
this as an objective where more
stringent requirements may be
established for EPs and hospitals under
the Medicaid program in states where
this capability exists. This is just one
example of a possible State proposed
modification to meaningful use.
First, a technical correction, in the
proposed rule we incorrectly stated that
the capability to send electronic data to
immunization registries was included in
the certification standards for certified
EHR technology. We intended for this
data to be sent to public health agencies
and ONC in their final rule at 45 CFR
170.304(l) correctly stated this
capability as such.
Comment: Commenters asked
whether the test needs to be ‘‘live’’ or if
it could be a ‘‘simulation’’.
Response: As specified in the
proposed rule, this test must involve the
actual submission of information to a
public health agency, if one exists that
will accept the information.
Comment: Commenters asked
whether the use of ‘‘test’’ or ‘‘dummy’’
data is permissible.
Response: While the use of test
patient information may increase the
risk that the system will not be testing
to its full capability, given the privacy
and security concerns surrounding the
transmission of actual patient
information we do not require it for the
purposes of a test. Therefore, the use of
test information about a fictional patient
that would be identical in form to what
would be sent about an actual patient
would satisfy this objective. However,
we note that this is one of the objectives
that a State may modify in accordance
with the discussion in II.A.2.c. of the
proposed rule. Therefore, more stringent
requirements may be established for EPs
and eligible hospitals under the
Medicaid program in states where this
capability exists.
Comment: A few commenters
expressed confusion as to the required
ferquency of the test.
Response: As stated in the proposed
rule, the required frequency of a test in
Stage 1 for EPs, eligible hospitals, and
CAHs is at least once prior to the end
of the EHR reporting period. We further
clarify that each payment year would
require it own unique test.
Comment: Commenters requested that
one national standard be established for
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reporting syndromic surveillance data to
public health agencies.
Response: Standards for content
exchange and vocabulary are
established in the ONC final rule. While
we encourage all providers and public
health agencies to work together to
develop efficient, electronic submission
of syndromic surveillance data to all
public health agencies, for purposes of
becoming a meaningful EHR user, we
only require a single test and follow up
submission if that test is successful.
Comment: Commenters suggested
deferring the measure to a later stage
due to the lack of a mature HIE
infrastructure.
Response: We agree that many areas
of the country currently lack the
infrastructure to support the electronic
exchange of information. As meaningful
use seeks to ensure certified EHR
technology has the capability to submit
electronic data to public entities, we
only require a single test if a receiving
entity is available and follow up
submission only if that test is
successful. We note that this measure
only applies if there is a public health
agency with the capacity to receive this
information.
Comment: Commenters requested
clarification on whether a failed
attempted test satisfies the measure and
whether EPs in a group setting using
identical certified EHR technology
would only need to conduct a single
test, not one test per EP.
Response: A failed attempt would
meet the measure. We highly encourage
EPs, eligible hospitals, and CAHs to
work with their vendor and the
receiving entity with whom they tested
to identify the source of the failure and
develop remedies, but for Stage 1 of
meaningful use a failed attempt would
meet the requirements. We had
indicated in the proposed rule that only
on test is required for EPs practicing in
a group setting that shares the same
certified EHR technology. We maintain
that proposal for the final rule.
After consideration of the public
comments received, we are modifying
the meaningful use measure for EPs at
§ 495.6(e)(10)(ii) and eligible hospitals
and CAHs at § 495.6(g)(10)(ii) of our
regulations to ‘‘Performed at least one
test of certified EHR technology’s
capacity to provide electronic
syndromic surveillance data to public
health agencies and follow-up
submission if the test is successful
(unless none of the public health
agencies to which an EP, eligible
hospital, or CAH submits such
information have the capacity to receive
the information electronically.)’’
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We further specify that in order to
meet this objective and measure, an EP,
eligible hospital, or CAH must use the
capabilities Certified EHR Technology
includes as specified and standards at
45 CFR 170.302(l). The ability to
calculate the measure is included in
certified EHR technology. EPs, eligible
hospitals, and CAHs should attempt to
identify one public health agency with
whom to conduct a test of the
submission of electronic data. This test
must include the transfer of either
actual or ‘‘dummy’’ data to the chosen
public health agency. The testing could
occur prior to the beginning of the EHR
reporting period, but must occur prior to
the end of the EHR reporting period. If
the test is successful, then the EP,
eligible hospital, or CAH should
institute regular reporting to that entity
according to applicable law and
practice. CMS will accept a yes/no
attestation to verify all of the above for
eligible hospitals and CAHs.
If an EP does not collect any
reportable syndromic information on
their patients during the EHR reporting
period, then they are excluded from this
measure according to the discussion of
whether certain EP, eligible hospital or
CAH can meet all Stage 1 meaningful
use objectives given established scopes
of practices.
The fifth health outcomes policy
priority is to ensure adequate privacy
and security protections for personal
health information. The following care
goals for meaningful use address this
priority:
• Ensure privacy and security
protections for confidential information
through operating policies, procedures,
and technologies and compliance with
applicable law.
• Provide transparency of data
sharing to patient.
NPRM EP/Eligible Hospital Objective:
Protect electronic health information
created or maintained by the certified
EHR technology through the
implementation of appropriate technical
capabilities.
In the proposed rule, we discussed
how we were relating the objectives
presented by the HIT Policy committee
more tightly to the meaningful use of
certified EHR technology as opposed to
the broader success of the EP, eligible
hospital or CAH in ensuring privacy and
security. The primary reason we gave
was that the proper vehicle for ensuring
privacy and security is the HIPAA
Privacy and Security Act and that we
sought with this objective to ensure that
certified EHR technology does not
impede an EP’s, eligible hospital’s or
CAH’s ability to comply with HIPAA.
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Comment: We received considerable
support from many commenters who
supported this objective and measure as
proposed.
Response: We appreciate the support
of these commenters for our proposed
objective and measure.
Comment: Commenters requested
clarification of appropriate technical
capabilities.
Response: The ONC final rule
specifies certain capabilities that must
be in certified EHR technology. For the
objective we simply mean that a
technical capability would be
appropriate if it protected the electronic
health information created or
maintained by the certified EHR
technology. All of these capabilities
could be part of the certified EHR
technology or outside systems and
programs that support the privacy and
security of certified EHR technology. We
could not develop an exhaustive list.
Furthermore as we state in the proposed
rule compliance with HIPAA privacy
and security rules is required for all
covered entities, regardless of whether
or not they participate in the EHR
incentive programs. Furthermore,
compliance with the HIPAA Privacy
and Security Rules constitutes a wide
range of activities, procedures and
infrastructure. We rephrased the
objective to ensure that meaningful use
of the certified EHR technology supports
compliance with the HIPAA Privacy
and Security Rules and compliance with
fair sharing data practices outlined in
the Nationwide Privacy and Security
Framework (https://healthit.hhs.gov/
portal/server.pt/gateway/PTARGSl0l
10731l848088l0l0l18/
NationwidePSlFramework-5.pdf), but
do not believe meaningful use of
certified EHR technology is the
appropriate regulatory tool to ensure
such compliance with the HIPAA
Privacy and Security Rules.
Comment: Several commenters urged
CMS not to finalized requirements for
the fair data sharing practices set forth
in the Nationwide Privacy and Security
Framework and to clarify the policies to
which CMS is referring.
Response: While we stated in the
proposed rule we rephrased the
objective to ensure ‘‘compliance with
fair sharing data practices outline in the
Nationwide Privacy and Security
Framework,’’ we did not propose any
practices or policies related to the
Nationwide Privacy and Security
Framework and do not finalize any in
this final rule.
Comment: Several commenters
requested the elimination of this
objective as redundant to HIPAA.
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Response: We do not see meaningful
use as an appropriate regulatory tool to
impose different, additional, and/or
inconsistent privacy and security policy
requirements from those policies
already required by HIPAA. With that
said, we do feel it is crucial that EPs,
eligible hospitals, and CAHs evaluate
the impact certified EHR technology has
on their compliance with HIPAA and
the protection of health information in
general. Therefore, we retain this
objective and measure for meaningful
use in the final rule.
Comment: We received hundreds of
comments that requested the
cancelation of the EHR incentive
payment program due to the privacy
and security risks imposed by the
implementation and use of certified
EHR technology.
Response: We are required by the
ARRA to implement the EHR incentive
programs and cannot cancel them. We
seek to mitigate the risks to the security
and privacy of patient information by
requiring EPs, eligible hospitals, and
CAHs to conduct or review a security
risk analysis in accordance with the
requirements under 45 CFR 164.308
(a)(1) and implement security updates
as necessary.
After consideration of the public
comments received, we are finalizing
the meaningful use objective for EPs at
§ 495.6(d)(15)(i) and eligible hospitals
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and CAHs at § 495.6(f)(14)(i) of our
regulations as proposed.
We include this objective in the core
set. We believe maintaining privacy and
security is crucial for every EP, eligible
hospital or CAH that uses certified EHR
technology and was recommended by
the HIT Policy Committee for inclusion
in the core set.
NPRM EP/Eligible Hospital Measure:
Conduct or review a security risk
analysis in accordance with the
requirements under 45 CFR 164.308
(a)(1) and implement security updates
as necessary.
In the proposed rule, we discussed
the role of certified EHR technology in
privacy and security. We said that while
certified EHR technology provides tools
for protecting health information, it is
not a full protection solution. Processes
and possibly tools outside the scope of
certified EHR technology are required.
Therefore, for the Stage 1 criteria of
meaningful use we propose that EPs and
eligible hospitals conduct or review a
security risk analysis of certified EHR
technology and implement updates as
necessary at least once prior to the end
of the EHR reporting period and attest
to that conduct or review. The testing
could occur prior to the beginning of the
EHR reporting period. This is to ensure
that the certified EHR technology is
playing its role in the overall strategy of
the EP or eligible hospital in protecting
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health information. We have maintained
this discussion for the final rule, but
modified the measure to account for
requests discussed in the comment and
response section below.
Comment: Some commenters
requested clarification of the phrase
‘‘implement security updates as
necessary’’.
Response: A security update would be
required if any security deficiencies
were identified during the risk analysis.
A security update could be updated
software for certified EHR technology to
be implemented as soon as available, to
changes in workflow processes, or
storage methods or any other necessary
corrective action that needs to take
place in order to eliminate the security
deficiency or deficiencies identified in
the risk analysis. To provide better
clarity on this requirement, we are
modifying the measure.
After consideration of the public
comments received, we are modifying
the meaningful use measure for EPs at
§ 495.6(d)(15)(ii) and eligible hospitals
and CAHs at § 495.6(f)(14)(ii) of our
regulations ‘‘Conduct or review a
security risk analysis per 45 CFR
164.308(a)(1) of the certified EHR
technology, and implement security
updates and correct identified security
deficiencies as part of its risk
management process.’’
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BILLING CODE 4120–01–C
3. Sections 4101(a) and 4102(a)(1) of the
HITECH Act: Reporting on Clinical
Quality Measures Using EHRs by EPs,
Eligible Hospitals, and CAHs 3
a. General
As discussed in the meaningful use
background in section II.A.2.a. there are
three elements of meaningful use. In
this section, we discuss the third
requirement: using certified EHR
technology, the EP, eligible hospital, or
CAH submits to the Secretary, in a form
and manner specified by the Secretary,
information for the EHR reporting
period on clinical quality measures and
other measures specified by the
Secretary. The submission of other
measures is discussed in section II.A.2.c
of this final rule. The two other
elements of meaningful use are
discussed in section II.A.2.d.1 of this
final rule.
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b. Requirements for the Submission of
Clinical Quality Measures by EPs,
Eligible Hospitals, and CAHs
Sections 1848(o)(2)(B)(ii) and
1886(n)(3)(B)(ii) of the Act provide that
the Secretary may not require the
electronic reporting of information on
clinical quality measures unless the
Secretary has the capacity to accept the
information electronically, which may
be on a pilot basis.
In the proposed rule, we stated that
we do not anticipate that HHS will
complete the necessary steps for us to
have the capacity to electronically
accept data on clinical quality measures
from EHRs for the 2011 payment year.
We believe that it is unlikely that by
2011 there will be adequate testing and
demonstration of the ability to receive
the required transmitted information on
a widespread basis. The capacity to
accept information on clinical quality
measures also would depend upon the
Secretary promulgating technical
specifications for EHR vendors with
respect to the transmission of
information on clinical quality measures
3 For purposes of this final rule, the term ‘‘eligible
hospital’’ for the Medicaid EHR incentive program
is inclusive of Critical Access Hospitals (CAHs) as
defined in this final rule.
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sufficiently in advance of the EHR
reporting period for 2011, so that
adequate time has been provided either
for such specifications to be certified, or
for EHR vendors to code such
specifications into certified systems.
Therefore, for 2011, we proposed that
Medicare EPs, eligible hospitals, and
CAHs use an attestation methodology to
submit summary information to us on
clinical quality measures as a condition
of demonstrating meaningful use of
certified EHR technology, rather than
electronic submission.
We proposed that from the Medicaid
perspective, delaying the onset of
clinical quality measures electronic
reporting until 2012 addresses concerns
about States having the ready
infrastructure to receive and store
clinical quality measures data before
then. More importantly, we recognized
that since Medicaid providers are
eligible to receive incentive payments
for adopting, implementing, or
upgrading certified EHR technology,
Medicaid providers may not be focused
on demonstrating meaningful use until
2012 or later.
We stated that we anticipate that for
the 2012 payment year we will have
completed the necessary steps to have
the capacity to receive electronically
information on clinical quality measures
from EHRs, including the promulgation
of technical specifications for EHR
vendors to use for obtaining certification
of their systems. Therefore, for the
Medicare EHR incentive program
beginning in CY 2012 we proposed that
an EP using a certified EHR technology
or beginning in FY 2012 an eligible
hospital or CAH using a certified EHR
technology, as appropriate for clinical
quality measures, must submit
information on clinical quality measures
electronically, in addition to submitting
the other measures described in section
II.2.d.2, in order for the EP, eligible
hospital, or CAH to be a meaningful
EHR user, regardless of whether CY
2012 is their first or second payment
year. However, if the Secretary does not
have the capacity to accept the
information on clinical quality measures
electronically in 2012, consistent with
sections 1848(o)(2)(B)(ii) and
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1886(n)(3)(B)(ii) of the Act, we will
continue to rely on an attestation
methodology for reporting of clinical
quality measures as a requirement for
demonstrating meaningful use of
certified EHR technology for payment
year 2012. We stated in the proposed
rule that should we not have the
capacity to accept information on
clinical quality measures electronically
in 2012, we would inform the public of
this fact by publishing a notice in the
Federal Register and providing
instructions on how this information
should be submitted to us.
We also are finalizing in this final rule
that States must identify for us in their
State Medicaid HIT Plans how they plan
to accept data from Medicaid providers
who seek to demonstrate meaningful
use by reporting on clinical quality
measures, either via attestation or via
electronic reporting, subject to our prior
approval. If they initiate their program
by accepting attestations for clinical
quality measures, they must also
describe how they will inform providers
of their timeframe to accept submission
of clinical quality measures
electronically. We expect that States
will have the capacity to accept
electronic reporting of clinical quality
measures by their second year
implementing their Medicaid EHR
incentive program.
For purposes of the requirements
under sections 1848(o)(2)(A)(iii) and
1886(n)(3)(iii) of the Act, we defined
‘‘clinical quality measures’’ to consist of
measures of processes, experience, and/
or outcomes of patient care,
observations or treatment that relate to
one or more quality aims for health care
such as effective, safe, efficient, patientcentered, equitable, and timely care. We
noted that certain statutory limitations
apply only to the reporting of clinical
quality measures, such as the
requirement discussed in the previous
paragraph prohibiting the Secretary
from requiring the electronic reporting
of information on clinical quality
measures unless the Secretary has the
capacity to accept the information
electronically, as well as other statutory
requirements for clinical quality
measures that are discussed below in
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section II.A.3.c.1 of this final rule. These
limitations apply solely to the
submission of clinical quality measures,
and do not apply to other measures of
meaningful EHR use. The clinical
quality measures on which EPs, eligible
hospitals, or CAHs will be required to
submit information using certified EHR
technology, the statutory requirements
and other considerations that were used
to select these measures, and the
reporting requirements are described
below.
With respect to Medicaid EPs and
eligible hospitals, we noted that section
1903(t)(6) of the Act recognizes that the
demonstration of meaningful use may
also include the reporting of clinical
quality measures to the States. We
proposed that in the interest of
simplifying the program and guarding
against duplication of meaningful use
criteria, the clinical quality measures
adopted for the Medicare EHR incentive
program, would also apply to EPs and
eligible hospitals in the Medicaid EHR
incentive program.
Despite the statutory limitation
prohibiting the Secretary from requiring
the electronic submission of clinical
quality measures in the Medicare EHR
incentive program, if HHS does not have
the capacity to accept this information
electronically, as previously discussed,
the Secretary has broad discretion to
establish requirements for meaningful
use of certified EHR technology and for
the demonstration of such use by EPs,
eligible hospitals, and CAHs. Although
we proposed to require the electronic
submission of information on clinical
quality measures in 2012, we stated that
we do not desire this to delay the use
of certified EHR technology by EPs,
eligible hospitals, and CAHs to measure
and improve clinical quality.
Specifically, we stated that using EHR
functionalities that support
measurement of clinical quality is
critical to a central goal of the HITECH
Act, improving health care quality.
Measuring quality is a fundamental
aspect of improving such quality,
because it allows EPs, eligible hospitals,
and CAHs to receive quantitative
information upon which they can then
act in order to improve quality.
Accordingly, although we did not
propose under sections
1848(o)(2)(A)(iii) and 1886(n)(3)(A)(iii)
of the Act to require that for 2011 EPs,
eligible hospitals, and CAHs report
clinical quality measures to us or States
electronically, we proposed to require as
an additional condition of
demonstrating meaningful use of
certified EHR technology under sections
1848(o)(2)(A)(i), 1886(n)(3)(A)(ii), and
1903(t)(6) of the Act that EPs and
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eligible hospitals use certified EHR
technology to capture the data elements
and calculate the results for certain
clinical quality measures. Further, we
proposed that EPs, eligible hospitals,
and CAHs demonstrate that they have
satisfied this requirement during the
EHR reporting period for 2011 through
attestation. We also proposed to require
that Medicare EPs, eligible hospitals,
and CAHs attest to the accuracy and
completeness of the numerators and
denominators for each of the applicable
measures. Finally, in accordance with
our authority under sections
1848(o)(C)(i)(V) and 1886(n)(3)(C)(i)(V)
of the Act, which grants us broad
discretion to specify the means through
which EPs, eligible hospitals, and CAHs
demonstrate compliance with the
meaningful use criteria, we proposed
that EPs, eligible hospitals, and CAHs
demonstrate their use of certified EHR
technology to capture the data elements
and calculate the results for the
applicable clinical quality measures by
reporting the results to us for all
applicable patients. For the Medicaid
incentive program, we proposed that
States may accept provider attestations
in the same manner to demonstrate
meaningful use in 2011. However, we
indicated that we expect that most
Medicaid providers will qualify for the
incentive payment by adopting,
implementing, or upgrading to certified
EHR technology, and therefore will not
need to attest to meaningful use of
certified EHR technology in 2011, for
their first payment year.
We stated that we recognize that
considerable work needs to be done by
measure owners and developers with
respect to the clinical quality measures
that we proposed. This includes
completing electronic specifications for
measures, implementing such
specifications into EHR technology to
capture and calculate the results, and
implementing the systems, themselves.
We also recognized that some measures
are further developed than others, as
discussed in the measures section (see
75 FR 1871) of the proposed rule.
Nevertheless we stated our belief that
overall there is sufficient time to
complete work on measures and
measures specifications so as to allow
vendors and EPs, eligible hospitals, and
CAHs to implement such systems. We
stated that it was our intention not to
finalize those specific measures should
the necessary work on measure
specifications not be completed for
particular measures according to the
timetable we discuss below. As we
discuss below, we finalize in this final
rule only those clinical quality measures
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for which clearly defined electronic
specifications have been finalized by the
date of display of this final rule.
Finalized clinical quality measures are
listed in Table 6 for EPs and Table 7 for
eligible hospitals and CAHs. We also
clarify that while States may not have
the capacity to accept electronic
reporting of clinical quality measures in
2011 or their first year implementing
their Medicaid EHR incentive program,
we expect that they will have such
capacity by their second
implementation year. However, if they
do not, as with the Federal government,
the State would continue to rely on an
attestation methodology for reporting
clinical quality measures as a
requirement for demonstrating
meaningful use of certified EHR
technology, subject to CMS prior
approval via an updated State Medicaid
HIT plan.
Comment: A few commenters
requested that the definition of ‘‘clinical
quality measures’’ be expanded to
include ‘‘appropriate clinical
prevention.’’
Response: We agree that appropriate
clinical prevention is a pertinent topic
for clinical quality measures, but we do
not believe the definition of clinical
quality measures needs to delineate
every aspect of quality care included in
the definition.
Comment: Several commenters said it
will be difficult to develop the EHR
capability to capture, integrate and train
staff regarding measure specifications if
the clinical quality measures are not
posted with sufficient time to allow
these activities. Other commenters said
there is insufficient time allowed for
vendors to retool their products and
complete development of the reports
and/or systems. Several commenters
indicated that the clinical quality
measures have not been tested, and
reliability and validity testing should be
performed. Other commenters indicated
that standard, clearly defined electronic
specifications do not exist and new
specifications should be pilot tested and
published for stakeholder/public
comment. A commenter requested that
CMS establish an explicit process for
development and testing of evidence
based electronically specified measures
(eMeasure), and ensure adequate time
for field testing.
Response: In general we agree with
the desirability of having electronic
specifications available, pilot tested,
and published for stakeholder viewing
sufficiently in advance so as to allow
adequate time for modifications if
necessary and vendors to incorporate
them into certified EHR technology, and
for EPs, eligible hospitals, and CAHs to
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integrate the measures into their
operations and train staff on the
measures. In this case, however, there is
a process for certification of certified
EHR technology which includes testing
of the capability of the certified EHR.
The final rule issued by ONC (found
elsewhere in this issue of the Federal
Register) provides that certified EHR
technology must have the ability to
calculate clinical quality measures as
specified by us. We interpret this
requirement to mean that certified EHR
technology must have the capability to
calculate those clinical quality measures
selected in this final rule based on the
specifications we select and post on the
CMS Web site. In order to provide
sufficient time for vendors to retool
their products and complete
development of the necessary reports
and/or systems for calculation of the
results for the required clinical quality
measures, and for certifying bodies to
test and certify that EHR technologies
adequately do so, we are adopting only
those electronic specifications that are
posted on the CMS Web site as of the
date of display of this final rule. We
believe testing that is part of the process
for certification of EHR technology will
substitute for testing that might
otherwise occur. Additionally, some of
the selected measures have undergone
various amounts of testing already. For
example, the Emergency Department
Throughput, Stroke and Venous
Thromboembolism (VTE) measures
mentioned by the commenter were
tested during the January 2010
Connectathon and demonstrated at the
Health Information and Management
Systems Society (HIMSS) 2010
Interoperability Showcase which
demonstrated the use of the measures by
participating vendors. However, we
expect the EHR certification process to
carry out the necessary testing to assure
that applicable certified EHR technology
can calculate sufficient number of EP,
eligible hospital and CAH clinical
quality measures required to qualify for
the meaningful use incentive program.
In order to permit greater participation
by EHR vendors, including specialty
EHRs, the certification program (see
ONC final rule found elsewhere in this
issue of the Federal Register) will
permit EHRs to be certified if they are
able to calculate at a minimum three
clinical quality measures in addition to
the six core and alternative core
measures. In addition, the fact that EPs,
eligible hospitals, and CAHs can adopt
an EHR reporting period toward the end
of FY/CY 2011, we believe, will provide
additional time for providers to
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implement and train staff on the
measures we adopt in this final rule.
c. Statutory Requirements and Other
Considerations for the Selection of
Clinical Quality Measures for Electronic
Submission by EPs, Eligible Hospitals,
and CAHs
(1) Statutory Requirements for the
Selection of Clinical Quality Measures
for Electronic Submission by EPs,
Eligible Hospitals, and CAHs
Sections 1848(o)(2)(B)(i)(II) and
1886(n)(3)(B)(i) of the Act require that
prior to any clinical quality measure
being selected, the Secretary will
publish in the Federal Register such
measure and provide for a period of
public comment on such measure. The
proposed clinical quality measures for
EPs, eligible hospitals, and CAHs for
2011 and 2012 payment were listed in
Tables 3 through 21 of the proposed rule
(see 75 FR 1874 through 1900).
In the proposed rule, we noted that
for purposes of selecting clinical quality
measures on which EPs will be required
to submit information using certified
EHR technology, section
1848(o)(2)(B)(i)(I) of the Act, as added
by section 4101 of the HITECH Act,
states that the Secretary shall provide
preference to clinical quality measures
that have been endorsed by the entity
with a contract with the Secretary under
section 1890(a) of the Act, as added by
section 183 of the Medicare
Improvement for Patients and Providers
Act (MIPPA) of 2008. For submission of
clinical quality measures by eligible
hospitals and CAHs, section
1886(n)(3)(B)(i)(I) of the Act, as added
by section 4102(a) of the HITECH Act,
requires the Secretary to provide
preference to those clinical quality
measures that have been endorsed by
the entity with a contract with the
Secretary under section 1890(a) of the
Act, as added by section 183 of the
MIPPA, or clinical quality measures that
have been selected for the purpose of
applying section 1886(b)(3)(B)(viii) of
the Act (that is, measures that have been
selected for the Reporting Hospital
Quality Data for Annual Payment
Update (RHQDAPU) program).
On January 14, 2009, the U.S.
Department of Health and Human
Services awarded the contract required
under section 1890(a) of the Act to the
National Quality Forum (NQF).
Therefore, we explained in the proposed
rule that when selecting the clinical
quality measures EPs must report in
order to demonstrate meaningful use of
certified EHR technology in accordance
with section 1848(o)(2)(B)(i)(I) of the
Act, we will give preference to the
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clinical quality measures endorsed by
the NQF, including NQF endorsed
measures that have previously been
selected for the Physician Quality
Reporting Initiative (PQRI) program.
Similarly, we stated that when selecting
the clinical quality measures eligible
hospitals and CAHs must report in order
to demonstrate meaningful use of
certified EHR technology in accordance
with section 1886(n)(3)(B)(i)(I) of the
Act, we will give preference to the
clinical quality measures selected from
those endorsed by the NQF or that have
previously been selected for the
RHQDAPU program. In some instances
we proposed measures for EPs, eligible
hospitals, and CAHs that are not
currently NQF endorsed in an effort to
include a broader set of clinical quality
measures. In the proposed rule, we
noted that the HITECH Act does not
require the use of NQF endorsed
measures, nor limit the measures to
those included in PQRI or RHQDAPU.
We stated that if we, professional
societies, or other stakeholders identify
clinical quality measures which may be
appropriate for the EHR incentive
programs, we will consider those
measures even if they are not endorsed
by the NQF or have not been selected
for the PQRI or RHQDAPU programs,
subject to the requirement to publish in
the Federal Register such measure(s) for
a period of public comment.
We proposed certain clinical quality
measures for EPs, eligible hospitals, and
CAHs, and listed these measures in
Tables 3 through 21 of the proposed rule
(see 75 FR 1874–1900) for use in the
2011 and 2012 payment years. We
stated that no changes (that is, additions
of clinical quality measures) would be
made after publication of the final rule,
except through further rulemaking.
However, we stated that we may make
administrative and/or technical
modifications or refinements, such as
revisions to the clinical quality
measures titles and code additions,
corrections, or revisions to the detailed
specifications for the 2011 and 2012
payment year measures. We stated that
the 2011 specifications for user
submission of clinical quality measures
would be available on our Web site
when they are sufficiently developed or
finalized. Specifications for the EHR
incentive programs must be obtained
only from the specifications documents
for the EHR incentive program clinical
quality measures.
Comment: Numerous comments were
received regarding the criteria for
selection of clinical quality measures.
Some commenters noted the importance
of scientific and medical evidence
supporting the measure, as well as
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concerns regarding how the clinical
quality measures are maintained. Many
other commenters indicated that all
clinical quality measures should be
evidence-based and up-to-date with
current medical standards. Several
commenters communicated support for
using NQF; Hospital Quality Alliance
(HQA); Ambulatory care Quality
Alliance (AQA); and the American
Medical Association-Physician
Consortium for Performance
Improvement (AMA–PCPI) clinical
quality measures. Another commenter
suggested that measures that have a
related U.S. Preventative Services Task
Force (USPSTF) recommendation
should follow the USPSTF guidelines
and the regulations should allow for
clinical quality measures to be updated
as the evidence base changes. Another
commenter indicated CMS should
ensure that all clinical quality measures
are endorsed through a stakeholder
consensus process. Commenters also
questioned why some clinical quality
measures in the proposed rule do not
have identifiers for example, NQF
number and another commenter
indicated some of the clinical quality
measures titles were different in the
clinical quality measure tables. Some
commenters also stated that clinical
quality measures should be phased in,
implementing the clinical quality
measures by clinically related sets, and
that all CMS proposed clinical quality
measures should be NQF endorsed.
Some commenters suggested that
CMS should consult with other quality
measure stakeholders, such as, NQF, the
Hospital Quality Alliance (HQA), and
the National Committee for Quality
Assurance (NCQA), The Joint
Commission (TJC), and Regional Health
Improvement Collaboratives to verify
the validity, reliability, and
appropriateness of proposed clinical
measures. In addition when developing,
validating and recommending clinical
quality measures for the pediatric
population, a commenter suggested
CMS include consultation with the
Child Healthcare Corporation of
America (CHCA) or the National
Association of Children’s Hospitals
(NACHRI).
Response: The HITECH Act requires
that we give preference to clinical
quality measures that are NQF
endorsed. NQF is the only organization
that we are aware of which is in
compliance with the requirements of
National Technology Transfer and
Advancement Act (NTTAA), to endorse
quality measures through voluntary
consensus standards. However, the
HITECH Act does not require the
exclusive use of NQF endorsed
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measures, nor limit the measures to
those produced by any particular
developer or adopted or supported by
any particular organization, such as
those suggested by the commenters. We
gave preference to NQF endorsed
clinical quality measures in this final
rule. However, we do not adopt a policy
that would restrict the Secretary’s
discretion of beyond what is required by
the statute. Measures listed in the
proposed rule that did not have an NQF
identifying number were not NQF
endorsed.
With respect to specific organizations,
we have received broad input regarding
clinical quality measures including from
many organizations mentioned by
commenters and have considered their
comments in determining which
clinical quality measures to finalize in
this final rule. We also note that, for
NQF endorsed measures, the NQF
provides a venue for public and member
input as a part of the endorsement
process. With respect to commenters
urging consideration of whether the
scientific and medical evidence support
the measure, whether the clinical
quality measures are evidence-based
and consistent with current medical
standards, and how the clinical quality
measures are maintained, we note that
these factors are part of the NQF
process, as well as standard measure
development processes. We are
committed to working with national,
State and local associations to identify
or develop additional electronically
specified clinical quality measures,
particularly for pediatric populations,
for later stages of meaningful use.
In selecting clinical quality measures
for the Medicare EHR incentive
program, the Secretary is required to
provide for notice in the Federal
Register with public comment. This
provides broad public input which we
fully consider. However, as we stated in
the proposed rule, we are finalizing the
policy that technical specifications for
clinical quality measures are developed
and finalized through the sub-regulatory
process. Further, this requirement does
not pertain to the Medicaid EHR
incentive program. We expect to
develop a process in the future to solicit
public input on Medicaid-specific
clinical quality measures for future
stages of meaningful use, if needed.
However, because there are no such
Medicaid-specific measures in this final
rule, and all measures apply uniformly
across both the Medicare and Medicaid
EHR incentive program, we have not
developed such a process in this final
rule.
After consideration of the public
comments received, the HITECH Act
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requires that we give preference to
clinical quality measures that are NQF
endorsed. However, it does not require
the exclusive use of NQF endorsed
measures, nor limit the measures to
those produced by any particular
developer nor be adopted by any
particular organization. In this case, all
clinical quality measures we are
finalizing are NQF endorsed and have
current electronic specifications as of
the date of display of this final rule.
Effective with the publication of this
final rule, these specifications are final
for clinical quality measure reporting
under the HITECH Act beginning with
2011 and 2012. The detailed electronic
specifications of the clinical quality
measures for EPs, eligible hospitals, and
CAHs are displayed on the CMS Web
site at https://www.cms.gov/
QualityMeasures/03_Electronic
Specifications.asp#TopOfPage.
Sections 1848(o)(2)(B)(iii) and
1886(n)(3)(B)(iii) of the Act requires that
in selecting clinical quality measures,
the Secretary shall seek to avoid
redundant or duplicative reporting
otherwise required, including reporting
under section 1848(k)(2)(C) of the Act
(the PQRI program) and eligible
reporting under section
1886(b)(3)(B)(viii) of the Act
(RHQDAPU program). For EPs, when
the proposed rule was issued there was
no statutory authority to provide PQRI
incentive payments for services
furnished for 2011 or subsequent years.
Since then, the PQRI incentive payment
for 2011 has been authorized. We
acknowledge there is overlap within the
clinical quality measure reporting for
EPs in the EHR incentive program with
the PQRI incentive program. However,
the reporting periods in these two
incentive programs are different.
Currently, the PQRI has a six and a
twelve month reporting period. The
reporting period for the HITECH EHR
incentive program for the first payment
year is 90 days, which does not meet the
PQRI reporting requirement of six or
twelve month reporting period, as
currently provided. However, in the
second payment year of the HITECH
EHR incentive program the reporting
period is one year, and the PQRI
reporting period, would be
synchronous. The requirement for
qualification for PQRI is subject to a
separate regulation. Although there may
be additional issues beyond the
reporting periods, we anticipate efforts
to avoid redundant and duplicative
reporting in PQRI of the same clinical
quality measures as required in the EHR
incentive program. We envision a single
reporting infrastructure for electronic
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submission in the future, and will strive
to align the EHR incentive program and
PQRI as we develop the reporting
framework for clinical quality measures
to avoid redundant or duplicative
reporting. Further, we also note that the
Affordable Care Act (Pub. L. 111–148)
requires that the Secretary develop a
plan to integrate the EHR incentive
program and PQRI by January 1, 2012.
In doing so we expect to further address
the issue of redundant and duplicative
reporting. For eligible hospitals and
CAHs, for the EHR incentive program,
we are finalizing one set of 15 clinical
quality measures for both Medicare and
Medicaid. For Stage 1 (for clinical
quality measures Stage 1 is 2011 and
beginning in 2012), none of the finalized
15 clinical quality measures for eligible
hospitals and CAHs are currently
included in the RHQDAPU program,
and therefore there is no issue of
redundant and duplicative reporting
based upon the HITECH Act.
Nevertheless, clinical quality measures
in the EHR incentive program for
eligible hospitals and CAHs were
electronically specified for use in the
RHQDAPU program with the
anticipation to place these measures in
RHQDAPU once we have completed
and implemented the mechanism to
accept quality measures through
electronic submission. For the future,
we do not anticipate having one set of
clinical quality measures for the EHR
incentive program and another set for
RHQDAPU. Rather, we anticipate a
single set of hospital clinical quality
measures, most of which we anticipate
can be electronically specified. We note
some of the RHQDAPU quality
measures, for example HCAHPS
experience of care measures, do not
lend themselves to EHR reporting.
Similarly, certain outcome quality
measures, such as the current
RQHDAPU readmission measures, are
based on claims rather than clinical
data. In the future, we anticipate
hospitals that report RHQDAPU
measures electronically would receive
incentives from both the RHQDAPU and
EHR incentive program, in addition to
properly reporting any required quality
measures that are not able to be derived
from EHRs; this is however subject to
future rulemaking. Further, in the
future, for hospitals that do not report
electronically we anticipate that they
may only qualify for an incentive
through the RHQDAPU program, and
not through the EHR incentive program.
Again this is subject to future
rulemaking. We envision a single
reporting infrastructure for electronic
submission in the future, and will strive
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to align the hospital quality initiative
programs to seek to avoid redundant
and duplicative reporting of quality
measures for eligible hospitals and
CAHs.
Comment: Many commenters also
suggested aligning clinical quality
measure reporting across federal
agencies (for example, HRSA, CMS) as
well as across programs, (for example,
PQRI, CHIP, Medicare and Medicaid) to
avoid duplicative and redundant quality
performance reporting. Additionally,
several commenters suggested that
similar clinical quality measures and/or
quality data efforts included in the
proposed rule are included in other
clinical quality recognition programs
and EPs who successfully report in
these programs via a certified EHR
should be deemed to have successfully
reported in the EHR incentive program.
Other commenters suggested using the
PQRI reporting process to satisfy the
meaningful use requirement under the
EHR incentive program for EPs. Another
commenter indicated that clinical
quality measures employed by this
program and others will be valuable if
EPs using EHRs have an in-depth
understanding of how to leverage the
technology and the data they produce to
improve care. A number of commenters
requested that only clinical quality
measures chosen for use in the
RHQDAPU program should be
considered for implementation in the
EHR incentive program for eligible
hospitals and CAHs that qualify for both
incentives. Additionally, the
commenters stated they would like the
process for avoiding duplicative
reporting clearly defined.
Response: The HITECH Act requires
that the Secretary seek to avoid
redundant and duplicative reporting,
with specific reference to PQRI for EPs
and RHQDAPU for eligible hospitals
and CAHs. We have sought to avoid
duplicative and redundant reporting in
the implementation of the HITECH Act
as discussed elsewhere in our responses
to comments in this final rule. We will
seek to align quality initiative programs
in future rulemaking.
(2) Other Considerations for the
Selection of Clinical Quality Measures
for Electronic Submission by EPs,
Eligible Hospitals, and CAHs
In addition to the requirements under
sections 1848(o)(2)(B)(i)(I) and
1886(n)(3)(B)(i)(I) of the Act and the
other statutory requirements described
above, we also proposed applying the
following considerations to the selection
of the clinical quality measures for
electronic submission under the
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Medicare and Medicaid EHR incentive
programs:
• Clinical quality measures that are
included in, facilitate alignment with, or
allow determination of satisfactory
reporting in other Medicare (for
example, PQRI or the RHQDAPU
program), Medicaid, and Children’s
Health Insurance Program (CHIP)
program priorities.
• Clinical quality measures that are
widely applicable to EPs and eligible
hospitals based on the services provided
for the population of patients seen.
• Clinical quality measures that
promote CMS and HHS policy priorities
related to improved quality and
efficiency of care for the Medicare and
Medicaid populations that would allow
us to track improvement in care over
time. These current and long term
priority topics include: prevention;
management of chronic conditions; high
cost and high volume conditions;
elimination of health disparities;
healthcare-associated infections and
other conditions; improved care
coordination; improved efficiency;
improved patient and family experience
of care; improved end-of-life/palliative
care; effective management of acute and
chronic episodes of care; reduced
unwarranted geographic variation in
quality and efficiency; and adoption and
use of interoperable HIT.
• Clinical quality measures that
address or relate to known gaps in the
quality of care and measures that
through the PQRI program, performed at
low or highly variable rates.
• Clinical quality measures that have
been recommended for inclusion in the
EHR incentive by the HIT Policy
Committee.
We noted in the proposed rule that
the Children’s Health Insurance
Program Reauthorization Act (CHIPRA)
of 2009 (Pub. L. 111–3) Title IV, section
401 requires the Secretary to publish a
core set of clinical quality measures for
the pediatric population. We stated that,
to the extent possible, we would align
the clinical quality measures selected
under the EHR incentive program with
the measures selected under the
CHIPRA core measure set. Included in
the proposed clinical quality measures
were nine clinical quality measures
pertaining to pediatric providers. Four
of these nine measures were on the list
of CHIPRA initial core measures that
were recommended to the Secretary by
the Subcommittee to AHRQ’s National
Advisory Committee (SNAC). In our
proposed rule, we noted that not all
CHIPRA initial measures recommended
to the Secretary were applicable to EHR
technology or to the EHR incentive
payment program. For example, some of
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Since the publication of the proposed
rule, the CHIPRA core measure set has
been published in a final rule (see 74 FR
68846 through 68849). In this EHR
incentive program final rule, there are
four clinical quality measures that are
also in the published CHIPRA initial
core measure set. These clinical quality
measures are shown below in Table 4:
Due to the concurrent CHIPRA and
ARRA HIT implementation activities,
we believe there is an exciting
opportunity to align the two programs
and strive to create efficiencies for
States and pediatric providers, where
applicable. Similarly, the adult quality
measures requirements enacted in the
ACA will provide another opportunity
for CMS to align its quality measures
programs for consistency and to
maximize use of electronic reporting. As
these programs move forward, we will
continue to prioritize consistency in
clinical quality measure selection for
providers when possible.
We solicited comments on the
inclusion or exclusion of any clinical
quality measure or measures proposed
for the 2011 and 2012 payment years,
and to our approach in selecting clinical
quality measures.
We stated in the proposed rule that
we do not intend to use notice and
comment rulemaking as a means to
update or modify clinical quality
measure specifications. A clinical
quality measure that has completed the
consensus process through NQF has a
designated party (usually, the measure
developer/owner) who has accepted
responsibility for maintenance of the
clinical quality measure. In general, it is
the role of the clinical quality measure
owner, developer, or maintainer/
steward to make basic changes to a
clinical quality measure in terms of the
numerator, denominator, and
exclusions. We proposed that the
clinical quality measures selected for
the 2011 and 2012 payment year be
supplemented by our technical
specifications for EHR submission. We
proposed to post the complete clinical
quality measures specifications
including technical specifications to our
Web site and solicited comments on our
approach.
We received various comments as to
our proposed considerations for
selection of clinical quality measures for
submission by EPs, eligible hospitals,
and CAHs.
Comment: One commenter said that
there needs to be longer than nine
months for the look back for capturing
clinical quality measures data. Several
commenters indicated that baseline
measurements that have used the
clinical quality measure in the past have
not been performed. Commenters also
recommended the linkage of clinical
decision support to clinical quality
measures to strengthen quality
improvement efforts. A commenter
supported our inclusion of measures
that address both quality and resource
use efficiency. Another commenter
indicated support for the clinical quality
measures as represented in the proposed
rule.
Response: The look back for capturing
clinical quality measures is the period
of time for which data would be
considered as applying to the measure
calculation. The look back period for a
clinical quality measure and the method
of documentation of prior information is
defined by the clinical quality measure
specification. The clinical quality
measures require reporting and not
achievement on particular performance
thresholds. We agree with the
commenters regarding the benefits of
linking clinical decision support tools to
the clinical quality measures, and
anticipate that as EHR technology
evolves, many of the clinical quality
measures will be supported by clinical
decision support tools. We also agree
with the benefits of efficiency measures
and we expect that in future program
years the scope and variety of measures
that address these factors will expand.
Comment: Commenters requested a
definition for ‘‘Eligible Provider and
Non-Qualifying Eligible Provider’’ with
respect to the provider’s ability to meet
meaningful use if there are no
appropriate clinical quality measures to
report, the application of financial
penalties beginning in 2015, and the
handling of exclusions. Another
commenter stressed the need for
detailed information regarding what is
included and excluded in the numerator
and denominator for each measure so as
to ensure that certified EHR
technology’s programmed analytics
capture all patients who meet the
relevant criteria and to ensure that
clinical quality measures are properly
evaluated. Others indicated that
reporting measures electronically will
reduce administrative reporting costs.
Other commenters supported the ability
to report ‘‘N/A’’ for clinical quality
measures where an insufficient
denominator exists. Other commenters
urged that CMS not include any clinical
quality measures in Stage 1 of
Meaningful Use because they believe
Stage 1 should focus on the initial
implementation of certified EHR
systems and its use for patient care, and
that EPs must gain experience with their
certified EHR technology before
attesting to the accuracy and
completeness of numerators,
denominators and quality calculations
generated from these systems.
Response: While some commenters
recommended we not include any
clinical quality measures in Stage 1
(2011 and beginning in 2012), as
previously described for Stage 1 EPs are
required to attest to the clinical quality
measures calculated results (numerator,
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the measures are population-based,
survey-derived, or not yet NQF
endorsed. We stated that new or
additional measures for the next
iteration of the CHIPRA core set would
have EHR extractability as a priority.
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denominator, and exclusions) as
automatically calculated by the certified
EHR technology. Given that the
statutory requirement for clinical
quality measures is an element of
meaningful use, we believe that
providing this information on clinical
quality measures is appropriate for
Stage 1 (2011 and beginning in 2012).
We would expect that the patient for
whom a clinical quality measure does
not apply will not be included in the
denominator of the clinical quality
measure. If not appropriate for a
particular EP we would expect that
either patients would not appear in the
denominator of the measure (a zero
value) or an exclusion would apply.
Therefore reporting ‘‘N/A’’ is not
necessary. Exclusion parameters—that
is, information on what is included and
excluded in the numerator and
denominator for a clinical quality
measure–are included in the measure
specifications. We agree that reporting
measures electronically will reduce
administrative reporting costs, however
as discussed in this final rule we will
not require electronic submission of
clinical quality measures until 2012.
Also discussed earlier in this final rule,
we believe collecting clinical quality
measure data is an important part of
meaningful use.
Comment: A commenter indicated
that CMS should take ownership of each
of the EP clinical quality measures so
that CMS can then adjudicate issues
related to the clinical quality measures,
instead of referring the EP to the
measure owner. One commenter
believes that EPs and their specialty
societies should be the only owners of
EP clinical quality measures.
Response: We are the owner/
developer for certain clinical quality
measures. More commonly, we use the
clinical quality measures developed and
owned by others, who are then
responsible for the clinical quality
measure specifications as endorsed by
NQF. Numerous measures have been
developed over the years by various
organizations and CMS, and therefore
we do not believe that specialty
societies should be the only owners of
EP clinical quality measures. The
HITECH Act does not suggest or require
that we should be the sole owner/
developer of clinical quality measures.
Comment: A commenter questioned
whether clinical quality measures
would be updated during the bi-annual
review process and how much lead time
will be given.
Response: The measures for Stage 1
(2011 and beginning in 2012) of
meaningful use are finalized in this final
rule and will not change during that
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stage. Additionally, the electronic
specifications, as posted on the CMS
Web site at the time of publication of
this final rule, are final. We intend to
expand the clinical quality measures
again for Stage 2 of meaningful use,
which we anticipate will first be
effective for the 2013 payment year. As
required by the HITECH Act for the
Medicare EHR incentive program, prior
to selecting any new clinical quality
measure(s) for Stage 2 of meaningful
use, we will publish notice of the
proposed measure(s) and request and
consider public comments on the
proposed measures. We note that the
Medicaid EHR incentive program does
not have the same statutory
requirement. If future stages of
meaningful use include clinical quality
measures specific for Medicaid
providers, we will consider a process to
receive public input on such measures.
Comment: One commenter suggested
that only measures chosen for use in the
pay-for-reporting program should be
considered for implementation in the
EHR incentive program.
Response: We selected clinical quality
measures that are broadly applicable for
the 2011 and 2012 EHR incentive
program. Many clinical quality
measures used in other Medicare payfor-reporting programs are not
applicable to all Medicaid eligible
providers, such as pediatricians,
certified nurse-midwives, and children’s
hospitals.
Comment: Commenters suggested
alignment between measures with
vocabulary standards, in order to
promote interoperability of clinical data.
Stage 1 allows alternative vocabularies
for problems, drugs, and procedures;
and measures should only be included
if alternative specifications using all
Stage 1 vocabularies are provided.
Commenters recommended
incorporating HL7, LOINC, SNOMED,
ICD–9, and ICD–10 for data exchange.
Response: Standards for certified
EHRs, including vocabulary standards,
are included in ONC’s final rule (found
elsewhere in this issue of the Federal
Register).
Comment: Commenter recommended
that in the beginning stages of
implementation of the EHR incentive
programs, CMS should base its reporting
initiatives on existing industry models
to prevent delays, consumer mistrust,
and potential legal issues.
Response: We have conducted
extensive reviews of industry standards,
employed the comments of industry
experts and solicited public comments
on all proposed processes.
Comment: Many commenters are
concerned that there will not be
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adequate time to communicate and
implement the electronic specification
for 2011 clinical quality measure
requirements. Additionally, one
commenter expressed concern that the
additional clinical quality measures
required for 2011 reporting will not be
posted by CMS in time for careful
review and assessment, since currently
there are only 15 measures
electronically specified and posted.
Commenters requested clinical quality
measures to be posted with
implementation guides for each quality
reporting metric to ensure successful
reporting.
Response: We have limited the
requirements for clinical quality
measure reporting for eligible hospitals
and CAHs to the 15 measures that were
electronically specified and posted at
the time of publishing the proposed
rule. All measures specifications for
clinical quality measures selected are
final effective upon publication of the
EHR incentive program final rule.
d. Clinical Quality Measures for EPs
For the 2011 and 2012 EHR reporting
periods, based upon the considerations
for selecting clinical quality measures
discussed above, we proposed certain
clinical quality measures that were
identified in the proposed rule (see 75
FR 1874–1889) for EPs. Tables 4 though
19 of the proposed rule divided the
clinical quality measures identified in
Table 3 into core measures and specialty
group measures (see 75 FR 1890 through
1895). The concept of core measures
and specialty group measures is
discussed below.
We also stated that some measures
were in a higher state of readiness than
others, and requested comment on each
measure’s state of readiness for use in
the EHR incentive programs. For those
measures where electronic
specifications did not, at the time of the
proposed rule, exist, we solicited
comment on how quickly electronic
specifications could be developed, and
the period of time required from final
posting of the electronic specifications
for final measures to ensure the effective
implementation of the measures. We
stated our intention to publish
electronic specifications for the
proposed clinical quality measures on
the CMS Web site as soon as they
become available from the measure
developer(s). Electronic specifications
may be developed concurrently with the
development of measures themselves
and potentially with the NQF
endorsement processes. We stated that
all of the proposed clinical quality
measures included in Table 3 (see 75 FR
1874–1889) meet one or more of the
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criteria for the selection of clinical
quality measures, discussed in the
proposed rule. A large portion of these
measures had been through notice and
comment rulemaking for PQRI, and
nearly all PQRI clinical quality
measures are NQF endorsed.
Additionally, they have broad
applicability to the range of Medicare
designated specialties, and the services
provided by EPs who render services to
Medicare and Medicaid beneficiaries
and many others. Further, nine of the
proposed 90 clinical quality measures
listed in Table 3 (see 75 FR 1874–1889)
(PQRI numbers 1, 2, 3, 5, 7, 110, 111,
112, and 113) had preliminary
specifications for electronic submission
that had already been developed for the
purpose of testing the submission of
clinical quality data extracted from an
EHR for the PQRI program. The link to
the preliminary electronic specifications
for nine PQRI clinical quality measures
was provided: https://www.cms.hhs.gov/
pqri.
We stated that in terms of CMS and
HHS healthcare quality priorities,
clinical quality PQRI measures
numbered 1, 2, 3, 5, and 7 address high
priority chronic conditions, namely
diabetes, coronary artery disease, and
heart disease. Clinical quality PQRI
measures numbered 110, 111, 112, 113,
114, 115, and 128 support prevention
which is a high CMS and HHS priority.
The PQRI clinical quality measure
specifications for claims-based or
registry-based submission of these
clinical quality measures for the most
current PQRI program year can be found
on the PQRI section of the CMS Web
site at https://www.cms.hhs.gov/PQRI/
15_MeasuresCodes.asp#TopOfPage. A
description of the clinical quality
measure, including the clinical quality
measure’s numerator and denominator,
can be found in the PQRI clinical
quality measure specifications.
We pointed out that the PQRI clinical
quality measures that were proposed
largely align with the recommendations
of the HIT Standards Committee.
However, in addition to proposed
clinical quality measures that are
currently included in PQRI, we also
proposed certain other clinical quality
measures that we stated are of high
importance to the overall population.
Those clinical quality measures are
Ischemic Vascular Disease (IVD): Use of
Aspirin or another Antithrombotic; IVD:
Complete Lipid Profile; IVD: Low
Density Lipoprotein (LDL–C) Control,
and Blood Pressure Management.
Finally, we proposed an array of other
measures which address important
aspects of clinical quality.
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We stated our belief that the proposed
clinical quality measures were broad
enough to allow for reporting for EPs
and addressed high priority conditions.
We recognized the importance of
integrating the measures into certified
EHR technologies for calculation of
measures results, and that not all
measures would be feasible for 2011 and
2012. We invited comment on the
advisability of including the measures
for payment years 2011 and 2012.
Although we recognized that there are
many other important clinical quality
measures of health care provided by
EPs, we anticipated expanding the set of
clinical quality measures in future years
and listed a number of clinical quality
measures for future consideration in
section II.A.3.g of the proposed rule
preamble, on which we also invited
comment.
Comment: Many of the proposed
clinical quality measures received
favorable comments and support for
inclusion in the final clinical quality
measure set. A few examples of
measures that were supported for
inclusion were measures related to
prevention and screening, and diabetes.
It was stated by a commenter that the
proposed rule includes some similar
clinical quality measures. For example,
the commenter indicated NQF 0059 and
NQF 0575 both deal with hemoglobin
A1c control. Others commented that
some measures should be eliminated
and not utilized in the final set of
clinical quality measures for EPs. For
example, a few commented that the
following two measures should be
eliminated, NQF 0052 and NQF 0513
were intended to be implemented at the
administrator site level using outpatient
hospital claims and not at the
individual practitioner level. A number
of commenters stated that the
specifications for certain clinical quality
measures, for example, NQF 0022, NQF
0031, NQF 0032, NQF 0033, NQF 0034,
and NQF 0061 were not consistent with
current clinical practice guidelines.
Another commenter requested
clarification for the specifications for
NQF 0013 because blood pressures are
not routinely monitored for 2-month-old
patients. Many commenters provided
suggestions for other clinical quality
measures not included in the proposed
rule.
Response: We appreciate all of the
suggestions from the commenters. We
are unable to add any clinical quality
measures that were not identified in the
proposed rule due to language in
sections 1848(o)(2)(B)(i)(II) and
1886(n)(3)(B)(i) of the Act requiring a
period of public comment for any
finalized measures. This requirement
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does not pertain to the Medicaid EHR
incentive program; we expect to develop
a process in the future to solicit public
input on Medicaid-specific clinical
quality measures for future stages of
meaningful use, if needed. However, we
will consider those additional clinical
quality measures recommended by
commenters for future inclusion in the
clinical quality measure sets.
In regard to suggested changes/
revisions and/or elimination of the
proposed clinical quality measures, we
considered these suggestions when
finalizing clinical quality measures in
this final rule. In regard to this, we
considered these suggestions when
evaluating the clinical quality measures
for selection in this final rule. Of the
clinical quality measures in the
proposed rule that we are not finalizing,
we removed the measures that do not
have electronic specifications by the
date of display of this final rule.
Additionally, some of the proposed
clinical quality measures were
recommended for deletion or
modification, and therefore were
recommended to not be used in the final
rule; this is delineated in other
comments and responses in this final
rule. Further, we are only finalizing
clinical quality measures that are
electronically specified the date of
display of the final rule. The electronic
specifications included in the final set
of clinical quality measures for EPs are
posted to the CMS Web site at: https://
www.cms.gov/QualityMeasures/03_
ElectronicSpecifications.asp#
TopOfPage.
Comment: Numerous commenters
were concerned about the burden
(economic and other) of reporting on the
large number of clinical quality
measures and the overall quality
reporting burden this will add to EPs.
Some commenters stated that the use of
numerators and denominators for some
measures will require manual
calculation on the part of the EPs since
there are no automated reports that can
capture all of the information that must
be tabulated. One commenter stated that
there are insufficient resources to
calculate the denominators of the
required measures. Other commenters
suggested using the PQRI requirements
of reporting only three measures, and
others suggested reporting on
significantly smaller number of
measures.
Response: In response to the many
comments received regarding the undue
burden associated with reporting on a
large number of clinical quality
measures, or measures that involve a
manual process, we have finalized only
those clinical quality measures that can
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be automatically calculated by a
certified EHR technology. We further
limited the measures to those for which
electronic specifications are currently
available, which we posted as final by
the date of display of this final rule.
This limitation significantly reduces the
number of measures EPs are required to
report in 2011 and 2012, thus reducing
the EPs’ reporting burden as well as
addressing commenters’ concerns about
readiness. Although for 2011, Medicare
EPs, eligible hospitals, and CAHs will
still need to manually report (attest) to
the results automatically calculated by
their certified EHR technology, we
believe that with the reduction in the
number of measures that the burden is
reasonable. Additionally, this provides
for the reporting of clinical quality
measures beyond simply the core
clinical quality measures that EPs
identify as suitable to report.
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Table 5, below, shows the proposed
clinical quality measures for submission
by Medicare and Medicaid EPs for the
2011 and 2012 payment year as stated
in the proposed rule (see 75 FR 1874–
1889) for EPs, but that are not being
finalized. Table 5 conveys the NQF
measure number and PQRI
implementation number (that is, the
number used in the PQRI program to
identify the measure as implemented in
PQRI (for the 2010 PQRI measures list
see https://www.cms.gov/PQRI/
Downloads/2010_
PQRI_MeasuresList_111309.pdf)),
clinical quality measure title and
description, and clinical quality
measure steward and contact
information. The measures listed below
in Table 5 do not have electronic
specifications finished before the date of
display of this final rule, thus we have
eliminated these measures for this final
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rule and will consider the addition of
these measures in future rulemaking.
Also several measures listed below were
only concepts at the time of publication
of the proposed rule (that is,
Hysterectomy rates, Appropriate
antibiotic use for ear infections, Statin
after Myocardial Infarction, 30 day
Readmission Rate, 30 Readmission Rate
following deliveries, and Use of CT
Scans). These concept measures were
not developed or electronically
specified clinical quality measures, nor
NQF endorsed; and there was not
adequate time to consider these
concepts for development for this final
rule. Therefore, the concepts listed
below will be considered in future
rulemaking. Lastly, NQF 0026 has since
been retired since publication of the
proposed rule.
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Comment: Some commenters
requested that CMS implement feedback
reports early in the process that
document whether EPs are successfully
participating in the PQRI Program, the
EHR incentive program, and the eprescribing program, and that the report
communicate whether the information
received by CMS for these programs was
successfully submitted and received.
Response: As the PQRI and eprescribing programs are beyond the
scope of this rule, we do not address
suggestions that we implement feedback
reports related to these programs. The
criteria to qualify for the EHR incentive
payments are based on results
automatically calculated by EPs’
certified EHR technology, as attested by
the EPs. As such, we believe that the EP
will be able to determine whether they
have reported the required clinical
quality measures to CMS or the State,
rendering it unnecessary that CMS or
the State provide the EP with a feedback
report. We expect the system through
which EPs, must submit information
would indicate successful receipt
beginning the first year of Stage 1.
Comment: A commenter indicated
that the clinical quality measure that
addresses tobacco use and the measure
that addresses smoking status apply to
different age groups, and stated that
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they should be consistent. A number of
commenters recommended removing
smoking status as an objective from
meaningful use section of this final rule,
and only including it in the clinical
quality measures in order to avoid
confusion.
Response: We are in agreement that
the meaningful use objective and the
clinical quality measure address the
same topic of smoking. The clinical
quality measure requires measurement
of a clinical action performed by the EP
to address the negative consequences of
smoking, whereas the meaningful use
objective seeks to make sure smokers are
identified. Additionally, the age for
recording smoking status for meaningful
use is 13 years and older, and the
population addressed by the clinical
quality measure is 18 years and older,
thus they are different with respect to
intent of the objective/measure and the
age population. For the clinical quality
measure, we are keeping the age range
at 18 years and older because the
measure is currently NQF endorsed
with these specifications. We will
consider merging these in the future to
reconcile the age range.
Comment: Some commenters stated
that reporting of ambulatory quality
measures should remain voluntary for
EPs, based on the view that many
process measures do not correlate with
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outcomes and are not evidence based. A
process measure focuses on a process
which leads to a certain outcome,
meaning that a scientific basis exists for
believing that the process, when
executed well, will increase the
probability of achieving a desired
outcome. A commenter stated that EPs
serving needy patients, minorities, and
populations with lower socioeconomic
levels will experience lower
performance on many clinical quality
measures, and therefore will be deterred
from participating in the EHR incentive
program.
Response: The EHR incentive program
is voluntary. Similar to other Medicare
quality measure reporting programs, EPs
are not required to satisfy minimum
clinical quality performance levels in
order to qualify for the EHR payment
incentive, but rather merely report on
their ambulatory quality measure
results. Thus, as currently structured,
we do not believe the requirement that
EPs report clinical quality measures
would deter EPs who serve minority
patients or patients of lower
socioeconomic status or otherwise
disadvantaged from participating in the
program.
After consideration of the public
comments received, we are finalizing
the basic requirement that EPs submit
results for clinical quality measures.
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This requirement applies to both the
2011 and 2012 reporting periods (and
will potentially continue to apply, until
CMS issues a subsequent final rule that
supplants this final rule). We are
limiting the clinical quality measures to
those for which electronic specifications
are available (posted by CMS on the
Web site at the time of display of this
final rule.) These measures are listed in
Table 6 of this final rule for EPs. They
constitute the clinical quality measures
‘‘specified by CMS’’ for the purposes of
the ONC final rule (found elsewhere in
this issue of the Federal Register) and
are the measures that certified EHRs are
required to be able to calculate. Of
these, nine EP measures have
preliminary electronic specifications for
which we provided links for in the
proposed rule. The remaining 35
clinical quality measures for EPs were
electronically specified more recently
and posted on the CMS Web site by the
date of display of this final rule. We are
finalizing only those measures for
which there are available electronic
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specifications as of the date of display
of this final rule. Although we are not
finalizing all of 90 proposed clinical
quality measures that were proposed for
EPs in Table 3 (see 75 FR 1874–1889)
of the proposed rule, because of lack of
electronic specifications, our intent is to
include all of them in our proposed
Stage 2 requirements, or to propose
alternative measures following a
transparent process that includes
appropriate consultation with
stakeholders and other interested
parties. In addition, we plan to add new
measures to fill gaps where measures
were not previously proposed, such as
in behavior and mental health (e.g.,
depression and alcoholism). Certified
EHR technology must be able to
calculate each measure numerators,
denominators and exclusions for each of
the clinical quality measures finalized
for the EHR incentive program. Table 6
conveys the applicable NQF measure
number and PQRI implementation
number (that is, the number used in the
PQRI program to identify the measure as
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implemented in PQRI (for the 2010
PQRI measures list see https://
www.cms.gov/PQRI/Downloads/2010_
PQRI_MeasuresList_111309.pdf)), title,
description, the owner/steward, and a
link to existing electronic specifications.
The NQF number is an identifying
number that is associated with the NQF
endorsed measure number. All of the
clinical quality measures in Table 6 are
NQF endorsed and have broad
applicability to the range of Medicare
designated specialties, and the services
provided by EPs who render services to
Medicare and Medicaid beneficiaries
and many others. In terms of CMS and
HHS healthcare quality priorities,
clinical quality PQRI measures
numbered 1, 2, 3, 5, and 7 address high
priority chronic conditions, namely
diabetes, coronary artery disease, and
heart disease. Clinical quality PQRI
measures numbered 66, 110, 111, 112,
113, 114, 115, and 128 support
screening and prevention all of which is
a high CMS and HHS priority.
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BILLING CODE 4120–01–C
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Federal Register / Vol. 75, No. 144 / Wednesday, July 28, 2010 / Rules and Regulations
e. Clinical Quality Measures Reporting
Criteria for EPs
For the 2011 and 2012 EHR reporting
periods, to satisfy the requirements for
reporting on clinical quality measures
for Medicare under section
1848(o)(2)(A)(i) and (iii) of the Act and
for Medicaid under section 1903(t)(6)(C)
of the Act, we proposed to require that
each EP submit information on two
measure groups: a core measures group
(Table 4 of the proposed rule see 75 FR
1890), and the subset of clinical
measures most appropriate given the
EP’s specialty (Tables 5 through 19
specialty group measures see 75 FR
1891 through 1895). For the core
measure group, we stated our belief that
the clinical quality measures were
sufficiently general in application and
of such importance to population
health; we would require that all EPs
treating Medicare and Medicaid patients
in the ambulatory setting report on all
of the core measures as applicable for
their patients.
We proposed that with the inclusion
of measures applicable to targeting
children and adolescents and the wide
applicability of the measures like Blood
Pressure Management, we believed the
proposed core set of clinical quality
measures and specialty measures was
broad enough to enable reporting by all
EPs. However, we encouraged
commenters to identify the EPs in
question and propose specific remedies
if the public believed that other EPs
would not have sufficient patients in the
denominator of these core measures.
Comment: Several commenters
requested clarification about the core
measures group. Many comments were
received regarding the inclusion of a
core measure set for EPs. Some
commenters favored the inclusion of
one or more core measures (for example,
preventive care) and others indicated
core measures were essential for
improving the quality of care.
Conversely, numerous commenters
suggested eliminating the core measure
set for EPs. The primary reason offered
by commenters for excluding core
measures was that these clinical quality
measures were outside their scope of
practice and/or not relevant to their
specific patient population. A
commenter requested that the core set of
clinical quality measures be better
defined and/or increased for each
reporting period. Many commenters
indicated the clinical quality measures
included in the core measure set are not
appropriate to all EPs and specialists
(for example, EPs that do not have direct
physical access to the patients such as
teleradioloists, EPs that do not routinely
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report blood pressure in patients with
diagnosed hypertension, such as
dermatologists) and they would not be
able to report on these clinical quality
measures. Many commenters supported
reporting exclusions. A commenter
recommended the use of PQRI 128/NQF
0421 Preventive Care and Screening:
BMI Screening and Follow-up as a core
clinical quality measure. Other
commenters indicated these clinical
quality measures were important for
improving care and the core measure set
should be expanded.
Response: After considering the
comments, we agree there may be
circumstances such that the core
clinical quality measures are not
applicable for specific patient
populations and/or a specific EP’s scope
of practice. In such circumstances we
anticipate that the patients will not
appear in the denominator at all or will
be excluded. We have defined the core
measure set for EPs in Table 7 of this
final rule, and these core measures will
be required for Stage 1. We expanded
the core measures set to include three
alternate measures, as well as added
PQRI 128/NQF0421 as a required core
measure, based on commenters
feedback. Although we require all EPs to
report the core measures, there is no
requirement that the EP have any
particular number of patients in the
denominator, which could be zero as
calculated by the EHR. Therefore we
have changed the reporting criteria to
require EPs to report on all three core
measures (as shown in Table 7, below),
and three additional clinical quality
measures selected from Table 6 (other
than the core or alternate core measures
listed in Table 6). The clinical quality
measures included in this final rule
reflect a subset of measures that were
included in the proposed rule (see 75
FR 1874 through 1889). The clinical
quality measures included in Table 6 of
this final rule were selected from the
Tables included in the proposed rule,
based on having electronic
specifications fully developed by the
date of display of this final rule.
Comment: Many commenters
indicated that NQF 0022 Drugs to be
avoided in the elderly is an
inappropriate clinical quality measure
and should be removed. The rationale
given for removal is that the numerator
(at least one prescription for any drug to
be avoided in the elderly in the
measurement year or at least two
different drugs to be avoided in the
elderly in the measurement year) tends
to be very small. Others considered
poly-pharmacy a more significant
problem in the elderly than avoidance
of specific drugs. A number of
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commenters indicated this clinical
quality measure should include a list of
the drugs to be avoided.
Response: We agree with the concerns
expressed by the commenters and have
removed the measure NQF 0022.
Additionally, electronic specifications
are not available for this measure by the
date of display of this final rule making
this measure impractical to use for Stage
1. We will consider this measure in
future rulemaking.
After consideration of the public
comments received, we are finalizing
the requirement that all EPs must
submit calculated results for three core
measures using the certified EHR
technology. However, we are finalizing
only two of the clinical quality
measures that were proposed as ‘‘core
measures’’ in the proposed rule. The
other core measures presented in Table
6 of this final rule were selected because
they have broad applicability, support
prevention, were recommended by
commenters, and have electronic
specifications by the date of display of
this final rule. Insofar as a measure does
not apply to patients treated by the EP,
this will be reflected in the calculation
of the clinical quality measure either by
the patient not being included in the
denominator for the measure or the
patient being excluded. Therefore, it is
not necessary for CMS to delineate for
a particular specialty which measures
may or not apply. We note that to
qualify as a meaningful EHR user, EPs
need only report the required clinical
quality measures; they need not satisfy
a minimum value for any of the
numerator, denominator, or exclusions
fields for clinical quality measures. The
value for any or all of those fields, as
reported to CMS or the States, may be
zero if these are the results as displayed
by the certified EHR technology. Thus,
the clinical quality measure requirement
for 2011 and beginning in 2012 is a
reporting requirement and not a
requirement to meet any particular
performance standard for the clinical
quality measure, or to in all cases have
patients that fall within the
denominator of the measure.
The three core measures that EPs will
be required to report are: [NQF 0013:
Hypertension: Blood Pressure
Management; NQF 0028: Preventative
Care and Screening Measure Pair: a.
Tobacco Use Assessment b. Tobacco
Cessation Intervention; and NQF0421/
PQRI 128: Adult Weight Screening and
Follow-up]. Insofar as the denominator
for one or more of the core measures is
zero, EPs will be required to report
results for up to three alternate core
measures [NQF 0041/PQRI 110:
Preventative Care and Screening:
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core measure(s) will be reported. If all
six of the clinical quality measures in
Table 7 have zeros for the denominators
(this would imply that the EPs patient
population is not addressed by these
measures), then the EP is still required
to report on three additional clinical
measures of their choosing from Table 6
in this final rule. In regard to the three
additional clinical quality measures, if
the EP reports zero values, then for the
remaining clinical quality measures in
Table 6 (other than the core and
alternate core measures) the EP will
have to attest that all of the other
clinical quality measures calculated by
the certified EHR technology have a
value of zero in the denominator, if the
EP is to be exempt from reporting any
of the additional clinical quality
measures (other than the core and
alternate core measures) in Table 6.
Thus, EPs are not penalized in the Stage
1 reporting years as long as they have
adopted a certified EHR and that EHR
calculates and the EP submits the
required information on the required
clinical quality measures, and other
meaningful use requirements as defined
in this final rule in section II.A.2.d.1 of
this final rule.
Table 7, below, shows the core
measure groups for all EPs for Medicare
and Medicaid to report.
We proposed that EPs were to submit
calculated results on at least one of the
sets listed in Tables 5 and 19 as
specialty groups (see 75 FR 1891–1895).
The specialty groups were Cardiology,
Pulmonary Diseases, Endocrinology,
Oncology, Proceduralist/Surgery,
Primary Care Physicians, Pediatrics,
Obstetrics and Gynecology, Neurology,
Psychiatry, Ophthalmology, Podiatry,
Radiology, Gastroenterology, and
Nephrology.
We recognized that clinical quality
measures as specified by measures
developers and as endorsed by the NQF
were not specific to particular
specialties. Rather, the denominator of
clinical quality measures and the
applicability of a measure is determined
by the patient population to whom the
measure applies and the services
rendered by the particular EP.
Nevertheless, we grouped the
proposed measures according to the
types of patients commonly treated and
services rendered by EPs of various
specialties. We did this for purposes
similar to measures groups used in PQRI
which, however, are based on clinical
conditions, rather than specialty types.
We proposed that the general purpose of
each specialty measures grouping was to
have standardized sets of measures, all
of which must be reported by the EP for
the self-selected specialty measures
groups in order to meet the reporting
requirements. We expected to narrow
down each set to a required subset of
three-five measures based on the
availability of electronic measure
specifications and comments received.
We also proposed to require for 2011
and 2012 that EPs would select a
specialty measures group, on which to
report on all applicable cases for each of
the measures in the specialty group. We
also proposed that the same specialty
measures group selected for the first
payment year would be required for
reporting for the second payment year.
We invited comment on whether there
were EPs who believed no specialty
group would apply to them. In
accordance with public comments, we
noted that we would specify in the final
rule which EP specialties would be
exempt from selecting and reporting on
a specialty measures group. As stated,
we proposed, EPs that are so-designated
would be required to attest, to CMS or
the States, to the inapplicability of any
of the specialty groups and would not
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Influenza Immunization for Patients ≥50
Years Old; NQF 0024: Weight
Assessment and Counseling for
Children and Adolescents; and NQF
0038: Childhood Immunization Status].
We believe this final set of core clinical
quality measures provides EPs a greater
opportunity for successful reporting.
The EP will not be excluded from
reporting any core or alternate clinical
quality measure because the measure
does not apply to the EPs scope of
practice or patient population. The
expectation is that the EHR will
automatically report on each core
clinical quality measure, and when one
or more of the core measures has a
denominator of zero then the alternate
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be required to report information on
clinical quality measures from a
specialty group for 2011 or 2012, though
the EP would still be required to report
information on all of the clinical quality
measures listed in the proposed core
measure set (see 75 FR 1890).
Comment: Several commenters asked
if certain specialties, such as
chiropractors, audiologists, allergist and
immunology, otolaryngologists, etc.,
could be exempt from having to report
all specific clinical quality specialty
measures. Many of these EPs indicated
the clinical quality measures included
in Table 3 were not relevant to their
specific practice and/or patient
population. Other commenters
requested that specialty groups be
created for specialties not included in
the proposed rule measure groups, (for
example, chiropractors, dentists,
dermatologists, infectious disease,
pediatric oncology, neurosurgery,
interventional radiology, plastic &
reconstructive surgery, physical
therapists, occupational therapists, eye
care specialists, family planning,
genetics, ear/nose/throat, and
nutritionists providers, etc.). Other
commenters indicated that specialty
clinical quality measures were specific
to a subset of patients, but were not
broadly applicable to their specialty for
treating other conditions within their
specialty area. Other commenters asked
that CMS reconsider allowing EPs to
attest only and be exempt from
reporting if no applicable clinical
quality measures specialty group exists
for them. Another commenter indicated
support of specific measure sets for
different clinical specialties. Many
commenters supported the elimination
of specialty groups altogether as a
mandatory set and instead supported
the reporting of a fixed number of
relevant clinically quality measures
regardless of the specialty group. A
commenter asked for a definition of
‘‘specialist’’ which is not included in the
proposed rule. Several commenters
expressed concern about the large
number of clinical quality measures in
certain measure groups versus other
measure groups (for example, the
primary care, pediatric and ob/gyn
measure groups) as well as the
applicability of clinical quality
measures assigned to primary care EPs
when they do not manage conditions
that are typically referred to a specialist
for example, ischemic vascular disease.
A commenter requested clarification
and suggestions on how to select a
clinical quality measure group. Several
commenters wanted clarification on the
proposed EP Specialty Measures Tables
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(see 75 FR 1874), and whether the EPs
are accountable for only the clinical
quality measures for their specialty. One
comment indicated agreement with
CMS regarding requiring EPs to report
on the same specialty measure groups
for 2011 and 2012 and another
commenter indicated that CMS should
not delay reporting of clinical quality
measures as early adopters of EHRs will
be ready to report. A few commenters
suggested adding NQF 0033 Chlamydia
screening in women to all other
appropriate specialty clinical quality
measure groups. A commenter indicated
that PQRI #112, 113, and NQF 0032
should be removed from the oncology
clinical quality specialty measure group
as oncologists do not perform routine
cancer screenings.
Response: We are appreciative of the
detail provided by commenters to the
potential inapplicability of the proposed
specialty measures groups to various
practitioner types or to the
inapplicability of certain measures
within groups to the specialties
designated. Our primary purpose,
similar to the core measures, was to
encourage a certain consistency in
reporting of clinical quality measures by
EPs. However, after consideration of the
comments we do not believe that the
proposed specialty measures groups are
sufficient to have a robust set of
specialty measures groups. Further,
given the lack of electronic
specifications or final development of
many of these measures, requiring
specialty measures groups becomes
even more impractical. We expect that
electronic specifications will be
developed for measures which would
allow for a broadly applicable set of
specialty measures groups in the future.
After consideration of the public
comments received, we removed the
requirement for EPs to report on
specialty measures groups as proposed.
We intend to reintroduce the proposed
rule’s specialty group reporting
requirement in Stage 2 with at least as
many clinical quality measures by
specialty as we proposed for Stage 1 in
the proposed rule. We expect to use a
transparent process for clinical quality
measure development that includes
appropriate consultation with specialty
groups and other interested parties, and
we expect that electronic specifications
will be developed for all of the measures
that we originally proposed for Stage 1
or alternative related measures, which
would allow for a broadly applicable set
of specialty measures groups and
promote consistency in reporting of
clinical quality measures by EPs. Also,
in consideration of public comments
received, we are finalizing the
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requirement (in addition to the core
measure requirement) that EPs must
report on three measures to be selected
by the EP from the set of 38 measures
as shown in Table 6, above. As stated
previously, in regard to the three
additional clinical quality measures, if
the EP reports zero values, then for the
remaining clinical quality measures in
Table 6 (other than the core and
alternate core measures) the EP will
have to attest that all of the other
clinical quality measures calculated by
the certified EHR technology have a
value of zero in the denominator. In
sum, EPs must report on six total
measures, three core measures
(substituting alternate core measures
where necessary) and three additional
measures (other than the core and
alternate core measures) selected from
Table 6.
We also proposed that although we do
not require clinical quality measure
reporting electronically until 2012, we
would require clinical quality reporting
through attestation in the 2011 payment
year. We solicited comment on whether
it may be more appropriate to defer
some or all clinical quality reporting
until the 2012 payment year. If reporting
on some but not all measures in 2011
was feasible, we solicited comment on
which key measures should be chosen
for 2011 and which should be deferred
until 2012 and why. We discuss
comments received regarding the
reporting method for clinical quality
measures in section II.A.3.h. of this final
rule.
f. Clinical Quality Measures for
Electronic Submission by Eligible
Hospitals and CAHs
Our proposed rule would have
required eligible hospitals and CAHs to
report summary data to CMS on the set
of clinical quality measures identified in
Table 20 and 21 of the proposed rule
(see 75 FR 1896–1899), with eligible
hospitals attesting to the measures in
2011 and electronically submitting these
measures to CMS using certified EHR
technology beginning in 2012. For
hospitals eligible for only the Medicaid
EHR incentive program, we proposed
that reporting would be to the States. In
the proposed rule, for eligible hospitals
under both programs, we proposed that
they would have to also report on the
clinical quality measures identified in
Table 21 of the proposed rule to meet
the requirements for the reporting of
clinical quality measures for the
Medicaid program incentive (see 75 FR
1896 through 1900). Tables 20 and 21 of
the proposed rule (see 75 FR 1896
through 1900) conveyed the clinical
quality measure’s title, number, owner/
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developer and contact information, and
a link to existing electronic
specifications where applicable.
We included in the proposed hospital
measures set several clinical quality
measures which have undergone
development of electronic
specifications. These clinical quality
measures have been developed for
future RHQDAPU consideration. The
electronic specifications were
developed through an interagency
agreement between CMS and ONC to
develop interoperable standards for EHR
electronic submission of the Emergency
Department Throughput, Stroke, and
Venous Thromboembolism clinical
quality measures on Table 20 of the
proposed rule (see 75 FR 1896 through
1899). We also proposed to test the
submission of these clinical quality
measures in Medicare (see 75 FR
43893). The specifications for the
RHQDAPU clinical quality measures for
eligible hospitals and CAHs that are
being used for testing EHR-based
submission of these clinical quality
measures can be found at https://
www.hitsp.org/ConstructSet_
Details.aspx?&PrefixAlpha=5&
PrefixNumeric=906 (A description of
the clinical quality measure, including
the clinical quality measure’s numerator
and denominator, can be found here as
well.) Other measures we proposed
derived from the RHQDAPU program or
were measures we considered important
for measuring or preventing adverse
outcomes. In addition to risk
standardized readmission clinical
quality measures, we proposed that nonrisk-adjusted readmission rates also be
reported. For the proposed rule, we also
considered HIT Standards Committee
recommendations, including the
Committee’s recommendation to
include a measure on Atrial Fibrillation
Receiving Anticoagulation Therapy
which was included on Table 20 of the
proposed rule Our proposed rule noted
that we did not propose one measure
recommended by the HIT Standards
Committee: Surgery patients who
received Venous Thromboembolism
prophylaxis within 24 hours period to
surgery to 24 hours after surgery end
time. We noted that the measure is a
current clinical quality measure
collected in the RHQDAPU program
through chart abstraction for all
applicable patients (SCIP–VTE–2), and
that the VTE–2 clinical quality measure
in Table 20 of the proposed rule (see 75
FR 1896 through 1899) was a parallel
clinical quality measure to SCIP–VTE–
2. SCIP–VTE–2 includes surgical and
non-surgical patients, and can be more
easily implemented for the EHR
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incentive program because electronic
specifications had been completed. We
added SCIP–VTE–2 for future
consideration.
Comment: Many commenters
recommended reducing the number of
eligible hospital clinical quality
measures and indicated that such a large
number of measures would pose a
significant financial and administrative
burden on hospitals. Commenters
suggested a variety of solutions which
include: Eliminating duplication
between clinical quality measures and
meaningful use objectives and
associated measures, reducing the
number of clinical quality measures for
reporting and allowing organizations to
select a limited number of clinical
quality measures on which they would
like to report.
We received comments supporting
many of the measures in the proposed
rule including Venous
Thromboembolism, Emergency
Department, Stroke, RHQDAPU, and
measures that are evidence-based that
could improve the quality of care.
Others recommended additional clinical
quality measures, changes to the
specifications for clinical quality
measures or the elimination of certain
clinical quality measures such as risk
adjusted re-admission measures or
measures not applicable to CAHs. Many
commenters supported the process
through which the electronic
specifications were developed for the
Emergency Department Throughput,
Stroke and Venous Thromboembolism
measures while also pointing out the
length of time necessary to adequately
develop electronic specifications and
test the clinical quality measures. Many
commented that the remaining measures
had not been electronically specified or
had otherwise not completed
development and would not be ready in
time for the 2011–2012 implementation.
Others stated their concerns about
duplicate reporting systems and the
belief that the HITECH Act reporting
requirements should be based on the
RHQDAPU program, similar to the
conceptual framework of hospitals
value-based purchasing plan. Others
pointed to measures that are already
currently reported in RHQDAPU and
the statutory provision that clinical
quality measure reporting required for
the HITECH Act should seek to avoid
duplicative and redundant reporting of
measures reported under RHQDAPU.
Response: We are appreciative of the
comments supporting many of the
clinical quality measure sets and the
process utilized for electronically
specifying the Emergency Department
Throughput, Stroke, and Venous
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Thromboembolism sets. As we have
discussed for the EP measures, we agree
that we should limit the required
clinical quality measures to those
measures for where there are electronic
specifications as of the date of display
of this final rule. This will allow EHR
vendors sufficient time to ensure that
certified EHR technology will be able to
electronically calculate the measures.
Therefore, we are not finalizing those
clinical quality measures that either
have not been fully developed, are
currently only specified for claims
based calculation, or for which there are
not fully developed electronic
specifications as of the date of display
of this final rule. Accordingly, we are
only finalizing the 15 measures listed in
Table 10 of this final rule. We note that
none of these measures are duplicate
measures which are currently required
for reporting in the RHQDAPU program.
We therefore do not need to address the
issue of duplicate or redundant
reporting. We will consider adding,
changing, developing, and eliminating
duplicative clinical quality measures
and meaningful use objectives/
associated measures in future
rulemaking.
Table 8, shows the proposed clinical
quality measures for submission by
Medicare and Medicaid Eligible
Hospitals for the 2011 and 2012
payment year as stated in the proposed
rule (see 75 FR 1896–1899) for EPs, but
that are not being finalized. Table 9,
shows the proposed alternative
Medicaid clinical quality measures for
Medicaid eligible hospitals in the
proposed rule (see 75 FR 1899–1900).
Tables 8 and 9 convey the NQF measure
number, clinical quality measure title
and description, and clinical quality
measure steward and contact
information. The measures listed below
in Tables 8 and 9 do not have electronic
specifications finished before the date of
display of this final rule, thus we have
eliminated these measures for this final
rule and will consider the addition of
these measures in future rulemaking.
Also several measures listed below were
only concepts at the time of publication
of the proposed rule (that is, Hospital
Specific 30 day Rate following AMI
admission, Hospital Specific 30 day
Rate following Heart Failure admission,
Hospital Specific 30 day Rate following
Pneumonia admission, and All-Cause
Readmission Index). These concept
measures were not developed or
electronically specified clinical quality
measures, nor NQF endorsed; and there
was not adequate time to consider these
concepts for development for this final
rule. Therefore, the concepts listed
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Comment: Commenters stated that
current health information technology is
not capable of electronically collecting
or reporting on clinical quality
measures. Commenters also stated we
should not require reporting on clinical
quality measures that cannot easily be
derived from EHRs. Other commenters
believed the timeline was unreasonable
to obtain the functionality required in
the EHR system to report on these
clinical quality measures and were
concerned that there were no
vocabulary standards.
Response: We agree with the
comment that eligible hospitals should
only be required to submit information
that can be automatically obtained from
certified EHR technology. As we
discussed elsewhere, ONC’s final rule
(found elsewhere in this issue of the
Federal Register) requires that certified
EHR technology must be able to
calculate clinical quality measures
specified by us in this final rule.
Standards for certified EHRs, including
vocabulary standards, are included in
ONC’s final rule (found elsewhere in
this issue of the Federal Register).
Comment: Commenters recommended
that CMS conduct a pilot test of the
NQF endorsed HITSP electronic
specifications of measures in the
proposed rule for Stage 1 prior to their
adoption. Commenters requested CMS
publish results of the pilot and use this
information to inform the setting of
Stage 2 and 3 objectives and clinical
quality measures. Commenters also
requested allowing adequate time for
implementation after the pilot test
before such measures are considered for
certification, and 24 months before
requiring them for meaningful use. One
commenter stated that the Emergency
Department Throughput, Stroke, and
Venous Thromboembolism have not yet
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been thoroughly tested for automated
reporting and data element capture.
Additional commenters recommended
that the measures selected for the
eligible hospitals incentive program
should be comprehensively
standardized and tested in the field to
ensure that they are thoroughly
specified, clinically valid when the data
are collected through the eligible
hospitals system, feasible to collect, and
are regularly updated and maintained
with a well established process.
Response: We agree with the
commenters that it is important to allow
adequate time for pilot testing and
implementation before clinical quality
measures should be considered for
certification, as well as requiring these
measures for meaningful use.
Emergency Department 1, Emergency
Department 2, and Stroke 3, clinical
quality measures for eligible hospitals
and CAHs that are included in this final
rule, were tested during the January
2010 Connectathon and demonstrated at
the HIMSS 2010 Interoperability
Showcase. Additionally, as part of the
process of certification of EHR
technology it is expected that certifying
bodies will test the ability of EHR
technology to calculate the clinical
quality measures finalized in this final
rule.
After consideration of the public
comments received, eligible hospitals
and CAHs will be required to report on
each of the 15 clinical quality measures,
as shown in Table 10. Requiring eligible
hospitals and CAHs to report on each of
the 15 clinical quality measures in the
EHR incentive program is consistent
with the RHQDAPU program, which
requires reporting on all applicable
quality measures. Eligible hospitals and
CAHs will report numerators,
denominators, and exclusions, even if
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one or more values as displayed by their
certified EHR is zero. We note that to
qualify as a meaningful EHR user,
eligible hospitals and CAHs need only
report the required clinical quality
measures; they need not satisfy a
minimum value for any of the
numerator, denominator, or exclusions
fields for clinical quality measures. The
value for any or all of those fields, as
reported to CMS or the States, may be
zero if these are the results as displayed
by the certified EHR technology. Thus,
the clinical quality measure requirement
for 2011 and beginning with 2012 is a
reporting requirement and not a
requirement to meet any particular
performance standard for the clinical
quality measure, or to in all cases have
patients that fall within the
denominator of the measure. Further,
the criteria to qualify for the EHR
incentive payments are based on results
automatically calculated by eligible
hospitals or CAHs certified EHR
technology, as attested by the eligible
hospital or CAH. As such, we believe
that the eligible hospitals or CAHs will
be able to determine whether they have
reported the required clinical quality
measures to CMS or the State, rendering
it unnecessary that CMS or the State
provide the eligible hospital or CAH
with a feedback report, which provides
information to eligible hospitals and
CAHs as to whether they have reported
their required clinical quality measures.
We expect successful receipt of
Medicare eligible hospitals and CAHs’
information, beginning the first year of
Stage 1.
We are finalizing Table 10, which
conveys the clinical quality measure’s
title, number, owner/steward and
contact information, and a link to
existing electronic specifications.
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We proposed that to satisfy the
requirements of reporting on clinical
quality measures under sections
1886(n)(3)(A)(iii) and 1903(t)(6)(C) of
the Act for the 2011–2012 payment year,
we would require eligible hospitals and
CAHs to report on all EHR incentive
clinical quality measures for which they
have applicable cases, without regard to
payer. We proposed that Medicare
eligible hospitals and CAHs, who are
also participating in the Medicaid EHR
incentive program, will also be required
to report on all Medicaid clinical quality
measures for which the eligible hospital
has applicable cases. We also proposed
that to demonstrate an eligible hospital
or CAH is a meaningful EHR user, the
eligible hospital or CAH would be
required to electronically submit
information on each clinical quality
measures for each patient to whom the
clinical quality measure applies,
regardless of payer, discharged from the
hospital during the EHR reporting
period and for whom the clinical quality
measure is applicable. Although as
proposed, we did not require clinical
quality reporting electronically until
2012, we would begin clinical quality
reporting though attestation in the 2011
payment year. We solicited comment on
whether it may be more appropriate to
defer some or all clinical quality
reporting until the 2012 payment year.
If reporting on some but not all
measures in 2011 was feasible, we
solicited comment on which key
measures should be chosen for 2011 and
which should be deferred until 2012
and why.
Comment: We received numerous
comments strongly opposed to requiring
the reporting of clinical quality
measures by eligible hospitals prior to
2013, although some comments favored
the reporting in 2011 and 2012.
Comments in favor pointed to the
importance of quality measurement to
achieving improvement in healthcare
quality. Those opposed to the reporting
of clinical quality measures in 2011 and
2012 cited concerns as to the readiness
of EHR technology for automated
calculation and reporting of clinical
quality measures as well as financial
and administrative burden. Many
commenters stated that measures should
be fully automated and tested prior to
implementation, and recommended the
process for Emergency Department
Throughput, Stroke, and Venous
Thromboembolism measures where
CMS developed the specifications and
has in place a plan to test the
submission of such measures for
RHQDAPU. Commenters stated their
expectation that the testing process
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would reveal important insights as to
potential challenges of electronic
submission. Numerous commenters
opposed measures already in
RHQDAPU and not able to be calculated
by the EHR technology. Many
commenters stated that electronic data
submission should be developed
through the RHQDAPU program rather
than have a separate quality measure
reporting program, such as the EHR
incentive program. Further, commenters
stated that RHQDAPU should provide
the foundation for migration to
electronic reporting. Numerous
commenters were opposed to having a
temporary data collection and reporting
process through attestation that would
need to be updated or replaced once
CMS has the appropriate infrastructure
in place. Many commenters stated that
requiring hospitals to report summary
data through attestation, without the
ability for CMS to receive the summary
data electronically, creates a dual
reporting burden for measures currently
in RHQDAPU. Many commenters stated
concerns as to the timing of the
certification process for EHRs since
having a certified EHR is an essential
element for quality incentives.
Numerous commenters pointed out that
only 15 of the proposed measures have
electronic specifications currently
available.
Response: We are sensitive to and
appreciate the many comments urging
us not to require the submission of
clinical quality measures, through
attestation or electronic submission,
prior to 2013, based on lack of readiness
of many of the proposed measures, fully
automating and testing prior to
implementation, burden, and the
potential duplication of quality
measures reporting requirements under
the RHQDAPU and the EHR incentive
payment programs. Having carefully
considered these comments, we have
sought to address them while still
retaining the important goal of
beginning the process of using the
capacity of EHRs to promote improved
quality of care in hospitals by providing
calculated results of clinical quality
measures. In terms of readiness, we are
limiting the clinical quality measures to
those measures having existing
electronic specifications as of the date of
display of this final rule. Additionally,
as recommended by commenters, we
will only require hospitals to submit
that information that can be
automatically calculated by their
certified EHR technology. Thus we will
require no separate data collection by
the hospital, but require submission
solely of that information that can be
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generated automatically by the certified
EHR technology; that is, we only adopt
those clinical quality measures where
the certified EHR technology can
calculate the results. Further, we are not
adopting any measures which are
already being collected and submitted
in the RHQDAPU program. Therefore,
we are imposing no duplicate reporting
requirement on hospitals who
participate in RHQDAPU. Through
future rulemaking we will seek to align
the EHR incentive program with
RHQDAPU.
Comment: Some commenters stated
that CMS contradicts itself, where the
proposed rule states that Medicare
eligible hospitals who are also
participating in Medicaid EHR incentive
program will need to report on all of the
Medicaid clinical quality measures and
where it says that Table 21 is an
alternative set of clinical quality
measures if the hospital does not have
any patients in the denominators of the
measures in Table 20. Many
commenters requested clarification of
the Medicare and Medicaid reporting.
Response: We agree that the
description of the eligible hospital and
CAH reporting requirements was
unclear. To clarify, our proposal was
that if a hospital could submit
information on clinical quality measures
sufficient to meet the requirements for
Medicare that would also be sufficient
for Medicaid. However, hospitals for
which the Medicare measures did not
reflect their patient populations could
satisfy the Medicaid requirements by
reporting the alternate Medicaid clinical
quality measures. Reporting the
alternate Medicaid measures would
only qualify for the Medicaid program
and would not qualify eligible hospitals
as to the Medicare incentive program. In
this final rule, this clarification is moot,
however, because we removed the
alternate Medicaid list of clinical
quality measures listed in Table 21 (see
75 FR 1896 through 1900) of the
proposed rule for eligible hospitals. This
was based on the lack of electronic
specifications for these measures
available at the time of display of this
final rule. Hospitals that report
information on all 15 of the clinical
quality measures, as applicable to their
patient population, will qualify for both
the Medicare and the Medicaid
submission requirements for clinical
quality measures. We recognize that
many of the measures in the Medicare
list would likely not apply to certain
hospitals, such as children’s hospitals.
However, an eligible hospital would
meet the clinical quality measure
requirement by reporting values for the
15 clinical quality measures, including,
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values of zero for the denominator, if
accurate. Some value is required for
each of the 15 clinical quality measures
for eligible hospitals and CAHs.
Therefore, for example, a children’s
hospital would enter zero for the
denominator for any of the 15 measures
for which they do not have any patients
as described in the measure.
After consideration of public
comments received, we are finalizing 15
clinical quality measures that eligible
hospitals and CAHs will be required to
report for Stage 1 (2011 and beginning
2012), as applicable to their patient
population. Those 15 clinical quality
measures for eligible hospitals and
CAHs can be found in Table 10 of this
final rule.
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g. Potential Measures for EPs, Eligible
Hospitals, and CAHs in Stage 2 and
Subsequent Years
We stated our expectation that the
number of clinical quality measures for
which EPs, eligible hospitals, and CAHs
would be able to electronically submit
information would rapidly expand in
2013 and beyond.
We plan to consider measures from
the 2010 PQRI program. These clinical
quality measures can be found at
https://www.cms.hhs.gov/PQRI/05_
StatuteRegulations
ProgramInstructions.asp. For future
considerations of clinical quality
measures for Stage 2 of meaningful use
and beyond for eligible hospitals and
CAHs, we also plan to consider other
clinical quality measures from the
RHQDAPU program which are
identified in the FY 2010 IPPS final rule
(75 FR 43868–43882). We invited
comments on inclusion of clinical
quality measures for the 2013 and
beyond for the HITECH Act Medicare
and Medicaid incentive program. We
note that as with the other meaningful
use objectives and measures, in the
event that we have not promulgated
clinical quality measures for the 2013
payment year, the measures for Stage 1
(beginning in 2011) would continue in
effect.
For the Stage 2 of meaningful use, we
indicated in the proposed rule that we
are considering expanding the Medicaid
EHR incentive program’s clinical quality
measure set for EPs and eligible
hospitals to include clinical quality
measures that address the following
clinical areas, to address quality of care
for additional patient populations, and
facilitate alignment with Medicaid and
CHIP programs:
• Additional pediatrics measures
(such as completed growth charts,
electronic prescriptions with weight-
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based dosing support and
documentation of newborn screening).
• Long-term care measures.
• Additional obstetrics measures.
• Dental care/oral health measures.
• Additional behavioral/mental
health and substance abuse measures.
The above list does not constitute a
comprehensive list of all clinical quality
measures that may be considered. We
stated that specific measures for Stage 2
of meaningful use and beyond may be
addressed by CMS in future notice and
comment rulemaking. To assist us in
identifying potential clinical quality
measures for future consideration for
Stage 2 of meaningful use and beyond,
we solicited comments on the potential
topics and/or clinical quality measures
listed above as well as suggestions for
additional clinical quality measure
topics and/or specific clinical quality
measures.
The following is a summary of
comments received regarding the
request for public comment on potential
measures for EPs, eligible hospitals, and
CAHs for Stage 2 of meaningful use and
subsequent stages, and our responses.
Comment: A commenter suggested
using newly adopted NQF Level 3
measures that incorporate common
electronic administrative and clinical
data that represent a better measure of
the patient’s condition. A commenter
suggested adding long term care and
post acute care measures in the next
stage of meaningful use. A few
commenters suggested future clinical
quality measures be coordinated with
Healthy People 2020. Another comment
regarding measures included a request
for medication measures that evaluate
provider intervention. Other
commenters indicated CMS should
provide a more structured process for
the adoption of clinical quality
measures such that specialty EPs would
have greater input into and ownership
of the process. A commenter requested
consideration that future clinical quality
measures address both quality and
resource use efficiency (for example
potentially preventable Emergency
Department visits and hospitalizations
and inappropriate use of imaging MRI
for acute low back pain). A commenter
requested future clinical quality
measures for the following areas: reduce
hospital readmissions and to improve
medication management, specifically
safe and efficient management of heart
disease, diabetes, asthma, mental health
conditions and hospital procedures. A
commenter requested clinical quality
measures that will aid in increasing
improved patient safety and reduce
disparities. A commenter also
recommended developing new clinical
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quality outcomes measures to address
overuse and efficiency, care
coordination, and patient safety. Some
commenters requested the inclusion of
HIV testing and reporting for preventive
service quality measures. Some
commenters stated that this would help
to facilitate continued efforts to promote
and implement the 2006 CDC Revised
Recommendation on HIV testing,
especially to non-HIV medical
specialties. Some commenters
recommended measure development in
the areas of community mental health,
home health, renal dialysis centers, long
term care, post acute care, and nursing
homes. A commenter recommended
including 3 month treatment of
pulmonary emboli (NQF 0593) and deep
vein thrombosis (NQF 0434) for the next
stage of meaningful use and beyond. A
commenter requested including health
disparity data in all clinical quality
measure analyses. Some commenters
also recommended future clinical
quality measure development in the
following areas: Diabetes, heart disease,
asthma, disease screening, chronic
disease management, patient safety,
nursing sensitive measures, atrial
fibrillation, and ethnic disparities.
Commenters requested expanding
pediatric measures to provide expanded
focus on childhood diseases that require
hospitalization such as asthma,
developmental issues and weight-based
medication dosage safety issues.
Additional commenters requested
measures for blood test for lead levels
for children up to 1 year of age and
between 1 and 2 years of age, co-morbid
conditions and dental utilization. A
commenter recommended that only one
EP should be accountable for the quality
intervention and clinical quality
measure such as NQF 0323 Title: End
Stage Renal Disease (ESRD): Plan of
Care for Inadequate Hemodialysis in
ESRD Patient. The commenter indicated
that this type of measure could involve
more than one provider, for example,
nephrologist and a dialysis facility.
Because provider clinical practices may
vary, practice variations may
independently influence patient
outcomes. Some commenters suggested
future development of measures foster
greater use of the clinical information
available in EHRs to improve clinical
processes and evaluate patient outcomes
and suggested use of outcomes measures
instead of process measures.
Furthermore, commenters support the
inclusion of outcomes measures rather
than process measures and composite
versus individual measures. Several
commenters indicated support for the
preventive care measures included in
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the proposed rule and suggested
expanding the set of preventive care
measures to include HIV and STD
screening and eye care specialty
measures. A commenter requested CMS
provide information about their strategic
plan for future Medicare clinical quality
measurement selection, how they will
improve care delivery, proposed stages
of reporting, goals and metrics.
Response: We are appreciative of the
many suggestions and acknowledge the
breadth of interest in certified EHR
technology being the vehicle for clinical
quality measures reporting. We expect
to consider these suggestions for future
measure selection in the Medicare and
Medicaid EHR incentive payment
programs.
Comment: We received various
comments pertaining to future clinical
quality measures applicable principally
to the Medicaid population. One
commenter urged CMS to include
clinical quality measures specific to
newborn screening in Stage 1 of
meaningful use for pediatric providers.
Response: We agree that newborn
screening, both as a clinical quality
measure, and from a data standards
perspective, is a prime candidate for
inclusion in the Stage 2 definition of
meaningful use. We affirm our proposed
statement about our commitment to
work with the measure development
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community to fill noted gaps. We are
appreciative of the many suggestions.
We expect to consider these suggestions
for immunizations, prenatal screening,
infectious disease, etc. in measure
selection in future rulemaking.
Comment: A commenter indicated
CMS should make explicit the health
goals and targets for the HITECH Act
investments that are already implied by
the proposed clinical measures. Making
them explicit allows CMS to set national
targets.
Response: In general, the goal with
respect to clinical quality measures is to
improve healthcare quality as measured
by the clinical quality measures. We
believe that specific quantitative targets
are impractical at this stage given lack
of established base level notes and no
prior clinical quality measure reporting
via certified EHR technology.
Comment: Several commenters asked
how CMS plans to develop further
measure specifications for clinical
quality measures. Another commenter
asked for an electronic source for ICD–
9 and CPT codes defining the specific
conditions or diagnoses or treatments in
order to maintain an up-to-date
capability.
Response: For many clinical quality
measures, clearly defined electronic
specifications are not yet available. In
general, CMS relies on the measures’
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stewards to both develop measures and
to provide the specifications.
Nevertheless, we recognize that many
existing measures, some of which are
owned and maintained by us or its
contractors, do not currently have
electronic specifications. We are aware
of work currently taking place to fill this
gap. We expect to actively work in a
collaborative way with measures
developers and stewards to help assure
the development of electronic
specifications for clinical quality
measures, but we also expect to engage
a contractor to perform work developing
electronic specifications which may or
may not involve measure developers
and stewards. As for CPT codes, these
are copyrighted by and are available
from the American Medical Association.
The National Center for Health Statistics
(NCHS) and CMS are the U.S.
governmental agencies responsible for
overseeing all changes and
modifications to the ICD–9 codes.
Comment: Some commenters
suggested specific new clinical quality
measures which are listed below in
Table 11. Several commenters suggested
new or revised clinical quality measures
or the use of existing measures from
other programs.
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Medicare EHR incentive payment
program, as required by the HITECH
Act, we will publish the measures in the
Federal Register and provide an
opportunity for public comment. We
will examine all options for soliciting
public comment on future Medicaidspecific clinical quality measures, as the
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Federal Register notice requirement
does not apply to the Medicaid EHR
incentive program.
Comment: Some commenters
suggested the following new topics for
clinical quality measure development
for our program:
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Response: Many of the proposed
clinical quality measures are in the
existing PQRI program or are NQF
endorsed. Others are not. We are
appreciative of these many specific
suggestions and will retain the
comments for future consideration.
Prior to including measures in the
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BILLING CODE 4120–01–C
Response: We appreciate the
suggested measure topics submitted by
commenters for potential new clinical
quality measures. Any future clinical
quality measures developed will be in
consideration of the clinical practices
particular to EPs and eligible hospitals.
We have captured these
recommendations and will have them
available for consideration in future
years.
h. Reporting Method for Clinical Quality
Measures for 2011 and Beginning With
the 2012 Payment Year
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(1) Reporting Method for 2011 Payment
Year
As we previously discussed, we
proposed to use attestation as a means
for EPs, eligible hospitals and CAHs, for
purposes of the Medicare incentive
program, to demonstrate the meaningful
use requirement for the calculation and
submission of clinical quality measure
results to CMS.
Specifically, for 2011, we proposed to
require that Medicare EPs and hospitals
attest to the use of certified EHR
technology to capture the data elements
and calculate the results for the
applicable clinical quality measures.
State Medicaid HIT Plans submitted to
CMS will address how States will verify
use of certified EHR technology to
capture and calculate clinical quality
measures by Medicaid EPs and eligible
hospitals.
Further, we proposed to require that
Medicare EPs, eligible hospitals, and
CAHs attest to the accuracy and
completeness of the numerators,
denominators, and exclusions submitted
for each of the applicable measures, and
report the results to CMS for all
applicable patients. We expect that
States will follow a similar strategy as
Medicare for the Medicaid EHR
incentive program.
We proposed that attestation will
utilize the same system for other
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attestation for meaningful use
objectives, and proposed we would
require for Medicare EPs that they attest
to the following:
• The information submitted with
respect to clinical quality measures was
generated as output of an identified
certified EHR technology.
• The information submitted is
accurate to the best of the knowledge
and belief of the EP.
• The information submitted includes
information on all patients to whom the
clinical quality measure applies.
• The NPI and TIN of the EP
submitting the information, and the
specialty group of clinical quality
measures that are being submitted.
• For an EP who is exempt from
reporting each of the core measures, an
attestation that one or more of the core
measures do not apply to the scope of
practice of the EP.
• For an EP who is exempt from
reporting on a specialty group, an
attestation that none of the specialty
groups applies to the scope of practice
of the EP.
• For an EP who does report on a
specialty group, but is exempt from
reporting on each of the clinical quality
measures in the group, an attestation
that the clinical quality measures not
reported do not apply to any patients
treated by the EP.
• The numerators, denominators, and
exclusions for each clinical quality
measure result reported, providing
separate information for each clinical
quality measure including the
numerators, denominators, and
exclusions for all patients irrespective of
third party payer or lack thereof; for
Medicare FFS patients; for Medicare
Advantage patients; and for Medicaid
patients.
• The beginning and end dates for
which the numerators, denominators,
and exclusions apply.
Again, State Medicaid Agencies will
determine the required elements for
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provider attestations for clinical quality
measure reporting, subject to CMS prior
approval via the State Medicaid HIT
Plan.
For eligible hospitals, we proposed to
require that they attest to the following:
• The information submitted with
respect to clinical quality measures was
generated as output from an identified
certified EHR technology.
• The information submitted to the
knowledge and belief of the official
submitting on behalf of the eligible
hospital.
• The information submitted includes
information on all patients to whom the
measure applies.
• The identifying information for the
eligible hospital.
• For eligible hospitals that do not
report one or more measures an
attestation that the clinical quality
measures not reported do not apply to
any patients treated by the eligible
hospital during the reporting period.
• The numerators, denominators, and
exclusions for each clinical quality
measure result reported, providing
separate information for each clinical
quality measure including the
numerators, denominators, and
exclusions for all patients irrespective of
third party payer or lack thereof; for
Medicare FFS patients; for Medicare
Advantage patients; and for Medicaid
patients.
• The beginning and end dates for
which the numerators, denominators,
and exclusions apply.
The following is a summary of
comments received regarding the
proposed reporting method for clinical
quality measures for the 2011 payment
year, and our responses.
Comment: The majority of
commenters were against requiring
attestation for 2011, rather than
suggesting modification of the specific
attestation requirements. Others
commented that reporting should not be
delayed to realize quality improvements
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and better health outcomes for patients
as soon as possible. Many commenters
suggested deferral of clinical quality
measures submission until CMS can
electronically accept data. Commenters
indicated that this is consistent with
allowing delayed reporting by Medicaid
providers until 2012 or beyond. A
number of commenters suggested that
attestation should be confined to
attesting that the EP’s had reviewed or
selected relevant clinical quality
measures.
Response: While we received many
comments to delay attestation past 2011,
we are finalizing our proposed
requirement for EPs and eligible
hospitals to attest to the numerators,
denominators, and exclusions in their
first payment year for the required
clinical quality measures as described in
section II.A.3.d through f of this final
rule. Medicaid providers do not have
‘‘delayed reporting of clinical quality
measures.’’ The statute and this final
rule allow Medicaid providers the
option of receiving the EHR Incentive
Payment for having adopted,
implemented or upgraded to certified
EHR technology, in lieu of meeting the
meaningful use bar in their first
participation year. We expect that most
Medicaid providers would choose to
adopt, implement or upgrade to certified
EHR technology, rather than
demonstrating they are meaningful EHR
users in their first participation year.
Comment: Some commenters also
suggested EPs should only have to attest
that the EP is entering the required data
elements for clinical quality measure
reporting where those fields exist in the
certified EHR technology and provide
feedback to the vendor where structured
data fields are not available. Other
commenters indicated the burden of
adding numerous new data elements is
high and labor intensive.
Response: We considered the
suggestion of only requiring attestation
of documentation of clinical encounters.
While we agree that this could be
considered ‘‘information on clinical
quality measures,’’ however, we do not
believe that such information is needed
when including the submission of
information on clinical quality
measures, which is a required element
of meaningful use. We also believe that
submission of such information would
be of limited value. We believe that by
limiting the clinical quality measure
submission requirement to those results
calculated by certified EHR technology,
we have limited the potential burden.
After consideration of the public
comments received, we are requiring
EPs, eligible hospitals, and CAHs to
attest to the numerator, denominator,
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and exclusions for the payment year
2011 at § 495.8. We are finalizing the
following requirements for EPs in this
final rule for reporting clinical quality
measures:
• The information submitted with
respect to clinical quality measures was
generated as output of an identified
certified electronic health record.
• The information submitted is
accurate to the best of the knowledge
and belief of the EP.
• The information submitted includes
information on all patients to whom the
clinical quality measure applies for all
patients included in the certified EHR
technology.
• The NPI and TIN of the EP
submitting the information at § 495.10.
• The numerators, denominators, and
exclusions for each clinical quality
measure result reported, providing
separate information for each clinical
quality measure including the
numerators, denominators, and
exclusions for all applicable patients
contained in the certified EHR
technology irrespective of third party
payer or lack thereof.
• The beginning and end dates for
which the numerators, denominators,
and exclusions apply (the Medicare
EHR reporting period in payment year 1
is 90 days as stated at § 495.4, and for
payment year 2 is the beginning and end
date of the reporting period as stated at
§ 495.4. For Medicaid providers, as
there is no EHR reporting period for
adopting, implementing or upgrading
for their first payment year, it is in their
second payment year/first year of
demonstrating meaningful use that they
have a 90-day EHR reporting period.
Therefore, it is their 2nd year of
demonstrating meaningful use that has
a 12 month EHR reporting period. For
eligible hospitals and CAHs, we are
finalizing the following requirements in
this final rule:
• The information submitted with
respect to clinical quality measures was
generated as output from an identified
certified EHR technology.
• The information submitted is
accurate to the best of the knowledge
and belief of the official submitting on
behalf of the eligible hospital or CAHs.
• The information submitted includes
information on all patients to whom the
measure applies for all patients
included in the certified EHR
technology.
• The identifying information for the
eligible hospital and CAH at § 495.10.
• The numerators, denominators, and
exclusions for each clinical quality
measure result reported, providing
separate information for each clinical
quality measure including the
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numerators, denominators, and
exclusions for all applicable patients
contained in the certified EHR
technology irrespective of third party
payer or lack thereof.
• The beginning and end dates for
which the numerators, denominators,
and exclusions apply (the Medicare
EHR reporting period in payment year 1
is 90 days as stated at § 495.4, and for
payment year 2 is the beginning and end
date of the reporting period as stated at
§ 495.4. For Medicaid providers, as
there is no EHR reporting period for
adopting, implementing or upgrading
for their first payment year, it is in their
second payment year/first year of
demonstrating meaningful use that they
have a 90-day EHR reporting period.
Therefore, it is their 2nd year of
demonstrating meaningful use that has
a 12 month EHR reporting period.
States must implement the same
meaningful use requirements, including
clinical quality measures, with the
exceptions described in section II.A. of
this final rule. Therefore, Medicaid EPs
and eligible hospitals must submit the
same required information described
above for clinical quality measures.
States will propose in their State
Medicaid HIT Plans how they will
accept provider attestations in the first
year they implement their Medicaid
EHR incentive program, and how they
will accept electronic reporting of
clinical quality measures from
providers’ certified EHR technology in
their second and subsequent
implementation years.
(2) Reporting Method Beginning in 2012
In our proposed rule, we proposed
that for the 2012 payment year, the
reporting method for clinical quality
measures would be the electronic
submission to CMS of summary
information, (that is, information that is
not personally identifiable) on the
clinical quality measures selected by the
Secretary using certified EHR
technology. For Medicaid, we proposed
that EPs and hospitals eligible only for
the Medicaid EHR incentive program
must report their clinical quality
measures data to States. We proposed
that States would propose to CMS how
they plan to accept and validate
Medicaid providers’ clinical quality
measures data in their State Medicaid
HIT Plans, subject to CMS review and
approval.
As we did for payment year 2011, for
2012, we also proposed reporting on all
cases to which a clinical quality
measures applies in order to accurately
assess the quality of care rendered by
the particular EP, eligible hospital, or
CAH generally. Otherwise it would only
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be possible to evaluate the care being
rendered for a portion of patients and
lessen the ability to improve quality
generally. We solicited comments on the
impact of requiring the submission of
clinical quality measures data on all
patients, not just Medicare and
Medicaid beneficiaries.
The following is a summary of
comments received regarding the
proposed reporting method beginning in
2012 in regard to the collection of
aggregate level data on all patients.
Comment: Several commenters noted
that it appears that EPs are supposed to
submit clinical quality measures
electronically to the States in 2012. The
commenters noted that several States
have aging Medicaid Management
Information Systems that may not be
capable of accepting this data/
information. The commenters requested
clarification about whether CMS expects
the States to utilize and report this data
immediately.
Response: To clarify, States may
propose to CMS in their State Medicaid
HIT Plans (See Section 495.332) the
means by which they want to receive
providers’ clinical quality measures,
starting with States’ second
implementation year of their Medicaid
EHR incentive program. States are not
obliged to receive this data using their
MMIS but can consider other options
such as but not limited to: An external
data warehouse, registries or health
information exchanges that include data
repositories.
Comment: A commenter asked that
we state the authority which provides
us the ability to require EPs and
hospitals to report on non-Medicare and
Medicaid patients.
Response: Sections 1848(o)(A)(2)(iii)
and 1886(n)(3)(A)(iii) of the Act broadly
state that as a condition of
demonstrating meaningful use of
certified EHR technology, an EP, CAH or
eligible hospital must ‘‘submit
information’’ for the EHR reporting
period on the clinical quality or other
measures selected by the Secretary ‘‘in a
form and manner specified by the
Secretary.’’ Likewise, section 1903(t)(6)
of the Act states that demonstrating
meaningful use may include clinical
quality reporting to the States, and may
be based upon the methodologies that
are used in sections 1848(o) and
1886(n). This language does not limit us
to collecting only that information
pertaining to Medicare and Medicaid
beneficiaries. Therefore, we believe that
we have the authority to collect
summarized clinical quality measures
selected by the Secretary, with respect
to all patients to whom the clinical
quality measure applies, treated by the
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EP, eligible hospital, or CAH. We
believe that the quality of care of our EP,
eligible hospitals, and CAHs, as well as
the ability to demonstrate the
meaningful use of certified EHR
technology, is best reflected by the care
rendered to all patients, not just
Medicare or Medicaid beneficiaries.
Comment: Some commenters
recommended patient level data for
clinical quality measure reporting while
others supported CMS’ requirement to
submit summary level data for EPs and
hospitals. There were several
commenters that indicated support for
reporting clinical quality measure data
on all patients rather than just on
Medicare and Medicaid patients.
Another commenter stated that CMS
should not require hospitals to submit
patient level data and that the data
should be at the aggregated level for all
payment years. Another commenter
stated that it is well proven in other
disciplines that aggregated clinical data
on quality measures can drive
improvements in outcomes. Another
commenter recommended patient level
data that would be useful to State health
programs and link information to
managed care organizations.
Response: We agree with the
commenters that stated that reporting
clinical quality measure data for all
patients provides a more comprehensive
measure of quality. We acknowledge
that there are potential advantages to
patient level data in measuring quality
such as those stated by the commenter.
However, for Stage 1 we have elected to
require aggregate level data since the
EHR standards as adopted by ONC’s
final rule (found elsewhere in this issue
of the Federal Register) do not provide
standards for the submission of patient
level data.
Comment: The commenter requested
that CMS should have a process in place
to support end-users with on-going help
desk support.
Response: We agree with the
suggestion for the implementation of a
help desk to respond to questions
related to the various CMS related
questions after implementation of the
proposed rule. Information about how
we will provide assistance to providers
will occur outside this final rule.
Comment: A few commenters asked
for clarification regarding the Stage 1
audit process to ensure accuracy for the
reporting of clinical quality measures
(for example, numerator, denominator,
and exception data).
Response: EPs, eligible hospitals, and
CAHs are required for 2011 to attest to
results as automatically calculated by
certified EHR technology. Beginning
with 2012, such information will be
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submitted electronically with respect to
these requirements; we expect our audit
strategy would be based on verifying
that the results submitted accord with
how they were calculated by the
certified EHR technology.
Comment: We received comments
requesting that CMS require that eligible
providers report their clinical quality
measures data to not only States and
CMS, but also to Regional Health
Improvement Collaboratives, where
such programs exist. The commenters
believed that this represents an
alternative means for data submission
rather than attestation and would allow
States and CMS to test this alternative
in 2011 or 2012. A commenter requested
that CMS interpret the statutory
requirement (Sections 1848(o)(2)(B)(iii)
and 1886(n)(3)(B)(iii)) to avoid
redundant or duplicative reporting of
quality measures to include not just
other CMS reporting efforts but also to
avoid duplicative and redundant
reporting with State and/or regional
quality measurement and reporting
efforts. They therefore requested that for
Medicaid, CMS require EPs and
hospitals report their clinical quality
measures to not only States/CMS but
also to Regional Health Improvement
Collaboratives, where such programs
exist.
Response: Clinical quality measures
need to be reported to CMS for the
Medicare program. For 2011, we intend
to provide a web based tool for
attestation. Beginning with 2012 for
Medicare, we will provide one or more
alternative options for electronic
submission which may include
intermediaries. For Medicaid,
information will go to the States as
directed by the States. We believe it
would go well beyond the purview of
this provision to require additional
reporting other than to CMS or the
States. To clarify the issue raised by the
commenter, sections 1848(o)(2)(B)(iii)
and 1886(n)(3)(B)(iii) are tied to the
Secretary and Federally-required quality
measures reporting programs. However,
CMS agrees that State and regional
redundancies could be very
problematic. We therefore clarify our
proposed policy. States must include in
their State Medicaid HIT Plans an
environmental scan of existing HIT and
quality measure reporting activities
related to Medicaid. We expect States to
include details in their SMHP about
how these other on-going efforts can be
leveraged and supported under
HITECH; and how HITECH will not
result in duplicative and/or burdensome
reporting requirements on the same
providers or organizations.
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In the proposed rule, we proposed
that Medicare EPs, eligible hospitals,
and CAHs would be required to report
the required clinical quality measures
information electronically using
certified EHR technology via one of
three methods. The primary method we
proposed would require the EP, eligible
hospital, or CAH to log into a CMSdesignated portal. Once the EP, eligible
hospital, or CAH has logged into the
portal, they would be required to
submit, through an upload process, data
payload based on specified structures,
such as Clinical Data Architecture
(CDA), and accompanying templates
produced as output from their certified
EHR technology.
As an alternative to this data
submission method, we proposed to
permit Medicare EPs, eligible hospitals,
and CAHs to submit the required
clinical quality measures data using
certified EHR technology through
Health Information Exchange (HIE)/
Health Information Organization (HIO).
This alternative data submission
method would be dependent on the
Secretary’s ability to collect data
through a HIE/HIO network and would
require the EP, eligible hospital, or CAH
who chooses to submit data via an HIE/
HIO network to be a participating
member of the HIE/HIO network.
Medicare EPs, eligible hospitals, and
CAHs would be required to submit their
data payload based on specified
structures or profiles, such as Clinical
Data Architecture (CDA), and
accompanying templates. The EPs,
eligible hospitals, or CAHs data payload
would be an output from their
respective certified EHR technologies, in
the form and manner specified from
their HIE/HIO adopted architecture into
the CMS HIE/HIO adopted architecture.
As another potential alternative, we
proposed to accept submission through
registries dependent upon the
development of the necessary capacity
and infrastructure to do so using
certified EHRs.
We stated in the proposed rule that
we intended to post the technical
requirements for portal submission and
the alternative HIE/HIO submission, the
HIE/HIO participating member
definition, and other specifications for
submission on our Web site for
Medicare EPs on or before July 1, 2011
and for Medicare eligible hospitals and
CAHs on or before April 1, 2011 for EHR
adoption and incorporation and to
accommodate EHR vendors.
The following is a summary of
comments received regarding the
proposed reporting method for clinical
quality measures beginning with the
2012 payment year, and our responses.
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Comment: A commenter
recommended that CMS test a range of
reporting options for clinical quality
measures to establish uniform and
reliable rates of data transmission.
Several commenters supported the three
data submission methodologies listed in
the proposed rule to allow flexibility in
the quality reporting mechanisms. Many
commenters requested reporting via
registries.
Response: We agree with the
desirability of considering the three
transmission methodologies listed in the
proposed rule. The submission through
a portal is the only mechanism that is
feasible and practical for 2012 electronic
clinical quality measure submission. We
plan to test HIE/HIO and registry
submission for future possible
implementation through HITECH.
Comment: A commenter requested
clarification as to when CMS would no
longer accept data for 2012 for Medicare
EPs.
Response: The specific technical
mechanism for attestation and
electronic submission will be posted on
the CMS Web site, and through various
educational products in development.
We anticipate that the last date for
attestation or electronic submission will
be two-three months after the close of
the applicable EHR reporting period for
EPs, eligible hospitals, and CAHs
respectively.
Comment: Several commenters
requested that CMS continue programs
that incentivize advanced patient care
for providers who are not eligible for the
EHR incentive program and/or who do
not become meaningful users of
certified EHR technology.
Response: CMS clarifies, based upon
the comments, that our efforts to avoid
duplicative quality reporting
requirements do not necessarily mean
the discontinuation of other quality
reporting programs. CMS and State
Medicaid agencies support several
quality reporting programs that are
legislatively mandated or approach
quality measurement in ways that are
not exclusively tied to HIT, or that, are
voluntary and/or address emerging or
developing quality measure focus areas.
We are committed to determining where
the EHR incentive program’s quality
measure reporting can support other
quality objectives, where it cannot and
how to best align our overall quality
measurement efforts across programs.
Comment: Many commenters
requested deferring quality measure
reporting until 2012 and/or 2013, at
which time all measures will be
electronically specified and tested.
Commenters believed that this was
especially important for new clinical
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quality measures such as Emergency
Department Throughput and Stroke, and
recommended gradually phasing in or
gradually increasing the number of
reportable measures and measure sets
over time to allow for sufficient testing
and harmonization between programs.
Some commenters suggested that for
Stage 1, eligible hospitals should be
required to report only on the 15
measures that have been electronically
specified and those that are appropriate
for that organization. One commenter
requested clinical quality measure
reporting should be optional. Also,
commenters requested for 2011 and
2012 that hospitals continue to report
clinical quality measures through the
current pay-for-reporting (RHQDAPU
and HOP QDRP) programs or on clinical
quality measures that coincide with
HEDIS reporting measures including
HOS and CAHPS, using the existing
approaches, while quality measurement
specialists and vendors create valid,
reliable, and field-tested e-measures for
deployment in the eligible hospitals for
2013. Finally, commenters stated that
the proposed timeline may negatively
impact credibility of data produced and
have potentially negative impact on
patient safety.
Response: With respect to comments
received regarding the timeline for
implementation of the EHR incentive
program, we are only finalizing clinical
quality measures that are electronically
specified by the date of display of this
final rule. For eligible hospitals and
CAHs, we are finalizing 15 clinical
quality measures as listed in Table 10 of
this final rule that will be required to
report for 2011 and 2012, as applicable
to their patient population. Although we
understand the suggestion that reporting
through RHQDAPU should suffice for
the HITECH Act, the difficulty is that
HITECH specifically requires that EPs,
eligible hospitals, and CAHs use
‘‘certified EHR technology’’ in
connection with the submission of
clinical quality measures. Thus the
HITECH Act introduces a requirement
that at least some clinical quality
measures be submitted in connection
with the use of certified EHR
technology, whereas RHQDAPU has no
such requirement. We have limited the
measures to those that have been
electronically specified and that are able
to be automatically calculated by the
certified EHR technology. These results
will be reported by EPs, eligible
hospitals, and CAHs. We will seek to
align the EHR incentive program and
quality reporting programs in future
rulemaking.
Comment: A number of commenters
urged CMS not to require submission of
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clinical quality measures data beyond
what a certified EHR can produce.
Specifically, commenters stated that no
clinical quality measures required for
submission in Stage 1 should require a
manual chart review. Some commenters
also requested allowing submission of
clinical quality measures through other
EHRs that are not certified.
Response: We have adopted the
suggested approach for 2011 and 2012
that limits the required information on
clinical quality measures results to that
which can be automatically calculated
by the certified EHR technology. As to
non-certified EHR technology, the
HITECH Act incentive program
specifically requires the meaningful use
of certified EHR technology.
Comment: Several commenters stated
that currently the data required to be
used in the calculation of clinical
quality measures are obtained from EHR
discrete fields, free text and paper
records. Commenters recommended a
uniform reporting structure.
Commenters questioned if they would
be submitting raw data, numerators and
denominators only, if there will be an
intermediary file that will allow manual
edits to the file prior to submission, and
if not will validity be based entirely on
discrete electronic data. Commenters
asked if sampling will be permitted or
if hospitals will be required to report on
entire populations. Commenters
supported the value of reporting clinical
quality measures for all patients, not
just Medicare and Medicaid patients, in
order to see the whole picture of the
patient population which will enhance
quality improvement.
Response: As discussed elsewhere,
the submission requirement is limited to
calculated results of clinical quality
measures from certified EHR
technology, as specified in this final
rule, and as is consistent with the ONC
final rule (see 75 FR 2014) which
requires certified EHR technology to be
able to calculate clinical quality
measures as specified by CMS.
Comment: Several commenters
suggested the clinical quality measures
requiring medication administration
data be delayed for reporting because
they require advanced features of EHR
systems with implementation of the
features, in particular Electronic
Medication Administration Record
(eMAR).
Response: The Department has
adopted certification criteria for EHR
Modules and Complete EHRs, as
identified in the Health Information
Technology: Initial Set of Standards,
Implementation Specifications, and
Certification Criteria for Electronic
Health Record Technology; Interim
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Final Rule (75 FR 2014). It has also
proposed temporary and permanent
certification programs for testing and
certifying health information technology
in a March 10, 2010 proposed rule (75
FR 11328). The certification of EHRs
will assure functionality of the
information system to obtain clinical
quality data from the EHR.
After consideration of the public
comments received, starting in payment
year 2012, in addition to meeting
requirements for measures on
meaningful EHR use and other
requirements, Medicare EPs, eligible
hospitals, and CAHs will be required to
electronically submit clinical quality
measures results (numerators,
denominators, exclusions) as calculated
by certified EHR technology at § 495.8.
Medicaid EPs will be required to do so
in the State’s second implementation
year for their Medicaid EHR incentive
program. The clinical quality measures
will be for all patients, regardless of
payer, and will be for the period of the
EHR reporting period. Medicare EPs,
eligible hospitals, and CAHs will be
required to report the required clinical
quality measures information
electronically using certified EHR
technology via one of three methods.
The primary method will require the EP,
eligible hospital, or CAH to log into a
CMS-designated portal. Once the EP,
eligible hospital, or CAH has logged into
the portal, they will be required to
submit, through an upload process, data
payload based on specified structures,
such as Clinical Data Architecture
(CDA), and accompanying templates
produced as output from their certified
EHR technology.
As an alternative to this data
submission method, contingent on
feasibility, we will permit Medicare EPs,
eligible hospitals, and CAHs to submit
the required clinical quality measures
data using certified EHR technology
through a Health Information Exchange
(HIE)/Health Information Organization
(HIO). This alternative data submission
method will be dependent on the
Secretary’s ability to collect data
through a HIE/HIO network and would
require the EP, eligible hospital, or CAH
who chooses to submit data via an HIE/
HIO network to be a participating
member of the HIE/HIO network.
Medicare EPs, eligible hospitals, and
CAHs would be required to submit their
data payload based on specified
structures or profiles. The EPs, eligible
hospitals, or CAHs data payload should
be an output from their respective
certified EHR technologies, in the form
and manner specified from their HIE/
HIO adopted architecture into the CMS
HIE/HIO adopted architecture.
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As another alternative, we will also
accept submission through registries
dependent upon the development of the
necessary capacity and infrastructure to
do so using certified EHRs. Finally,
qualifying Medicare Advantage
organizations for their eligible Medicare
Advantage EPs, as well as, Medicare
Advantage-affiliated eligible hospitals
and CAHs will continue to submit
HEDIS, HOS and CAHPS data instead of
the clinical quality measures results
under this final rule in section II.C.6.
We will post the technical
requirements for portal submission and
the alternative HIE/HIO submission, the
HIE/HIO participating member
definition, and other specifications for
submission on our Web site for
Medicare EPs on or before July 1, 2011
and for Medicare eligible hospitals and
CAHs on or before April 1, 2011 for EHR
adoption and to accommodate EHR
vendors.
State Medicaid Agencies must follow
the same requirements for meaningful
use, including clinical quality measures,
for example, across all payers and for
the entire EHR reporting period for EPs
and eligible hospitals. We expect that
States will be able to accept the
electronic reporting of clinical quality
measures by their second year of
implementing the EHR incentive
program. States will include in their
State Medicaid HIT Plan a description
of how Medicaid providers will be able
to electronically report clinical quality
measures, subject to CMS prior
approval.
i. Alternative Reporting Methods for
Clinical Quality Measures
We proposed several alternative
reporting methods to create a dataset of
provider-submitted summary data. One
such alternative we proposed is the
development of a distributed network of
EHRs where health information is
retained locally in individual EP,
eligible hospital, and CAH EHRs and
only summary reports are submitted to
CMS. Another alternative we proposed
is the creation of databases of patientlevel EHR data stored at the state or
regional level.
The following is a summary of
comments received regarding the
proposed alternative reporting methods
for clinical quality measures and our
responses.
Comment: A commenter recommends
aggregate reporting necessary for
clinical quality measures to be able to be
completed in secondary systems such as
data warehouses.
Response: For Medicare, we require
that the data source be from certified
EHR technology. EPs, eligible hospitals
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and CAHs may use intermediaries (data
warehouses) to submit the EHRgenerated clinical quality measure if
available, assuming all requirements are
met. States may seek CMS prior
approval via their State Medicaid HIT
Plans for how they expect Medicaid
providers to report the required
meaningful use data, including clinical
quality measures. For example, States
may propose that the data, while it
originates in the providers’ certified
EHR technology, may be reported using
a health information exchange
organization or registry as an
intermediary.
Comment: A few commenters
communicated that the calculation and
submission of quality measures may
depend on the use of health information
technology systems beyond those used
by the EP such as data warehouses or
registries that have to manipulate the
data received. They indicated the final
rule should not exclude the use of
additional non-certified EHR technology
to assist EPs in satisfying the quality
reporting requirements provided the EP
uses certified EHR technology to capture
the data and to calculate the results.
Response: Certified EHR technology
will be required to calculate the clinical
quality measure results for the CMS
specified measures we finalize in this
final rule and transmit under the PQRI
Registry XML specification, as provided
in the ONC final rule (found elsewhere
in this issue of the Federal Register).
Comment: Several commenters
recommended inclusion of QRDA with
PQRI XML for reporting, thus allowing
vendors the ability to bypass PQRI XML
if they plan to ultimately implement
QRDA. There is also concern that
switching to QRDA from XML will
require duplicative investments. They
recommended attestation for 2011 and
2012 as well as allowing use of QRDA
in 2012.
Response: Electronic specifications
will need to utilize standards that the
certified EHR can support. ONC’s final
rule (found elsewhere in this issue of
the Federal Register) limits this to PQRI
Registry XML specifications. There is no
current requirement that a certified EHR
be able to produce QRDA.
j. Reporting Period for Reporting of
Clinical Quality Measures
Sections 1848(o)(A)(2)(iii) and
1886(n)(3)(A)(iii) of the Act state that to
demonstrate meaningful use of certified
EHR technology for an EHR reporting
period, an EP, eligible hospital, and
CAH must submit information ‘‘for such
period’’ on the clinical quality measures
and other measures selected by the
Secretary. Therefore we proposed that
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the reporting period for the clinical
quality measures selected by the
Secretary be the EHR reporting period.
Another alternative we proposed was
a fixed reporting period of four quarterly
reporting periods, or two six-month
reporting periods. In terms of practice
and precedent for other Medicare
clinical quality measure reporting
programs, all of these programs submit
data to us at specific reporting intervals.
The following is a summary of
comments received regarding the
proposed EHR reporting period for EPs,
eligible hospitals, and CAHs.
Comment: Some commenters asked
for clarification on whether the EP must
continuously report during the ‘‘entire
payment year’’ or whether the reporting
period for clinical quality measures
covers a 12-month period. Other
commenters questioned the timing of
the requirements associated with the
measures—whether the specifications
for Stage 1 payment year 1 apply to EPs
regardless of when the EPs become first
eligible or whether the clinical quality
measure specifications follow the
calendar year.
Response: The EP only needs to report
clinical quality measures once a year, as
described at § 495.4. For Medicare EPs,
eligible hospitals and CAHs, the EHR
reporting period is 90 days for their first
payment year. For Medicaid eligible
providers, their first payment year in
which they demonstrate meaningful use
(which may be their second payment
year, if they adopted, implemented or
upgraded in their first payment year)
also has a 90-day EHR reporting period.
For Medicare EPs, eligible hospitals and
CAHs, in their second payment year, the
reporting period is 12 months. For
Medicaid EPs and eligible hospitals, in
their second payment year of
demonstrating meaningful use, they also
have a 12-month EHR reporting period.
Related to the timing of the
requirements, the final clinical quality
measure specifications for 2011 and
2012 will be posted at the time of
display of this final rule.
Comment: Some commenters
requested clarification of the process for
reporting in the entire payment year. A
commenter requested clarification
regarding whether the EP must
continuously report during the entire
payment year or whether the reporting
period for clinical quality measures
covers an entire 12-month period. Some
commenters pointed out that reporting
capability may not be available every
day of the year due to information
system availability.
Response: Technical requirements for
electronic reporting will be posted on
the CMS Web site prior to the reporting
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period. The reporting period refers to
parameters of the data captured in the
EHR or the services documented in the
EHR, not the time when the submission
of information regarding clinical quality
measures is made. States will dictate for
Medicaid EPs and eligible hospitals the
timing of submission of their clinical
quality measures data via electronic
reporting. Submission could be as
infrequent as once a year after the close
of the reporting period. The reporting
period beyond 2011 and 2012 for
clinical quality measures will be
determined in future rulemaking.
4. Demonstration of Meaningful Use
Section 1848(o)(3)(C) of the Act, as
added by section 4101(a) of the HITECH
Act, requires that as a condition of
eligibility for the incentive payment, an
EP must demonstrate meaningful use of
certified EHR technology (other than the
reporting on clinical quality and other
measures) as discussed in section II.A.3
of this final rule in the manner specified
by the Secretary, which may include the
following: An attestation, the
submission of claims with appropriate
coding, a survey response, reporting of
clinical quality or other measures, or
other means. Similarly, section
1886(n)(3)(c) of the Act, as added by
section 4102(a) of the HITECH Act,
requires that hospitals seeking the
incentive payment demonstrate
meaningful use of certified EHR
technology in the manner specified by
the Secretary. Section 1903(t)(6)(C)(i)(II)
of the Act, as added by section
4201(a)(2) under the HITECH Act, states
that a Medicaid EP or eligible hospital
must demonstrate meaningful use
through a ‘‘means that is approved by
the State and acceptable to the
Secretary.’’ In addition, pursuant to
section 1903(t)(9) of the Act, a State
must demonstrate to the satisfaction of
the Secretary that the State is
conducting adequate oversight,
including the routine tracking of
meaningful use attestations and
reporting mechanisms.
a. Common Methods of Demonstration
in Medicare and Medicaid
As proposed, in the final rule, we are
adopting a common method for
demonstrating meaningful use in both
the Medicare and Medicaid EHR
incentive programs, for the same
reasons we have a uniform definition of
meaningful use. The demonstration
methods we adopt for Medicare would
automatically be available to the States
for use in their Medicaid programs. The
Medicare methods are segmented into
two parts, as discussed in section II.4.b
of this final rule. States seeking to
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modify or propose alternative
demonstration methods must submit the
proposed methods for prior CMS
approval. This process is discussed
more fully in section II.D.7.b.2.c. of this
final rule.
b. Methods for Demonstration of the
Stage 1 Criteria of Meaningful Use
Our final regulations, at § 495.8, will
require that for CY 2011, EPs
demonstrate that they satisfy each of the
fifteen objectives and their associated
measures of the core set listed at
§ 495.6(d) and five of the objectives and
their associated measures from the
menu set listed at § 495.6(e) unless
excluded as described in § 495.6(a)(2).
(An exclusion will reduce the number of
objectives/measures the EP must satisfy
by the number that is equal to the EP’s
exclusions. For example, an EP that can
exclude two menu objectives/measures
is required to satisfy only three of the
objectives and associated measures from
the menu set. Similarly, an exclusion
will reduce the number of core
objectives/measures that apply). We
permit only those exclusions that are
specifically indicated in the description
of each objective and its associated
measure (§ 495.6(d) for the core set and
§ 495.6(e) for the menu set). If an
exclusion exists and the EP meets the
criteria for it, the EP would report to
CMS or the States that fact rather than
demonstrating that they satisfy the
objective and associated measure. At
§ 495.8, we will require that for FY
2011, eligible hospitals and CAHs
demonstrate that they satisfy each of the
fourteen objectives and their associated
measures of the core set listed at
§ 495.6(f) and five of objectives and their
associated measures from the menu set
listed at § 495.6(g) unless excluded as
described in § 495.6(b)(2). As with EPs,
all exclusions are specifically indicated,
in the description of the objective and
associated measures (§ 495.6(f) for the
core set and § 495.6(g) for the menu set)
and an exclusion will reduce the
number of objectives and associated
measures an eligible hospital or CAH
must satisfy (see above example for
EPs). If an exclusion exists and the
hospital meets the criteria for it, the
eligible hospital or CAH would report to
CMS or the States that fact rather than
demonstrating that they satisfy the
objective and associated measure.
Finally, as specified in 495.316(d), for
those participating in the Medicaid EHR
incentive program, the State may alter
the requirements for demonstrating that
an EP or eligible hospital is a
meaningful user, with regard to four
specific objectives and measures. For
these objectives and measures, the State
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may also choose to make a menu-set
objective a core objective. Such State
additions could increase the core or
menu set objectives and measures that
must be satisfied.
For payment years beginning in CY
2012 and subsequent years, our final
regulations, at § 495.8, will require that
for Stage 1 of meaningful use, EPs
demonstrate that they satisfy each of the
15 objectives and their associated
measures of the core set listed at
§ 495.6(d), except § 495.6(d)(4) ‘‘Report
ambulatory quality measures to CMS or,
in the case of Medicaid EPs, the states’’
and 5 of the objectives and their
associated measures from the menu set
listed at § 495.6(e) unless excluded as
described in § 495.6(a)(2). The form and
mechanism for excluding an objective
and its associated measure is the same
for CY2012 and subsequent years as it
is for CY2011. The ability for States to
add certain requirements is the same for
CY 2012 and subsequent years as it is
for CY 2011. The EP must demonstrate
that they satisfy the objective
‘‘Submitting quality measure to CMS or
the States’’ through electronic reporting
of clinical quality measures to CMS or
the States, as specified in section II.A.3
of this final rule. For payment years
beginning in FY2012 and subsequent
years, our final regulations, at § 495.8,
will require that eligible hospitals and
CAHs demonstrate that they satisfy each
of the fourteen objectives and their
associated measures of the core set
listed at § 495.6(f), except § 495.6(f)(3)
‘‘Report hospital quality measures to
CMS or, in the case of Medicaid EPs, the
states’’ and five of the objectives and
associated measures from the menu set
listed at § 495.6(g) unless excluded as
described in § 495.6(b)(2). The form and
mechanism for excluding an objective
and its associated measure is the same
for FY2012 and subsequent years as it
is for FY2011. The ability for States to
add certain requirements also is the
same for FY 2012 and subsequent years
as it is for FY 2011. The eligible hospital
or CAH must demonstrate that they
satisfy the objective ‘‘Submitting quality
measure to CMS or the States’’ through
electronic reporting of clinical quality
measures to CMS or the States, as
specified in section II.A.3 of this final
rule.
Except for the clinical quality
measures (for which we require
electronic reporting in CY or FY 2012
and subsequent years as discussed
above), satisfaction of meaningful use
objectives and associated measures may
be demonstrated through attestation.
Specifically, we will require that EPs,
eligible hospitals and CAHs attest
through a secure mechanism, such as
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through claims based reporting or an
online portal. For the Medicare FFS and
MA EHR incentive programs, CMS will
issue additional guidance on this
mechanism. For the Medicaid EHR
incentive program, the States will
include additional information in the
State Medicaid HIT plans they submit to
CMS to implement the program. We will
require that an EP, eligible hospital or
CAH would, through a one-time
attestation following the completion of
the EHR reporting period for a given
payment year, identify the certified EHR
technology they are utilizing and the
results of their performance on all the
measures associated with the reported
objectives of meaningful use. We would
require attestation through a secure
mechanism because we do not believe
that HIT will advance enough from its
current state to allow for more
automated and/or documented options
of demonstrating meaningful use. As
HIT matures we expect to base
demonstration more on automated
reporting by certified EHR technologies,
such as the direct electronic reporting of
measures both clinical and non clinical
and documented participation in HIE.
The first example is to the move from
attestation for clinical quality measures
to direct reporting in 2012 and
subsequent years for EPs, eligible
hospitals and CAHs. As HIT advances
we expect to move more of the
objectives away from being
demonstrated through attestation.
However, given the current state of HIT,
we believe that imposing such
demonstration requirements for 2011
would pose significant barriers to
participation in the EHR incentive
programs.
We believe that the means by which
EPs, eligible hospitals and CAHs
demonstrate meaningful use should
work for all provider types. We also
believe that uniform means of
demonstration for EPs, eligible hospitals
and CAHs are preferred and that a
greater burden should not be placed on
one or the other. In addition, we do not
believe that demonstration of
meaningful use could require use of
certified EHR technology beyond the
capabilities certified according to the
ONC FR.
In addition to requiring electronic
reporting of clinical quality measures
beginning in 2012 in Medicare and
Medicaid, we also leave open the
possibility for CMS and/or the States to
test options to utilize existing and
emerging HIT products and
infrastructure capabilities to satisfy
other objectives of the meaningful use
definition. The optional testing could
involve the use of registries or the direct
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electronic reporting of some measures
associated with the objectives of the
meaningful use definition. We do not
require any EP, eligible hospital or CAH
to participate in this testing in either
2011 or 2012 in order to receive an
incentive payment. The state of
electronic exchange varies widely across
the country and is dependent on
numerous Federal, State, local, nonprofit and for-profit initiatives. Given
this high state of flux, CMS and/or the
States would have to issue considerable
updated guidance to EPs, eligible
hospitals and CAHs who wish to join in
our efforts to explore the electronic
exchange of information. Any testing
should be based on the principle of
electronic exchange of information from
certified EHR technology either directly
to the States or through an intermediary.
For purposes of the programs in this
final rule it would be counterproductive
for an intermediary to collect
information through paper abstraction.
We will issue further instructions on
the specifics for submitting attestation
through established outreach venues.
Comment: Several commenters
submitted comments regarding the
methods of demonstration for clinical
quality measures.
Response: We summarize and
respond to those comments in section
II.A.3 of this final rule.
Comment: A few commenters
submitted comments regarding section
1848(o)(2)(A) of the Act, which provides
discretion to the Secretary to provide for
the use of alternative means for meeting
the requirements of meaningful use in
the case of an eligible professional
furnishing covered professional services
in a group practice. Some of these
commenters suggested that CMS
provide such an alternative means in
the final rule, while others suggested we
consider doing so in future rulemaking.
Response: We did not propose any
alternative means in the proposed rule.
Given the per EP basis for most of the
objectives and their associated
measures, we did not believe group
reporting would provide an accurate
reflection of meaningful use. In
addition, as the incentives payments are
calculated on a per EP basis it is unclear
to us how variance of meaningful use
among EPs within the group should be
treated. We believe the possible
reduction in burden of attesting once
per group versus once per EP is
outweighed by the less accurate
reporting, increased possibility of
duplicate payments and decreased
transparency. We note that many of the
measures rely on data which could
easily be stored at a group level such as
a patient’s demographics or medication
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lists and any EP with access to that
information about a patient in their
certified EHR technology and who sees
that same patient in the EHR reporting
period would receive credit for that
patient in their numerator and
denominator. Other aspects such as the
enabling of drug-drug, drug-allergy
checks, using CPOE and eRx could vary
widely from EP to EP within the same
group. We would also be concerned
with EPs in multi-specialty group
practices some of whom might be
eligible for an exclusion, while others
would not be. As requested by
commenters we will continue to review
this option in future rulemaking, but for
this final rule we do not include the
option to demonstrate meaningful use at
a group level.
While we did not make changes to the
demonstration of meaningful use
requirements based on the comments
above, we did make modifications to
other aspects of the Stage 1 definition of
meaningful use that required the
descriptions of how many and which
objectives and their associated measure
EPs, eligible hospitals and CAHs to be
altered accordingly. These changes are
to the first paragraph of this section
(II.4.b).
5. Data Collection for Online Posting,
Program Coordination, and Accurate
Payments
As described below, the HITECH Act
requires the Secretary to post online the
names of Medicare EPs and eligible
hospitals and CAHs who are meaningful
EHR users for the relevant payment
year. Section 1903(t)(2) of the Act also
requires us to ensure that EPs do not
receive an EHR incentive payment
under both Medicare and Medicaid. To
fulfill these mandates, we must collect
several data elements from EPs and
eligible hospitals. Beyond these two
direct HITECH Act requirements, CMS
and the States also require certain data
in order to accurately calculate and
distribute the incentive payments.
a. Online Posting
In the proposed rule, we said that
section 1848(o)(3)(D) of the Act requires
the Secretary to list in an easily
understandable format the names,
business addresses, and business phone
numbers of the Medicare EPs and, as
determined appropriate by the
Secretary, of group practices receiving
incentive payments for being
meaningful EHR users under the
Medicare FFS program on our Internet
Web site. We will not post information
on group practices because we will not
base incentive payments at the group
practice level. Section 1886(n)(4)(B) of
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the Act, as added by section 4102(c) of
the HITECH Act, requires the Secretary
to list in an easily understandable
format the names and other relevant
data, as she determines appropriate, of
eligible hospitals and CAHs who are
meaningful EHR users under the
Medicare FFS program, on our Internet
Web site. Eligible hospitals and CAHs
will have the opportunity to review the
list before the list is publicly posted.
Sections 1853(m)(5) and 1853(l)(7) of
the Act, as added by sections 4101(c)
and 4102(c) of the HITECH Act, require
the Secretary to post the same
information for EPs and eligible
hospitals in the MA program as would
be required if they were in the Medicare
FFS program. Additionally, the
Secretary must post the names of the
qualifying MA organizations receiving
the incentive payment or payments. We
would collect the information necessary
to post the name, business address and
business phone numbers of all EPs,
eligible hospitals and CAHs
participating in the Medicare FFS and
MA EHR incentive programs, and to
post this information on our Web site.
The HITECH Act did not require
Medicaid EPs and eligible hospitals to
be identified online so we will not do
so.
We did not receive any comments and
we are finalizing these provisions as
proposed.
b. Program Election Between Medicare
FFS/MA and Medicaid for EPs
In the proposed rule, we said section
1903(t)(2) of the Act prohibits an EP
from receiving incentive payments
under the Medicaid program unless the
EP has waived any rights to incentive
payments under the Medicare FFS or
MA programs. Furthermore, section
1903(t)(7) of the Act requires the
Secretary to assure no duplication of
funding with respect to the Medicaid
program, and the physician and MA
incentive payments under sections
1848(o) and 1853(l) of the Act. This
waiver and non-duplication
requirement applies only to EPs meeting
both the Medicare FFS/MA and
Medicaid EHR incentive programs
eligibility criteria, and does not apply to
hospitals (which, if eligible, could
receive incentive payments from both
Medicare and Medicaid
simultaneously). Section 495.10 allows
an EP meeting the eligibility criteria for
both the Medicare FFS/MA and
Medicaid programs to participate in
either program. We would also allow an
EP to change his or her election once
during the life of the EHR incentive
programs after making the initial
election, for payment years 2014 and
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before. We believe this one-time
election rule allows an EP whose patient
volume no longer makes him or her
eligible for the Medicaid program to
nevertheless continue to receive
incentive payments that would
encourage the meaningful use of
certified EHR technology. For example,
an EP who moves to a different practice
or geographically relocates practices
may reduce his or her Medicaid patient
volume, and therefore become ineligible
for the Medicaid incentive payments.
Allowing this EP to continue to receive
incentive payments under Medicare (if
eligible) continues the availability to the
EP of the incentive for meaningfully
using EHR technology, and would allow
EPs a certain amount of flexibility in
their operations. While allowing this
flexibility creates administrative
complexity, we believe a significant
number of EPs could have their
participation in the EHR incentive
programs endangered due to changing
circumstances unrelated to the EHR
incentive programs.
In the proposed rule, we proposed at
495.10(e)(5), that an EP switching
program is ‘‘placed in the payment year
the EP would have been in, had the EP
not switched programs.’’ For example, if
an EP decides to switch after receiving
his or her Medicare FFS incentive
payment for their second payment year,
then the EP would be in its third
payment year for purposes of the
Medicaid incentive payments. For the
final rule, we are clarifying that the EP
is ‘‘placed in the payment year the EP
would have been in had the EP begun
in and remained in the program to
which he or she has switched.’’ We have
modified 495.10(e)(5) accordingly.
We believe this clarification is
necessary in order to address comments
we received on non-consecutive
payments. As outlined in II.A.1.c and d
of this final rule, the definition of first,
second, third, fourth, fifth, and sixth
payment year differs across the
Medicare and Medicaid programs.
Section 1848(o)(1)(E)(ii) of the Act
requires that the second Medicare
payment year be successive to the first
payment year and immediately follow
it. Similarly, the third payment year
must immediately follow the second,
and so on. Thus, as explained in
II.A.1.c., ‘‘if a Medicare EP receives an
incentive in CY2011, but does not
successfully demonstrate meaningful
use or otherwise fails to qualify for the
incentive in CY2012, CY2012 still
counts as one of the EP’s five payment
years and they would only be able to
receive an incentive under the Medicare
EHR incentive program for three more
years.’’ The same rule, however, does
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not apply to the Medicaid EHR
incentive program. For that program, EP
payments may generally be nonconsecutive. If an EP does not receive an
incentive payment for a given CY or FY
then that year would not constitute a
payment year. For example, if a
Medicaid EP receives incentives in
CY2011 and CY2012, but fails to qualify
for an incentive in CY 2013, they would
still be potentially eligible to receive
incentives for an additional four
payment years.
The rules on consecutive payment,
discussed above, govern how an EP
should be treated after switching from
the Medicaid to the Medicare EHR
incentive program, or vice versa. As
stated above, we believe that an EP that
switches from the Medicaid to the
Medicare program should be treated in
the same manner as if such EP had
started in the Medicare program.
Payment years that are skipped in the
Medicaid EHR incentive program thus
become payment years that count
against the EP’s five years of payment in
Medicare. For example, an EP that
receives nonconsecutive payment under
Medicaid for CYs 2011 and 2013 (but
skips CY 2012), and then switches to the
Medicare program in CY 2014, is in the
fourth payment year in 2014, and is
limited to that payment year’s limit on
incentive payments. Such an EP may
receive only one more year of incentive
payments under the Medicare EHR
incentive program. We believe this rule
is equitable, given that, had the EP
started in the Medicare program, the EP
would not have been able to benefit
from non-consecutive payments
available under the Medicaid EHR
incentive program. We see no reason
why EPs that switch from the Medicaid
to the Medicare program should be
treated differently from those who
initially began in the Medicare program,
and believe that any other rule might
encourage gaming on the part of eligible
professionals.
By the same token, an EP that
switches from the Medicare to the
Medicaid EHR incentive program will
not be penalized for non-consecutive
payment years accrued while in the
Medicare program. For example, an EP
that receives nonconsecutive payment
under Medicare for CYs 2011 and 2013
(but skips CY 2012), and then switches
to the Medicaid program in CY 2014, is
in the third year of payment in 2014,
and is potentially eligible to receive
three additional years of payment under
Medicaid (after 2014), for a total of six
years of payment. Similar to our
rationale described in the paragraph
above, we do not believe an EP that
switches to the Medicaid program
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should be treated differently from the
EP that initially begins in the Medicaid
program, as once the EP switches to the
Medicaid program, there is no statutory
requirement that the payment year
ordering be consecutive.
We believe it is self-evident that an EP
switching to a new program is subject to
the requirements of such new program.
Thus, for example, an EP switching
from Medicaid to Medicare might be
subject to a higher stage of meaningful
use upon moving to the Medicare
program. The EP also would be subject
to fewer years of payment and to the
requirement that no incentive payments
may be made after 2016.
Finally, even after lining up the
payment years, it is possible for an EP
to exceed the payment cap under
Medicaid by switching programs at the
right time. We do not believe that the
Congress intended for the payment caps
to be exceeded under any circumstance,
and therefore proposed that no EP
should receive more than the maximum
incentive available to them under
Medicaid, which is the higher of the two
caps. The last year incentive payment
would be reduced if awarding the EP
the full amount would exceed the
overall maximum available under
Medicaid. This is possible if an EP
receives their first two payment years
from Medicare and then the last four
from Medicaid, as the cap would be
exceeded by $250. If the EP receives the
HPSA bonus available under the
Medicare FFS EHR incentive program,
this amount could be as much as $4,450.
An EP who switches from Medicaid to
Medicare could potentially exceed the
Medicare threshold in a number of
circumstances; however, since they will
not be allowed to exceed the Medicaid
threshold under any circumstance, we
would pay the incentive for which they
are eligible for a given payment year in
whichever program they are in for that
payment year until they exceed the
Medicaid threshold. No incentive
payments will be made to any EP that
would allow the EP to exceed the
Medicaid threshold. We anticipate that
this would result in a prorated final year
incentive payment. Finally, we
proposed that the last year for making
an incentive payment program switch
would be CY 2014. In making this
proposal, we considered that it is both
the last year an EP can enroll in the
Medicare EHR incentive program, and
also the last year before the payment
adjustments under Medicare can begin.
Comment: We received comments
requesting clarification on when an EP
could make their one switch.
Response: As described in our
example, the EP could make their one
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switch anytime after the receipt of an
incentive payment under either the
Medicare or Medicaid program. Since
this policy would also apply to other
program changes (for example, changing
from one State to another, or updating
registration data elements), we want to
clarify when program registration
changes can take place. An EP, eligible
hospital or CAH sets into motion receipt
of the incentive payment when they
attempt to demonstrate meaningful use
or demonstrate to the State efforts to
adopt, implement, or upgrade to
certified EHR technology. Therefore,
prior to their first successful attempt to
demonstrate meaningful use or
demonstrate to the State efforts to adopt,
implement, or upgrade to certified EHR
technology, the EP could change their
registration in either the Medicare or
Medicaid EHR incentive program as
many times as they wish. Furthermore,
EPs and hospitals selecting the
Medicaid incentive program may also
switch freely prior to payment as
described here. However, there may
only be one payment from one State in
any one payment year.
After consideration of the public
comment received, we are modifying
the provision at § 495.10(e)(2) to ‘‘(2)
After receiving at least one EHR
incentive payment, may switch between
the two EHR incentive programs only
one time, and only for a payment year
before 2015’’. This modification better
reflects our clarification in response to
the comment received on the ability to
switch between programs. For the final
rule, we have made a few other
technical changes to § 495.10, in
addition to the changes made to
§ 495.10(e)(2) and (e)(5).
c. Data To Be Collected
In addition to information regarding
the demonstration of meaningful use, in
§ 495.10 of this final rule we would
collect the following administrative data
for the Medicare and Medicaid EHR
incentive programs to fulfill our
requirements of online posting,
avoidance of duplication of incentive
payments, and to ensure accurate and
timely incentive payments:
• Name, NPI, business address, and
business phone of each EP or eligible
hospital.
• Taxpayer Identification Number
(TIN) to which the EP or eligible
hospital wants the incentive payment
made. For Medicaid EPs this must be
consistent with assignment rules at
§ 495.10.
• For EPs, whether they elect to
participate in the Medicare EHR
incentive programs or the Medicaid
EHR incentive program.
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• For eligible hospitals and CAHs,
their CCN.
To coordinate with the States to avoid
duplication of payments, we would
make available to the States through a
single National Level Repository (NLR)
the following additional data:
• Whether an EP or eligible hospital
is a meaningful EHR user, and
• The remittance date and amount of
any incentive payments made to an EP
or eligible hospital.
• Other information as specified by
CMS.
CMS, our contractors, and the States
will have access to these data elements
through the NLR maintained by CMS.
The States will have to provide
information to us on whether EPs or
eligible hospitals are eligible for the
Medicaid incentive program, whether
EPs or eligible hospitals participating in
the Medicaid program are meaningful
EHR users, and when any Medicaid
incentive payments are made and the
amount of the payment. We will put in
place processes for an EP or eligible
hospital to change their information,
including the one-time switch in EHR
incentive program election by EPs.
Comment: We received comments
that some EPs do not use TINs, but
rather the EP’s Social Security Number
(SSN).
Response: In these cases the EP would
submit a TIN, which is their SSN. An
incorporated EP would have a TIN for
the corporation that would be an EIN.
The EP’s own TIN remains his/her SSN.
Comment: Some commenters
requested clarification on whether the
business address is the physical location
or the mailing address.
Response: We believe that the
HITECH Act required reporting of this
information to assist the public in
identifying meaningful EHR users. We
believe the practice location address
serves this purpose better than the
mailing address. However we will allow
EPs to enter an alternate address for
posting purposes but will not allow that
address to be a post office box.
Comment: Commenters suggested that
States would be allowed to determine
the requirements associated with
Medicaid provider TIN assignments.
Response: We discuss the
requirements associated with TIN
assignment in 495.10(f) and in the
requirements associated with SMHPs in
this preamble at section 495.332
SMHPs. States are responsible for
making sure the providers are providing
an acceptable TIN, consistent with the
regulations at 495.10(f), which states
that providers may only assign to
certain TINs.
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We clarified 495.10(f), to reflect this
and other changes.
Comment: CMS received numerous
comments about the schedule for and
State’s role in the national single
repository where CMS will collect data
elements on all registrants.
Response: The technological
requirements and systems interfaces are
outside this regulation and we look
forward to providing additional
guidance.
Comment: Some commenters
recommended a shorter record retention
period that the ten years proposed.
Commenters recommended periods
ranging from three to eight years. The
reasons given for a shorter time period
were the cost of record retention, no
perceived need for a retention period
longer than the incentive period, rapid
changes in EHR technology and
consistency with other unspecified
retention requirements.
Response: After reviewing the
comments, we agree with commenters
that ten years is longer than necessary
to ensure the integrity of the program.
In considering a shorter retention
period, we believe that there may be
cause to look over the entire incentive
period. As a Medicaid EP would be
eligible for incentives over a six-year
period if they successfully receive an
incentive each year and that is the
longest such period available to any
participant in the Medicare and
Medicaid EHR incentive programs, we
adopt a new retention period of six
years for this final rule.
Comment: We received a comment
suggesting that Medicare adopt an
appeals process similar to the one
proposed for Medicaid.
Response: We expect to address
Medicare appeals in future guidance.
6. Hospital-Based Eligible Professionals
Section 1848(o)(1)(C)(i) of the Act, as
added by section 4101(a) of the HITECH
Act, states that hospital-based EPs are
not eligible for the Medicare incentive
payments. Similarly, the majority of
hospital-based EPs will not be eligible
for Medicaid incentive payments under
1903(t)(2)(A) of the Act (the only
exception to this rule is for those
practicing predominantly in an FQHC or
RHC). Sections 4101(a) and 4201(a) of
the HITECH Act originally defined the
term ‘‘hospital-based eligible
professional’’ to mean an EP, such as a
pathologist, anesthesiologist, or
emergency physician, who furnishes
substantially all of his or her Medicarecovered professional services during the
relevant EHR reporting period in a
hospital setting (whether inpatient or
outpatient) through the use of the
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facilities and equipment of the hospital,
including the hospital’s qualified EHRs.
Following publication of our proposed
rule, Congress modified the definition of
hospital-based EPs. More specifically,
on April 15, 2010, President Obama
signed into law the Continuing
Extension Act of 2010 (Pub. L. 111–157)
which, in Section 5, made the following
changes to the Social Security Act as it
applies to both the Medicare and
Medicare EHR incentives for EPs:
(1) Medicare—Section
1848(o)(1)(C)(ii) of the Social Security
Act (42 U.S.C. 1395w–4(o)(1)(C)(ii)) is
amended by striking ‘setting (whether
inpatient or outpatient)’ and inserting
‘inpatient or emergency room setting’.
(2) Medicaid—Section 1903(t)(3)(D) of
the Social Security Act (42 U.S.C.
1396b(t)(3)(D)) is amended by striking
‘setting (whether inpatient or
outpatient)’ and inserting ‘inpatient or
emergency room setting’.
These amendments were effective as
if included in the enactment of the
HITECH Act.
The above sections indicate that the
determination of whether an EP is a
hospital-based EP shall be made on the
basis of the site of service, as defined by
the Secretary, and without regard to any
employment or billing arrangement
between the EP and any other provider.
For example, the hospital-based
determination for an EP would not be
affected by whether the EP is an
employee of the hospital, under a
contractual relationship with the
hospital, or with respect to whether he
or she has made a reassignment to the
hospital for Part B billing purposes.
In addition, as discussed below,
section 1848(a)(7)(D) of the Act, as
added by section 4101(b) of the HITECH
Act, exempts hospital-based EPs from
the downward payment adjustment
applied under section 1848(a)(7)(A)(i) of
the Act to covered professional services
provided during a payment year by EPs
who are not meaningful EHR users for
the relevant payment year beginning in
2015.
Based on section 4101(a) of the
HITECH Act (and prior to the
amendments in the Continuing
Extension Act of 2010), we proposed
that an EP would be a hospital-based EP
and therefore ineligible to receive a
Medicare or Medicaid EHR incentive
payment if more than 90 percent of their
services are provided in the following
place of service (POS) codes for HIPAA
standard transactions: 21—Inpatient
Hospital, 22—Outpatient Hospital, 23—
Emergency Room.
In addition, because of concerns that
some primary care EPs who provide
services to Medicare and Medicaid
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beneficiaries would be ineligible for the
incentive payments under this proposed
definition, in the proposed rule, we
asked for comments on whether we
should use another method for defining
hospital-based EPs. We estimated that
under this proposal, 12–13 percent of
family practitioners under Medicare
would be considered hospital-based. We
did not have corresponding data for
Medicaid EPs.
Comment: Many congressional
representatives, hospital associations,
individual providers and other
commenters indicated that they
believed that the proposal would
inappropriately exclude from receiving
EHR incentive payments EPs practicing
in ambulatory settings such as those that
practice in hospital provider-based
departments (referred to by most
commenters as ‘‘outpatient centers and
clinics’’). They indicated these centers
and clinics provide services similar to
services furnished by EPs in private
offices. Many suggested that this
definition may inhibit hospital
investments in their outpatient primary
care sites. Commenters believe the
absence of any EP incentive payment in
these settings may discourage hospitals
from adopting EHR in ambulatory
settings, particularly if doing so requires
the purchase of an ambulatory-based
EHR system (or an ambulatory
component to be added to the hospital’s
EHR system). This is because the
hospital’s total incentive payment is
based on total inpatient services. A
hospital with a large outpatient
department will not receive a higher
incentive payment as a result of their
outpatient services. These commenters
indicated that ambulatory care EHRs are
very different from inpatient EHRs
because of the inherent differences
between the types of care provided in
each setting. Commenters differed
somewhat to the extent that they
provided specific alternatives. Some
commenters went so far as to suggest
that all EPs should be eligible to receive
EHR incentive payments, regardless of
where they practice.
Response: The changes to the
hospital-based definition that are
included in the Continuing Extension
Act of 2010 (Pub. L. 111–157) discussed
above address commenters concerns
about ambulatory settings. These
changes have been incorporated into the
final rule. An EP will be a hospitalbased EP and therefore ineligible to
receive a Medicare (or Medicaid) EHR
incentive payment if more than 90
percent of their Medicare (or Medicaid)
services are provided in the following
two place of service (POS) codes for
HIPAA standard transactions: 21—
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Inpatient Hospital, 23—Emergency
Room.
Comment: Some commenters argued
that the proposed rule failed to make a
critical distinction between hospitalbased EPs who primarily use an EHR
paid for and maintained by the hospital
and those that did not. Some
commenters suggested that an EP
should be eligible for an EHR incentive
payment if he or she had contributed 15
percent or more toward the cost of
acquiring or maintaining the certified
EHR. Some commenters requested that
CMS change the definition of a hospitalbased EP to read: ‘‘An EP who furnishes
90 percent or more of his or her covered
professional services in the CY
preceding the payment year in a
hospital setting and primarily through
the use of the qualified electronic health
records of the hospital.’’ The
commenters believed that Congress’s
intent was to exclude only those EPs
using qualified EHRs of the hospital,
and that their approach would allow
separate EHR incentive payments for
EPs who have developed cutting-edge,
patient centered EHR modules, thereby
allowing for a clinical specificity not
currently available in more generalized,
hospital-wide EHR systems.
Commenters stated that these EHR
technologies are currently used in
hospital settings and interoperate with
hospital systems, but are paid for and
primarily maintained by physician
groups who see patients in hospital
settings. The commenters indicate that
these physician groups continue to
invest in their EHRs through
improvements, ongoing maintenance,
and support staff employed to ensure
optimal use of such technology. The
commenters indicated that many early
health IT champions, including
hospital-based anesthesiologists,
radiologists, pathologists, hospitalists,
emergency medicine physicians, and
neonatal physicians would be
negatively affected by the proposal.
These comments would apply to EP
services provided in all hospital
settings, including inpatient, outpatient,
and emergency rooms.
Response: The statute, as now
amended, indicates that hospital-based
EPs are those who furnish substantially
all their services in an inpatient or
emergency room setting, such as a
pathologist, anesthesiologist, or
emergency physician, and who do so
using the facility and equipment,
including qualified electronic health
care records, of the hospital. While
commenters focused on the statutory
language: ‘‘* * * including qualified
electronic health care records of the
hospital’’, they did not address the
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broader meaning of the section which
also includes the requirement that
hospital-based EPs are those who
furnish services ‘‘using the facility and
equipment’’, including qualified
electronic health care records of the
hospital. We believe both phrases
together are intended to provide an
explanation of why hospital-based EPs
are to be excluded from receiving EHR
incentive payments (that is, that they
would typically use the facilities and
equipment, including the EHR, of the
hospital and that therefore it would
represent double payment if both
hospitals and hospital-based EPs were
to be paid incentives). We do not
believe that the intent of this language
was to require CMS to evaluate each EP
as to whether they are using the EHR of
the hospital. Further, the commenters
did not address the significance of the
next sentence of the statute, which
clearly indicates that: ‘‘The
determination of whether an eligible
professional is a hospital-based eligible
professional shall be made on the basis
of the site of service * * *’’. Since
Congress directed that site of service
must be the determinant of whether an
EP is hospital-based, we could not use
individualized determinations of
whether an EP is using the EHR of the
hospital to deliver his or her services.
Also, the subsequent legislation in the
Continuing Extension Act of 2010 is
consistent with the interpretation that
the determination of whether an EP is
hospital-based is based on the place
where the EP furnishes services, as that
subsequent legislation further limited
hospital-based to those EPs providing
substantially all services in the
emergency room or inpatient hospital
settings. Furthermore, our final policy is
that eligible hospitals must demonstrate
meaningful use based upon all
applicable cases in the inpatient (21)
and emergency department (23) site of
service codes. Therefore, there would be
duplication in measuring meaningful
use for the purposes of making EHR
incentive payments in the scenario
proposed by these commenters.
The HITECH Act does not define the
term ‘‘hospital’’ for purposes of
establishing a definition of hospitalbased EPs for Medicare and Medicaid.
However, section 1861(e) of the Act
defines the term a ‘‘hospital’’ to mean an
institution that ‘‘is primarily engaged in
providing, by or under the supervision
of physicians, to inpatients (A)
diagnostic services and therapeutic
services for medical diagnosis,
treatment, and care of injured, disabled,
or sick persons, or (B) rehabilitation
services for the rehabilitation of injured,
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disabled, or sick persons.’’ Therefore,
clearly EPs that practice primarily in
inpatient hospital settings, as referenced
in section 1861(e) of the Act, would be
considered hospital-based EPs.
We will consider the use of place of
service (POS) codes on physician claims
to determine whether an EP furnishes
substantially all of their professional
services in a hospital setting and is,
therefore, hospital-based. This code set
is required for use in the
implementation guide adopted as the
national standard for electronic
transmission of professional health care
claims under the provisions of the
Health Insurance Portability and
Accountability Act of 1996 (HIPAA).
HIPAA directed the Secretary of HHS to
adopt national standards for electronic
transactions. These standard
transactions require all health plans and
providers to use standard code sets to
populate data elements in each
transaction. The Transaction and Code
Set Rule (65 FR 50312) adopted the ASC
X12N–837 Health Care Claim:
Professional, volumes 1 and 2, version
4010, as the standard for electronic
submission of professional claims. This
standard names the POS code set
currently maintained by CMS as the
code set to be used for describing sites
of service in such claims and is
available at https://www4.cms.gov/
PlaceofServiceCodes/Downloads/
posdatabase110509.pdf.
From this code set, we would
consider the use of the following POS
codes to determine whether an EP is a
hospital-based eligible professional for
Medicare:
• 21—Inpatient Hospital—is a
facility, other than psychiatric, which
primarily provides diagnostic,
therapeutic (both surgical and
nonsurgical), and rehabilitation services
by, or under, the supervision of
physicians, to patients admitted for a
variety of medical conditions.
• 23—Emergency Room, Hospital—is
a portion of a hospital where emergency
diagnosis and treatment of illness or
injury is provided.
Comment: Most commenters were
supportive of the proposal to define
‘‘substantially all’’ of his or her covered
professional services in a hospital
setting as EPs who furnish at least 90
percent of his/her services in a hospital
setting. However, some commenters
expressed concerns that this threshold
will be too high starting in 2015 when
the time comes to determine which EPs
should be subject to penalties for failure
to become meaningful users of certified
EHR technology. A few commenters
misunderstood the proposal and
requested that a hospital-based EP be
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defined as one who provides at least 90
percent of his or her services, defined as
encounters and not as charges.
Response: The statutory definition of
hospital-based EP provides that to be
considered a hospital-based EP, the EP
must provide ‘‘substantially all’’ of his or
her covered professional services in a
hospital setting. Therefore, we must
identify the minimum percentage of an
EP’s covered professional services that
must be provided in a hospital setting
in order for the EP to be considered as
providing ‘‘substantially all’’ of his or
her covered professional services in a
hospital setting. Consistent with the
statute, we proposed to make this
determination on the basis of services
performed by each EP, not the charges
for each EP. We are finalizing the
proposed definition of ‘‘substantially
all’’ as furnishing at least 90 percent of
services in a hospital setting. We believe
a 90 percent threshold certainly would
qualify as ‘‘substantial.’’
Comment: Representatives of
surgeons asked that CMS make an
accommodation to the hospital-based
definition to account for services paid
under a global fee.
Response: The determination of
whether or not an EP is hospital-based
is determined individually for each EP.
A global fee is a single payment for a
bundle of services, some of which could
be performed in a hospital such as major
surgery or hospital visits, whereas some
could be performed in an office such as
follow-up visits, CMS does not have
data, for the place of service for services
performed by individual EPs when the
services are paid as part of a global fee.
We considered possibilities for using
national level estimates for individual
services typically performed under
global fees as proxies for services
provided by individual EPs. However,
this would add significant additional
operational complexity to the
determination of hospital-based status
and we have not pursued this approach.
Comment: Some commenters
requested that CMS establish a process
by which EPs could know in advance of
a payment year whether CMS
considered them as being hospital-based
and therefore ineligible for an incentive
payment.
Response: To the extent practical, we
intend on establishing a process
whereby the EP would know his/her
hospital-based status during the
registration period. We plan to provide
information to EPs regarding their
hospital-based status as early as possible
(that is, no later than early in each
payment year). As indicated in the
proposed rule, we will make a
determination for Medicare incentive
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payment purposes, as to whether or not
an EP is hospital-based by annually
analyzing an EP’s claims history from
the prior year. In the proposed rule we
indicated that we would use claims data
from the prior calendar year to make
hospital-based determinations for EPs.
However, in order to provide
information regarding the hospitalbased status of each EP at the beginning
of each payment year, we will need to
use claims data from an earlier period.
Therefore, we will use claims data from
the prior fiscal year (October through
September). Under this approach, the
hospital-based status of each EP would
be reassessed each year, using claims
data from the fiscal year preceding the
payment year. The hospital-based status
will be available for viewing beginning
in January of each payment year. For
Medicaid purposes, State Medicaid
agencies will make the determination
about whether or not an EP is hospitalbased by analyzing an EP’s Medicaid
claims data, or in the case of EPs who
deliver care via Medicaid managed care
programs, by analyzing either encounter
data or other equivalent data sources, at
the State’s option. For purposes of
making this determination, States would
be permitted to use data either from the
prior fiscal or calendar year.
After consideration of the public
comments received, we are revising the
definition of hospital based EPs in this
final rule. An EP will be defined as
being hospital-based and therefore
ineligible to receive an EHR incentive
payment under either Medicare or
Medicaid, regardless of the type of
service provided, if more than 90
percent of their services are identified as
being provided in places of service
classified under two place of service
codes 21 (Inpatient Hospital) or 23
Emergency Room, Hospital. We plan to
reassess the hospital-based status of
each EP for Medicare purposes each
year, using claims data from the fiscal
year immediately preceding the
payment year. Based on preliminary
claims data from the first 9 months of
2009, CMS currently estimates that,
under this final definition of hospitalbased EPs, about 14 percent of Medicare
EPs (physicians) would be considered
hospital-based and thus not eligible to
receive any incentive payments. We do
not have any data on Medicaid
practitioners.
7. Interaction With Other Programs
In the proposed rule, we described
how the HITECH Act addresses
interactions between the Medicare EHR
incentive program and the E-prescribing
Incentive Program authorized by
MIPPA. Under section 1848(m)(2)(D) of
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the Act, as added by section
4101(f)(2)(B) of the HITECH Act, if a
Medicare FFS or MA EP receives an
incentive payment from the Medicare
EHR incentive program, the EP (or
group practice) is not eligible to also
receive the incentive payment under the
E-prescribing Incentive Program created
by MIPPA. Given the payment timelines
in this final rule for the Medicare EHR
incentive program and the existing
payment timeline for the E-prescribing
Incentive Program, we will know
whether an EP received a Medicare EHR
incentive payment before the eprescribing Incentive Program payment
is calculated. Thus we will exclude
those EPs (or group practices) who
accept a Medicare EHR incentive
payment for a given year from being
eligible for the e-prescribing Incentive
Program payment for that same year.
EPs receiving a Medicaid EHR incentive
payment would remain eligible for the
Medicare MIPAA E-Prescribing
Incentive Program payment.
As the HITECH Act does not specify
any other restrictions on participation in
other programs and participation in the
Medicare and Medicaid EHR incentive
programs, we do not propose any other
restrictions. There may be opportunities
to avoid duplication of reporting
requirements among our various
programs. In section II.A.3. of this final
rule, we discuss how we will avoid
duplication of reporting requirements
for clinical quality measures.
Comment: Some commenters
requested more information on efforts to
avoid duplication of requirements and
highly encouraged CMS to do
everything it could in this regard.
Response: We address comments on
the avoidance of duplication of
requirements in several other areas of
this rule where more specifics can be
provided.
Comment: Commenters generally
supported our proposal to only apply
the limitation of participation in
multiple programs to the limitation
outlined in the HITECH Act.
Response: We continue to believe that
providers should be able to participate
in every program for which they are
statutorily eligible and therefore are
maintaining our proposal to only limit
Medicare EPs from receiving either the
Medicare EHR incentive payment or the
Medicare E–Prescribing incentive
payment.
B. Medicare Fee for Service Incentives
1. Incentive Payments for Eligible
Professionals (EP)
Section 1848(o)(1)(A) of the Act, as
amended by section 4101(a) of the
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HITECH Act, provides for incentive
payments to EPs who are meaningful
users of certified EHR technology during
the relevant EHR reporting periods.
Section 1848(o)(1)(A)(i) of the Act
provides that EPs who are meaningful
EHR users during the relevant EHR
reporting period are entitled to an
incentive payment amount, subject to an
annual limit, equal to 75 percent of the
Secretary’s estimate of the Medicare
allowed charges for covered
professional services furnished by the
EP during the relevant payment year.
Under section 1848(o)(1)(B)(ii)(VI) of the
Act, an EP is entitled to an incentive
payment for up to 5 years. In addition,
in accordance with section
1848(o)(1)(A)(ii) of the Act, there shall
be no incentive payments made with
respect to a year after 2016. The
incentive payments would be disbursed
from the Federal Supplementary
Medical Insurance Trust Fund, as
provided for under section
1848(o)(1)(A)(i) of the Act. As noted in
section II.A. of this final rule, EPs who
qualify for both the Medicare and
Medicaid incentive payments must elect
to receive payments from one program
or the other.
a. Definitions
In accordance with section
1848(o)(5)(C) of the Act, we will add a
definition of the term ‘‘eligible
professional’’ in our regulations at
§ 495.100 to mean a physician as
defined under section 1861(r) of the Act.
Section 1861(r) of the Act defines the
term ‘‘physician’’ to mean the following
five types of professionals, each of
which must be legally authorized to
practice their profession under state
law: a doctor of medicine or osteopathy,
a doctor of dental surgery or dental
medicine, a doctor of podiatric
medicine, a doctor of optometry, or a
chiropractor. As discussed in section
II.B.1.a of this final rule, in accordance
with section 1848(o)(1)(C) of the Act,
hospital-based EPs are not eligible for an
incentive payment.
Section 1848(o)(5)(A) of the Act
defines covered professional services as
having the same meaning as in section
1848(k)(3) of the Act, that is, services
furnished by an eligible professional for
which payment is made under, or is
based on, the Medicare physician fee
schedule.
In accordance with section 1848(a)(1)
of the Act, the Medicare allowed charge
for covered professional services is the
lesser of the actual charge or the
Medicare physician fee schedule
amount established in section 1848 the
Act. As specified under section
1848(o)(1)(A)(i) of the Act, the
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Secretary’s estimate of allowed charges
is based on claims submitted to
Medicare no later than 2 months
following the end of the relevant
payment year. We proposed to codify
these specifications and definitions in
our regulations at 495.102.
Comment: The commenters who
expressed concerns about the EP
definition under the Medicare program
had one overall theme. It is that the
definition is too narrow and that it
should be more inclusive of other health
professionals in order to serve the goals
of the HITECH Act. The commenters
stated that they believe that the intent
of the electronic health records (EHR)
legislation is to encompass a wide range
of health professionals to incorporate
efficient and effective EHR technology.
Specifically, these commenters stated
that the Medicare EP definition should
be expanded to include nonphysician
practitioners and health professionals
such as physician assistants (PAs),
nurse practitioners (NPs), clinical nurse
specialists (CNSs), certified nursemidwives (CNMs), clinical
psychologists (CPs), clinical social
workers (CSWs), certified registered
nurse anesthetists (CRNAs), registered
nurses (RNs), occupational therapists
(OTs), and credentialed pedorthists who
make shoes for diabetic patients.
Additionally, we received a comment
that the Medicare EP definition should
recognize health professionals who
provide health support services as
members of an interdisciplinary health
care team such as a team consisting of
diabetes nurse educators, NPs,
pharmacists, PAs, dieticians, and case
managers.
Representatives of rural health clinics
(RHCs), Federally qualified health
centers (FQHCs), ambulatory surgical
centers (ASCs), outpatient clinics and
dialysis facilities commented that their
providers should also be included under
the Medicare EP definition to qualify for
Medicare incentive payments. These
providers believe that they are a key set
of contributors that will implement and
meaningfully utilize electronic health
care record program modules that
directly benefit their patient
populations. Alternatively, one of these
commenters recommended that
provider eligibility should be
determined by type of service provided
rather than by location of service and
should include non-physician clinicians
and providers.
The sub-theme of the comments that
we received on the Medicare EP
definition is that the definition of an
‘‘eligible provider’’ that qualifies for EHR
incentive payments should be a
common definition for the Medicare and
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Medicaid programs. The commenters
believe that a uniform definition of an
EP would be more administratively
efficacious for the Medicare and
Medicaid programs considering that EPs
are permitted to switch participation
between the Medicare and Medicaid
incentive programs one-time after the
initial payment year.
An organization representing
pathologists expressed concern that the
Medicare EP definition, as currently
drafted would subject certain
pathologists to payment incentive
penalties for not being meaningful EHR
users if the pathologists performed less
than 90 percent of their professional
services in any inpatient or outpatient
setting in the prior year. All EPs have to
report on all Core Measures and a subset
of clinical measures that pathologists
could not meet in their day-to-day
practice given the nature of pathology’s
scope of practice. Accordingly, this
organization recommended that CMS
ensure that pathologists who are
currently defined as Medicare EPs be
considered as ‘‘non-qualifying’’ EPs, that
are exempt from future meaningful user
penalties.
Response: While we appreciate the
comments that we received on the
Medicare EP definition, we are unable
to expand or alter this statutory
definition or consolidate it with the
Medicaid program EP definition as
suggested by the commenters. Under the
EHR incentive payment program, the
law provided a separate Medicare EP
definition rather than giving the
Secretary authority or discretion to
determine who is a Medicare EP or, who
is an EP for both the Medicare and
Medicaid programs.
Comment: A commenter requested
clarification of the method used for
determining Medicare incentives for EPs
practicing in a rural health clinic.
Response: The amount of the EHR
incentive payment is based on the
estimated allowed charges for all
covered professional services furnished
by an EP during the payment year,
subject to the maximum payment
amount for the payment year for the EP.
For EPs that practice in an RHC, EHR
incentive payments are based on the
amount of covered professional services
that are not part of the RHC package of
services and are billed by the EP
through the physician fee schedule.
Comment: A commenter suggested
that the definition of allowable charges
be amended to include the RHC
schedule of services, or allow providers
who use UB92 and HCFA 1500 forms to
be eligible for the EHR incentive
payment.
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Response: The allowed charge is the
amount that Medicare determines to be
reasonable payment for a provider or
service under Part B, including
coinsurance and deductibles. RHC
services furnished by an EP are not
considered covered professional
services for purposes of the Medicare
EHR because they are not billed or paid
under the physician fee schedule.
After consideration of the public
comments received on the term,
‘‘eligible professional’’ for the Medicare
program, we are adopting the Medicare
EP definition in our regulations at
§ 495.100 that state that a Medicare EP
is a physician as defined under § 1861(r)
of the Social Security Act. That is, a
Medicare EP is a doctor of medicine or
osteopathy, a doctor of dental surgery or
dental medicine, a doctor of podiatric
medicine, a doctor of optometry, or a
chiropractor and a doctor who is legally
authorized to practice their profession
under State law.
b. Incentive Payment Limits
Section 1848(o)(1)(B)(i) of the Act sets
forth the annual limits on the EHRrelated incentive payments to EPs.
Specifically, section 1848(o)(1)(B) of the
Act provides that the incentive payment
for an EP for a given payment year shall
not exceed the following amounts:
• For the EP’s first payment year, for
such professional, $15,000 (or, $18,000
if the EP’s first payment year is 2011 or
2012).
• For the EP’s second payment year,
$12,000.
• For the EP’s third payment year,
$8,000.
• For the EP’s fourth payment year,
$4,000.
• For the EP’s fifth payment year,
$2,000.
• For any succeeding year, $0.
Under section 1848(o)(1)(B)(iv) of the
Act, for EPs who predominantly furnish
services in a geographic HPSA (as
designated by the Secretary under
section 332(a)(1)(A) of the Public Health
Service (PHS) Act), the incentive
payment limitation amounts for each
payment year are increased by 10
percent. Section 1848(o)(1)(B)(iii) of the
Act also provides for a phased reduction
in payment limits for EPs who first
demonstrate meaningful use of certified
EHR technology after 2013. Specifically,
if the EP’s first payment year is after
2013, then the annual limit on the
incentive payment equals the annual
limit applicable to an EP whose first
payment year is 2013. Accordingly, if
the EP’s first payment year is 2014, the
EP’s maximum incentive payment will
be $12,000 in 2014, $8,000 in 2015, and
$4,000 in 2016. Section 1848(o)(1)(B)(v)
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of the Act provides that if the EP’s first
payment year is after 2014, then the
applicable incentive payment limit for
such year and any subsequent year shall
be $0. In other words, an EP who does
not qualify to receive an EHR-related
incentive payment prior to 2015 will not
receive any of these incentive payments.
Comment: One commenter believes
that the methodology for determining
the incentive payments under the
incentive program does not offer each
EP an equal incentive, despite being
held to the same standards of adoption
and implementation.
Response: We are uncertain why the
commenter believes that the
methodology for determining the
incentive payments under the incentive
program does not offer each EP an equal
incentive to adopt EHR technology.
However, the payment methodology in
the statute for EPs (as well as the
methodologies for hospitals and CAHs)
is quite prescriptive, and offers no
discretion for us to adopt revisions
designed to enhance incentives for
adoption. For EPs, the HITECH Act
defines the incentive payment amount
as, ‘‘an amount equal to 75 percent of
the Secretary’s estimate * * * of the
allowed charges under this part of all
such covered professional services
furnished by the eligible professional
during such year.’’
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c. Increase in Incentive Payment for EPs
Who Predominantly Furnish Services in
a Geographic Health Professional
Shortage Area (HPSA)
Section 1848(o)(1)(B)(iv) of the Act
provides that the amount of the annual
incentive payment limit for each
payment year be increased by 10
percent for EPs who predominantly
furnish services in an area that is
designated by the Secretary (under
section 332(a)(1)(A) of the PHS Act) as
a geographic health professional
shortage area (HPSA). This section of
the PHS Act refers to geographic HPSAs,
which are areas that have been
designated by the Secretary as having a
shortage of health professionals, based
on the population-to-provider ratio and
other factors. HPSAs are located in
every State, and in both rural and urban
areas.
Geographic HPSAs are defined in 42
CFR Part 5 and include primary medical
care, dental, and mental health HPSAs.
In accordance with the statute, we will
increase the limits per payment year by
10 percent for EHR-related incentive
payments to EPs who predominantly
furnish covered professional services in
a geographic primary medical care,
dental, or mental health HPSA.
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We proposed that for an EP to be
considered as ‘‘predominantly’’
furnishing covered professional services
in a geographic HPSA, more than 50
percent of the EP’s covered professional
services must be furnished in a
geographic HPSA. We stated that using
‘‘more than 50 percent’’ as the criterion
to define ‘‘predominantly’’ is consistent
with how the term is defined in general
parlance as well as how the definition
is used for purposes of other aspects of
the Medicare program. Our data
indicates that most physicians
furnishing services in a HPSA furnish
100 percent of their covered services in
a HPSA, and only very few furnish
services in both HPSA and non-HPSA
areas.
To determine whether an EP has
furnished more than 50 percent of his/
her covered professional services in a
geographic HPSA, we proposed to
utilize frequency of services provided
over a 1-year period from January 1 to
December 31, rather than basing it on
the percentage of allowed charges. We
proposed to make the incentive
payment to the EP based on an EP’s
estimated allowed charges for the
relevant payment year.
We proposed that once we compile a
full year of data, we would determine
eligibility for the EHR HPSA payment
limit increase for the payment year
based on whether the EP provided more
than 50 percent of his/her services in a
geographic HPSA during the payment
year. The determination would be made
based on claims submitted not later than
2 months after the end of the year. If we
determine that the EP provided more
than 50 percent of his/her services in a
geographic HPSA and is therefore
eligible for the EHR HPSA payment
limit increase, we would then make an
additional lump sum payment to reflect
that increased limit amount based on
the estimated allowable charges for that
EP for the prior year. The additional
amount would be paid no later than 120
days after the end of the prior year for
which the EP was eligible for the 10
percent EHR HPSA payment limit
increase.
Most physicians furnishing services
in a HPSA furnish 100 percent of their
covered services in a HPSA. Section
1848(o)(1)(B)(iv) of the Act also
authorizes us to apply the provisions of
sections 1833(m) and (u) of the Act in
implementing this 10 percent EHR
HPSA payment limit increase, as the
Secretary determines appropriate.
Section 1833(m) of the Act establishes
the HPSA bonus program, which
provides a 10 percent bonus to
physicians who furnish Medicare
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covered professional services in a
geographic HPSA.
Section 1833(m)(1) of the Act
provides that physicians who furnish
covered professional services in a year
in an area that is designated as a
geographic HPSA prior to the beginning
of the year are eligible to receive the
HPSA bonus for services furnished
during the current year. We have
interpreted this to mean that bonus
payments should continue throughout
the current year, even if the area loses
its designation as a geographic HPSA
during the current year. Physicians
furnishing Medicare-covered
professional services in an area that is
not designated as a geographic HPSA by
December 31 of the prior year are not
eligible to receive the HPSA bonus for
the current year, even if the area is
subsequently designated as a geographic
HPSA during the current year. We will
apply these same rules for the 10
percent EHR HPSA payment limit
increase provided under section
1848(o)(1)(B)(iv) of the Act.
Section 1833(m)(2) of the Act also
provides that geographic HPSAs that
consist of an entire county be identified
and the bonus paid automatically. We
publish a list annually of the zip codes
that are in these areas on our Web site
at https://www.cms.hhs.gov/
HPSAPSAPhysicianBonuses/
01_Overview.asp#TopOfPage.
Physicians furnishing Medicarecovered professional services in a zip
code that is on this list automatically
receive the HPSA bonus payment.
Physicians furnishing Medicare covered
professional services in a zip code that
is not on this list but that was
designated as a geographic HPSA as of
December 31 of the prior year must use
a modifier when submitting a Medicare
claim in order to receive the HPSA
bonus.
Comment: We received a comment
stating that many EPs who work in a
HPSA do so only on a part-time basis
and that most would not qualify for the
10 percent increase in the payment limit
based on the proposed threshold of
furnishing more than 50 percent of his/
her covered professional services in a
geographic HPSA. The commenter
suggested that an EP should be able to
qualify for the ten percent increase in
the payment limit if at least 25 percent
of his/her covered services during an
EHR reporting period are furnished in a
HPSA.
Response: The statute states that the
annual payment limit be increased by
ten percent for EPs who predominantly
furnish services in a geographic HPSA.
We continue to believe that ‘‘more than
fifty percent’’ correctly reflects the
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meaning of the word ‘‘predominantly’’ as
used in this statute. As noted above, our
data also indicate that most physicians
furnish all of their services either in a
HPSA or outside of a HPSA, and only
very few furnish services in both HPSA
and non-HPSA areas.
Comment: Several commenters
requested that Federally Qualified
Health Centers (FQHCs) be eligible to
receive the ten percent increase in the
payment limit for EPs who
predominantly furnish services in a
HPSA since the FQHC is a legal entity
that bills Medicare and receives
payment for services provided by
physicians.
Response: The 10 percent increase in
the payment limit applies to EPs who
predominantly furnish services in a
geographic HPSA. FQHCs and RHCs are
not eligible for the ten percent increase
in the payment limit because they do
not meet the definition of EP as
specified in section 1848(o)(5)(C) of the
Act. Please see others sections of the
regulation that discuss the criteria to be
considered an EP. Additionally, we
wish to restate that FQHCs are not
entitled to any Medicare or Medicaid
incentive payments under this program.
Comment: A commenter suggested
that ‘‘predominantly’’ be defined as the
location where the EP provides the most
services, so that an EP who sees patients
in more than two locations could
receive the increase in the payment
limit if he/she provided more care in the
HPSA location than any other location.
The commenter also suggested that if
this is too difficult to administer, we
should accept an attestation from the
EP.
Response: We are aware that many
physicians, especially in rural areas,
furnish services in more than one
location, and appreciate the
commenter’s interest in making the
HPSA payment limit increase available
to these EPs. If we were to accept this
recommendation, then an EP who
worked in three locations at forty
percent, thirty percent, and thirty
percent time respectively, would be
eligible for the HPSA payment limit
increase if the first location was in a
geographic HPSA. If the EP worked in
four locations at thirty percent, twentyfive percent, twenty five percent, and
twenty percent time respectively, he/she
would be eligible for the HPSA payment
limit increase if the first location was in
a geographic HPSA. We considered this
suggestion and concluded that lowering
the threshold for services furnished in a
HPSA would be inconsistent with the
intent of the HPSA payment limit
increase, which is to provide an
incentive to promote the use of EHR by
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EPs who practice predominantly in
HPSAs. Also, if an EP who worked in
more than two locations and furnished
services in a HPSA only thirty or forty
percent of his/her time was eligible for
the HPSA payment limit increase, this
would be unfair to an EP who worked
in two locations and spent forty-five
percent of his/her time in a HPSA and
fifty-five percent time in a non-HPSA,
because this EP would not be eligible for
the HPSA payment limit increase even
though he/she spent more total time in
a HPSA.
Comment: A commenter stated that
the proposed HPSA payment limit
increase was being applied
inconsistently because an EP would still
get the payment limit increase if the
designation was removed mid-year, and
would not get the payment limit
increase if the designation was added
mid-year.
Response: Section 1848(o)(1)(B)(iv) of
the Act authorizes us to apply the
provisions of the HPSA bonus program
to the implementation of the EHR HPSA
payment limit increase. The HPSA
bonus is paid to physicians who furnish
Medicare-covered professional services
in an area that is designated as a
geographic HPSA as of December 31 of
the prior year. They are authorized to
receive the HPSA bonus throughout the
current year, even if the area loses its
designation as a geographic HPSA
during the current year. Physicians
furnishing Medicare-covered
professional services in an area that is
not designated as a geographic HPSA as
of December 31 of the prior year are not
eligible to receive the HPSA bonus for
the current year, even if the area is
subsequently designated as a geographic
HPSA during the current year. We
proposed to use the same methodology
for the HPSA EHR program, and believe
that this is consistent with the statute.
After consideration of the public
comments received, we are finalizing
these provisions as proposed.
d. Form and Timing of Payment
Section 1848(o)(1)(D)(i) of the Act, as
amended by section 4101(a) of the
HITECH Act, provides that the incentive
payments may be disbursed as a single
consolidated payment or in periodic
installments as the Secretary may
specify. We proposed to make a single,
consolidated, annual incentive payment
to EPs. Payments would be made on a
rolling basis, as soon as we ascertained
that an EP had demonstrated
meaningful use for the applicable
reporting period (that is, 90 days for the
first year or a calendar year for
subsequent years), and reached the
threshold for maximum payment.
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Section 1848(o)(1)(A) of the Act
provides that ‘‘with respect to covered
professional services provided by an
eligible professional,’’ the incentive
payment ‘‘shall be paid to the eligible
professional (or to an employer or
facility in the cases described in clause
(A) of section 1842(b)(6)).’’ Section
1842(b)(6)(A) of the Act allows for
reassignment to an employer or entity
with which the physician has a valid
contractual arrangement allowing the
entity to bill for the physician’s services.
Therefore, we proposed that EPs would
be allowed to reassign their incentive
payment to their employer or an entity
which they have a valid employment
agreement or contract providing for
such reassignment, consistent with all
rules governing reassignments. We
proposed to preclude an EP from
reassigning the incentive payment to
more than one employer or entity. To
implement this requirement, we
proposed to use the EP’s Medicare
enrollment information to determine
whether an EP belongs to more than one
practice (that is, whether the EP’s
National Provider Identifier (NPI) is
associated with more than one practice).
In cases where the EP was associated
with more than one practice, we
proposed that EPs would select one tax
identification number to receive any
applicable EHR incentive payment.
As mentioned above, we proposed
that payments would be made on a
rolling basis, as soon as we ascertain
that an EP has demonstrated meaningful
use for the applicable reporting period
(that is, 90 days for the first year or a
calendar year for subsequent years), and
reached the threshold for maximum
payment. We proposed to add a new
part 495.10(e) and (f) to permit
reassignment of the incentive payment
with certain limitations. The following
is a summary of the comments we
received and our responses.
Comment: Several commenters,
including one representing Rural Health
Clinics, requested clarification of the
statement in the proposed rule (75 FR
1910) that an eligible professional (EP)
is allowed to reassign his/her EHR
incentive payment to an employer or
other entity to which the EP has
reassigned his/her payments for
Medicare covered services. The
commenters believe that the HITECH
Act requires in such cases that any
Medicare EHR incentive for which the
EP qualifies must be paid to such
employer or other entity. The
commenters reference the phrases from
the HITECH Act, ‘‘shall be paid’’ to an
eligible professional (or to an employer
or facility in cases described in the
reassignment provisions of the Social
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Security Act). In addition, the
commenters referenced the phrase
regarding the transfer of an EP’s
Medicaid EHR incentive which states
that ‘‘such incentives are paid directly to
such provider (or to an employer or
facility to which such provider has
assigned payments)’’. The commenters
interpret these phrases to mean that an
EP’s EHR incentive payments (both
Medicare and Medicaid) must be paid to
an employer or other entity to which the
EP has reassigned payments for his/her
services.
Response: We do not agree with the
commenters’ conclusions regarding to
whom the payments must be made. As
we stated in the proposed rule, Section
1842(b)(6) of the Act allows, but does
not require reassignment to an employer
or entity with which the physician has
a valid contractual arrangement
allowing the employer or entity to bill
for the physician’s services. The
HITECH Act provisions cited by the
commenter similarly do not require that
the EHR incentive payment be made
pursuant to a reassignment, but provide
that the payment may be made directly
to the EP or to the employer or other
entity. A physician reassigns payment
based on the scope of his or her
employment or contractual
arrangement. Based upon our
interpretation of the applicable
provisions, we are finalizing our
proposal at § 495.10(f) to permit EPs to
reassign their incentive payments to
their employer or to an entity with
which they have a contractual
arrangement, consistent with all rules
governing reassignments including part
424, subpart F.
We are taking this opportunity to
remind the public that if the EP wishes
to reassign his or her incentive payment
to the employer or entity with which the
EP has a contractual arrangement, the
parties should review their existing
contract(s) to determine whether the
contract(s) currently provides for
reassignment of the incentive payment
or if the contract(s) needs to be revised.
Reassignment of the incentive payment
must be consistent with applicable
Medicare laws, rules, and regulations,
including, without limitation, those
related to fraud, waste, and abuse. For
Medicaid, a discussion of reassignment
of the incentive payment is found in
section II.D.3.e of this final rule ‘‘Entities
Promoting the Adoption of Certified
EHR technology.’’
Comment: Several commenters stated
that the rationale and objectives of the
HITECH Act provisions regarding
transfer of the EP’s EHR incentives are
merely to align EHR incentives and EHR
costs. Therefore, they believe that the
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HITECH Act provisions support their
view that Congressional intent was to
prevent windfall EHR incentives to EPs
who incur no EHR-related costs. The
commenters also asserted that CMS’s
failure to address this issue will require
entities that employ or contract with
EPs to enter into negotiations and a
separate agreement transferring the EP’s
EHR incentive payments to the
employer or other entity.
Response: We do not agree with the
commenters’ statement that the
Congress intended to prevent windfall
EHR incentives to EPs who incur no
EHR-related costs. Title IV, Division B
of the HITECH Act establishes incentive
payments under the Medicare and
Medicaid programs for certain
professionals and hospitals that
meaningfully use certified EHR
technology. The provisions are not
focused solely upon the costs associated
with the EHR technology. Rather, as we
stated in the proposed rule (75 FR
1849), it focuses upon the adoption,
implementation, upgrade, or meaningful
use of the technology.
However, we do agree that some
entities may have to review and/or
negotiate current contractual
arrangements to address the transfer of
the incentive payments. The first
payment year for the incentive payment
is CY 2011, which we believe should
afford parties sufficient time to reach a
new agreement. For Medicaid, a
discussion of reassignment of the
incentive payment is found in section
II.D.3.e of this final rule ‘‘Entities
Promoting the Adoption of Certified
EHR technology.’’
Comment: Several commenters
supported our proposal that if an EP has
reassigned his or her payments for
services to more than one employer or
entity, that only one of those employers
or entities should receive the EP’s EHR
incentive payments for a particular EHR
Reporting Period (75 FR 1910). The
commenters do not believe that EPs
should decide which employer or entity
should receive his or her EHR incentive
payment. Rather, the commenters stated
that such payments should
automatically be paid to the employer or
entity that has received for the reporting
period the largest percentage of the EP’s
Medicare or Medicaid payments for
services.
Response: We are not persuaded to
adopt the commenters’ suggestion. We
believe that the suggestion by the
commenters would create
administrative complexities for both
CMS and EPs with little benefit. Many
of these obstacles would be similar to
those described in the proposed rule
when discussing the possibility of
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making proportional EHR incentive
payments (75 FR 1911). Therefore, we
are finalizing our proposal to revise
§ 495.10(e) to preclude an EP from
reassigning the incentive payment to
more than one employer or entity. In
cases where the EP is associated with
more than one practice, EPs must select
one TIN to receive any applicable EHR
incentive payment.
Comment: The commenters also state
that if an EP has incurred out-of-pocket
costs in connection with an EHR
provided by an employer or other entity
to which the EP has reassigned
payments for his or her services, the EP
should be permitted to keep an amount
of his or her EHR incentives equal to the
amount of such costs incurred.
Response: The statute does not
address this issue. It simply provides
that the incentive payments are to be
made directly to the EP or to an
employer or other entity to which the
EP has reassigned the incentive
payment. Reassignment of the incentive
payment must be consistent with
applicable Medicare laws, rules, and
regulations, including, without
limitation, those related to fraud, waste,
and abuse. We believe that any costsharing or subsequent distribution of the
incentive payment, such as in the
manner described by the commenter,
should be resolved between the parties.
Comment: Several commenters urged
CMS to clarify that any reassignment of
the EP’s EHR incentive payment should
not constitute a financial arrangement
within the meaning of the physician
self-referral law, or remuneration within
the meaning of the federal anti-kickback
statute.
Response: The physician self-referral
law prohibits a physician from making
a referral for designated health services
to an entity with which the physician or
a member of the physician’s immediate
family has a financial relationship,
unless an exception applies. For
purposes of the physician self-referral
law, a financial arrangement includes
ownership or investment interests and
compensation arrangements. The statute
defines a ‘‘compensation arrangement’’
to mean any arrangement involving
remuneration, direct or indirect, overt or
covert, in cash or in kind. A
reassignment of an EP’s EHR payment
would constitute remuneration, and we
note that reassignment generally occurs
in the context of an existing
compensation arrangement (for
example, employment). There are many
potentially applicable exceptions for
compensation arrangements that involve
a physician’s reassignment of Medicare
payments.
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Similarly, with respect to the antikickback statute, absent compliance
with a safe harbor, a determination of
whether a reassignment constitutes
prohibited remuneration would be made
on a case-by-case basis and we therefore
decline to issue any statement regarding
the application of the anti-kickback
statute to a reassignment. For additional
information regarding the anti-kickback
statute, please refer to the OIG’s Web
site at https://oig.hhs.gov.
Comment: One commenter
representing American Indian and
Alaska Native health providers urged
CMS to require that the HITECH/EHR
Meaningful Use provider incentive
payments be reassigned to the Tribal
outpatient clinics, because the Tribal
clinics developed the infrastructure not
the EPs themselves, and purchased
electronic medical record systems to
complement the current Registration
Patient Management Systems (RPMS) of
the Indian Health Service. In addition,
the commenter noted that many tribal
outpatient clinics have employment
contracts with their EPs. Thus, the
commenters urged CMS to require that
incentive EHR payments should be
included in employment contracts to
help protect the EP as employee and the
Tribe as the employer.
Response: As stated above, section
1848(o)(1)(A) of the Act provides that
the EP’s incentive payment shall be paid
to the eligible professional (or to an
employer or other entity with which the
physician has a valid contractual
arrangement allowing the employer or
other entity to bill for the physician’s
services). We recognize that some tribes
purchased EHR systems based upon
criteria established by the Indian Health
Service. However, after careful
consideration, we believe that the same
standards concerning the incentive
payments should apply. The EP and the
Tribal outpatient clinic should jointly
resolve whether the EP’s EHR incentive
payment will be reassigned to the Tribal
outpatient clinic or made directly to the
EP. Similarly, any decision by the Tribal
outpatient clinic concerning whether to
include language in its employment
contract (or in the alternative, whether
any pre-existing contract already
requires reassignment of the payment),
is a matter of contract interpretation that
should be resolved by the parties
themselves. This discussion is also
addressed in the Medicaid section of
this rule at II.D.4.a.3.
Comment: One commenter expressed
concern about the potential tax
consequences associated with an EP’s
reassignment of the EHR incentive
payment by an independent contractor
to a larger organization. The commenter
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recommended that a 1099 independent
contractor should consult with his/her
tax advisor before agreeing to reassign
incentive payments and to ensure that
the election to reassign is made before
payment is sent from CMS or the State
Medicaid Agency.
Response: The commenter’s
recommendation falls outside the scope
of our authority. This is a matter for the
1099 independent contractor EP to
consider.
Comment: Many national and state
medical associations expressed concern
regarding the proposed requirement that
the EP must identify a Tax Identification
Number (TIN) to which the EP’s
incentive payment should be made.
They assert that this will not work for
physicians who do not have a TIN, and
are enrolled in Medicare or Medicaid
through their Social Security Number
(SSN). Therefore, the commenters
recommend that CMS accept the SSN in
lieu of the TIN, so that all eligible
physicians are able to participate in the
Medicare and Medicaid EHR incentive
programs.
Response: We recognize that many
physicians are enrolled in Medicare or
Medicaid through their Social Security
Number (SSN). Therefore, we are
revising our proposal at § 495.10 that an
EP must submit, in a manner specified
by CMS, the Taxpayer Identification
Number (TIN) to which the EP’s
incentive payment should be made. In
finalized § 495.10(c), we provide that
the TIN may be the EP’s Social Security
Number (SSN) to which the EP’s
incentive payment should be made. We
note that if the physician is part of a
group with more than one owner or
organization that is incorporated, they
would have a TIN for the corporation
that is not the EP’s SSN.
Comment: Some commenters
recommended that the employer or
entity to which an EP reassigns payment
for covered services, should be deemed
authorized to provide, on the EP’s
behalf, any documentation necessary for
the EP to qualify for EHR incentive
payments.
Response: We believe that this should
be resolved by the parties themselves.
There is nothing in the statute that
requires an EP’s employer or other
entity to which an EP reassigns payment
to provide any necessary documentation
for an EP to qualify for EHR incentive
payments. Rather, the finalized
regulatory provision at § 495.8 provides
that an EP must demonstrate that he or
she satisfies each of the applicable
objectives and associated measures
under § 495.6. If the parties wish to have
the necessary documentation furnished
by the employer or entity, they should
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resolve this pursuant to an employment
or contractual agreement. We are
finalizing our proposal because we
believe that making a single,
consolidated payment would be the
least administratively burdensome for
both CMS and EPs. In addition, we
believe a single, consolidated payment
would reduce the possibility of fraud
and duplicate payments. Several of
these issues related to reassignment of
payment are also addressed in the
Medicaid section. See II.D.3.e.
e. Payment Adjustment Effective in CY
2015 and Subsequent Years for EPs Who
Are Not Meaningful Users of Certified
EHR Technology
Section 1848(a)(7) of the Act, as
amended by section 4101(b) of the
HITECH Act, provides for payment
adjustments effective for CY 2015 and
subsequent years for EPs who are not
meaningful EHR users during the
relevant EHR reporting period for the
year. In general, beginning in 2015, if an
EP is not a meaningful EHR user for any
EHR reporting period for the year, then
the Medicare physician fee schedule
amount for covered professional
services furnished by the EP during the
year (including the fee schedule amount
for purposes of determining a payment
based on the fee schedule amount) is
adjusted to equal the ‘‘applicable
percent’’ of the fee schedule amount
(defined below) that would otherwise
apply. The HITECH Act includes a
significant hardship exception,
discussed below, which, if applicable,
could exempt certain EPs from this
payment adjustment. The payment
adjustments do not apply to hospitalbased EPs.
The term ‘‘applicable percent’’ means:
‘‘(I) for 2015, 99 percent (or, in the case
of an EP who was subject to the
application of the payment adjustment
if the EP is not a successful electronic
prescriber under section 1848(a)(5) for
2014, 98 percent); (II) for 2016, 98
percent; and (III) for 2017 and each
subsequent year, 97 percent.’’
In addition, section 1848(a)(7)(iii) of
the Act provides that if for 2018 and
subsequent years the Secretary finds
that the proportion of EPs who are
meaningful EHR users is less than 75
percent, the applicable percent shall be
decreased by 1 percentage point from
the applicable percent in the preceding
year, but in no case shall the applicable
percent be less than 95 percent.
Significant Hardship Exception—
section 1848(a)(7)(B) of the Act provides
that the Secretary may, on a case-bycase basis, exempt an EP who is not a
meaningful EHR user for the year from
the application of the payment
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adjustment if the Secretary determines
that compliance with the requirements
for being a meaningful EHR user would
result in a significant hardship, such as
in the case of an EP who practices in a
rural area without sufficient Internet
access. The exemption is subject to
annual renewal, but in no case may an
EP be granted a hardship exemption for
more than 5 years.
Comment: Some commenters believed
that when an EP’s performance leads to
a negative financial impact under
Medicare payment policy, it would be
unfair and overly punitive for them to
face a separate and potentially more
significant financial impact—whether
through a denial of funding and/or
ARRA’s penalties. Further, some
commenters indicated that they
interpreted these requirements to mean
that Medicaid participants would or
would not experience fee-schedule
adjustments if they are not meaningful
users by the end of 2014.
Response: We will reduce payments
as specified under the statute. Under
sections 4101(b) and (c) of the HITECH
Act, we are required to pay EPs less
than 100 percent of the fee schedule and
to make downward adjustments to MAaffiliated EPs for their professional
services if they are not meaningful users
of certified EHR beginning in CY 2015.
Under sections 4102(a), (a)(2), and (c) of
the HITECH Act, we are authorized to
pay eligible hospitals a reduced annual
payment update, provide downward
payment adjustment to CAHs for cost
reporting periods, and provide
downward payment adjustment to MAaffiliated hospitals respectively, if they
are not meaningful users of certified
EHR technology beginning in FY 2015.
The Medicare fee schedule adjustments
will impact any EP or subsection(d)
hospital that is not a meaningful user by
the end of 2014. The adjustments are
not authorized under Medicaid, but the
adjustments will still apply to Medicaid
EPs who are also Medicare EPs and also
to Medicaid acute care hospitals that are
also subsection(d) hospitals. We are
finalizing these provisions as proposed.
2. Incentive Payments for Hospitals
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a. Definition of Eligible Hospital for
Medicare
Section 1886(n) of the Act, as
amended by section 4102(a)(1) of the
HITECH Act, provides for incentive
payments, beginning in FY 2011 (that is,
October 1, 2010 through September 30,
2011) for eligible hospitals that are
meaningful users of certified EHR
technology during the EHR reporting
period for the payment year. In the
proposed rule, we proposed a new
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§ 495.104 to implement this provision.
As we noted in the proposed rule,
section 1886(n)(6)(B) of the Act defines
‘‘eligible hospitals’’ for purposes of the
incentive payments provision, as
‘‘subsection (d) hospitals,’’ referring to
the definition of that term in section
1886(d)(1)(B) of the Act. Section
1886(d)(1)(B) of the Act generally
defines a ‘‘subsection (d) hospital’’ as a
‘‘hospital located in one of the fifty
States or the District of Columbia.’’ The
term therefore does not include
hospitals located in the territories or
hospitals located in Puerto Rico. Section
1886(d)(9)(A) of the Act separately
defines a ‘‘subsection (d) Puerto Rico
hospital’’ as a hospital that is located in
Puerto Rico and that ‘‘would be a
subsection (d) hospital if it were located
in one of the 50 states.’’ Therefore,
because section 4102(a)(1) of the
HITECH Act does not refer to
‘‘subsection (d) Puerto Rico hospitals,’’
we proposed that incentive payments
for meaningful users of certified EHR
technology would not available under
this provision to hospitals located in
Puerto Rico. The provision does apply
to inpatient, acute care hospitals located
in the State of Maryland. These
hospitals are not currently paid under
the IPPS in accordance with a special
waiver provided by section 1814(b)(3) of
the Act. Despite this waiver, the
Maryland hospitals continue to meet the
definition of a ‘‘subsection (d) hospital’’
because they are hospitals located in the
50 states. Therefore we proposed that
incentive payments for meaningful
users of certified EHR technology would
be available under this provision to
acute care hospitals located in the State
of Maryland. The statutory definition of
a subsection (d) hospital also does not
apply to hospitals and hospital units
excluded from the IPPS under section
1886(d)(1)(B) of the Act, such as
psychiatric, rehabilitation, long term
care, children’s, and cancer hospitals.
We also proposed that, for purposes of
this provision, we would provide
incentive payments to hospitals as they
are distinguished by provider number in
hospital cost reports. We proposed that
incentive payments for eligible hospitals
would be calculated based on the
provider number used for cost reporting
purposes, which is the CMS
Certification Number (CCN) of the main
provider (also referred to as OSCAR
number). Payments to eligible hospitals
are made to each provider of record. The
criteria for being a meaningful EHR
user, and the manner for demonstrating
meaningful use, are discussed in section
B.2. of this final rule.
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Comment: We received numerous
comments on our proposal to identify
all individual hospitals eligible for
incentive payments based on the
provider number used for cost reporting
purposes (the CCN of the main
provider). These commenters, including
national and regional hospital
associations, hospital systems, and
hospitals with multiple campuses,
objected to the proposed policy on
various grounds. Many of these
commenters pointed out that there is no
standard policy that defines the specific
types of facilities to which a single CCN
applies. As a result, a single CCN could
encompass multiple hospitals within a
hospital system in some cases, while in
other cases multiple hospitals within a
system could have separate CCNs. These
commenters therefore maintained that
our proposed policy would unjustifiably
lead to disparate treatment of hospital
systems based solely on whether the
system had one or more provider
numbers. Commenters also maintained
that, because the Medicare and
Medicaid payment incentives are
calculated using a per-hospital base
amount, plus a capped per-discharge
amount per hospital, identifying
individual hospitals solely by CCN
would result in distributing payments in
a manner that does not foster
widespread EHR adoption and use. The
for this argument regarding limited EHR
adoption and use is that multi-campus
systems with a single CCN would
receive only one base payment, and
would be more likely to reach the
discharge cap. Some commenters also
argued that linking incentive payments
only to a single CCN would not
accurately reflect the pattern of costs
required for deploying EHR systems
across all sites in a hospital system. For
example, even hospital sites that are
part of the same system often require
significant variations in their EHR
systems, accommodating local policies
and processes, as well as different
legacy systems, physician preferences,
clinical protocols, and other variables.
Some commenters cited as a precedent
our policy with regard to hospitals with
one CCN, but multiple sites spanning
more than one wage index region. CMS
has instructed such hospitals to report
wage data for each site separately on the
cost report, and pays for discharges
under the wage index that applies
where the service is provided, that is,
under a different wage index for each
site.
These commenters recommended
various approaches to recognizing and
verifying the status of separate hospitals
under one CCN number. Many of them
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recommended that we adopt a ‘‘multipronged approach that allows a
‘‘hospital’’ to be defined in ways that
acknowledge the varied organizational
structures of multi-hospital systems,
including by a distinct CCN, a distinct
emergency department, or a distinct
hospital license.’’ Commenters
recommended that we indentify and
verify the distinct hospitals within
hospital systems either by revising the
cost report or by developing an
attestation process similar to the process
employed under § 413.65 of the
regulations to verify provider-based
status. Commenters also recommended
that we either collect the data necessary
for determining payment amounts (for
example, discharge counts) directly
from each hospital within a system with
a single provider number, or develop a
method of allocating discharges, bed
days, and other relevant data among the
hospital campuses represented in a
hospital cost report under a single CCN.
Finally, a number of the commenters
advocating a different approach
contended that our proposed policy ran
counter to the intent of the EHR
incentive provision, which is to
promote broader adoption of EHR
systems. These commenters argued in
various ways that recognizing each
campus of a multi-campus hospital for
separate payment was most consistent
with the statute because it would
provide a greater overall level of
funding for EHR efforts, especially to
hospital systems that have elected to
enroll multiple campuses under a single
Medicare provider agreement, and thus
support diffusion of EHR systems more
broadly. One of these commenters did,
however, acknowledge that ‘‘in most
circumstances the term ‘subsection(d)
hospital’ under the Medicare Program
includes all of a hospital system’s
inpatient facilities that operate under a
single provider number,’’ before going
on to argue that CMS has both the
authority and the obligation under the
HITECH Act to diffuse EHR incentive
payment more broadly by treating each
facility under a hospital system as a
separate hospital, regardless of whether
any of the facilities share a single
provider number.
Response: We appreciate the
commenters’ concerns, but we continue
to believe that our proposal represents
the best policy approach in determining
what constitutes an ‘‘eligible hospital.’’
In the absence of clear direction from
the statute to the contrary, we believe
that the most appropriate policy is to
interpret the terms in subsection (d)
‘‘acute care hospital’’ and ‘‘children’s
hospital’’ in the light of existing
Medicare and Medicaid program
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policies and precedents. It is quite true,
as a number of the commenters noted,
that hospital systems have considerable
latitude (although not unlimited) in
choosing whether to obtain one CCN for
all their facilities, or to obtain separate
CCNs for some or all of their facilities.
However, once a hospital has sought
and obtained a single CCN for two or
more facilities, that hospital has chosen
to represent itself to CMS as a single
hospital, including for purposes of
payment, cost reporting, and satisfying
the conditions of participation. Such
systems submit unified cost reports
integrating data (including charges,
discharges, bed days, and other relevant
data) from every facility under the
single CCN. For purposes of DSH and
IME payments under the IPPS, both
eligibility for payment and the
applicable payment amounts are
determined on the basis of this
integrated data. Most significantly, the
Medicare conditions of participation
require that a system with a single CCN
establish and maintain a single
governing structure, medical staff,
nursing staff, and record services.
Section 482.2 states that a ‘‘hospital
must have an organized medical staff
that operates under by-laws approved
by the governing body.’’ Section
482.21(e) states that the governing body
must ensure, among other matters, that
‘‘the hospital-wide quality assessment
and performance improvement efforts
address priorities for improved quality
of care.’’ In addition, § 482.24 states that
the hospital must have ‘‘a medical
record service that has administrative
for medical records.’’. For these reasons,
we believe that recognition of the
decision made by each hospital or
hospital to represent and organize itself
as a single entity under one CCN, or as
two or more distinct entities under
separate CCNs is a strength, rather than
a weakness, of our proposed policy.
Each institution that has exercised
available latitude to obtain one CCN for
all their facilities not only represents
itself as a single hospital, but also agrees
to conduct itself in significant ways as
a single hospital.
We also do not agree with those
commenters who argue that our policy
of applying different wage indexes to
the campuses comprising a hospital
system operating under a single CCN
warrants our treating each campus as a
separate eligible hospital for purposes of
the EHR incentive payment program.
Our policy for these few cases when a
multi-campus hospital spans two or
more wage index areas does not amount
to recognizing that each campus is a
separate hospital for payment purposes,
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44449
but rather to accounting for the fact that,
in these few cases, one hospital is
located in two wage index areas. In
these cases, it is appropriate to pay, and
to account for wages, on the basis of
where each discharge occurs rather than
on the basis of where, for example, the
main campus of a hospital may be
located.
With regard to the disparate treatment
argument advanced by a number of
commenters, we acknowledge that,
under our proposed policy, a single
hospital system with two campuses will
receive (all other things being equal)
lower incentive payments than the
combined incentive payments of twosingle-campus hospitals with the same
number of discharges. However, an
equivalent disparate treatment situation
would arise under the policy advocated
by these commenters. Under the policy
of recognizing each campus of a multicampus system as a separate hospital, a
single-campus hospital would received
lower incentive payments than a multicampus hospital with the same number
of discharges, despite the fact that both
hospitals have a single CCN and are
recognized for administrative and
financial purposes, and for purposes of
the conditions of participation, as a
single hospital.
Example: Hospital A is a multicampus
hospital with 30,000 discharges and a
Medicare share of 50 percent. Hospital
A’s discharges are evenly split between
its two campuses. Hospital B is a single
campus hospital with 30,000 discharges
and a Medicare share of 50 percent.
During the first year of the transition,
each campus of Hospital A would
receive a separate incentive payment
determined on the following manner:
($2,000,000 base amount + [(15,000 ¥
1,149) × $200] discharge-related
amount) × .5 Medicare share × 1.0
transition factor = ($2,000,000 +
$2,770,200) × .5 × 1.0 = $2,385,100
Hospital A’s total payment would
therefore be $4,770,200. In contrast,
Hospital B would receive a single
payment determined in the following
manner:
($2,000,000 base amount + [(23,000 ¥
1,149) × $200] discharge-related
amount) × .5 Medicare share × 1.0
transition factor = ($2,000,000 +
$4,370,200) × .5 × 1.0 = $3,185,100
Hospital B would thus receive a
payment that is $1,585,100 smaller than
Hospital A’s total payment for the same
number of discharges.
The change in policy recommended
by these commenters will therefore
replace one equity issue with another.
We see no reason to privilege one of
these arguments over the other, and
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therefore we believe that the decision on
a final policy ought to turn on the other
considerations that we discuss.
Finally, we cannot agree with the
commenters that determining the
appropriate policy on this question
should turn on which alternative
produces the greatest overall level of
spending on EHR systems. Many
decisions could result in lower potential
payments to some or all potential
meaningful users of EHR payments.
Congress deliberately chose to limit
incentive payments based on the
statutory formula (using the current
statutory and regulatory definition of
‘‘subsection (d) hospital’’), and further
limited the amount of incentive
payments available to large hospitals by
not increasing incentive payments
above 23,000 discharges.
After consideration of the public
comments received, we are finalizing
our policy as proposed. For purposes of
this provision, we will provide
incentive payments to hospitals as they
are distinguished by provider number in
hospital cost reports. Incentive
payments for eligible hospitals will be
calculated based on the provider
number used for cost reporting
purposes, which is the CMS
Certification Number (CCN) of the main
provider (also referred to as OSCAR
number). Payments to eligible hospitals
will be made to each provider of record.
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b. Incentive Payment Calculation for
Eligible Hospitals: Initial Amount
Section 1886(n)(2) of the Act, as
amended by 4102(a) of the HITECH Act,
describes the methodology for
determining the incentive payment
amount for eligible hospitals that are
meaningful users of certified EHR
technology during the EHR reporting
period for a payment year. In general,
that section requires the incentive
payment for each payment year to be
calculated as the product of: (1) An
initial amount; (2) the Medicare share;
and (3) a transition factor applicable to
that payment year.
As amended by section 4201(a) of the
HITECH Act, section 1886(n)(2)(A)(i) of
the Act defines the initial amount as the
sum of a ‘‘base amount,’’ as defined in
section 1886(n)(2)(B) of the Act, and a
‘‘discharge related amount,’’ as defined
in section 1886(n)(2)(C) of the Act. The
base amount is $2,000,000, as defined in
section 1886(n)(2)(B) of the Act. The
term ‘‘discharge related amount’’ is
defined in section 1886(n)(2)(C) of the
Act as ‘‘the sum of the amount,
estimated based upon total discharges
for the eligible hospital (regardless of
any source of payment) for the period,
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for each discharge up to the 23,000th
discharge as follows:
(i) for the first through the 1,149th
discharge, $0.
(ii) for the 1,150th through the 23,000th
discharge, $200.
(iii) for any discharge greater than the
23,000th, $0.’’
In addition to the base amount, the
discharge related amount provides an
additional $200 for each hospital
discharge during a payment year,
beginning with a hospital’s 1,150th
discharge of the payment year, and
ending with a hospital’s 23,000th
discharge of the payment year. No
additional payment is made for
discharges prior to the 1,150th
discharge, or for those discharges
subsequent to the 23,000th discharge.
We proposed to implement the ‘‘initial
amount’’ within the formula as that term
is defined in the statute.
Comment: Several commenters
requested that we identify the sources of
the discharge data we plan to employ
for purposes of determining the
discharge related amount. These
commenters also requested confirmation
of their understanding that no type of
discharge, regardless of source of
payment, would be excluded from the
discharge count for this purpose.
Commenters specifically cited nursery
discharges and discharges from non-PPS
areas of a hospital as examples of
discharges that should not be excluded
under the statutory language, which
they believe requires the inclusion of all
patient discharges regardless of type of
patient within the inpatient areas of the
hospital.
Response: We cannot agree with the
commenters that the statutory language
includes all patient discharges within
the inpatient areas of the hospital.
Rather, the statutory language clearly
restricts the discharges to be counted for
purposes of determining the dischargerelated amount to discharges from the
acute care portion of the hospital. As we
discussed in the proposed rule, the term
‘‘discharge related amount’’ is defined in
section 1886(n)(2)(C) of the Act as ‘‘the
sum of the amount, estimated based
upon total discharges for the eligible
hospital (regardless of any source of
payment) for the period, for each
discharge up to the 23,000th discharge
as follows:
(i) for the first through the 1,149th
discharge, $0.
(ii) for the 1,150th through the 23,000th
discharge, $200.
(iii) for any discharge greater than the
23,000th, $0.’’
The phrase ‘‘total discharges for the
eligible hospital (regardless of any
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source of payment)’’ limits the count of
discharges to the acute care inpatient
discharges. This is because of the
reference to ‘‘eligible hospital.’’ ‘‘Eligible
hospital’’ is defined in section
1886(n)(6)(B) of the Act for purposes of
the incentive payments provision, as ‘‘a
subsection (d) hospital,’’ referring in
turn to the definition of that term in
section 1886(d)(1)(B) of the Act. Section
1886(d)(1)(B) of the Act generally
defines a ‘‘subsection (d) hospital’’ as a
‘‘hospital located in one of the fifty
States or the District of Columbia,’’
excluding hospitals that are not paid
under the IPPS in accordance with
section 1886(d)(1)(B) of the Act, such as
psychiatric, rehabilitation, long term
care, children’s, and cancer hospitals.
However, 1886(d)(1)(B) also specifies
that the ‘‘term ‘subsection (d) hospital
* * * does not include a psychiatric or
rehabilitation unit of the hospital which
is a distinct part of the hospital (as
defined by the Secretary).’’ Therefore,
the term ‘‘eligible hospital’’ for purposes
of the incentive payments provision
does not extend to the excluded units of
the hospital. The term does, of course,
include the inpatient portion of the
hospital that receives payment for
Medicare purposes under the inpatient
PPS. The phrase ‘‘regardless of any
source of payment,’’ however, indicates
that the count of ‘‘total discharges’’ for
this purpose should include not only
patients for whom Medicare is the
source of payment, but also patients for
whom payment is received from
Medicaid or any other source of
payment. Accordingly, in the revised
cost report form that is currently
pending and which will be finalized in
time for the 2011 payment year, CMS
Form 2552–10, Hospital and Hospital
Health Care Complex Cost Report, we
have included a cell for entry of ‘‘Total
hospital discharges as defined in section
4102 of AARA,’’ in the new Worksheet
E–1, Part II, ‘‘Calculation of
Reimbursement for Settlement for HIT.’’
This new cell is derived from line 14,
from ‘‘Worksheet S–3, Part I column 15.’’
In turn, this cell from Worksheet
S–3, Part I, column 15 incorporate all
discharges from the inpatient, acute care
portion of the hospital, regardless of
payment source. In this final rule, we
have also revised the definition of
‘‘eligible hospital’’ in § 495.100 of the
regulations, as well as the specification
of ‘‘initial amount’’ in § 495.104(c)(3) of
the regulations, in order to clarify this
point.
Section 1886(n)(2)(C) of the Act, as
amended by section 4102(a) of the
HITECH Act, specifies that a ‘‘12-month
period selected by the Secretary’’ may be
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employed for purposes of determining
the discharge related amount. While the
statute specifies that the payment year
is determined based on a Federal fiscal
year (FY), section 1886(n)(2)(C) of the
Act provides the Secretary with
authority to determine the discharge
related amount on the basis of discharge
data from a relevant hospital cost
reporting period, for use in determining
the incentive payment during a FY. FYs
begin on October 1 of each calendar
year, and end on September 30 of the
subsequent calendar year. Hospital cost
reporting periods can begin with any
month of a calendar year, and end on
the last day of the 12th subsequent
month. We proposed, for purposes of
administrative simplicity and
timeliness, for each eligible hospital
during each incentive payment year, to
use data on the hospital discharges from
the hospital fiscal year that ends during
the FY that is prior to the FY that serves
as the payment year as the basis for
making preliminary incentive payments.
Similarly, we proposed that final
payments would be determined at the
time of settling the cost report for the
hospital fiscal year that ends during the
payment year, and settled on the basis
of the hospital discharge data from that
cost reporting period.
Example of proposal: FY 2011 begins
on October 1, 2010 and ends on
September 30, 2011. For an eligible
hospital with a cost reporting period
running from July 1, 2009 through June
30, 2010, we would employ the relevant
data from the hospital’s cost reporting
period ending June 30, 2010 in order to
determine the incentive payment for the
hospital during FY 2011. This timeline
would allow us to have the relevant data
available for determining payments in a
timely manner for the first and
subsequent payment years. This
timeline would also render it
unnecessary to develop a cumbersome
process to extract and employ discharge
data across more than one hospital cost
reporting period in order to determine
the discharge related amount for a FYbased payment period. However, final
payments would be based on hospital
discharge data from the cost report
ending June 30, 2011, and determined at
the time of settlement for that cost
reporting period.
Commenters raised several issues
with regard to our proposals regarding
the timing of the cost reports to be used
for purposes of determining preliminary
and final incentive payments. Each of
these issues embraces the use of several
data elements, including discharge
counts, bed days, and other factors
employed in the payment calculations.
For purposes of simplicity, we will
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address these issues in general terms in
this section. As we will note at several
junctures below, this discussions of
these issues, however, are applicable to
the cost report data for other elements
of the computation.
Comment: Several commenters called
our attention to timing issues with
regard to the cost reporting periods that
we proposed to use for purposes of
determining preliminary and final
incentive payments. These commenters
noted that, if we finalize our proposal to
use data from the hospital fiscal year
that ends during the FY prior to the FY
that serves as the payment year as the
basis for making preliminary incentive
payments, hospitals with cost reporting
periods on the October-to-September
cycle would face a delay of two months
or longer after potentially qualifying as
a meaningful user before receiving a
preliminary incentive payment.
Specifically, for hospitals on this cycle,
the cost report that would be used for
determining interim payments for the
first payment year (the October 1, 2009
through September 30, 2010 cost report)
would not be due until February 28,
2011, two months after the hospital may
have been able to qualify as a
meaningful user (January 1, 2011). For
hospitals on the September-to-August
cycle, the delay could be one month.
The commenters pointed out that over
one-fifth of subsection (d) hospitals
have cost reporting periods beginning
on September 1 or October 1. The
commenters therefore recommended
that we employ discharge and other data
from a hospital’s most recently filed cost
report as the basis for determining the
hospital’s preliminary incentive
payment once the hospital has qualified
as a meaningful user.
Response: We agree with these
commenters, and in this final rule we
are therefore adopting the policy that we
employ discharge and other data from a
hospital’s most recently filed 12-month
(see discussion below) cost report as the
basis for determining the hospital’s
preliminary incentive payment once the
hospital has qualified as a meaningful
user. However, the precise timing of
payments, especially during the first
payment year, may be affected by other
factors such as the timeline for
implementing the requisite systems to
calculate and disburse the payments.
We are adopting the policy
recommended by the commenters in
order to avoid any unnecessary delays
in making interim payments due merely
to the timing of cost reporting periods.
Example: FY 2011 begins on October
1, 2010 and ends on September 30,
2011. For an eligible hospital with a cost
reporting period on the October-to-
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September cycle, we would employ the
relevant data from the hospital’s most
recently submitted cost reporting period
in order to determine the incentive
payment for the hospital during FY
2011. If the hospital qualifies for
incentive payments on January 1, 2011,
this would probably be the cost report
for the period running from October 1,
2008 through September 30, 2009.
However, we would also employ the
October 1, 2009 through September 30,
2010 cost report, if that cost report is
submitted before the point when
preliminary incentive payments can be
calculated.
Comment: A number of commenters
also raised concerns about our proposal
to determine final incentive payments at
the time of settling the cost report for
the hospital fiscal year that ends during
the payment year, and to be settled on
the basis of the hospital discharge and
other data from that cost reporting
period. These commenters pointed out
that the pending CMS Form 2552–10
will not be effective in time for all
hospitals and CAHs to complete the
new S–10 worksheet, Hospital
Uncompensated Care and Indigent Care
Data, reporting charity care for their cost
reporting period ending during the
payment year. The effective date of the
new cost report will be for cost
reporting periods beginning on or after
May 1, 2010 (as opposed to February 1,
2010 date anticipated in the proposed
rule). For purposes of our proposal for
determining final incentive payments,
including the Medicare share/charity
calculation, the first cost reporting
period for which the new cost report
will be available is the period running
from May 1, 2010 through April 30,
2011. This means that, for cost reporting
periods ending in FY 2011 before April
30, hospitals will not be able to
complete the new S–10 worksheet to
report charity care charges. Therefore,
these commenters recommended that
we revise our proposed policy, so that
final incentive payments will be
determined at the time of settlement for
the cost reporting period beginning in
the payment year. In this way all
hospitals, regardless of their cost
reporting cycle, will have adequate time
to submit the revised cost reports in
time for determining final incentive
payments.
Response: We agree with these
commenters, and in this final rule we
are therefore adopting the policy that we
determine final incentive payments at
the time of settling the 12-month (see
discussion below) cost report for the
hospital fiscal year that begins after the
beginning of the payment year, and to
be settled on the basis of the hospital
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discharge and other data from that cost
reporting period.
Example: FY 2011 begins on October
1, 2010 and ends on September 30,
2011. For an eligible hospital with a cost
reporting period running from July 1
through June 30, we would employ the
relevant data from the hospital’s cost
reporting period ending June 30, 2009 in
order to determine the preliminary
incentive payment for the hospital
during FY 2011 (or June 30, 2010, if that
cost report was filed prior to the
calculation). However, final payments
would be based on hospital discharge
data from the cost report beginning on
July 1, 2011 and ending June 30, 2012,
and determined at the time of settlement
for that cost reporting period.
Comment: Several commenters
requested that we explain how the
occurrence of non-standard cost
reporting periods will be taken into
account in determining the appropriate
cost reporting periods to employ for
determining preliminary and final EHR
incentive payments. Non-standard cost
reporting periods run for periods shorter
than the standard 12-month cost
reporting periods (for example, 3
months, 6 months), and are typically
employed to accommodate the
circumstances of hospitals in several
distinct situations, such as newly
constructed hospitals, changes of
ownership, and reorganization of a
single multicampus hospital into
multiple separate providers. In these
cases, one non-standard cost reporting
period may be employed before the
hospital resumes (or begins) cost
reporting on a 12-month cycle. One
commenter recommended that we
account for these situations by adopting
three changes to our proposed
regulations:
• For purposes of determining
preliminary incentive payments,
employ the most recently submitted 12month cost reporting period that ends in
the year prior to the payment year, in
order to account for those situations in
which the most recent cost reporting
period ending prior to the payment year
is a non-standard period.
• For purposes of determining final
incentive payments, employ the first 12month cost reporting period that begins
after the start of the payment year, in
order to account for those situations in
which the cost reporting period ending
during the payment year is a nonstandard period.
• Provide that a hospital may address
the CMS regional office responsible for
its payment area for determination of
the appropriate cost reporting period to
employ for calculating preliminary or
final incentive payment in cases that are
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not anticipated by the rules adopted in
the final regulation.
Response: We acknowledge that we
failed to address the circumstances of
non-standard cost reporting periods in
the proposed rule, and we agree with
the commenters that it is only
appropriate to do so. Non-standard cost
reporting periods are not likely to be
truly representative of a hospital’s
experience, even if methods were to be
adopted for extrapolating data over a
normal 12-month cost reporting period.
This is because these periods are often
quite short (for example, 3 months),
which makes it questionable to
extrapolate the data over a full cost
reporting period. In addition, these
abbreviated periods often capture the
experience of a hospital during a period
of transition (for example, change of
ownership), which often renders the
data highly unrepresentative. We also
agree with the logic of the policy
revisions proposed by the commenter
cited above, subject only to the
necessity of adapting the
recommendations slightly to the
revisions, as discussed above, we are
also adopting to our proposals for
identifying the cost reporting periods to
be employed in determining
preliminary and final EHR incentive
payments.
After consideration of the public
comments we receive with regard to the
use of cost reporting periods for
preliminary and final incentive payment
determinations, we are adopting the
following policies in this final rule.
• For purposes of determining
preliminary incentive payments, we
will employ discharge and other
relevant data from a hospital’s most
recently submitted 12-month cost report
once the hospital has qualified as a
meaningful user.
• For purposes of determining final
incentive payments, we will employ the
first 12-month cost reporting period that
begins after the start of the payment
year, in order to settle payments on the
basis of the hospital discharge and other
data from that cost reporting period. In
this final rule, we are revising section
495.104(c)(2) of the regulations
accordingly. We are not adopting the
recommendation to allow the CMS
regional offices to make a determination
about the appropriate cost reporting
period in situations not anticipated by
these rules because we believe that
these two rules cover all possible
situations. For example, even in
complicated cases involving nonstandard cost reporting periods, the cost
reporting period for a hospital adjusts to
a standard 12-month cycle within a brief
period.
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c. Incentive Payment Calculation for
Eligible Hospitals: Medicare Share
As previously discussed, the initial
amount must be multiplied by the
eligible hospital’s Medicare share and
an applicable transition factor to
determine the incentive payment to an
eligible hospital for a payment year. As
added by section 4102(a) of the HITECH
Act, section 1886(n)(2)(D) of the Act
defines the Medicare share for purposes
of calculating incentive payments as a
fraction based on estimated Medicare
FFS and managed care inpatient bed
days, divided by estimated total
inpatient bed-days, modified by charges
for charity care. This section specifies
that the Medicare share fraction is
determined for the incentive payment
year ‘‘for an eligible hospital for a period
selected by the Secretary.’’ As in the
case of the discharge data discussed
above, this clause provides the Secretary
with authority to determine the eligible
hospital’s Medicare share fraction on
the basis of data from a relevant hospital
cost reporting period, for use in
determining the incentive payment
during a FY. For purposes of
administrative simplicity and timeliness
equivalent to those discussed above
with regard to discharge data, we
proposed, for each eligible hospital
during each payment year, to employ
data on the hospital’s Medicare fee-forservice and managed care inpatient bed
days, total inpatient bed-days, and
charges for charity care from the
hospital FY that ends during the FY
prior to the FY that serves as the
payment year as the basis for
preliminary payment. We also proposed
that final payment would be made on
the basis of the data from the hospital
fiscal year that ends during the FY that
serves as the payment year at the time
of the settlement of the cost report for
the latter period.
As a result of the changes we are
making to these proposed policies in
response to the comments discussed in
the previous section, in this final rule
we are adopting the following policies
for employing data on the eligible
hospital’s Medicare fee-for-service and
managed care inpatient bed days, total
inpatient bed-days, and charges for
charity care from the hospital in making
preliminary and final EHR incentive
payment determinations:
• For purposes of determining
preliminary incentive payments, we
will employ data on the hospital’s
Medicare fee-for-service and managed
care inpatient bed days, total inpatient
bed-days, and charges for charity care
from a hospital’s most recently
submitted 12-month cost report once the
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hospital has qualified as a meaningful
user.
• For purposes of determining final
incentive payments, we will employ the
first 12-month cost reporting period that
begins after the start of the payment
year, in order to settle payments on the
basis of the hospital’s Medicare fee-forservice and managed care inpatient bed
days, total inpatient bed-days, and
charges for charity care data from that
cost reporting period.
Section 1886(n)(2)(D) of the Act, as
amended by section 4102 of the HITECH
Act, defines the numerator and
denominator of the Medicare share
fraction for an eligible hospital in terms
of estimated Medicare FFS and managed
care inpatient bed-days, estimated total
inpatient bed-days, and charges for
charity care. Specifically, section
1886(n)(2)(D)(i) of the Act defines the
numerator of the Medicare share
fraction as the sum of—
• The estimated number of inpatientbed-days (as established by the
Secretary) which are attributable to
individuals with respect to whom
payment may be made under part A;
and
• The estimated number of inpatientbed-days (as so established) that are
attributable to individuals who are
enrolled with a MA organization under
Part C.
We proposed to determine the
numbers of Medicare Part A and Part C
inpatient-bed-days using the same data
sources and methods for counting those
days that we employ in determining
Medicare’s share for purposes of making
payments for direct graduate medical
education costs, as provided under
section 1886(h) of the Act and § 413.75
of our regulations. Specifically, we
proposed to derive ‘‘the estimated
number of inpatient-bed-days * * *
attributable to individuals with respect
to whom payment may be made under
part A’’ from lines 1, 6 through 9, 10,
and 14 in column 4 on Worksheet S–3,
Part I of CMS Form 2552–96, Hospital
and Hospital Health Care Complex Cost
Report. We stated that the data entered
on these lines in the cost report include
all patient days attributable to Medicare
inpatients, excluding those in units not
paid under the IPPS and excluding
nursery days.
Comment: A number of commenters
pointed out an apparent contradiction
between the cost report sources from
which we proposed to derive the ‘‘the
estimated number of inpatient-bed-days
* * * attributable to individuals with
respect to whom payment may be made
under part A’’ (lines 1, 6 through 9, 10,
and 14 in column 4 on Worksheet S–3,
Part I of CMS Form 2552–96,), and our
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statement that ‘‘the data entered on these
lines in the cost report include all
patient days attributable to Medicare
inpatients, excluding those in units not
paid under the IPPS and excluding
nursery days.’’ These commenters
supported our proposal to employ the
data from those lines of the cost report,
on the grounds that these cost report
lines ‘‘adequately capture the necessary
data.’’ However, as the commenters
pointed out, the data on the identified
lines do include patient days in units
not paid under the inpatient PPS. These
commenters also contended that the
relevant statutory language (‘‘inpatientbed-days * * * attributable to
individuals with respect to whom
payment may be made under part A’’;
emphasis supplied) would seem to
include patient days in units not paid
under the inpatient PPS.
Response: We agree with the
commenters that our citation of the
specific cost report sources from which
we proposed to derive ‘‘the estimated
number of inpatient-bed-days * * *
attributable to individuals with respect
to whom payment may be made under
part A’’ was not consistent with our
statement the data entered on these
lines in the cost report include ‘‘all
patient days attributable to Medicare
inpatients, excluding those in units not
paid under the IPPS and excluding
nursery days.’’ In this case, our error was
in the specific cost report lines that we
cited, rather than in our statement that
the relevant statutory language
(‘‘inpatient-bed-days * * * attributable
to individuals with respect to whom
payment may be made under part A’’)
includes ‘‘all patient days attributable to
Medicare inpatients, excluding those in
units not paid under the IPPS and
excluding nursery days.’’ As in the case
which we discussed above with regard
to counting ‘‘total discharges,’’ the
relevant statutory language directs that
the numerator and denominator of the
Medicare share fraction incorporate
inpatient bed-day counts for the eligible
hospital, and, as discussed in our
section on total discharges, ‘‘eligible
hospital’’ is defined with reference to
section 1886(d)(1)(B) of the Act, which
specifically excludes from the definition
psychiatric or rehabilitation units that
are a distinct part of the hospital.
Specifically, the ‘‘Medicare share’’ is to
be ‘‘specified * * * for an eligible
hospital.’’ The numerator of the
Medicare share fraction is further
defined as ‘‘the sum (* * * with respect
to the eligible hospital) of—
‘‘(I) the estimated number of inpatientbed-days (as established by the
Secretary) which are attributable to
individuals with respect to whom
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payment may be made under part A;
and
‘‘(II) the estimated number of
inpatient-bed-days (as so established)
which are attributable to individuals
who are enrolled with a Medicare
Advantage organization under part C.’’
Finally, the denominator of the
Medicare share fraction includes ‘‘the
estimated total number of inpatient-beddays with respect to the eligible
hospital.’’ Therefore, the inpatient-bedday counts included in the Medicare
share fraction for purposes of the
incentive payments provision do not
extend to inpatient-bed-days in
excluded units of the hospital, but only
to inpatient-bed-days in the acute care
portion of the hospital that receives
Medicare payment under the inpatient
PPS. In this final rule, we are revising
section 495.104(c)(4) of the regulations
in order to clarify this point.
Since the publication of the proposed
rule, we have adopted various changes
to the Medicare cost report, including
changes designed to accommodate the
appropriate computation and final
settlement of EHR incentive payments
for qualifying hospitals. These changes
are included in the pending cost report
form, CMS Form 2552–10. In this
revised form, the relevant Medicare
inpatient days are entered in line 2 of
the new Worksheet E–1, Part II,
‘‘Calculation of Reimbursement for
Settlement for HIT.’’ This new line is
defined as the sum of lines 1 and 8
through 12, from Worksheet S–3, Part I,
column 6 of CMS Form 2552–10. These
lines include all patient days
attributable to Medicare inpatients,
excluding those in units not paid under
the IPPS, and excluding nursery days.
Comment: Several commenters also
contended that our proposed exclusion
of nursery days from the determination
of ‘‘inpatient-bed-days * * *
attributable to individuals with respect
to whom payment may be made under
part A’’ is inappropriate. These
commenters maintained that the
statutory language is broad enough to
include all inpatient days associated
with Medicare eligible individuals
without restriction based on the type of
Part A patient.
Response: In excluding nursery days
from the count of Medicare inpatient
bed days, we are following the
precedent of not counting such days for
purposes of the direct medical
education, indirect medical education,
and disproportionate share adjustments
under the Medicare IPPS. As in the case
of the term ‘‘subsection (d)’’ hospital, we
believe that, in the absence of clear
direction from the statute to the
contrary, the most appropriate policy is
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to interpret terms such as ‘‘inpatient
bed-days’’ in the light of existing
Medicare program policies and
precedents. Under our policies for the
direct medical education, indirect
medical education and disproportionate
share adjustments, a bed must be
permanently maintained for lodging
inpatients in order to be included in
available inpatient bed and inpatient
bed day counts. We exclude the days
provided to newborns (except for those
in intensive care units of the hospital)
because healthy newborn infants are not
provided with an acute level of hospital
care. (This is not the case with
newborns assigned to intensive care
units, who are included in the counts
for those units.) For these reasons,
nursery days are explicitly excluded
from:
• The counts of Medicare inpatient
hospital days and total inpatient
hospital days for purposes of direct
graduate medical education payments
under section 413.75(b) of the
regulations, where the definition of
Medicare patient load reads: ‘‘Inpatient
days in any distinct part of the hospital
are included and nursery days are
excluded.’’
• The counts of bed days for purposes
of the Medicare indirect graduate
medical education adjustment under
section 412.105(b): the ‘‘count of
available bed days excludes bed days
associated with * * * (5) Beds or
bassinets in the healthy newborn
nursery * * *.’’
• The count of beds for purposes of
the Medicare DSH adjustment under
section 412.106(a)(i) of the regulations:
‘‘The number of beds in a hospital is
determined in accordance with
§ 412.105(b).’’
We note that, in addition to excluding
nursery days from the numerator of the
Medicare share fraction, these days are
excluded for the same reasons from the
count of total inpatient bed days in the
denominator of the Medicare share
fraction. We therefore do not believe
that excluding these days would result
in disadvantage to hospitals in
determining their Medicare share
fractions for purposes of calculating
EHR incentive payments. (See our
discussion of the cost report data
employed to determine total inpatient
bed days in the denominator of the
Medicare share fraction, below.)
Comment: Other commenters
maintained that swing bed days should
also be included in the determination of
‘‘inpatient bed-days * * * attributable
to individuals with respect to whom
payment may be made under part A.’’
Response: Once again, as in the case
of the term ‘‘subsection(d)’’ hospital, we
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believe that, in the absence of clear
direction from the statute to the
contrary, the most appropriate policy is
to interpret terms such as ‘‘inpatient
bed-days’’ in the light of existing
Medicare program policies and
precedents. We are therefore also
following the precedent of Medicare
payment adjustments in excluding
certain swing bed days from the count
of Medicare inpatient days. As in these
cases, swing bed days are excluded
when the swing bed is used to furnish
SNF care, because only the days used
for inpatient hospital care will be
included in the count of ‘‘inpatient beddays * * * attributable to individuals
with respect to whom payment may be
made under part A.’’ Otherwise, we
would be including non-inpatient beddays in the count.
Comment: One commenter objected
that, for purposes of the Medicare
inpatient day count in the Medicare
share, we appeared to be proposing to
use only paid Medicare days. This
commenter argued that all eligible
Medicare days should be counted in
order to reflect a hospital’s true
Medicare utilization. The commenter
also maintained that the statute’s
reference to days ‘‘attributable to
individuals with respect to whom
payment may be made under part A’’
requires inclusion of all days when a
beneficiary was eligible for Medicare, on
the grounds that this language ‘‘does not
require actual payment by Medicare.’’
The commenter further noted that the
other factor in the numerator of the
Medicare share fraction requires
inclusion of all patient days associated
with individuals enrolled in a Part C
Medicare Advantage plan, and
maintained that there ‘‘would be no
rational basis for Congress to include all
enrolled Part C days, quite clearly
regardless of whether they are paid, but
to limit part A days to those paid by
Medicare.’’
Response: We assume that, by the
term ‘‘unpaid’’ Medicare days, the
commenter is referring to days provided
to Medicare entitled beneficiaries for
which the services are non-covered,
such as the cases in which a beneficiary
has exhausted coverage of inpatient
hospital services, or in which the
services are not covered under a
national or local coverage
determination. We do not agree with the
commenter that these days ought to be
included in the count of ‘‘inpatient-beddays * * * attributable to individuals
with respect to whom payment may be
made under part A.’’ Indeed, we believe
that the best reading of this statutory
language suggests the opposite of what
the commenter maintains: In cases of
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non-covered days, payment may not be
made under Part A, and therefore these
days should not be included in a count
of days ‘‘attributable to individuals with
respect to whom payment may be made
under part A.’’ We agree with the
commenter that the language for the
other factor in the numerator of the
Medicare share fraction (‘‘inpatient-beddays attributable * * * to individuals
who are enrolled with a MA
organization under Part C’’) is more
inclusive. However, we must assume
that the difference in the statutory
language is meaningful. Therefore, we
are finalizing our proposal not to
include days provided to Medicare
entitled beneficiaries for which the
services are non-covered in the count of
Medicare inpatient days. It is important
to note that we do include such ‘‘nonpaid’’ days for purposes of other
Medicare payment provisions, where it
is appropriate to do so under the
governing statutory provisions. For
example, for purposes of the Medicare
DSH adjustment the relevant statutory
language requires inclusion of days
associated with individuals who are
‘‘entitled’’ to benefits under Medicare
Part A, rather than days for which
‘‘payment may be made under part A.’’
After consideration of these
comments, we are finalizing our
proposals with regard to the data to be
used to determine the ‘‘inpatient beddays * * * attributable to individuals
with respect to whom payment may be
made under part A’’ in the numerator of
the Medicare share fraction.
Accordingly, we will derive this
information from Worksheet E–1, Part II,
line 2 of the pending Medicare cost
report, Form CMS–2552–10, which is
defined as the sum of lines 1 and 8
through 12 in column 6, Worksheet S–
3, Part I of the pending cost report. As
we have just discussed, we are revising
the cost report data sources from which
we are deriving this information in
order to be consistent with the statutory
requirement. We are also revising
§ 495.104(c)(4)(ii)(A)(2) of the
regulations to clarify this point.
Comment: One commenter inquired
about the status of inpatient-bed-days
attributable to individuals enrolled in
the 1876 Medicare cost plan operating
under ‘‘billing option 2,’’ under which
the section 1876 cost contractor pays
hospitals for Part A benefits, and then
claims reimbursement from CMS. The
cost-contractor pays Part A benefits for
its 36,000 enrolled Medicare
beneficiaries to contracted hospitals in
one State. The commenter maintained
that a reasonable interpretation of the
statutory language suggests that the
inpatient bed days for these
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beneficiaries should be counted in the
numerator of the Medicare share
fraction. The commenter requested
clarification concerning the inclusion of
these days in the data sources we
proposed to employ, or the development
of an appropriate remedy in order to
ensure that they are counted. Another
commenter noted that Worksheet S–3,
Part I, column 4, line 2 in the Medicare
cost report, CMS 2552–96, has
historically been completed primarily
by teaching hospitals, based on patient
days reported on Provider Statistical
and Reimbursement (PS&R) Report Type
118. The commenter further stated that
there have been many situations in
which non-teaching hospitals reporting
days on this cost report line have the
days removed by the Medicare fiscal
intermediary or Medicare administrative
contractor (MAC), as PS&R Report Type
118 contains no patient day data for
non-teaching hospitals. The commenter
recommended that we clarify our plans
with regard to PS&R Report Type 118
and allow the form to populate with
accurate data for all hospitals
submitting no-pay bills for Medicare
beneficiaries who are enrolled in
Medicare Advantage (MA) plans and
who receive Medicare-covered hospital
services. The commenter further noted
that, at this time, CAHs and IPPS
hospitals that do not receive the DSH
adjustment are not required to submit
no-pay bills for Medicare Advantage
patients.
Response: We agree with the
commenters that all these days should
be counted in the numerator of the
Medicare share fraction. With respect to
MA plan enrollees, these patients are
already included in the ‘‘estimated
number of inpatient-bed-days
attributable * * * to individuals who
are enrolled with a MA organization
under Part C.’’ In order for the data on
the inpatient days attributable to
individuals enrolled in MA plans to be
included on the Medicare cost report,
the hospital must submit a ‘‘no-pay’’ bill
to the Medicare contractor. We have
issued instructions clarifying that
hospitals must submit no-pay bills for
inpatient days attributable to
individuals enrolled in MA plans.
Specifically, CR 5647, dated July 20,
2007, required all hospitals paid under
the inpatient prospective payment
system (IPPS), inpatient rehabilitation
facility prospective payment system
(IRF PPS), and long term care hospital
prospective payment system (LTCH
PPS) to submit informational only
Medicare Advantage claims.
Furthermore, CR 6821, dated May 5,
2010, provided that applicable IPPS, IRF
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PPS and LTC hospitals will be given one
final opportunity to comply with the
requirement to submit FY 2007
informational only claims. In addition,
these hospitals are required to attest in
writing to their Medicare contractor that
they have either submitted all of their
Medicare Advantage claims for FY 2007
or that they have no Medicare
Advantage claims for that fiscal year.
After consideration of the comments, we
are finalizing our proposals for
determining the ‘‘inpatient bed-days
* * * attributable to individuals with
respect to whom payment may be made
under part A’’ and the ‘‘estimated
number of inpatient-bed-days
attributable * * * to individuals who
are enrolled with a MA organization
under Part C.’’ However, we are
modifying the language of
§ 495.104(c)(4)(ii)(A)(1) regarding the
counting of inpatient bed-days
attributable to individuals with respect
to whom payment may be under part A
to clarify that this count includes days
attributable to enrollees under section
1876 cost contracts where payments for
Part A benefits are made by the section
1876 contractor. We intend to derive
this information from Worksheet E–1,
Part II, line 3 of the pending Medicare
cost report, Form CMS–2552–10, which
is derived from line 2 in column 6,
Worksheet S–3, Part I of the pending
cost report. This data source on the
revised Medicare cost report is the
equivalent of the source we cited in the
proposed rule.
Section 1886(n)(2)(D)(ii) of the Act
defines the denominator of the Medicare
share fraction as the product of—
• The estimated total number of
inpatient-bed-days with respect to the
eligible hospital during such period;
and
• The estimated total amount of the
eligible hospital’s charges during such
period, not including any charges that
are attributable to charity care (as such
term is used for purposes of hospital
cost reporting under Title XVIII),
divided by the estimated total amount of
the hospital’s charges during such
period.
As in the case of Medicare Part A and
Part C inpatient-bed days, for purposes
of determining total inpatient-bed days
in the denominator of the Medicare
share fraction, we proposed to use the
same data sources, and the same
methods, that we employ in
determining Medicare’s share for
purposes of making payments for direct
graduate medical education costs.
Specifically, we proposed to derive the
relevant data from lines 1, 6 through 9,
10, and 14 in column 6 on Worksheet
S–3, Part I of the Medicare cost report.
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44455
We noted that the data entered on these
lines in the cost report include all
patient days attributable to inpatients,
excluding those in units not paid under
the IPPS.
Comment: Several commenters noted,
regarding our proposal concerning
Medicare inpatient days in the
denominator of the Medicare share
fraction, an apparent contradiction
between the cost report sources from
which we proposed to derive ‘‘estimated
total number of inpatient-bed-days with
respect to the eligible hospital during
such period’’ (lines 1, 6 through 9, 10,
and 14 in column 6 on Worksheet S–3,
Part I), and our statement that ‘‘the data
entered on these lines in the cost report
include all patient days attributable to
inpatients, excluding those in units not
paid under the IPPS .’’ These
commenters supported our proposal to
employ the data from those lines of the
cost report, on the grounds that these
cost report lines adequately capture the
necessary data. However, as the
commenters pointed out, the data on the
identified lines do include patient days
in units not paid under the inpatient
PPS. And these commenters contended
that the relevant statutory language (‘‘the
estimated total number of inpatient-beddays with respect to the eligible hospital
during such period’’) would seem to
include patient days in units excluded
from the inpatient PPS.
Response: As in the case of the
equivalent issue with regard to
Medicare inpatient bed days, we agree
with the commenters that our citation of
the specific cost report sources from
which we proposed to derive the ‘‘the
estimated total number of inpatient-beddays with respect to the eligible hospital
during such period’’ was not consistent
with our statement that the data entered
on these lines in the cost ‘‘include all
patient days attributable to inpatients,
excluding those in units not paid under
the IPPS.’’ And as in the case of
Medicare inpatient-bed-days, our error
was in the specific cost report lines that
we cited, rather than in our statement
that the relevant statutory language (‘‘the
estimated total number of inpatient-beddays with respect to the eligible
hospital’’) includes ‘‘all patient days
attributable to inpatients, excluding
those in units not paid under the IPPS.’’.
As we have discussed in connection
with counting discharges and Medicare
inpatient-bed-days, the relevant
statutory language directs that the
denominator of the Medicare share
fraction incorporate inpatient bed-day
counts for the eligible hospital.
Therefore, the inpatient-bed-day counts
included in the Medicare share fraction
for purposes of the incentive payments
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provision do not extend to inpatientbed-days in excluded units of the
hospital, but only to inpatient-bed-days
in the acute care portion of the hospital
that receives payment for Medicare
purposes under the inpatient PPS.
We are finalizing our proposal for
determining the count of total inpatientbed days in the denominator of the
Medicare share fraction as including all
patient days attributable to inpatients,
excluding those in units not paid under
the IPPS. Accordingly, we will derive
this information from Worksheet E–1,
Part II, line 4 of the pending Medicare
cost report, Form CMS–2552–10, which
is defined as the sum of lines 1and 8
through 12, in column 8, Worksheet S–
3, Part I of the pending cost report. As
we have just discussed, we are revising
the cost report data sources from which
we are deriving this information in
order to be consistent with the statutory
requirement. In this final rule, we are
also revising § 495.104(c)(4)(ii)(B)(1) to
clarify this point.
As we noted above, the denominator
of the Medicare share fraction also
includes the ‘‘estimated total amount of
the eligible hospital’s charges during
such period, not including any charges
that are attributable to charity care (as
such term is used for purposes of
hospital cost reporting under Title
XVIII), divided by the estimated total
amount of the hospital’s charges during
such period.’’ We discuss the data
sources and methods for calculating the
charges and charity care portions of this
formula in the next section.
d. Incentive Payment Calculation for
Eligible Hospitals: Charity Care and
Charges
In determining the denominator of the
Medicare share fraction, we also must
determine any charges that are
attributable to charity care furnished by
an eligible hospital or CAH. The
exclusion of charges attributable to
charity care has the effect of decreasing
the denominator of the Medicare share
fraction as the proportion of charity care
(charity care charge ratio) provided by a
hospital increases. This is because the
ratio of estimated total hospital charges,
not including charges attributable to
charity care, to estimated total hospital
charges during a period decreases,
relatively speaking, as a hospital
provides a greater proportion of charity
care. The effect of a greater charity care
factor on the denominator of the
Medicare share fraction is therefore to
decrease the denominator (as the total
number of inpatient-bed days is
multiplied by a relatively lower charity
care charge ratio), as a hospital provides
a greater proportion of charity care. A
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smaller denominator increases the
Medicare share factor, providing for
higher incentive payments, to a hospital
that provides a greater proportion of
charity care. Conversely, as a hospital
provides a lower proportion of charity
care, the ratio of estimated total hospital
charges, not including charges
attributable to charity care, to estimated
total hospital charges during a period
increases.
For the purposes of this final rule, we
define charity care as part of
uncompensated and indigent care
described for Medicare cost reporting
purposes in the Medicare cost report
instructions at section 4012 of the
Provider Reimbursement Manual (PRM),
Part 2; Worksheet S–10; Hospital
Uncompensated and Indigent Care Data.
Subsection (d) hospitals and CAHs are
required to complete the Worksheet
S–10.
As part of the Form CMS–2552–10
described above, the revised Worksheet
S–10 instructions define
uncompensated care as follows: ‘‘* * *
charity care and bad debt which
includes non-Medicare bad debt and
non-reimbursable Medicare bad debt.
Uncompensated care does not include
courtesy allowances or discounts given
to patients.’’ These instructions further
define charity care to include health
services for which a hospital
demonstrates that the patient is unable
to pay. Charity care results from a
hospital’s policy to provide all or a
portion of services free of charge to
patients who meet certain financial
criteria. For Medicare purposes, charity
care is not reimbursable, and unpaid
amounts associated with charity care are
not considered as an allowable
Medicare bad debt. Therefore, we
proposed to use the charity care charges
that are reported on line 19 of the
revised Worksheet S–10 in the
computation of the Medicare share of
the incentive payments. Line number 19
of the revised Worksheet S–10, as
proposed, has changed to line number
20 based on the pending OMB approved
final Form CMS–2552–10. Only the line
number has changed as the instructions
are the same for line 19 as proposed and
for line 20 in the pending final OMB
approved Worksheet S–10. Thus, the
charity care charges used to calculate
the final Medicare share is reported on
line 20 of the pending final OMB
approved Worksheet S–10.
Under section 1886(n)(2)(D) of the
Act, if the Secretary determines that
data are not available on charity care
necessary to calculate the portion of the
formula specified in clause (ii)(II) of
section 1886(n)(2)(D) of the Act, the
Secretary shall use data on
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uncompensated care and may adjust
such data so as to be an appropriate
proxy for charity care including a
downward adjustment to eliminate bad
debt data from uncompensated care
data. In the absence of the data
necessary for the Secretary to compute
the amount described in clause (ii)(II) of
section 1886(n)(2)(D) of the Act, the
amount under such clause shall be
deemed to be 1.
We believe that the charity care
charges reported on line 20 of the
pending final OMB approved Worksheet
S–10 represent the most accurate
measure of charity care charges as part
of the hospital’s overall reporting of
uncompensated and indigent care for
Medicare purposes. Therefore, since
eligible hospitals and CAHs are required
to complete the Worksheet S–10, if a
hospital has not properly reported any
charity care charges on line 20, we may
question the accuracy of the charges
used for computing the final Medicare
share of the incentive payments. With
appropriate resources, we believe the
charity care data can be obtained by the
MAC. This data would be used to
determine if the hospital’s charity care
criteria are appropriate, if a hospital
should have reported charity care
charges, and if the reported charges are
proper. If we determine, as based on the
determination of the MAC, that the
hospital did not properly report charity
care charges on line 20 of the pending
final OMB approved Worksheet S–10,
then we proposed to deem the portion
of the denominator described in section
1886(n)(2)(D)(ii)(II) of the Act to be 1.
In the proposed rule, we specifically
solicited public comments on the
charity care financial criteria
established by each hospital and
reviewed by the MACs, the collection of
charity care data on the Worksheet
S–10, and whether proxies for charity
care may be developed with other data
available to us.
Comment: Some commenters
requested that CMS clarify the
definition of charity care. One
commenter believed the CMS
incorrectly indicated that Medicare does
not reimburse for charity care. The
commenter believed this statement is
inconsistent with section 312 of the
Provider reimbursement Manual (PRM).
Response: Section 1886(n)(2)(D)(ii)(II)
of the Act defines charity care charges
to compute the Medicare share as such
term is used for purposes of hospital
cost reporting under Medicare. Thus, we
are adopting our proposed definition of
charity care as part of uncompensated
and indigent care described for
Medicare cost reporting purposes in the
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Medicare cost report instructions as
described above.
In addition, we believe that our
statement is correct in that Medicare
does not pay for charity care in
accordance with the regulations and
manual instructions. Specifically,
section 413.89(b)(1) of the Medicare
regulations defines bad debts as
amounts considered to be uncollectible
from accounts and notes receivable that
were created or acquired in providing
services. ‘‘Accounts receivable’’ and
‘‘notes receivable’’ are designations for
claims arising from the furnishing of
services, and are collectible in money in
the relatively near future. Section
413.89(b)(2) of the Medicare regulations
defines charity allowances as reductions
in charges made by the provider of
services because of the indigence or
medical indigence of the patient. Cost of
free care (uncompensated services)
furnished under a Hill-Burton obligation
are considered as charity allowances.
Furthermore, section 413.89(g) states
that charity allowances have no
relationship to beneficiaries of the
Medicare program and are not allowable
costs. These charity allowances include
the costs of uncompensated services
furnished under a Hill-Burton
obligation.
Also, section 312 of the PRM states
that, for Medicare bad debt purposes, a
non-Medicaid beneficiary may be
considered indigent or medically
indigent and that once indigence is
determined and the provider concludes
that no improvements in the
beneficiary’s financial condition exist,
the debt may be deemed uncollectible
without applying the collection
requirements of section 310 of the PRM.
We believe that the instructions at
section 312 of the PRM specify bad debt
amounts that may be allowable under
section 413.89 of the regulations and,
thus, these instructions are not related
to charity care amounts that are not
allowable for Medicare.
After consideration of the public
comments received, we are finalizing
the definition of charity care these
provisions as proposed.
Comment: We received some
comments asking if CMS will adopt
standards to determine if a hospital’s
charity care policy is sufficient to
qualify for the inclusion of charges in
the formula for EHR and whether that
same policy would suffice to meet the
criteria to determine the eligibility for
Medicare bad debt.
Response: Currently for bad debt
purposes, section 312 of the PRM
requires the provider to perform asset/
income tests of patient resources for
non-Medicaid beneficiaries. These tests
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will be used to determine if the
beneficiary meets the provider’s
indigent policy to qualify an unpaid
deductible and/or coinsurance amount
as a Medicare bad debt. The provider is
responsible for developing its indigent
policy. Currently, the Medicare
contractor will determine if the indigent
policies are appropriate for determining
allowable Medicare bad debt under
section 312 of the PRM and § 413.89 of
the regulations. We believe that the
Medicare contractor will continue to
determine if the provider’s indigent
policy for bad debt purposes is
appropriate and can determine if the
same policy would be sufficient to use
for charity care purposes.
Comment: We received many
comments on the use of charity care
charge data from line 19 of the revised
worksheet S–10, as proposed.
Commenters urge CMS to calculate
charity care costs by starting with the
amount of charges a hospital has written
off. Commenters noted that this
modification would help streamline and
unify charity care reporting across the
Federal government (based on the way
Internal Revenue Service (IRS)) requires
charity care to be reported) ensure
consistency of reporting, and avoid
significantly increasing hospitals’
administrative burden.
Response: As described above, we use
charity care charges from line 20 of the
pending final OMB approved worksheet
S–10 that captures ‘‘total initial payment
obligations of the patients who are given
full or partial discounts, based on the
hospital’s charity care criteria
(measured a full charge), for care
delivered during the cost reporting
period for the entire facility.’’ Similar
comments received on our proposed
rule were also received on the Agency
Information Collection Activities:
Proposed Collection: Comment Request
published in the July 2, 2009 Federal
Register (74 FR 31738). CMS issued a
revised package, Agency Information
Collection Activities: Submission for
OMB Review: Comment Request, in the
April 30, 2010 Federal Register (75 FR
22810). The comment period for the
submission for OMB review ended June
1, 2010. OMB will review the comments
received and issue an approved Form
CMS 2552 10. The OMB approved Form
CMS–2552–10 will be effective for cost
reporting periods beginning on or after
May 1, 2010.
Comment: Some commenters noted
that the Hospital Uncompensated Care
and Indigent Care Worksheet S–10 that
CMS proposed to revise in the July 2,
2009 Federal Register (74 FR 31738)
would not be timely (based on the
anticipated effective date for cost
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reporting periods beginning on or after
February 1, 2010 as stated in the
proposed rule), and therefore, hospitals
with cost reporting periods beginning
on November 1, 2009, December 1, 2009
or January 1, 2010 would not have the
opportunity to report charity care data
for the first year of the incentive
payment. Commenters further
highlighted their concern for available
data necessary to be included in interim
payments and for final payments for
periods that end December 31, 2010.
Commenters urged CMS to develop an
interim mechanism for hospitals to
report the necessary information so that
no hospital receives a charity care
adjustment of ‘‘1’’ merely because of its
cost reporting cycle. Some commenters
suggested that CMS use other charity
care data. Some commenters suggested
that CMS use the current version of the
Medicare cost report, Form CMS–2552–
96, to determine interim incentive
payments.
Response: To calculate the Medicare
share, which includes the charges for
charity care, we proposed in the
proposed rule to employ data from the
hospitals fiscal year that ends during the
FY prior to the FY that serves as the
payment year as the basis for
preliminary payment. We further stated
that final payment would be made on
the basis of the data from the hospital
fiscal year that ends during the FY that
serves as the payment year. After
consideration of the public comments
received, we are revising the provision
that for purposes of determining
preliminary incentive payments, we
will employ data on the hospital’s/
CAH’s Medicare fee-for-service and
managed care inpatient bed days, total
inpatient bed-days, and charges for
charity care from a hospital’s/CAH’s
most recently submitted 12-month cost
report once the hospital has qualified as
a meaningful user. For purposes of
determining final incentive payments,
we will employ the first 12-month cost
reporting period that begins after the
start of the payment year, in order to
settle payments on the basis of the
hospital’s/CAH’s Medicare fee-forservice and managed care inpatient bed
days, total inpatient bed-days, and
charges for charity care data from that
cost reporting period.
In addition, as described in the
proposed rule, hospitals have been
required to fill out the worksheet S–10
of the Form CMS 2552–96 since the
BBRA of 1999 was enacted. We
recognize that the charity care data from
the 2552–96 worksheet S–10 may have
some limitations because, in some cases,
providers failed to complete the
worksheet either partially or in its
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entirety. Furthermore, in the past CMS
did not review the worksheet S–10
because the data had no Medicare
payment implications. Thus, in the
absence of availability of charity care
data from the OMB approved Form CMS
2552–10, a hospital for the purposes of
calculating the charity care charges in
the interim may use the information
from the 2552–96 worksheet S–10; line
22 until the revised worksheet is
available. We believe that the Medicare
contractor can make a determination if
the charity care charges from the 2552–
96 are appropriate, and if so, use such
charges in determining the preliminary
incentive payment amount for hospitals,
as described above. Since CAHs were
not required to fill out the 2552–96
worksheet S–10, charity care charges
may not be available to determine
preliminary incentive payments until
the revised worksheet is available.
However, using data from the first 12month cost reporting period that begins
after the start of the payment year, as
described above, hospitals and CAHs
will calculate the final incentive
payment amount with data from the
pending Form CMS–2552–10 Medicare
cost report that is effective for cost
reporting periods beginning on or after
May 1, 2010.
Comment: Several commenters
pointed out that we had failed to
identify the source of the data for
‘‘estimated total amount of the eligible
hospital’s charges’’ in the proposed rule.
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Some of these commenters
recommended that we employ
Worksheet C, Column 8, line 103 for
this purpose.
Response: We did neglect to identify
the source of the data for ‘‘estimated
total amount of the eligible hospital’s
charges’’ in the proposed rule. In the
final rule, we are providing that, for this
purpose, we will employ the data from
Worksheet E–1, Part II, line 5 of the
revised Medicare cost report, Form
CMS–2552–10, which in turn derives
this information from line 200 in
column 8, Worksheet C, Part I of the
pending cost report. We note that line
200 in column 8, Worksheet C, Part I of
the revised cost report is the equivalent
of 101, Column 8, Worksheet C of the
current cost report. We are employing
the equivalent of line 101, rather than
the equivalent of line 103, as
recommended by the commenters,
because line 101 (current line 200)
includes the charges for observation,
and accordingly reflects the ‘‘total
amount of the eligible hospital’s
charges’’ more truly than line 103,
which excludes those charges.
e. Incentive Payment Calculation for
Eligible Hospitals: Transition Factor
As we have previously discussed, the
initial amount must be multiplied not
only by the Medicare share fraction, but
also by an applicable transition factor in
order to determine the incentive
payment to an eligible hospital for an
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incentive payment year. Section
1886(n)(2)(E)(i) of the Act designates
that the applicable transition factor
equals one (1) For the first payment
year, three-fourths for the second
payment year, one-half for the third
payment year, one-fourth for the fourth
payment year, and zero thereafter.
However, section 1886(n)(2)(E)(ii) of the
Act provides that if ‘‘the first payment
year for an eligible hospital is after
2013, then the transition factor specified
in this subparagraph for a payment year
for such hospital is the same as the
amount specified in clause (i) for such
payment year for an eligible hospital for
which the first payment year is 2013.’’
Accordingly, if a hospital’s first
payment year is FY 2014, then the
applicable transition factor equals threefourths (3⁄4) for the first payment year
(FY 2014), one-half (1⁄2) for the second
payment year (FY 2015), one-fourth (1⁄4)
for the third payment year (FY 2015),
and zero thereafter. If a hospital’s first
payment year is FY 2015, then the
applicable transition factor equals (1⁄2)
for the first payment year (FY 2015), (1⁄4)
for the second payment year (FY 2016),
and zero thereafter. As discussed in
more detail below, under section
1886(n)(2)(E)(ii) of the Act, the
transition factor for a hospital for which
the first payment year is after 2015
equals zero for all years. In other words,
2015 is the last year for which eligible
hospitals may begin participation in the
Medicare EHR Incentive Program.
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f. Duration and Timing of Incentive
Payments
Section 1886(n)(2)(E)(i) of the Act
establishes that an eligible hospital that
is a meaningful user of certified EHR
technology could receive up to 4 years
of financial incentive payments. The
transition factor phases down the
incentive payments over the 4-year
period. Therefore, an eligible hospital
that is a meaningful user of certified
EHR technology during the relevant
EHR reporting period, in payment year
FY 2011, could receive incentive
payments beginning with FY 2011
(transition factor equals 1), and for FY
2012 (transition factor equals 3⁄4), 2013
(transition factor equals 1⁄2), and 2014
(transition factor equals 1⁄4) if they
continue to be a meaningful user of
certified EHR technology during the
relevant EHR reporting periods.
Section 1886(n)(2)(E)(ii) of the Act
establishes the range of time during
which a hospital may begin to receive
incentive payments, and the applicable
transition periods for hospitals that are
permitted to begin receiving incentive
payments after FY 2011. Specifically,
that section provides that if the ‘‘first
payment year for an eligible hospital is
after 2015, the transition factor * * *
for such hospital and for such year and
subsequent year shall be 0.’’ This clause
in effect provides that no incentive
payments will be available to a hospital
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that would begin to receive such
payments after FY 2015. In other words,
FY 2015 is the last FY in which a
hospital can begin to receive incentive
payments. Taken together, sections
1886(n)(2)(G)(i) and 1886(n)(2)(E)(ii) of
the Act allow hospitals to begin
receiving incentive payments during
FYs 2011 through 2015. Section
1886(n)(2)(E)(ii) of the Act also
establishes the transition periods and
factors that will be in effect for hospitals
that begin to receive transition
payments during FY 2014 and 2015. As
discussed previously, that section states
that if ‘‘the first payment year for an
eligible hospital is after 2013, then the
transition factor specified in this
subparagraph for a payment year for
such hospital is the same as the amount
specified in clause (i) for such payment
year for an eligible hospital for which
the first payment year is 2013.’’ Section
1886(n)(2)(E)(ii) of the Act also
establishes the transition periods that
will be in effect for hospitals that begin
to receive transition payments during
FYs 2014 through 2015. That section
states that if ‘‘the first payment year for
an eligible hospital is after 2013, then
the transition factor specified in this
subparagraph for a payment year for
such hospital is the same as the amount
specified in clause (i) for such payment
year for an eligible hospital for which
the first payment year is 2013.’’ By
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implication, this clause establishes that,
for hospitals that begin to receive
incentive payments in FYs 2012 and
2013, the transition periods are
equivalent to those for hospitals that
begin to receive such payments in FY
2011. An eligible hospital that is a
meaningful user of certified EHR
technology could receive incentive
payments beginning with FY 2012
(transition factor equals 1), and for FY
2013 (transition factor equals 3⁄4), FY
2014 (transition factor equals 1⁄2), and
FY 2015 (transition factor equals 1⁄4).
Similarly, an eligible hospital that is a
meaningful EHR user could receive
incentive payments beginning with FY
2013 (transition factor equals 1), and for
FYs 2014 (transition factor equals 3⁄4),
2015 (transition factor equals 1⁄2), and
2016 (transition factor equals 1⁄4).
However, this section also specifically
provides that the transition factor is
modified for those eligible hospitals that
first become meaningful users of
certified EHR technology beginning in
2014 or 2015. Such hospitals would
receive payments as if they became
meaningful EHR users beginning in
2013. In other words, if a hospital were
to begin to demonstrate meaningful use
of EHR certified technology in 2014, the
transition factor used for that year
(2014) would be 3⁄4 instead of 1, 1⁄2 for
the second year (2015), 1⁄4 for the third
year (2016), and zero thereafter.
Similarly, if a hospital were to begin
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incentive payment and the transition
factor applicable to each year.
section 1886(b)(3)(B) of the Act provides
that, ‘‘for FY 2015 and each subsequent
FY,’’ an eligible hospital that is not ‘‘a
meaningful EHR user * * * for an EHR
reporting period’’ will receive a reduced
update to the IPPS standardized
amount. This reduction will apply to
‘‘three-quarters of the percentage
increase otherwise applicable.’’ For FY
2015 and each subsequent FY, the
reduction to three-quarters of the
applicable update for an eligible
hospital that is not a meaningful EHR
user will be ‘‘331⁄3 percent for FY 2015,
662⁄3 percent for FY 2016, and 100
percent for FY 2017 and each
subsequent FY.’’ In other words, the
Secretary is required to subject eligible
hospitals who are not meaningful users
to 1⁄4, 1⁄2, and 3⁄4 reductions of their
market basket updates in FY 2015, FY
2016, and FY 2017 and subsequent
years respectively. Section 4102(b)(1)(B)
of the HITECH Act also provides that
such ‘‘reduction shall apply only with
respect to the FY involved and the
Secretary shall not take into account
such reduction in computing the
applicable percentage increase * * * for
a subsequent FY.’’ This provision
establishes a continuing incentive for
hospitals to become meaningful EHR
users, because a hospital that does
become a meaningful EHR user in any
year after the effective date of the
update reduction will receive the same,
fully updated standardized amount for
that year, and subsequent years, as those
hospitals that were already meaningful
EHR users at the time when the update
reduction went into effect (although
hospitals would remain subject to a
separate reduction for failure to report
quality data under RHQDAPU). In order
to conform with this new update
reduction, section 4102(b)(1)(A) of the
HITECH Act revises section
1886(b)(3)(B)(viii)(1) of the Act to
provide that, beginning with FY 2015,
the reduction to the IPPS applicable
percentage increase for failure to submit
data on quality measures to the
Secretary shall be one-quarter of the
applicable market basket update. In this
way, even the combined reductions for
EHR use and quality data reporting will
not produce an update of less than zero
for a hospital in a given FY as long as
the hospital market basket remains a
positive number.
In the proposed rule, we noted that
specific proposals to implement these
payment adjustments for subsection (d)
hospitals that are not meaningful EHR
users were not being made at that time,
but would be subject to future
rulemaking prior to the 2015
implementation date. We invited
comments on these payment
adjustments, and stated any comments
received would be considered in
developing future proposals to
implement these provisions.
We received a few comments on this
provision.
g. Incentive Payment Adjustment
Effective in FY 2015 and Subsequent
Years for Eligible Hospitals Who Are
Not Meaningful EHR Users
In addition to providing for incentive
payments for meaningful use of EHRs
during a transition period, section
1886(b)(3)(B) of the Act, as amended by
section 4102(b)(1) of the HITECH Act,
provides for an adjustment to the market
basket update to the IPPS payment rate
for those eligible hospitals that are not
meaningful EHR users for the EHR
reporting period for a payment year,
beginning in FY 2015. Specifically,
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3. Incentive Payments for Critical
Access Hospitals (CAHs)
Section 1814(l)(3)(A) of the Act, as
amended by section 4102(a)(2) of the
HITECH Act, also provides for incentive
payments for CAHs that are meaningful
users of certified EHR technology during
an EHR reporting period for a cost
reporting period beginning during a
payment year after FY 2010 but before
FY 2016. The criteria for being a
meaningful EHR user, and the manner
for demonstrating meaningful use, are
discussed in section II.A.2. of this final
rule.
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of 1, 1⁄4 for the second year (2016), and
zero thereafter.
Table 25 shows the possible years an
eligible hospital could receive an
Comment: Several commenters
pointed out an apparent inconsistency
in the regulation text that we proposed
to implement the transition period and
applicable transition factors for EHR
incentive payments. Specifically, the
commenters noted that proposed section
495.104(b)(5) states that hospitals
‘‘whose first payment year is FY 2015
may receive such payments for FY 2015
through 2017’’ (emphasis supplied),
while proposed section 495.104(c)(5)
states that the transition factors for
hospitals ‘‘whose first payment year is
FY 2015’’ are:
(A) 1⁄2 for FY 2015; and
(B) 1⁄4 for FY 2016. (Emphasis
supplied.)
Response: These commenters are
correct. Our proposed section
495.104(b)(5) contained a typographical
error. In order to be consistent with the
clear requirements of the statute, section
495.104(b)(5) should have stated that
hospitals ‘‘whose first payment year is
FY 2015 may receive such payments for
FY 2015 through 2016.’’ In this final
rule, we are revising section
495.104(b)(5) of the final regulations
accordingly.
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meaningful use of certified EHR
technology in 2015, the transition factor
used for that year would be 1⁄2 instead
Federal Register / Vol. 75, No. 144 / Wednesday, July 28, 2010 / Rules and Regulations
a. Definition of CAHs for Medicare
Section 1861(mm)(1) of the Act
defines a CAH as a facility that has been
certified as a critical access hospital
under section 1820(c). CAHs are
reimbursed for services furnished to
Medicare beneficiaries under section
1814(l) of the Act for inpatient services
and section 1834(g) of the Act for
outpatient services. Incentive payments
for CAHs under section 1814(l)(3)(A) of
the Act will be calculated based on the
provider number used for cost reporting
purposes, which is the CCN of the main
provider. The process for making
incentive payments to CAHs is
discussed in section II.B.4.c. of this final
rule.
Comment: We received many
comments on the use of the CCN to
identify CAHs. Most comments were
similar to those received on the use of
the CCN for determining incentive
payments to eligible hospitals.
Response: We responded to the
comments for eligible hospitals
elsewhere in this final rule. Our
responses to comments received on
using the CCN to identify CAHs are the
same as the responses for eligible
hospital.
After consideration of the public
comments received, we are finalizing
our policy as proposed. For purposes of
this provision, we will provide
incentive payments to qualifying CAHs
as they are distinguished by the
provider number in the CAH’s cost
reports. Incentive payments for
qualifying CAHs will be calculated
based on the provider number used for
cost reporting purposes, which is the
CCN of the main provider (also referred
to as OSCAR number). Payments to
qualifying CAHs will be made to each
provider of record.
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b. Current Medicare Payment of
Reasonable Cost for CAHs
For Medicare purposes, CAHs are
paid for most inpatient and outpatient
services to Medicare beneficiaries on the
basis of reasonable cost under section
1814(l) and section 1834(g) of the Act,
respectively. Thus, CAHs are not subject
to the IPPS and Hospital Outpatient
Prospective Payment System (OPPS).
Section 1861(v)(1)(A) of the Act is the
statutory basis for reasonable cost
reimbursement in Medicare. Under the
reasonable cost reimbursement
methodology, payments to providers are
based on the reasonable cost of
furnishing Medicare-covered services to
beneficiaries. Reasonable cost includes
all necessary and proper costs in
furnishing the services, subject to the
principles of reasonable cost
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reimbursement relating to certain
specific items of revenue and cost.
Reasonable cost takes into account both
direct and indirect costs of providers of
services, including normal standby
costs. The objective of the reasonable
cost methodology is to ensure that the
costs for individuals covered by the
program are not borne by others not so
covered, and the costs for individuals
not so covered are not borne by the
program. The reasonable costs of
services and the items to be included
are determined in accordance with the
regulations at 42 CFR part 413, manual
guidance, and other CMS instructions.
Currently, under section 1814(l)(1) of
the Act and § 413.70(a) of the
regulations, effective for cost reporting
periods beginning on or after January 1,
2004, payment for inpatient services of
a CAH, other than services of a distinct
part unit of a CAH, is 101 percent of the
reasonable costs of the CAH in
providing CAH services to its inpatients,
as determined in accordance with
section 1861(v)(1)(A) of the Act and
with the applicable principles of cost
reimbursement in Parts 413 and 415 of
the regulations. However, payment for
inpatient CAH services is not subject to
the reasonable cost principles of the
lesser of cost or charges, the reasonable
compensation equivalent limits for
physician services to providers, the
ceilings on hospital operating costs, or
the payment window provisions for
preadmission services, specified in
§ 412.2(c)(5) and § 413.40(c)(2). Section
1834(g) of the Act and § 413.70(b) of the
regulations describe the payment
methodology for outpatient services
furnished by a CAH.
Currently, reasonable cost
reimbursement for CAHs includes
payment for depreciation of depreciable
assets used in providing covered
services to beneficiaries, as described
under Part 413 subpart G of our
regulations and § 104 of the Medicare
Provider Reimbursement Manual (PRM).
In general, the depreciation expense of
an asset, representing a portion of the
depreciable asset’s costs which is
allocable to a period of operation, is
determined by distributing the
acquisition costs of the depreciable
asset, less any salvage costs, over the
estimated useful life of the asset.
c. Changes Made by the HITECH Act
Sections 4102(a)(2) and 4102(b)(2) of
the HITECH Act amended section
1814(l) of the Act, which governs
payment for inpatient CAH services.
The HITECH Act did not amend section
1834(g) of the Act, which governs
payment for outpatient CAH services.
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44461
Sections 4102(a)(2) and 4102(b)(2) of
the HITECH Act amended section
1814(l) of the Act by adding new
paragraphs (3), (4), and (5) as follows:
Section 1814(l)(3)(A) of the Act
provides the following:
The following rules shall apply in
determining payment and reasonable costs
* * * for a critical access hospital that
would be a meaningful EHR user (as would
be determined under paragraph (3) of section
1886(n)) for an EHR reporting period for a
cost reporting period beginning during a
payment year if such critical access hospital
was treated as an eligible hospital under such
section:
(i) The Secretary shall compute reasonable
costs by expensing such costs in a single
payment year and not depreciating these
costs over a period of years (and shall
include as costs with respect to cost reporting
periods beginning during a payment year
costs from previous cost reporting periods to
the extent they have not been fully
depreciated as of the period involved).
(ii) There shall be substituted for the
Medicare share that would otherwise be
applied [to CAHs under section 1814(l)(1),] a
percent (not to exceed 100 percent) equal to
the sum of—
(I) The Medicare share (as would be
specified under paragraph (2)(D) of section
1886(n)) for such critical access hospital if
such critical access hospital was treated as an
eligible hospital under such section; and
(II) 20 percentage points.
Section 1814(l)(3)(B) of the Act
provides that the incentive payment for
CAHs will be paid ‘‘through a prompt
interim payment (subject to
reconciliation) after submission and
review of such information (as specified
by the Secretary) necessary to make
such payment.’’ The provision also
states that ‘‘[i]n no case may payment
under this paragraph be made with
respect to a cost reporting period
beginning during a payment year after
2015 and in no case may a critical
access hospital receive payment under
this paragraph with respect to more than
4 consecutive payment years.’’
Section 1814(l)(3)(C) of the Act
provides that the reasonable costs for
which a CAH may receive an incentive
payment are costs for the purchase of
certified EHR technology to which
purchase depreciation (excluding
interest) would otherwise apply under
section 1814(l)(1) of the Act.
Section 1814(l)(4)(A) of the Act
provides for an adjustment, subject to
the hardship exemption in section
1814(l)(4)(C) of the Act, to a CAH’s
reimbursement at 101 percent of its
reasonable costs if the CAH has not met
the meaningful EHR user definition for
an EHR reporting period that begins in
FY 2015 or a subsequent fiscal year.
Section 1814(l)(4)(B) of the Act specifies
that if a CAH is not a meaningful EHR
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user during the cost reporting period
beginning in FY 2015, its
reimbursement will be reduced from
101 percent of its reasonable costs to
100.66 percent. For FY 2016, the
percentage of reimbursement for a CAH
that is not a meaningful EHR user is
reduced to 100.33 percent of its
reasonable costs. For FY 2017 and each
subsequent FY, the percentage of
reimbursement is reduced to 100
percent of reasonable costs. Section
1814(l)(4)(C) of the Act states that, as
provided for eligible subsection (d)
hospitals, the Secretary may, on a caseby-case basis, exempt a CAH from this
adjustment if the Secretary determines,
subject to annual renewal, that requiring
the CAH to be a meaningful EHR user
during a cost reporting period beginning
in FY 2015 or a subsequent fiscal year
would result in a significant hardship,
such as in the case of a CAH in a rural
area without sufficient Internet access.
However, in no case may a CAH be
granted an exemption under this
provision for more than 5 years.
Section 1814(l)(5) provides that there
shall be no administrative or judicial
review under sections 1869 or 1878 of
the Act, or otherwise, of: (1) The
methodology and standards for
determining the amount of payment
under section 1814(l)(3) of the Act and
payment adjustments under section
1814(l)(4) of the Act; (2) the
methodology and standards for
determining a CAH to be a meaningful
EHR user; (3) the methodology and
standards for determining if the
hardship exemption applies to a CAH;
(4) the specification of EHR reporting
periods; and (5) the identification of
reasonable costs used to compute CAH
incentive payments.
d. Incentive Payment Calculation for
CAHs
Consistent with section 1814(l)(3)(A)
of the Act, we proposed to amend
§ 413.70(a) to add a new paragraph (5)
to provide for an incentive payment to
a qualifying CAH for the reasonable
costs incurred for the purchase of
certified EHR technology in a cost
reporting period beginning during a
payment year after FY 2010 but before
FY 2016. We proposed to include a
cross-reference to § 495.106 which
defines the terms associated with the
CAH incentive payment, including the
definition of a ‘‘qualifying CAH’’ that is
eligible to receive the CAH incentive
payment, and the methodology for
determining the amount of that
incentive payment. In addition, we
proposed to amend § 413.70(a) to add a
new paragraph (6) to provide for the
adjustment of a CAH’s reasonable costs
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of providing inpatient services starting
in FY 2015 if the CAH is not a
qualifying CAH.
In computing the CAH incentive
payment and applying the adjustments
to a CAH’s payment if the CAH is not
a qualifying CAH, we proposed to apply
the definitions of certified EHR
technology, EHR reporting period,
meaningful EHR user and qualified EHR
in § 495.4 that are discussed elsewhere
in this final rule.
In § 495.106(a), we proposed to define
a qualifying CAH as a CAH that would
meet the meaningful EHR user
definition for eligible hospitals in
§ 495.4, which is discussed in section II
A.1. of this final rule if it were an
eligible hospital. Also in § 495.106(a),
for the purposes of computing the CAH
incentive payment, we proposed that
the reasonable costs for the purchase of
certified EHR technology mean the
reasonable acquisition costs, excluding
any depreciation and interest expenses
associated with the acquisition,
incurred for the purchase of depreciable
assets as described at part 413 subpart
G, such as computers and associated
hardware and software, necessary to
administer certified EHR technology as
defined in § 495.4 of this final rule. We
also proposed to define payment year
for CAHs to mean a fiscal year
beginning after FY 2010 but before FY
2016.
Under proposed § 495.106(b), we
specified that a qualifying CAH must
receive an incentive payment for its
reasonable costs incurred for the
purchase of certified EHR technology.
The CAH incentive payment will be for
a cost reporting period that begins
during a payment year after FY 2010 but
before FY 2016.
Consistent with section 1814(l)(3)(A)
of the Act, we proposed under
§ 495.106(c) that the payment
methodology for computing the
incentive payment for a qualifying CAH
for a cost reporting period during a
payment year would be equal to the
product of—(1) the reasonable costs
incurred for the purchase of certified
EHR technology in that cost reporting
period and any similarly incurred costs
from previous cost reporting periods to
the extent they have not been fully
depreciated as of the cost reporting
period involved and (2) the CAH’s
Medicare share which equals the
Medicare share as computed for eligible
hospitals including the adjustment for
charity care (described in sections
II.A.2.b. and A.3. of this final rule) plus
20 percentage points. However, in no
case will the resulting Medicare share
for a CAH exceed 100 percent. This
payment methodology will be used in
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place of payment at 101 percent of
reasonable costs typically applied under
section 1814(l)(1) of the Act and
§ 413.70(a)(1) of the regulations.
For example, a CAH first requests an
incentive payment for its cost reporting
period beginning on January 1, 2012
which is in FY 2012. The CAH incurred
reasonable costs of $500,000 for the
purchase of certified EHR technology in
its previous cost reporting period
beginning on January 1, 2011. This CAH
is a meaningful user of certified EHR
technology during the relevant EHR
reporting period and thus qualifies for
an incentive payment for FY 2012. (For
illustrative purposes this example
assumes no salvage value of the assets
acquired.) The CAH depreciated
$100,000 of the costs of these items in
the cost reporting period beginning on
January 1, 2011. As a result, the amount
used to compute the incentive payment
will be the remaining $400,000 of
undepreciated costs. The CAH’s
Medicare share is 90 percent (its
Medicare share of 70 percent using the
methodology described in section
II.A.2.b. of this final rule plus 20
percentage points). Therefore, the CAH’s
incentive payment for FY 2012 is
$360,000 ($400,000 times 90 percent).
This CAH’s first payment year is FY
2012, and it can receive incentive
payments through 4 consecutive
payment years which, in this example,
would be FYs 2012 through 2015.
If, in the above example, the CAH also
incurred reasonable costs of $300,000
for the purchase of certified EHR
technology in its cost reporting period
beginning in FY 2012 that will not be
depreciated, then the incentive payment
for FY 2012 is $630,000 ($700,000
($400,000 in FY 2011 plus $300,000 in
FY 2012) times 90 percent).
(The preceding examples are offered for
illustrative purposes only and are not
intended to encompass all possible
computations of the CAH incentive
payment.)
Under proposed § 495.106(d)(1), the
amount of the incentive payment made
to a qualifying CAH under this section
represents the expensing and payment
of the reasonable costs of certified EHR
technology computed as described
above in a single payment year and, as
specified in § 413.70(a)(5), such
payment is made in lieu of any payment
that would have been made under
§ 413.70(a)(1) for the reasonable costs of
the purchase of certified EHR
technology including depreciation and
interest expenses associated with the
acquisition. The Medicare contractor
will review the CAH’s current year and
each subsequent year’s cost report to
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ensure that the assets associated with
the acquisition of certified EHR
technology are expensed in a single
period and that depreciation and
interest expenses associated with the
acquisition are not allowed.
Under proposed § 495.106(d)(2), the
amount of the incentive payment made
to a qualifying CAH under this section
would be paid through a prompt interim
payment for the applicable payment
year after—(1) the CAH submits the
necessary documentation, as specified
by CMS or its Medicare contractor, to
support the computation of the
incentive payment amount; and (2) CMS
or its Medicare contractor reviews such
documentation and determines the
interim amount of the incentive
payment.
Under proposed § 495.106(d)(3), the
interim incentive payment would be
subject to a reconciliation process as
specified by CMS and the final
incentive payment as determined by
CMS or its Medicare contractor would
be considered payment in full for the
reasonable costs incurred for the
purchase of certified EHR technology in
a payment year.
Under § 495.106(d)(4), we proposed
that an incentive payment may be made
with respect to a cost reporting period
beginning during a payment year
beginning with FY 2011 (October 1,
2010 through September 30, 2011)
through FY 2015 (October 1, 2014
through September 30, 2015), but in no
case may a CAH receive an incentive
payment with respect to more than four
consecutive payment years. Therefore, a
CAH, that is a meaningful EHR user,
may begin receiving an incentive
payment for its cost reporting period
beginning in FY 2011 for the incurred
reasonable costs for the purchase of
certified EHR technology during that
cost reporting period and in previous
cost reporting periods to the extent that
the item or items have not been fully
depreciated. These incentive payments
will continue for no more than 4
consecutive payment years and will not
be made for a cost reporting period
beginning during a payment year after
2015. As discussed above and in section
II.B.4. of this final rule, the CAH must
submit supporting documentation for its
incurred costs of purchasing certified
EHR technology to its Medicare
contractor (Fiscal Intermediary (FI)/
MAC).
CAHs cannot receive an incentive
payment for a cost reporting period that
begins in a payment year after FY 2015.
If the first payment year for a CAH is FY
2013 then the fourth consecutive
payment year would be 2016. However,
the CAH cannot be paid an incentive
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payment for FYs 2016 and beyond. For
FY 2016 and beyond, payment to CAHs
for the purchase of additional EHR
technology will be made under
§ 413.70(a)(1) in accordance with the
reasonable cost principles, as described
above, which would include the
depreciation and interest cost associated
with such purchase.
Comment: We received many
comments requesting CMS to provide a
list of those depreciable items that
would be used to determine the CAH
incentive payment under this provision.
The commenters were concerned that
certain expenses, such as staff training,
associated with an EHR system may not
be included in the CAH’s incentive
payment. We also received comments
requesting a further explanation of what
documentation will be required to
support the reasonable costs incurred by
the CAH.
Response: Section 1814(l)(3)(C) of the
Act, as amended by the HITECH Act,
provides that the costs for which a CAH
may receive an incentive payment are
reasonable costs for the purchase of
certified EHR technology to which
purchase depreciation (excluding
interest) would otherwise apply under
section 1814(l)(1) of the Act.
Furthermore, section 1814(l)(3)(A) of the
Act, as amended by the HITECH Act,
mandates that the Secretary shall
compute reasonable costs for the
purchase of certified EHR technology by
expensing such costs in a single
payment year and not depreciating these
costs over a period of years (and shall
include as costs with respect to cost
reporting periods beginning during a
payment year costs from previous cost
reporting periods to the extent they have
not been fully depreciated as of the
period involved). As described in the
proposed rule, for the purposes of
computing the CAH incentive payment,
we proposed that the reasonable costs
for the purchase of certified EHR
technology mean the reasonable
acquisition costs, excluding any
depreciation and interest expenses
associated with the acquisition,
incurred for the purchase of depreciable
assets as described at part 413 subpart
G, such as computers and associated
hardware and software, necessary to
administer certified EHR technology as
defined in § 495.4 of this final rule.
CAHs will incur both depreciable and
non-depreciable reasonable costs in a
payment year that are associated with
implementing and maintaining certified
EHR technology. According to the
statute, only the reasonable costs for the
purchase of certified EHR technology to
which purchase depreciation (excluding
interest) would otherwise apply are to
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be included in the CAH incentive
payment. Thus, CAHs will not have to
depreciate these reasonable costs over
the useful life of the EHR asset
purchased as such costs will be
expensed in a single payment year. Any
non-depreciable reasonable costs
incurred in that same single payment
year that are associated with an EHR
system may be paid for under the
current Medicare reasonable cost
payment system at 101 percent.
Currently, the CAH’s Medicare
contractor determines if an item
purchased is a depreciable asset under
Medicare principles or other accounting
standards. The Medicare contractor also
determines the CAH’s reasonable cost
for acquiring depreciable assets. For the
purposes of computing the CAH
incentive payment, we are not changing
the Medicare contractor’s current
responsibilities described above. We,
therefore, suggest that CAHs
communicate with their Medicare
contractors to determine the necessary
documentation to support their
reasonable costs incurred for the
purchase of certified EHR technology
and to determine if the items that they
purchase are depreciable assets under
Medicare principles or other accounting
standards.
Comment: We received some
comments requesting clarification of
how the incentive payments will be
computed if an eligible CAH converts to
or from an eligible ‘‘subsection d’’
hospital.
Response: If during a payment year an
eligible CAH is converted to or from a
‘‘subsection d’’ hospital, the CAH may
receive an incentive payment as long as
it incurred the reasonable costs of
purchasing certified EHR technology in
a payment year (or in a previous cost
reporting period) when it was a CAH
and as long as the affected providers
meet the meaningful use criteria
described elsewhere in this final rule.
When a conversion takes place, the
affected CAH and ‘‘subsection d’’
hospital are each required to file a
Medicare cost report under section
413.24 of the regulations. For instance,
if in month 6 of a cost reporting period
that begins January 1, 2011 and ends
December 31, 2011, a ‘‘subsection d’’
hospital converts to a CAH, the
‘‘subsection d’’ hospital will file a
terminating 6-month cost report
(January 1, 2011 to June 30, 2011). If the
CAH retains the same year end of
December 31, 2011, the CAH will file a
6-month cost report from July 1, 2011 to
December 31, 2011. In this instance, the
CAH’s 6-month cost report would be
used to determine if it incurred
reasonable costs for the purchase of
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certified EHR technology that may
qualify for a CAH incentive payment
during that period. The ‘‘subsection d’’
hospital’s 6 month terminating cost
report would be used to determine the
possible amount of any incentive
payment for that eligible hospital.
After consideration of the public
comments received, with the exception
of a few minor, technical and
conforming changes, we are finalizing
the applicable provisions as proposed.
Comment: We received many
comments regarding the use of data
from the revised Medicare cost report
(Form CMS–2552–10) described in the
proposed rule to compute the Medicare
share portion of the CAH incentive
payment. Commenters were also
concerned that certain cost report data
may not be available at the time of
computing a CAH’s incentive payment.
Response: As discussed elsewhere in
this final rule, we are addressing
concerns with data from the revised cost
report in a final collection that is
currently in the Paperwork Reduction
Act clearance process. In addition, we
address the timing issues with the
revised cost report data elsewhere in
this final rule.
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e. Reduction of Reasonable Cost
Payment in FY 2015 and Subsequent
Years for CAHs That Are Not
Meaningful EHR Users
Section 4102(b)(2) of the HITECH Act
amends section 1814(l) to include an
adjustment to a CAH’s reimbursement at
101 percent of its reasonable costs if the
CAH has not met the meaningful EHR
user definition for an EHR reporting
period that begins in FY 2015, FY 2016,
FY 2017, and each subsequent FY
thereafter. Consistent with this
provision, we proposed that under
§ 495.106(e) and § 413.70(a)(6), if a CAH
has not demonstrated meaningful use of
certified EHR technology for FY 2015,
its reimbursement would be reduced
from 101 percent of its reasonable costs
to 100.66 percent. For FY 2016, its
reimbursement would be reduced to
100.33 percent of its reasonable costs.
For FY 2017 and each subsequent FY,
its reimbursement would be reduced to
100 percent of reasonable costs.
However, as provided for eligible
hospitals, a CAH may, on a case-by-case
basis, be exempted from this adjustment
if CMS or its Medicare contractor
determines, on an annual basis, that
requiring the CAH to be a meaningful
EHR user would result in a significant
hardship, such as in the case of a CAH
in a rural area without sufficient
Internet access. However, in no case
may a CAH be granted an exemption
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under this provision for more than 5
years.
Comment: We received some
comments requesting further
clarification of how CMS will be
determining whether a significant
hardship exists to warrant an
exemption.
Response: We received a few
comments on this provision which is
not effective until FY 2015. We will take
these comments into account when we
develop proposals for implementing this
provision at a later date.
After consideration of the public
comments received, we are finalizing
sections 495.106(e) as proposed. We
have renumbered proposed section
413.70(a)(6)(iv) as 413.70(a)(7), but are
otherwise finalizing section 413.70(a)(6)
as proposed.
Section 1814(l)(5) of the Act exempts
the determinations made under
paragraphs (l)(3) and (l)(4) from
administrative and judicial review.
Accordingly, under § 413.70(a)(6)(iv)
and § 495.106(f), we proposed that there
shall be no administrative or judicial
review under sections 1869 or 1878 of
the Act, or otherwise, of the following:
• The methodology and standards for
determining the amount of payment
under section 1814(l)(3) of the Act and
payment adjustments under section
1814(l)(4) of the Act for CAHs,
including selection of periods under
section 1886(n)(2) of the Act for
determining, and making estimates or
using proxies of, inpatient-bed-days,
hospital charges, charity charges, and
the Medicare share under subparagraph
(D) of section 1886(n)(2) of the Act;
• The methodology and standards for
determining a CAH to be a meaningful
EHR user under section 1886(n)(3) of
the Act as would apply if the CAH was
treated as an eligible hospital under
section 1886(n) of the Act;
• The methodology and standards for
determining if the hardship exemption
under section 1814(l)(4)(C) of the Act
applies to a CAH;
• The specification of EHR reporting
periods under section 1886(n)(6)(B) of
the Act as applied under section
1814(l)(3) and (4) of the Act for CAHs;
and
• The identification of reasonable
costs used to compute the CAH
incentive payment under section
1814(l)(3)(C) of the Act.
Comment: We received some
comments requesting clarification of
whether CAHs will be able to appeal
their incentive payment amounts.
Response: We believe that the
limitation of administrative and judicial
review does not apply to the amount of
the CAH incentive payment. The CAH
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may appeal the statistical and financial
amounts from the Medicare cost report
used to determine the CAH incentive
payment. The CAH would utilize the
current provider appeal process
pursuant to section 1878 of the Act.
Accordingly, after consideration of
the public comments received, we are
finalizing § 495.106(f) as proposed. We
have renumbered proposed
§ 413.70(a)(6)(iv) as § 413.70(a)(7), but
are otherwise finalizing the provision as
proposed.
4. Process for Making Incentive
Payments Under the Medicare FFS
Program
As previously discussed in section
II.B.1. and 2. of this final rule and
sections 1848(o)(1) and 1886(n)(1) of the
Act, the statute provides for incentive
payments to eligible professionals,
eligible hospitals, and CAHS who are
meaningful users of certified EHR
technology as early as FY 2011 for
qualifying eligible hospitals and CAHs
and CY 2011 for qualifying EPs. The
statute does not specify the process for
making these payments to qualifying
EPs and qualifying eligible hospitals
and CAHs participating in the FFS
Medicare incentive payment program,
but instead leaves the payment process
to the Secretary’s discretion.
We proposed that FIs, carriers, and
MACs, as appropriate, would be
responsible for determining the
incentive payment amounts for
qualifying EPs and qualifying eligible
hospitals and CAHs in accordance with
the methodology set forth in section
II.B.1.b. and B.2.b. of this final rule
based on the previously discussed
meaningful use criteria, disbursing the
incentive payments to qualifying EPs
and qualifying eligible hospitals and
CAHs, and resolving any reconciliation
issues.
a. Incentive Payments to EPs
We proposed that the carriers/MACs
calculate incentive payment amounts
for qualifying EPs, where incentive
payments would be disbursed on a
rolling basis, as soon as they ascertained
that an EP demonstrated meaningful use
for the applicable reporting period (that
is, 90 days for the first year or a calendar
year for subsequent years), and reached
the threshold for maximum payment. In
accordance with section 1848(l)(3)(B) of
the Act, we proposed that if a qualifying
EP is not eligible for the maximum
incentive payment amount for the
payment year and if the qualifying EP
was also a qualifying MA EP, the
qualifying MA organization with which
the EP is affiliated would receive the
incentive payment for the EP through
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the MA EHR incentive program. If the
qualifying EP either does not also
qualify as a MA EP or he or she qualifies
as a MA EP but is not eligible for the
maximum incentive payment for the
payment year, we proposed that the
carriers/MAC would calculate the
amount of the qualifying EP’s incentive
payment and disburse the incentive
payment to the qualifying EP in the year
following the payment year. The
proposed rule also outlined that
incentive payments would not be issued
to qualifying EPs if an incentive
payment was already made under the
Medicaid program for the relevant
payment year, and as required by
section 1848(m)(2) of the Act as
amended by section 4101(f) of the
HITECH Act, qualifying EPs who
received incentive payments from the
Medicare EHR incentive payment
program would not be eligible to receive
an e-prescribing incentive payment.
Additionally, we proposed that the
incentive payments would be tracked at
the qualifying EP’s TIN level, and
disbursed to the TIN that the qualifying
EP indicated during the registration
process; qualifying EPs who do not have
individual TINs (that is, a qualifying EP
who works solely in a group practice)
would be paid at the group practice
level’s TIN. We proposed that qualifying
EPs select one TIN for disbursement of
their Medicare EHR incentive payment.
Of course, after the payment is
disbursed to their designated TIN,
qualifying EPs may decide to allocate
their incentive payment among the
multiple practices in which they furnish
covered professional services subject to
applicable laws, regulations and rules,
including, without limitation, those
related to fraud, waste, and abuse.
To be clear, we note that financial
relationships, including those arising
from the reallocation/reassignment of
incentive payments, between physicians
and their employers/other entities may
implicate certain fraud, waste, and
abuse laws, regulations, and rules.
Therefore, we proposed to include
specific safeguards to limit the risk that
the allocation/reassignment of incentive
payments could raise under those and
other applicable laws, regulations and
rules. Section II.B.1.d. above finalizes
our proposal at § 495.10(f) to permit EPs
to reassign their incentive payments to
their employer or to an entity with
which they have a contractual
arrangement, consistent with all rules
governing reassignments including part
424, subpart F.
Comment: Several commenters
expressed concern that the proposed
rule contained limited information on
how the incentive program for Medicare
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EPs will be operationalized. They
requested additional information on the
expected timeframe and process for
payments.
Response: The HITECH Act requires
that EHR incentive program payments
be separately tracked and monitored
because these funds cannot be
commingled with other Medicare funds.
Therefore, to facilitate funds control,
payments will be made through a single
payment contractor rather than through
the carriers/MACs as was originally
proposed. Additionally, the Integrated
Data Repository (IDR), rather than the
carriers/MACs, will be accumulating the
allowed charges for each qualified EP’s
NPI. Payments would be made on a
rolling basis, as soon as we ascertain
that an EP has successfully
demonstrated meaningful use for the
applicable reporting period (that is, 90
days for the first year or a calendar year
for subsequent years) and the EP’s
allowed charges has reached the
threshold that qualifies an EP for
maximum incentive payment, for the
relevant payment year. Once this
determination has been made, the
National Level Repository (NLR) will
calculate the EP’s incentive payment.
The payment will then be made by the
single payment contractor. We
anticipate that it will take anywhere
from 15 to 46 days from the time an EP
successfully attests to being a
meaningful user to the time an incentive
payment is made, and that for FY 2011,
incentive payments will be made to EPs
who successfully demonstrate that they
were meaningful EHR users for the EHR
reporting period (that is, 90 days) as
early as May 2011. As proposed, we will
pay a qualifying EP a single
consolidated incentive payment for a
payment year, rather than make periodic
installment payments. In order to
accommodate different attestation dates
throughout the first year for EPs, our
payment cycle is on a monthly basis as
previously described; however,
qualifying EPs will receive one single
payment per year. In other words, CMS
will issue payments as soon as possible
after a qualifying EP attested to
meaningfully using a certified EHR
system, hence the monthly payment
cycle; however, an EP will only receive
one incentive payment for each year
he/she qualifies. For qualifying EPs
whose allowed charges for the payment
year do not reach the maximum
thresholds, the single payment
contractor will disburse an incentive
payment in the following year.
Comment: One commenter
recommended CMS make semi-annual
incentive payments for the second and
subsequent payment years to ensure
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physician practices have cash flow to
deploy certified EHR systems and train
employees how to use the systems.
Response: When the EHR reporting
period is a full year, no EPs will have
successfully demonstrated that they are
meaningful users at the mid-year mark.
Therefore, as previously described,
qualifying Medicare EPs will receive a
single payment per year, issued on a
monthly payment cycle. We intend to
finalize this provision as proposed;
there will be a single successful
attestation per year and a single
payment following the attestation for
qualifying EPs.
Comment: One commenter questioned
whether the scopes of work for the
MACs/Medicare Carriers would be
revised to reflect the additional work
that this program will entail.
Response: As previously discussed in
the first comment and response, the
IDR, rather than the MACs/Medicare
Carriers, will accumulate the EPs
allowed charges. The MAC/Carrier work
related the Medicare EHR incentive
program will be within their current
scope of work and will be handled
through the normal change request
process.
Comment: One commenter believes
an EP’s program selection (Medicare or
Medicaid) is tied to the TIN where the
EP assigns incentive payments. The
commenter recommended CMS permit
additional changes in program selection
if EPs change their TIN. The commenter
believes allowing only one program
change in the life of the program is too
restricting given that patient mix might
change due to a practice being
purchased by another TIN or an EP
becoming a part-time employee of
another TIN.
Response: Section II.A.5.b. of this
final rule outlines our policy decision
around changing program selections.
After consideration of the public
comments received, we are finalizing
our policy as proposed. For purposes of
this provision, payments will be made
through a single payment contractor
with the IDR accumulating the allowed
charges for each qualified EP’s NPI.
Payments will be made on a rolling
basis, as soon as we ascertain that an EP
has successfully demonstrated
meaningful use for the applicable
reporting period (that is, 90 days for the
first year or a calendar year for
subsequent years), and reached the
threshold for maximum payment then
the NLR will calculate the incentive
payment. We estimate it will take
anywhere from 15 to 46 days from the
time an EP successfully attests to being
a meaningful user to the time an
incentive payment is made.
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b. Incentive Payments to Eligible
Hospitals
We proposed that the FIs/MACs
would calculate incentive payments for
qualifying eligible hospitals, and would
disburse such payments on an interim
basis once the hospital has
demonstrated it is a meaningful EHR
user for the EHR reporting period for the
payment year. As discussed above in
section B.2.b. of the final rule, the
formula for calculating a qualifying
eligible hospital’s incentive payment
requires the following data: (1) An
initial amount; (2) the Medicare share;
and (3) a transition factor applicable to
that payment year. We proposed that
FIs/MACs would use the prior-year cost
report, Provider Statistical and
Reimbursement (PS&R) System data,
and other estimates to calculate the
interim incentive payment. As
discussed in section II.B.2.c. of this final
rule, beginning in 2010, cost reports will
capture charity care data which will be
used in calculating the Medicare share
of the payment. We proposed that the
MACs/FIs calculate a qualifying
hospital’s final incentive payment using
data from the cost report for the
hospital’s fiscal year that ends during
the FY prior to the FY that serves as the
payment year. We also proposed that
the FIs/MACs calculate the final
incentive payment using actual cost
report data report for the hospital’s
fiscal year that ends during the FY prior
to the fiscal year that serves as the
payment year, and would reconcile the
incentive payment as necessary at
settlement of the cost report.
Additionally, incentive payments for
qualifying eligible hospitals would be
calculated based on the provider
number used for cost reporting
purposes, which is the CCN of the main
provider. Therefore, incentive payments
for qualifying hospitals would be
disbursed to the CCN rather than the
TIN.
Comment: Several commenters
expressed concern that the proposed
rule contained limited information on
how the incentive program for hospitals
will be operationalized. They requested
additional information on the expected
timeframe and process for payments as
well as requesting clarification that the
incentive payments would be
distributed as a ‘‘lump sum payment.’’
One commenter requested CMS
disburse one lump sum payment at the
start of each eligible year for those
hospitals that meet all of the meaningful
use requirements.
Response: Hospital EHR incentive
payments will be calculated by the FIs/
MACs; however, to facilitate funds
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control, payments will be made through
a single payment contractor. We will
direct the payment contractor to issue to
qualifying hospitals, that is those
hospitals who successfully demonstrate
that they are meaningful EHR users, a
single initial payment for the year. We
anticipate that payments will be made
to qualifying Medicare hospitals
beginning in May 2011. No payment
will be made prior to an eligible
Medicare hospital successfully
demonstrating that it was a meaningful
EHR user during the EHR period for the
relevant payment year. For purposes of
determining interim incentive
payments, we will employ data on the
hospital’s Medicare fee-for-service and
managed care inpatient bed days, total
inpatient bed-days, and charges for
charity care from a hospital’s most
recently submitted 12-month cost report
once the hospital has qualified as a
meaningful user. For purposes of
determining final incentive payments,
we will employ the first 12-month cost
reporting period that begins after the
start of the payment year, in order to
settle payments on the basis of the
hospital’s Medicare fee-for-service and
managed care inpatient bed days, total
inpatient bed-days, and charges for
charity care data from that cost
reporting period.
Comment: One commenter requested
that CMS allow hospitals to make an
interim attestation 90 days after the start
of the second and subsequent payment
years. They suggested the interim
attestation would note that they are in
compliance with the meaningful use
rules and intend to remain in
compliance. They requested that CMS
instruct the contractor to issue interim
EHR payments after receipt of such
attestation. The commenter believes this
would cut down on the time frame of 21
months between their first and second
hospital interim payments.
Response: The reporting period
requirements for a hospital’s second and
subsequent years are 365 days. Due to
the year-long reporting period, we do
not believe we can allow for an interim
attestation that the provider is a
meaningful EHR user. Under our
definitions at § 495.4, a provider is not
a meaningful EHR user unless it has ‘‘for
an EHR reporting period for a payment
year,’’ demonstrated meaningful use ‘‘in
accordance with § 495.8 by meeting the
applicable objectives and associated
measures under § 495.6.’’ Thus, we
could not determine that the provider is
a meaningful user at an interim point in
time, and there would be no basis for
providing the interim payment.
Comment: One commenter expressed
confusion over the term ‘‘demonstration
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period’’ and questioned if a hospital had
to complete the full demonstration
period before payments would be made.
Response: We assume the commenter
means EHR ‘‘reporting period’’ when
using the phrase, ‘‘demonstration
period.’’ A hospital must demonstrate
that it met the requirements for
meaningful use for the full EHR
reporting period for the relevant
payment year before we will direct the
payment contractor to issue an incentive
payment to the hospital for the payment
year. A hospital therefore must
complete the full EHR reporting period
before demonstrating that it was a
meaningful EHR user and before any
payments would be made.
Comment: Several commenters
recommended that CMS’ payment
process for eligible hospitals be
consistent with its payment process for
EPs, and that hospital’s initial incentive
payment thus be distributed no later
than two months after the hospital
successfully demonstrates meaningful
use. The same commenters requested
CMS specify that the final incentive
payment be issued no later than two
months after the hospital submits its
cost report from the FY that ends during
the payment year.
Response: We anticipate that for FY
2011, interim incentive payments will
be made to eligible hospitals that
successfully demonstrate that they were
meaningful EHR users for the EHR
reporting period for FY 2011 (that is, 90
days) as early as May 2011. The exact
timing of when a qualifying eligible
hospital receives its interim incentive
payment will depend on when the
hospital successfully demonstrates that
it was a meaningful EHR user; the
sooner a hospital successfully
demonstrate that is was a meaningful
EHR user during the EHR reporting
period for the payment year, the sooner
it will receive its interim incentive
payment. For a Medicare hospital’s
second and subsequent participation
years, after a hospital successfully
demonstrates that it was a meaningful
EHR user during the EHR reporting
period (that is, the federal fiscal year)
for the payment year, the hospital will
receive the interim incentive payment
in the following year; the initial
incentive payments will be made on a
monthly payment cycle beginning
shortly after the hospital is determined
to be a meaningful user. To the
commenters’ point of requesting that we
be consistent with the approach to
paying EPs, there seems to be confusion
around what was proposed as to the
timing and distribution of the EP’s
incentive payment. The proposal for the
EP’s incentive payment was that EP’s
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accumulated allowed charges would be
based on claims submitted not later than
two months after the end of the payment
year. The incentive payment for a
qualifying EP’s second and subsequent
payment years was always to be
disbursed in the year following the
payment year. We did not propose
paying an EP within two months of
being deemed a meaningful user.
Comment: Several commenters
questioned how CMS would treat a
hospital that qualified for an incentive
payment one year, but did not qualify
the next or subsequent years; what is the
impact on the stream of incentive
payments to the hospital?
Response: An eligible hospital’s first
payment year is the first year they
successfully demonstrate that they were
a meaningful EHR user for the EHR
reporting period for the payment year.
Section 1886(n)(2)(G) of the Act defines
the second through fifth payment years
for a hospital as each successive year
immediately following the first payment
year for such hospital. An eligible
hospital’s second payment year, then, is
the year following its first payment year,
regardless of whether the eligible
hospital qualifies for an incentive
payment in the year following its first
payment year. Similarly, an eligible
hospital’s third, fourth, and fifth
payment year are the third, fourth, and
fifth years, respectively, following the
hospital’s first payment year, even if the
hospital does not receive an incentive
payment for one or more of those years.
Comment: Several commenters
requested that CMS clarify that EHR
incentive payments for which a hospital
qualifies or receives under the EHR
incentive program (whether directly or
pursuant to an assignment,
reassignment or other transfer) shall not
affect or be taken into account in the
calculation or other payments made to
the eligible hospital under Medicare,
Medicaid, or any other state or federal
healthcare program, such as
disproportionate share payments,
graduate medical education and indirect
medical education payments, and
payments for un-compensated care
payments.
Response: EHR incentive payments
will have no bearing on the hospital’s
Medicare disproportionate share,
indirect medical education or direct
graduate medical education payments.
This discussion is also addressed in the
Medicaid section at II.D.4.b.
After consideration of the public
comments received, we are finalizing
our policy as proposed. For purposes of
this provision, Hospital incentive
payments will be calculated by the FIs/
MACs; however, to facilitate funds
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control, payments will be made through
a single payment contractor. We will
direct the payment contractor to issue to
qualifying hospitals a single initial
payment per year, and expect initial
payment may begin as early as May
2011, for those who demonstrate they
are meaningful EHR users at the earliest
date possible. We estimate it will take
anywhere from 15 to 46 days from the
time a hospital successfully attests to
being a meaningful user to the time an
incentive payment is made.
c. Incentive Payments to CAHs
In the proposed rule, CMS proposed
that because CAHs are paid on a cost
reimbursement basis once a CAH incurs
actual EHR costs, it could submit
supporting documentation to the FI/
MAC for review. The FIs/MACs would
determine an incentive payment
amount, as discussed in section II.A.3 of
the proposed rule by substituting for the
Medicare share amount that would
otherwise be applied under the formula
used for computing payments for
eligible hospitals, a percent (not to
exceed 100 percent) equal to the sum
of—(1) the Medicare share for such
CAH, and (2) 20 percentage points.
As discussed in the proposed rule, the
FIs/MACs would reconcile the cost
report and ensure the EHR expenses are
adjusted on the cost report to avoid
duplicate payments. Incentive payments
for qualifying CAHs would be
calculated based on the provider
number used for cost reporting
purposes, which is the CCN number of
the main provider. Therefore, incentive
payments for qualifying CAHs would be
based on the CCN rather than the TIN.
Comment: Several commenters
expressed concern that the proposed
rule contained limited information on
how the incentive program would be
operationalized for CAHs. They
requested additional information on the
expected timeframe and process for
payments to CAHs.
Response: To facilitate funds control,
payments will be made through a single
payment contractor. In order to receive
a HITECH incentive payment, a CAH
will have to attest that it is a meaningful
user, and submit documentation to its
FI/MAC to support the costs incurred
for its HIT system. Once the FI/MAC
reviews the documentation and the
allowable amount is determined, we
will direct the payment contractor to
release to the CAH a single incentive
payment in the next HITECH payment
cycle. Payment cycles will begin in May
2011.
Comment: Several commenters
requested more information on the
timing of the distribution of payments to
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CAHs once the necessary
documentation has been submitted and
that recommended CMS be consistent
with its proposal on incentive payments
for EPs and specify that the CAH’s
initial incentive payment will be
distributed no later than two months
after it submits the necessary
documentation. The same commenters
requested that CMS specify that the
final incentive payment be issued no
later than two months after the CAH
submits its cost report.
Response: CAHs will receive a single
initial incentive payment per year with
the initial payments beginning in May
2011. Once the FIs/MACs review the
documentation and the allowable
amount is determined, we will direct
the payment contractor to release a
single incentive payment in the next
incentive payment cycle to qualifying
CAHs. We anticipate the initial
payments will generally be made within
two months of the determination of the
allowable amount. The final payment
will be calculated on the cost report,
and the process to settle the cost report
will not be modified for these incentive
payments. It will continue to follow the
normal final settlement process. For the
CAHs’ second and subsequent
participation years, CAHs will also
receive a single initial incentive
payment per year and a final incentive
payment as described above. With
respect to the commenters’ request that
we be consistent with the proposed
approach to paying EPs, there seems to
be confusion around what was proposed
as to the timing and distribution of
incentive payments to EPs. The
proposal for EP incentive payments was
that an EP’s accumulated allowed
charges would be based on claims
submitted not later than two months
after the end of the payment year. The
incentive payment for a qualifying EP’s
second and subsequent payment years
was always to be disbursed in the year
following the payment year. We did not
propose to make incentive payments to
an EP within two months of the EP
being deemed a meaningful user.
Comment: Several commenters
questioned what is considered
‘‘necessary documentation’’ for CAHs to
submit in order to receive Medicare
CAH incentive payments. The same
commenters requested CMS propose
and obtain comments on ‘‘necessary
documentation’’ and finalize a rule
before FY 2011.
Response: The documentation
submitted should include information
reflecting what was purchased, and
support the costs incurred. Such
documentation may include invoices,
receipts, or other comparable materials.
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Comment: One commenter
recommended CMS (not the MACs/FIs)
should make all determinations
regarding CAHs.
Response: The documentation review
process for Medicare CAH incentive
payments is similar to processes
currently performed by FIs/MACs. Also,
the data needed to calculate the
Medicare Share is on the cost reports,
which are submitted to the FIs/MACs.
Accordingly, we believe it would be
most appropriate for the payment
determinations be made by the FIs/
MACs, and not by CMS.
After consideration of the public
comments received, we are finalizing
our policy as proposed. For purposes of
this provision, CAH payments will be
calculated by the FIs/MACs; however,
as discussed above, to facilitate funds
control, payments will be made through
a single payment contractor. Once the
FIs/MACs review the documentation
and the allowable amount is
determined, we will direct the payment
contractor to release to the CAH a single
incentive payment in the next HITECH
payment cycle. Payment cycles will
begin in May 2011.
d. Payment Accounting Under Medicare
We will conduct selected compliance
reviews of EPs, eligible hospitals, and
qualified CAHs who register for the
incentive programs and of recipients of
incentive payments for the meaningful
use of certified EHR technology. The
reviews will validate provider eligibility
through their meaningful use
attestations including verification of
meaningful use and would also review
components of the payment formulas.
We will identify and recoup
overpayments made under the incentive
payment programs that result from
incorrect or fraudulent attestations,
quality measures, cost data, patient data,
or any other submission required to
establish eligibility or to qualify for a
payment. The overpayment will be
recouped by CMS or its agents from the
EP, eligible hospital, MA organization,
CAH, other entities to whom the right to
payment has been assigned/reassigned,
or, in the case of Medicaid, from the
State Medicaid agencies. Medicare FFS
EPs and eligible hospitals will need to
maintain evidence of qualification to
receive incentive payments for 10 years
after the date they register for the
incentive program.
5. Preclusion of Administrative and
Judicial Review
We did not discuss preclusion of
administrative and judicial review in
our proposed rule. We are now
including a discussion, in order to make
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the public aware of the preclusion. Also,
the sections of this final rule discussing
payments to Medicare Advantage (MA)
organizations and CAHs both include a
description of the preclusion, as well as
accompanying regulation text.
Therefore, while we believe statutory
provisions on preclusion of review are
self-implementing, below, we include a
discussion of the preclusion of review
that applies to EPs and eligible
hospitals. We have also added
regulation text to maintain consistency
with the CAH and MA organization
provisions.
For EPs, section 1848(o)(3)(C) of the
Act prohibits administrative or judicial
review under section 1869, section
1878, or otherwise, of all of the
following:
• The methodology and standards for
determining EP incentive payment
amounts.
• The methodology and standards for
determining the payment adjustments
that apply to EPs beginning with 2015.
• The methodology and standards for
determining whether an EP is a
meaningful EHR user, including: (1) The
selection of clinical quality measures;
and (2) the means of demonstrating
meaningful EHR use.
• The methodology and standards for
determining the hardship exception to
the payment adjustments.
• The methodology and standards for
determining whether an EP is hospitalbased.
• The specification of the EHR
reporting period, as well as whether
payment will be made only once, in a
single consolidated payment, or in
periodic installments.
For eligible hospitals, section
1886(n)(4)(A) of the Act similarly
prohibits administrative or judicial
review under section 1869, section
1878, or otherwise, of the following:
• The methodology and standards for
determining the incentive payment
amounts made to eligible hospitals,
including: (1) The estimates or proxies
for determining discharges, inpatientbed-days, hospital charges, charity
charges, and Medicare share; and (2) the
period used to determine such estimate
or proxy.
• The methodology and standards for
determining the payment adjustments
that apply to eligible hospitals
beginning with FY 2015.
• The methodology and standards for
determining whether an eligible
hospital is a meaningful EHR user,
including: (1) The selection of clinical
quality measures; and (2) the means of
demonstrating meaningful EHR use.
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• The methodology and standards for
determining the hardship exception to
the payment adjustments.
• The specification of the EHR
reporting period, as well as whether
payment will be made only once, in a
single consolidated payment, or in
periodic installments.
We note that the above listing may
summarize or abbreviate portions of the
statute. For precise language on the
preclusion of judicial review, readers
should always refer to the statute.
C. Medicare Advantage (MA)
Organization Incentive Payments
1. Definitions
a. Qualifying MA Organization
Section 1853(l)(1) of the Act, as added
by section 4101(c) of the HITECH Act,
provides for incentive payments to
qualifying MA organizations for certain
of their affiliated EPs who are
meaningful users of certified EHR
technology during the relevant EHR
reporting period for a payment year.
Section 1853(l)(5) of the Act defines the
term ‘‘qualifying MA organization’’ as an
MA organization that is organized as a
health maintenance organization (HMO)
as defined in section 2791(b)(3) of the
PHS Act. Section 2791(b)(3) of the PHS
Act in turn defines a health
maintenance organization as a federally
qualified HMO, an organization
recognized as an HMO under State law,
or a similar organization regulated for
solvency under State law in the same
manner and to the same extent as an
HMO. Since there are few federally
qualified HMOs, we expect MA
organizations to primarily qualify for
incentive payments as State-licensed
HMOs, or as organizations regulated for
solvency under State law in the same
manner and to the same extent as
HMOs.
In § 495.200 we proposed to define
‘‘qualifying MA organization.’’
Specifically, in § 495.202(a)(2), we
proposed to deem MA organizations
offering MA HMO plans that are not
federally-qualified HMOs to meet the
definition of HMO in section 2791(b)(3)
of the PHS Act, as HMOs recognized
under State law, or as entities subject to
State solvency rules in the same manner
as HMOs. We believe this is reasonable
because under the MA application
process, State regulators are required to
certify that MA organizations operating
in their State are authorized to offer the
type of MA plan they proposed to offer,
and meet solvency standards that are
adequate for these purposes. For each
MA organization offering MA HMO
plans, the State has thus recognized that
the organization is able to assume risk
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as an HMO. Therefore, we have
determined that absent evidence to the
contrary, an MA organization offering
HMO plans is recognized by the State as
a health maintenance organization, or
that it is subject to State solvency
standards in the same manner and to the
same extent as an HMO and therefore
provides sufficient assurance that the
section 2791(b)(3) of the PHS Act
definition is met.
In § 495.202(a)(3), for MA
organizations that offer other
coordinated care MA plans (Preferred
Provider Organization (PPO) plans,
Provider Sponsored Organization (PSO)
plans, and Regional Preferred Provider
Organization (RPPO) plans) and for
other MA organizations offering other
MA plan types (private fee-for-service
(PFFS) plans, Medical Savings Account
(MSA) plans), we proposed that the
sponsoring MA organization would be
required to attest that the MA
organization is recognized under State
law as an HMO, or that it is a similar
organization regulated under State law
for solvency in the same manner and to
the same extent as an HMO before we
would make a determination that the
MA organization is a qualifying MA
organization for purposes of incentive
payments.
Although we did not receive any
comments on these provisions and are
finalizing them as proposed, there is one
exception. In order to bring 422.202(a)
into conformance with the change we
are making to 422.202(b)(1), we are
changing the date by which MAOs are
required to identify themselves to us
from the bidding deadline in June 2010
(for plan year 2011) to the bidding
deadline in June 2011 (for plan year
2012).
b. Qualifying MA Eligible Professional
(EP)
A qualifying MA organization may
receive an incentive payment only for
those EPs described under section
1853(l)(2) of the Act, as added by
section 4101(c) of the HITECH Act.
Section 1853(l)(2) of the Act provides
that MA EPs must be ‘‘eligible
professionals’’ as defined under section
1848(o) of the Act as added by section
4101(a) of the HITECH Act, and must
either—
• Be employed by the qualifying MA
organization; or
• Be employed by, or be a partner of,
an entity that through contract with the
qualifying MA organization furnishes at
least 80 percent of the entity’s Medicare
patient care services to enrollees of the
qualifying MA organization.
Further, the EP must furnish at least 80
percent of his or her professional
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services covered under Title XVIII
(Medicare) to enrollees of the qualifying
MA organization and must furnish, on
average, at least 20 hours per week of
patient care services.
As discussed in section II.A.1. of this
final rule, an EP is defined as a
physician (under section 1861(r) of the
Act).
We said we interpreted ‘‘employed
by’’ to mean that the EP is considered an
employee of a qualifying MA
organization or qualifying entity under
the usual common law rules applicable
in determining the employer-employee
relationship under section 3121(d)(2) of
the Internal Revenue Code of 1986.
We said we interpreted ‘‘to be a
partner of’’ to mean that the qualifying
MA EP has an ownership stake in the
entity. Under this interpretation, a
professional that contracts with an
entity, but who has no ownership stake
in the entity, would not be considered
a qualifying MA EP.
We said we interpreted ‘‘furnishing at
least 80 percent’’ of the entity’s ‘‘patient
care services’’ to enrollees of the
organization to mean at least 80 percent
of the qualifying entity’s total Medicare
revenue in a year (that is, total revenue
from Medicare FFS as well as from all
MA organizations) must be from a single
qualifying MA organization.
We proposed to interpret the
requirement that a qualifying MA EP
furnish at least 80 percent of their
professional services covered under
Title XVIII to enrollees of the
organization to mean that at least 80
percent of the professional’s total
Medicare revenue in a year (that is, total
revenue from Medicare FFS as well as
from all MA organizations) must be
from a single qualifying MA
organization. We said we believed that
in establishing the rule that qualifying
MA EPs need to furnish at least 80
percent of their Title XVIII covered
services ‘‘to enrollees of the
organization,’’ the statute limits payment
related to any specific qualifying MA EP
to a single qualifying MA organization.
Thus, if a qualifying MA EP provided an
average of 20 hours per week of patient
care services to two distinct qualifying
MA organizations, we said we would
pay the qualifying MA organization for
the MA EP only if such a qualifying EP
provided at least 80 percent of his or her
professional services covered under
Title XVIII to enrollees of that
organization.
For purposes of determining whether
a qualifying MA EP furnishes, on
average, at least 20 hours per week of
patient care services, we interpreted the
requirement to include both Medicare
and non-Medicare patient care services.
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Moreover, we proposed that the relevant
time period for determining whether an
MA EP furnishes at least 20 hours per
week of patient care services should be
the EHR reporting period. (We discuss
the definition of EHR reporting period
in section II.A.1.e. of this final rule.)
Therefore, we said that over the EHR
reporting period, the qualifying MA EP
must provide on average 20 hours per
week of patient care services. Finally,
we interpreted ‘‘patient care services’’ to
mean services that would be considered
‘‘covered professional services’’ under
sections 1848(o)(5)(A) and (k)(3) of the
Act. That is, health care services for
which payment would be made under,
or for which payment would be based
on, the fee schedule established under
Medicare Part B if they were furnished
by an eligible professional to a Medicare
beneficiary.
We considered various methods of
determining when at least 20 hour per
week, on average, of patient care
services would be considered to be
provided by MA EPs. We considered
methods such as defining a dollar or
service threshold, or the number of
hours of direct patient care services
actually provided. After due
consideration we proposed to require
qualifying MA organizations to attest to
the fact that MA EPs for whom they are
requesting EHR incentive payments
have provided, on average, 20 hours of
patient care services during the EHR
reporting period.
Comment: A few commenters
referenced the Report to Congress
required by section 4101(d) of the
HITECH Act. The commenters suggested
ways in which we could combine
original FFS Medicare claims-payment
data and MA services provided by EPs
in order to arrive at a single, combined
EHR payment. One commenter asked
whether payments to a provider from a
Medicare Advantage plan can contribute
to the volume of Allowed Charges for
the purpose of calculating maximum
Meaningful Use rewards, saying that he
believed that they should. Another
commenter said that a substantial
percentage of senior citizens receive
their care from EPs providing services
by way of Medicare Advantage plans.
The commenter continued that current
proposed rules provide incentive
payment only to EPs in whose practices
80 percent or more of total services are
to Medicare Advantage patients. The
commenter concluded that this would
exclude many EPs treating our most
vulnerable citizens from the opportunity
to meaningfully adopt EHRs in their
practices and that the 80 percent [MA]
practice requirement should be
eliminated. Other commenters argued
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that the regulation was unclear
regarding an exclusion of covered
professional services of an EP not
employed by an MAO when
determining their participation or level
of payment because those services are
provided to MA beneficiaries. The
commenter believed that the Secretary
should provide a mechanism, whereby
EPs can supplement their record to the
appropriate carrier/MAC with their MA
charges.
Response: We do not have statutory
authority to combine payments across
the FFS and MA EHR incentive
payment programs. The statutory
provision at section 1853(l)(3)(B) of the
Act, as added by section 4101 of the
HITECH, entitled ‘‘Avoiding Duplication
of Payments,’’ specifically prohibits us
from making payments to EPs for both
FFS and MA services. Additionally, had
Congress wanted CMS to combine FFS
and MA charges it could have included
a provision similar to the provision in
section 1886(n)(2)(D)(i) of the Act, as
added by section 4102(a) of the HITECH
Act, where FFS and MA inpatient-beddays are added together to derive the
numerator of the Medicare share
fraction. We do not have the authority
to eliminate the requirement that an EP
provide 80 percent of Medicare services
to enrollees of an MA organization, as
that requirement is set forth in section
1853(l)(2)(A)(i)(II) of the Act, as added
by the HITECH Act, which is clear in
requiring that an MA EP provide ‘‘80
percent of * * * professional services
* * * covered under this title to
enrollees of the [MA] organization.’’
Comment: One commenter
recommended that CMS retain its
proposal regarding how the 80 percent
and the 20 hours per week criteria will
be met by MA EPs. Another commenter
said that many EPs in Puerto Rico
would not qualify for incentives under
this test. The commenter said that the
single MA organization requirement of
80 percent revenue and 20 hours per
week for MA EPs would not be met due
to the competition and market changes
from year to year. The commenter
suggested eliminating the single MA
organization requirement. Instead, the
commenter said we should change the
standards to consider all enrollees of all
MA organizations to which an EP
furnishes services. The commenter
continued by saying that if the
requirements are not modified to accept
multiple MA organizations, the
commenter anticipated several
unintended consequences in the Puerto
Rico market. First, the commenter said,
it would be impossible for providers to
meet the single MA organization
requirement of 80 percent revenue and
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20 hours per week, and therefore, the
standard would create disinterest in
adopting EHRs in their practice. Second,
the commenter said, the single MA
organization requirement standard
would stymie competition. An
unanticipated consequence of the
requirement would be providers
dropping out of MA plans to consolidate
revenue in order to meet the standard
from a single MA organization. Third,
the commenter concluded, patients
would have fewer options to select
among MA plans, and to a lesser degree,
MA enrollees might be forced to
discontinue care with long time MA
providers in light of the providers’
determination to consolidate revenue
under a single MA organization.
Response: As noted above, the 80
percent of Medicare revenue standard is
set forth in the statute, and may not be
changed by regulation. The 20 hour per
week rule is also statutory and based on
section 1853(l)(2)(B) of the Act, as
added by the HITECH Act. We note,
however, that it is not the case that all
20 hours of patient care services per
week be provided by an EP to MA
enrollees of a single MA organization.
Rather, the 20 hours of patient care
services to enrollees of a single MA
organization can include both Medicare
and non-Medicare services and patients.
Comment: One commenter asked
CMS to continue to work with Congress
to develop an equitable mechanism by
which to provide incentives to
physicians that provide health care
services through participation with
more than one MAO.
Response: As previously mentioned
in the preamble to this final rule, the
statute clearly limits payment related to
any specific MA EP to a single
qualifying MA organization. Potential
changes in the statute are outside the
scope of this rulemaking.
After consideration of the public
comments received, we are
implementing the foregoing provisions
as proposed.
As discussed in section II.B. of this
final rule relating to Medicare FFS EPs,
a qualifying MA EP is also defined as a
physician under section 1861(r) of the
Act. Section 1853(l)(1) of the Act, as
added by section 4101(c) of the HITECH
Act, provides that the provisions of
sections 1848(o) and 1848(a)(7) of the
Act, as amended and added by sections
4101(a) and (b) of the HITECH Act,
respectively, which establish the
incentive payments for EPs under
Medicare FFS, apply to a qualifying MA
organization’s qualifying MA EPs ‘‘in a
similar manner’’ as they apply to EPs
under Medicare FFS. As discussed
above in section II.A.6. of this final rule,
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section 1848(o)(1)(C)(i) of the Act, as
added by section 4101(a) of the HITECH
Act, states that hospital-based EPs are
not eligible for incentive payments.
Therefore, we proposed that, similar to
the Medicare FFS incentive program,
MA incentive payments would also not
be available for hospital-based EPs. We
note that the hospital where a hospitalbased EP provides his or her Medicare
covered services would be potentially
entitled to an incentive payment either
through the Medicare FFS incentive
program, or through the MA-affiliated
hospital EHR incentive program.
Therefore, we proposed that for such a
hospital-based MA EP, a qualifying MA
organization would be no more entitled
to an MA EP incentive payment under
the MA EHR incentive program than a
similarly situated EP would be entitled
to an incentive payment under the
Medicare FFS EHR incentive program.
Comment: We received one comment
related to hospital-based MA EPs, and
specifically to our proposal in the
proposed rule that ‘‘similar to the
Medicare FFS incentive program, MA
incentive payments would also not be
available for hospital-based EPs.’’ The
commenter noted, however, that unlike
the proposed regulatory definition of
‘‘Qualifying Eligible Professional (EP)’’
under the Medicare FFS incentive
program, the proposed regulatory
definition of ‘‘Qualifying MA EP’’ under
the MA EHR incentive program did not
expressly exclude hospital-based EPs.
The commenter went on to say that if
hospital-based MA EPs are excluded
from the MA EHR incentive program
(for example, because they provide 90%
or more of their covered services in the
CY preceding the payment year in an
outpatient hospital setting), unless there
is an exception for MA EPs who are
hospital-based in qualifying MAAffiliated Eligible Hospitals that would
not qualify for an incentive payment
under the MA Affiliated hospital EHR
incentive program payment criteria,
Qualifying MA Organizations with MA
EPs who are hospital-based in such
qualifying MA-Affiliated Hospitals
would not qualify for an incentive, with
regard to those MA EPs, under any
HITECH Act Medicare incentive
program. The commenter concluded
that this outcome would not be
consistent with the objective of the
HITECH Act to promote widespread
adoption of HIT through the payment of
monetary incentives for meaningful use
of EHRs. The commenter recommended
that if hospital-based MA EPs are
excluded from the MA EHR incentive
program, then we should include an
exception for MA EPs who are hospital-
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based in Qualifying MA-Affiliated
Eligible Hospitals that would not qualify
for an incentive payment (or would only
qualify for a very minimal incentive
payment) under the MA-Affiliated
hospital EHR incentive program
payment criteria.
Response: We thank the commenter
for pointing out our oversight in not
including the hospital-based physician
exclusion in the proposed regulation
text related to the MA EP EHR incentive
program. We will include in regulation
text the fact that an MA EP is not a
‘‘hospital-based EP,’’ as that term is
defined in § 495.4 of this final rule. As
to a possible exception for hospitalbased EPs who are practicing in MAaffiliated hospitals that do not qualify
for incentive payments (or that qualify
for very minimal incentive payments),
we cannot provide such an exception.
MA-affiliated eligible hospitals will
receive EHR incentive payments based
on the same statutory formula used to
make EHR incentive payments to other
‘‘subsection (d)’’ hospitals—see section
II.C.3. of this final rule, below. There is
no statutory authority nor is there a
valid reason to treat MA EPs, in this
respect, any differently that other EPs
that are hospital-based.
After consideration of the public
comment received, we are modifying
the regulation text related to the
definition of MA EP by the additional of
an item 5) to the definition of
‘‘Qualifying MA EP’’ at § 495.200 to add
a specific hospital-based MA EP
exclusion.
As discussed in the proposed rule, an
MA EP must either be employed by the
qualifying MA organization, or be
employed by, or be a partner of, an
entity that through contract with the
qualifying MA organization furnishes at
least 80 percent of the entity’s Medicare
patient care services to enrollees of the
qualifying MA organization. With
respect to the later criteria, we did not
propose to define the term ‘‘entity,’’ but
instead recognized that there exist a
range of entities with which MA
organizations contract for patient care
services, including physician groups,
Independent Practice Associations
(IPAs), Exclusive Provider
Organizations (EPOs), Physician
Hospital Organizations (PHOs), and
Preferred Provider Organizations
(PPOs).
Moreover, we recognized that an EP
may contract with more than one such
entity, and that these entities often
contract with a number of MA
organizations and other health care
insurers. An EP also may directly
contract with more than one MA
organization. In general, we said, it is
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only when an EP is employed by a
single qualifying MA organization, or is
employed by or in partnership with an
entity that contracts with a single
qualifying MA organization, that an EP
can satisfy the criteria to be an MA EP.
We said that the qualifying MA
organization must attest to the fact that
each MA EP is a meaningful user of
certified EHR technology in accordance
with § 495.4. If all of these conditions
are met, such an individual is identified
as an MA EP. We proposed to define the
term ‘‘MA eligible professional (EP)’’ at
§ 495.200 as an EP who satisfies all of
these conditions.
Finally, we discussed section 4101(d)
of the HITECH Act which directed the
Secretary to study and report on ‘‘nearly
exclusive’’ physicians that primarily
treat MA enrollees and that would not
otherwise qualify for incentive
payments under current law. We
explained that this rule does not address
such individuals, as it is limited to
codifying in regulation existing
statutory language as discussed herein.
We did not receive any comments on
these provisions and are finalizing them
as proposed.
c. Qualifying MA-Affiliated Eligible
Hospital
We proposed to define ‘‘qualifying
MA-affiliated eligible hospital’’ in
§ 495.200. A qualifying MA organization
may receive an incentive payment only
for a qualifying MA-affiliated eligible
hospital described under section
1853(m)(2) of the Act, as added by
section 4102(c) of the HITECH Act, that
is a meaningful user of certified EHR
technology as defined in § 495.4.
Section 1853(m)(2) of the Act provides
that such MA-affiliated eligible
hospitals are ‘‘eligible hospitals’’ as
defined under section 1886(n)(6) of the
Act and must be under common
corporate governance with a qualifying
MA organization that serves individuals
enrolled under MA plans offered by
such organization where more than twothirds of the Medicare hospitals
discharges (or bed-days) are Medicare
individuals enrolled under MA plans
offered by such organization. As
discussed in section II.A.1. of this final
rule, section 1886(n)(6) of the Act
defines an ‘‘eligible hospital’’ as a
subsection (d) hospital (as defined
under section 1886(d)(1)(B) of the Act).
In § 495.200, we also proposed to define
‘‘under common corporate governance’’,
as a qualifying MA organization and a
qualifying MA-affiliated eligible
hospital that have a common parent
corporation, where one is a subsidiary
of the other, or where the organization
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and the hospital have a common board
of directors.
Section 1853(m)(3)(B)(i) of the Act, as
added by section 4101(c) of the HITECH
Act, provides that if for a payment year
at least one-third (33 percent) of an MA
eligible hospital’s discharges (or beddays) of Medicare patients are covered
under Part A (rather than under Part C),
the hospital may only receive an
incentive payment under section
1886(n) of the Act—the Medicare FFS
incentive program.
In § 495.200 we proposed to define
‘‘inpatient-bed-days’’ in the same
manner as that term is defined for
purposes of implementing section
4201(a) of the HITECH Act in the
preamble of this final rule. The term
will be used in the same way in
computing incentive payments due
qualifying MA organizations under the
qualifying MA-affiliated eligible
hospital incentive payment program.
We note that, as discussed in section
II.B.2.b. of this final rule, under section
1886(n)(2)(D)(i)(II) of the Act, the
portion of the Medicare FFS hospital
incentive payment comprising the
discharge related amount, or Medicare
share, is based in part on the estimated
number of inpatient-bed-days
attributable to individuals enrolled in
MA plans under Part C. This means that
hospitals that treat individuals enrolled
in MA plans will receive a Medicare
FFS hospital incentive payment
partially based on the number of MAenrollee bed-days. To the extent a
hospital does not meet the 33 percent
threshold requiring payment through
the FFS Medicare EHR hospital
incentive program, incentive payments
can be made to a qualifying MA
organization under common corporate
governance to the extent other
requirements of the MA EHR hospital
incentive program are met. (See section
II.C.3 of this final rule for the
computation of incentive payments to
qualifying MA organizations.)
Therefore, we proposed to make EHR
incentive payments to qualifying MAaffiliated eligible hospitals under the
FFS EHR incentive program. Finally, we
said that to the extent such data
necessary to estimate the inpatient-beddays-related incentive payment amount
are not already available to us through
the normal submission of hospital cost
reports; we proposed to require that
qualifying MA organizations seeking
reimbursement for qualifying MAaffiliated eligible hospitals submit
similar data.
We did not receive any comments on
these provisions and are finalizing them
as proposed.
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2. Identification of Qualifying MA
Organizations, MA EPs, and MAAffiliated Eligible Hospitals
In § 495.202 we proposed to require
an MA organization that intended to ask
for reimbursement under the MA EHR
incentive payment program to so
indicate as part of submissions of their
initial bid under section 1854(a)(1)(A) of
the Act, and to attest, in some cases, that
they meet the requirements of a
qualifying MA organization. For MA
organizations offering an MA HMO plan
type, we proposed to deem such
organizations to meet the definition of
HMO in 42 U.S.C. 300–gg(b)(3), (that is,
section 2791(b)(3) of the PHS Act). As
noted previously, for MA organizations
offering plan types other than HMOs,
we proposed to require an attestation by
the organization that the MA
organization is recognized under State
law as an HMO, or that it is a similar
organization regulated under State law
for solvency in the same manner and to
the same extent as an HMO before we
would make a determination that the
MA organization is a qualifying MA
organization for purposes of incentive
payments. We proposed to require this
beginning with bids due in June 2010
(for plan year 2011) for MA
organizations seeking reimbursement for
MA EPs and MA-affiliated eligible
hospitals.
We also proposed requiring qualifying
MA organizations, as part of their initial
bids starting with plan year 2011, to
make a preliminary identification of
potentially qualifying MA EPs and
potentially qualifying MA-affiliated
eligible hospitals for which the
organizations would seek EHR incentive
payments.
In developing the preliminary and
final lists of potentially qualifying MA
EPs, qualifying MA organizations, we
said that qualifying MA organizations
must exclude hospital-based MA EPs.
We proposed that qualifying MA
organizations identify hospital-based
MA EPs using the same criteria outlined
in section II.A.6 of this final rule for
identifying hospital-based EPs in the
Medicare FFS EHR incentive program.
Along with both the preliminary and
final lists of potentially qualifying MA
EPs and MA-affiliated hospitals, we said
that qualifying MA organizations would
be required to submit an attestation that
these professionals and hospitals meet
the criteria to be considered eligible. For
example, for hospitals, the qualifying
MA organization would need to attest
that they are under common corporate
governance with the qualifying MA
organization and for EPs, the qualifying
MA organization would need to attest
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that the list does not include any
hospital-based EPs.
We proposed requiring qualifying MA
organizations to provide final
identification of potentially qualifying
MA EPs by the end of the MA EP
payment year (December 31), and final
identification of potentially qualifying
MA-affiliated eligible hospitals by the
end of the MA-affiliated hospital
payment year (the FFY ending on
September 30), for which MA EHR
incentive payments were sought. We
also proposed requiring qualifying MA
organizations to report the name,
practice address, and other identifying
information, like NPI, for all physicians
that meet the requirements of a
qualifying MA EP for which the
qualifying MA organization would be
requesting payment under the MA EHR
incentive payment program.
We said that once a qualifying MA
organization identifies potential EPs, we
are required to ensure that such EPs did
not receive the maximum EHR incentive
payment for the relevant payment year
under the Medicare FFS program under
section 1848(o)(1)(A) of the Act, as
added by section 4101(a) of the HITECH
Act, before releasing an incentive
payment to a qualifying MA
organization related to such EP. (See
section 1853(l)(3)(B)(i) of the Act, as
added by section 4101(c) of the HITECH
Act). Therefore, in order to allow us
time to determine whether an MA EP
received the maximum EHR incentive
payment under the Medicare FFS
program, we proposed not to make
incentive payments to qualifying MA
organizations for the MA EPs for a
payment year until after the final
computation of EP incentive payments
for that year under the Medicare FFS
program. Additionally, we proposed to
require qualifying MA organizations to
ensure that all MA EPs are enumerated
through the NPI system, in order to
detect and prevent duplicate payment
for EPs under both the FFS and MA
EHR incentive payment programs.
Comment: Two commenters
contended that requiring MA
organizations to provide even a
preliminary list of MA EPs by June 2010
(for payment year 2011) would be
unrealistic and burdensome, especially
when publication of a Final Rule seems
unlikely before May 2010 at the earliest.
For 2011, any preliminary list will be
inaccurate, despite good faith efforts
and reasonable due diligence. Moreover,
CMS has not stated any justifiable
purpose for requiring such a
preliminary list.
Response: We agree with the
commenters that it would be
unnecessarily burdensome and
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unrealistic to require MA organizations
to provide preliminary lists as early as
June of 2010 of potential MA EPs for
incentive payment year 2011. We will
change the timing of this requirement in
§ 495.202(b)(1) to say that as part of
initial bids for plan year 2012 MA
organizations will be required to submit
preliminary lists in June of 2011 (when
bids are due for 2012) of potential MA
EPs for incentive payment year 2011.
Thus, we will delay the requirement for
a full year. The purpose of such
preliminary lists is to identify potential
MA EPs that have, for instance,
registered as FFS Medicare or Medicaid
EPs on the National Level Repository.
The intent of getting these lists before
payment is due, or before a final
determination of eligibility can be made,
is to help qualifying MA organizations
know of any potential conflicts in time
to ‘‘cure’’ them before final payment
determinations are made.
Comment: One commenter objected to
CMS’ proposal that MA organizations be
required to submit final lists of MA EPs
and MA hospitals by the last day of the
payment year, including the attestations
of meaningful use and accurate payment
calculation. The commenter argued that
this timing would not allow sufficient
time to ensure that data are complete
and accurate, especially considering
that MA organizations bear the
additional burden of having to develop
and support internal administrative
systems to determine eligibility and to
calculate payment (we will calculate
FFS EP payments based on claims
submitted). The commenter
recommended that we extend the
deadlines to produce both preliminary
and final lists of MA EPs and hospitals.
The commenter suggested that MA
organizations be given until 90 to 120
days after the close of the payment year
to identify and list eligible EPs and
hospitals (for example, after 31
December 2011 for plan year 2011).
Response: We agree with the
commenter that additional time should
be permitted and we are therefore
adding a due date in § 495.202(b)(3) for
final identification of potentially
qualifying MA EPs and MA-affiliated
eligible hospitals of 60 days after the
close of the payment year. We believe
60 days is reasonable, since it is the
same as the time in which FFS EPs have
to submit claims for consideration
under the Medicare FFS EHR incentive
payment program.
After consideration of the public
comments received, we are modifying
the regulation text related to the timing
of both preliminary and final
identification of MA EPs and MAaffiliated eligible hospitals. Preliminary
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identification of MA EPs and MAaffiliated hospitals for payment year
2011 will need to occur by the bidding
deadline in June 2011, and final
identification will need to occur within
60 days of the close of the payment year.
Accordingly, we are respectively
modifying the regulation text at
§ 495.202(b)(1) and § 495.202(b)(3). We
are also modifying the regulation text at
§ 495.204(b)(2) to be consistent with the
change to § 495.202(b)(3), since final
identification in § 495.202(b)(3) should
occur at the same time as final revenue
reporting under § 495.204(b)(2), so
calculations of payments due under the
MA EP incentive payment program can
be finalized. We are also modifying the
regulation text at § 495.210(b) and (c) to
be consistent with the changes to
§ 495.204(b)(2) and § 495.202(b)(3),
since the deadline for attestations of
meaningful use should be consistent
with deadlines for revenue reporting for
MA EPs, and final identification of MA
EPs and MA-affiliated hospitals. Finally,
as noted (above) in our discussion of the
definition of qualifying MA
organizations, we are modifying the date
in § 495.202(a)(1) by which MAOs are
required to identify themselves to us
from the bidding deadline in June 2010
(for plan year 2011) to the bidding
deadline in June 2011 (for plan year
2012).
We also proposed to require all
qualifying MA organizations to selfreport and identify themselves,
regardless of whether they have
qualifying MA EPs or MA-affiliated
eligible hospitals for whom or which the
organization plans to claim incentive
payments at the time the initial bid is
due (the first Monday of June, see
section 1854(a)(1)(A) of the Act)
beginning in 2014 for bids related to
plan year 2015. We proposed to require
this reporting by all qualifying MA
organizations in years beginning with
2014 in anticipation of the statutory
requirement in sections 1853(l)(4) and
1853(m)(4) of the Act, to negatively
adjust our capitation payments to
qualifying MA organizations for MA EPs
and MA-affiliated eligible hospitals that
are not meaningful users of certified
EHR technology for years beginning
with 2015.
We did not receive any comments on
these provisions and are finalizing them
as proposed.
3. Computation of Incentives to
Qualifying MA Organizations for MA
EPs and Hospitals
In § 495.204, we proposed a
methodology under which payments to
qualifying MA organizations for
qualifying MA EPs will be computed.
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Section 1853(l)(3)(A) of the Act provides
that in applying section 1848(o), instead
of the additional payment amount
specified under section 1848(o)(1)(A) of
the Act, the Secretary may substitute an
amount determined by the Secretary, to
the extent feasible and practical, to be
similar to the estimated amount in the
aggregate that would be payable under,
or would be based on, the Medicare
physician fee schedule under Part B
instead of Part C. Section II.B.1. of this
final rule discusses these provisions.
Section 1853(m)(3)(A) of the Act
provides that, in providing an incentive
payment to qualifying MA organizations
for MA-affiliated hospitals, we
substitute for the amount specified
under section 1886(n)(2) of the Act—the
incentive payment amount under
Medicare FFS for qualifying eligible
hospitals—an amount determined by
the Secretary to be similar to the
estimated amount in the aggregate that
would be payable if payment for
services furnished by such hospitals
was payable under Part A instead of Part
C. (For more detailed information see
section II.B.2. of this final rule.)
Sections 1848(o)(1)(D)(i) and
1886(n)(2)(F) of the Act permit us to
make incentive payments for a year in
installments, although we proposed to
make a single lump sum payment with
respect to MA EPs. With respect to MA
EP incentive payments, we said we read
the term ‘‘aggregate’’ to mean the
aggregate installment payments made by
us under the FFS EHR incentive
program to a qualifying EP over the
course of the relevant payment year.
The duplicate payment provisions in
section 1853(l)(3)(B)(i)(II) of the Act
direct us to make payment for EPs ‘‘only
under’’ the MA EHR incentive program
‘‘and not under’’ the Medicare FFS EHR
incentive program to the extent any EP
earned ‘‘less than [the] maximum
incentive payment for the same period’’
under the Medicare FFS EHR incentive
program. We noted in the proposed rule
that section 1853(l)(1) of the Act
provides that section 1848(o) of the Act
applies in a ‘‘similar,’’ but not the same,
manner to qualifying MA organizations
as it applies to EPs under Part B. The
Medicare FFS incentive payment
program under section 1848(o) does not
include payment for professional
services provided to MA enrollees, but
rather only for services paid under Part
B. In a similar manner we proposed to
limit payment to an MA organization to
only payment for their EPs’ services to
MA enrollees of plans offered by the
MA organization. We said we did not
believe it would be appropriate to
provide an incentive payment to an MA
organization for services provided to
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individuals covered under Part B.
Therefore, we proposed, that in
calculating qualifying MA EP incentive
payments, we would only consider
covered professional services provided
to enrollees of MA plans offered by
qualifying MA organizations and would
not include in the calculation any
services reimbursed by Medicare FFS.
Comment: Many commenters asked if
MA plan beneficiaries and services
would be counted in the calculation of
FFS EHR incentives and, if so, if it
would require separate submissions to
each MA plan in the local market.
Response: As we explained in the
preamble of the proposed rule, we
cannot make MA EP incentive payments
for Part B services covered and paid for
on a fee-for-service basis under the
original Medicare program. We also
cannot make MA EP incentive payments
to entities other than qualifying MAOs.
In short, the Medicare Advantage
services provided by EPs that are not
qualifying MA EPs—defined in statute
and in this rule at § 495.200—are not
reimbursable under the EHR incentive
payment program.
Comment: Two commenters
contended that the proposed Medicare
Advantage incentive computation was
inconsistent. They said that sections
II.C.3. through 5. of this final rule
discuss compensation, but the preamble
says that the Secretary may substitute a
different amount. This discrepancy
should be clarified.
Response: We disagree. The statute
says that we can substitute an amount
‘‘that is similar to the estimated amount
that would be payable or based on the
fee schedule.’’ It does not say that we
can substitute a different amount.
After consideration of the public
comments received, we are
implementing these provisions as
proposed.
We also said that under the Medicare
FFS EHR incentive program, an EP’s
incentive payment could not exceed the
annual limits specified under section
1848(o)(1)(B)(i) of the Act. We proposed
that similar payment limits apply to
qualifying MA organizations for their
qualifying MA EPs. Specifically, section
1848(o)(1)(B) of the Act provides that
the incentive payment for an EP for a
given year shall not exceed the
following amounts:
• For the EP’s first payment year,
$15,000 (or, if the first payment year is
2011 or 2012, $18,000).
• For the EP’s second payment year,
$12,000.
• For the EP’s third payment year,
$8,000.
• For the EP’s fourth payment year,
$4,000.
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• For the EP’s fifth payment year,
$2,000.
• For any succeeding year, $0.
Note that, similar to the Medicare FFS
EHR incentive program, there will be no
incentive payments made with respect
to a year after 2016. We proposed
similar restrictions related to qualifying
MA organizations. So, the maximum
cumulative incentive payment over 5
years to a qualifying MA organization
for each of its qualifying MA EPs that
meaningfully use certified EHRs
beginning on or before 2012 would be
$44,000 per qualifying MA EP. For
qualifying MA organizations first
reporting the meaningful use of certified
EHRs by qualifying MA EPs after 2014,
there is no incentive payment amount
available. Subject to an exception
discussed below, for MA organizations
first reporting the meaningful use of
certified EHRs by qualifying MA EPs in
2013 or 2014, the maximum potential
incentive payment per qualifying EP is,
respectively, $39,000 over 4 years, and
$24,000 over 3 years.
We did not receive any comments on
these provisions and are finalizing them
as proposed.
We proposed to make MA EP
incentive payments to qualifying MA
organizations on the same payment
cycle for all employed/partnering
qualifying EPs of the organization. In
other words, all MA EPs of a specific
qualifying MA organization will be in
the same payment year with respect to
the amount of the incentive payment
per qualifying EP that we will make. So,
for instance, if a qualifying MA
organization is in its second payment
year in 2013 and it hires a new EP for
which the qualifying MA organization
had not previously received an EHR
incentive payment, we will nevertheless
make a second year incentive payment
(up to $12,000 in 2013) with respect to
such an MA EP—assuming all other
conditions are met. Thus, the limits on
MA EP incentive payments discussed
above are applied to the qualifying MA
organization’s entire MA EP population
in any specific payment year relative to
that MA organization, regardless of the
length of employment/partnership of/
between that specific MA EP and that
specific qualifying MA organization.
Under section 1848(o)(1)(B)(iv) of the
Act, the annual incentive payment limit
for EPs who predominantly furnish Part
B services in a geographic health
professional shortage area (HPSA) is
increased by 10 percent. While we do
not anticipate that MA EPs would
generally practice in a HPSA area, to the
extent that an MA EP practices in an
area where he or she would be entitled
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to the 10 percent increase, that amount
would apply to MA EPs as well.
We did not receive any comments on
these provisions and are finalizing them
as proposed.
We explored various ways of
computing the EP-level incentive
payments due qualifying MA
organizations whose qualifying MA EPs
meaningfully use certified EHR
technology. One option that we
considered was using MA plan bidding
and payment data to estimate average
annual MA revenue for qualifying MA
EPs with respect to a qualifying MA
organization. However, we did not
pursue this option because the approach
results in an average revenue amount
across all potentially qualifying MA EPs
with respect to a qualifying MA
organization and, therefore, would
include revenue amounts that exceed
the annual per-professional ceiling on
incentive payments under FFS for all
EPs. We said we believed such a result
is contrary to the legal requirement that
qualifying MA organizations are to
receive incentive payments only for
qualifying MA EPs that actually provide
at least 20 hours per week of patient
care services. Under this method there
would be also no way to know if the EP
provided 80 percent of his/her
professional Medicare services to
enrollees of the organization.
We also considered a reporting system
for which qualifying MA organizations
would be required to report eligibleprofessional-specific information along
with MA patient encounters for
nonhospital-based office visits.
Specifically, we examined requiring
qualifying MA organizations reporting
qualifying MA EP encounters with MA
plan enrollees based on the five levels
of office visit codes recognized by
Medicare FFS.
We said we believed that such a
process would be administratively
burdensome and difficult to
operationalize. Therefore, we proposed
an alternative approach, but sought
input from interested parties as to
which of the approaches, or perhaps
others, would best address the statutory
requirement to compensate qualifying
MA organizations for qualifying MA EPs
the amount that would be payable if
payment for services furnished by such
professionals were made under Part B
instead of Part C.
Therefore, in § 495.204(b)(1) through
(3) we proposed an approach in which
the revenue received by the qualifying
MA EP for services provided to
enrollees of the qualifying MA
organization would serve as a proxy for
the amount that would have been paid
if the services were payable under Part
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B. Under our proposed approach, the
qualifying MA organization would
report to us the aggregate annual
amount of revenue received by each
qualifying MA EP for MA plan enrollees
of the MA organization. We said we
would calculate the incentive payment
amount due the qualifying MA
organization for each qualifying MA EP
as an amount equal to 75 percent of the
reported annual MA revenue of the
qualifying MA EP, up to the maximum
amounts specified under section
1848(o)(1)(B) of the Act.
For qualifying MA EPs who were
compensated on a salaried basis, we
proposed in § 495.204(b)(4) requiring
the qualifying MA organization to
develop a methodology for estimating
the portion of the qualifying MA EP’s
salary attributable to providing services
that would otherwise be covered as
professional services under Part B of
Medicare to MA plan enrollees of the
MA organization. The methodology,
which would require review and
approval by us, could be based on the
relative share of patient care hours spent
with MA enrollees of the organization or
another reasonable method. So, for
instance, if a qualifying MA EP spends
30 percent of his or her time providing
covered Part B physician office services
to MA plan enrollees, then the
qualifying MA organization would
report 30 percent of the qualifying MA
EP’s salary as annual revenue, which
would be used to compute the amount
of the MA incentive payment due to the
qualifying MA organization for the
qualifying MA EP. Thus, if the
qualifying MA EP had a base salary of
$150,000, 30 percent would be
$45,000—which is well over the
threshold of $24,000 needed by the MA
organization to qualify for a maximum
incentive payment of up to $18,000 (70
percent of $24,000) for such a qualifying
MA EP in any year. We also proposed
to require that salaries be prorated to
ensure that the amount reported reflects
the salary paid for the applicable year,
where necessary.
We also said that salaried physicians’
compensation typically does not
include an allowance for administrative
practice costs. Given that Part B allowed
amounts do include practice expense
costs, we proposed allowing qualifying
MA organizations to identify, where
appropriate, an additional amount
related to overhead that would be added
to the qualifying MA EP’s estimated Part
B compensation. To the extent Medicare
FFS compensation to physicians
includes an amount for office space
rental, office staffing, and equipment,
we believe that qualifying MA
organizations should also be permitted
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to include an amount for overhead
related to such costs not directly
experienced by salaried qualifying MA
EPs. In § 495.204(b)(4)(ii), we proposed
requiring qualifying MA organizations
to develop a methodology for estimating
the additional amount related to
overhead attributable to providing
services that would otherwise be
covered under Part B of Medicare. We
said the methodology would require
review and approval by us.
For qualifying MA EPs who are not
salaried (that is, who are paid on a
capitated or fee-for-service basis), we
proposed in § 495.204(b)(5) to require
qualifying MA organizations to obtain
attestations from such EPs and to submit
to us information from the attestations
as to the amount of compensation
received by the EPs for MA plan
enrollees of the MA organization. We
are proposing such attestations because
many EPs are not paid directly by MA
organizations, but rather by
intermediary contracting entities, such
as physician groups, and as a result the
qualifying MA organization may not
otherwise know how much
compensation is received by each
qualifying MA EP. In reporting
compensation, we are proposing that the
EPs include only those amounts for
professional services that would
otherwise be payable under Part B and
for which payment would be made
under, or would be based on, the
Medicare physician fee schedule.
Comment: One commenter
recommended that final CMS
regulations retain the exact
requirements outlined in
§§ 495.204(b)(4) and (5). Two
commenters said that CMS should allow
flexibility in methods MA organizations
propose for computing incentive
payments so long as the organization’s
approach is reasonable, straightforward,
and fairly equates to the Medicare feefor-service approach without imposing
undue burdens on MA organization
systems or compromising EP privacy.
The proposed rule describes how
incentive payment amounts will be
calculated for eligible hospitals and EPs.
The proposed rule presents options for
a MA payment methodology, but
expressly solicits comments from MA
organizations about how such a
methodology could be designed to fairly
approximate the FFS payment
calculation. The commenters included
recommendations about how MA
organizations could be reimbursed and
what methodology would be a
reasonable proxy for the Part B-based
payment applied to FFS physicians,
based on the amount of individual
physician care provided to MA
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members. The commenters said that MA
EPs who are employed by their
organizations are independent
physician group practices that contract
exclusively with their organizations to
meet the health needs of their members,
including MA enrollees. Their
organizations do not pay the salaries of
MA EPs who provide patient care
services to their members and patients.
They said that CMS has proposed that
the organization that directly pays the
EP salaries would perform a calculation
and attest to the MA organization about
the amount of payment. They said that
while this would mitigate some of the
confidentiality concerns related to
sharing salary information with the
health plans, salary information would
still be potentially exposed to CMS.
They said that another disadvantage of
using actual salary as a basis for
calculating the incentive payment is
that this approach potentially
introduces unacceptable variability into
the estimation of proxy amounts for
Medicare services. For example, two
MA EPs, whose salaries vary
significantly but provide the same
Medicare services in a reporting period,
would have different proxy amounts.
Further, they said, if such EPs were
billing under Part B, the amount of
Medicare services each billed would be
the same, regardless of whether their
incomes were the same. These
commenters went on to propose an
alternative method of computing a
proxy Part B amount. They said that as
a first step, the MA organization would
calculate the percentage of clinic time
each physician spends caring for MA
members. This MA Practice percentage
could be derived by either: (1) Capturing
the total scheduled appointment time
for MA members for each MA EP and
dividing that amount by the total
scheduled time for that MA EP (for all
appointments); or (2) capturing the
number of MA member visits/
procedures for each MA EP and
dividing that amount by the total
number of visits/procedures for that MA
EP (for all members). The organization
would then calculate the average
practice cost by specialty for all
specialties identified in the annual
American Medical Group Association’s
(‘‘AMGA’’) salary survey. The
commenters explained that AMGA
survey provides the median
compensation per physician in most
specialties as well as the noncompensation related clinic costs per
physician (staffing, supplies, overhead,
etc.) in most specialties. Adding
specialty specific compensation data
(for groups > 100 physicians) to the
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combined average non-compensation
related clinic costs for that specialty (for
all sized groups) would provide a
surrogate amount for each specialty’s
total operating costs. This would
produce the Average Operating Costs by
Specialty. Multiplying each MA EP’s
MA Practice percentage and the Average
Operating Costs by Specialty for that
MA EP’s practice specialty would
produce a surrogate Medicare Part B
amount. For each MA EP, the MA
organization would be paid an incentive
equal to 75 percent of the surrogate
Medicare billing amount for that
physician, such incentive not to exceed
the maximum incentive for each
payment year of the program (for
example, $18,000 if the first year of
participation is 2011).
Response: While we appreciate the
thought and effort that went into this
proposed alternative method of
calculating MA EP incentive payments,
we are reluctant to adopt it for the
simple reason that where salaries,
practice costs, or actual MA EP
compensation can be known, we believe
it is a better read of statutory
requirements to work from that actual
compensation and cost data than it
would be to allow estimation of both. In
many respects the proposed alternative
method is similar to the method
discussed and disposed of in the
proposed rule related to estimating
physician compensation based on MA
bidding and payment data. Although the
commenters’ alternative version factors
in actual practice time, we believe using
AMGA salary survey data would be
inferior to using actual physician
compensation practice cost information.
To the extent actual salary information
is unknown or unavailable to the MA
organization, we believe it could be
provided to us in a manner that would
protect the privacy of individual MA
EPs and physician groups. Furthermore,
the proposal also estimates ‘‘noncompensation related clinic costs’’ based
on AMGA data, which is, again,
inappropriate, when actual overhead
costs might be quite different in a
specific MA organization. However,
based on the commenters concerns
regarding provider privacy and the need
to develop a consistent and verifiable
method of computing the amount
payable to qualifying MA organizations
for MA EPs we are modifying the
regulation text at § 495.204(b)(5) to say
that qualifying MA organizations ‘‘may’’
obtain attestations from qualifying MA
EPs and ‘‘may’’ submit such information
to us—rather than ‘‘must.’’ And, we add
a new subparagraph (6) that allows the
physician group or other payer to
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provide EP reimbursement information
directly to us. We also provide
assurances that we will use the EP
reimbursement data for no other
purpose than to compute the MA EP
incentive payment due the qualifying
MA organization.
Comment: One commenter said that
in the proposed rule the methodology
for estimating the portion of the
qualifying MA EP’s salary attributable to
providing services that would otherwise
be covered as professional services
under Part B of Medicare to MA plan
enrollees of the MA organization would
require review and approval by CMS;
and that such methodology ‘‘could be
based on the relative share of patient
care hours spent with MA enrollees of
the organization or another reasonable
method.’’ However, the commenter
opined, the proposed rule offers no
details about how the review and
approval process would be conducted,
including dates and timelines for the
process. Thus, the commenter
recommended that CMS permit
flexibility in allowing MA organizations
to develop methodologies that will be
reasonable in light of organization
structure and systems, it is important to
provide some guidance about how CMS
will review and approve such proposals.
CMS should permit, the commenter
said, any reasonable payment
methodology method that is fair,
relatively easy to administer, subject to
audit and that provides a reliable
approximation of Medicare Part B
billing. In addition, the commenter
concluded, CMS should provide a
simple process for submission and
approval of MA payment
methodologies.
Response: In the proposed rule at
§ 495.204(b)(4) we offered flexibility
related to the ‘‘methodology for
estimating the portion of each qualifying
MA EP’s salary attributable to providing
services that would otherwise be
covered as professional services under
Part B,’’ said that the methodology had
to be ‘‘approved by CMS,’’ and that the
amount could include an ‘‘additional
amount related to overhead.’’ Based on
this comment we are adding a new
clause (iii) that says that such
methodological proposals must be
submitted to CMS by June of the
payment year, must be auditable by an
independent third-party, and that CMS
will review and approve or disapprove
such proposals in a timely manner.
Comment: One commenter wanted to
know what percentage of the incentive
payments will go to eligible
professionals under Medicare
Advantage.
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Response: No known percentage of
incentive payment will go to eligible
professionals under Medicare
Advantage, since MA EP payments are
made solely to qualifying MA
organizations.
In the proposed rule we said that in
applying the instruction in section
1853(m)(3)(A) of the Act to substitute
for the amount specified under section
1886(n)(2) of the Act an amount similar
to the estimated amount in the aggregate
that would be payable if payment for the
hospitals’ services were made under
Part A instead of Part C, we read the
term ‘‘aggregate’’ to mean the aggregate
installment payments made by us if
EHR incentive payments were made
under Part A instead of Part C.
Incentive payments to eligible
hospitals under the Medicare FFS EHR
incentive program are comprised of
three components: (1) An initial amount
composed of a base incentive payment
of $2,000,000 and a second incentive
payment amount of $200 per discharge
for discharges 1,150—23,000 during a
12-month period selected by the
Secretary; (2) the Medicare share; and
(3) a transition factor. As discussed in
the preamble related to § 495.104(c), for
purposes of calculating incentive
payments to eligible hospitals under the
Medicare FFS EHR incentive program,
we are proposing that the 12-month
period be based on the FFY. For the
purpose of calculating incentive
payments for qualifying MA-affiliated
eligible hospitals, we similarly are
proposing that the 12-month period be
based on the FFY.
Section II.B. of this final rule
discusses our methodology for
calculating the incentive payment for
qualifying eligible hospitals under the
Medicare FFS EHR program. As set forth
in § 495.204(c)(2), we proposed to use
the FFS EHR hospital incentive program
for purposes of calculating and making
the incentive payment for qualifying
MA-affiliated hospitals. To the extent
data are not available to reimburse MAaffiliated hospitals through the FFS
hospital incentive program, we
proposed to require submission of such
data to us and adopt the same definition
of ‘‘inpatient-bed-days’’ and other terms
under the Medicare FFS EHR hospital
incentive program specified in § 495.104
of this final rule. In such a case we
proposed in § 495.204(c)(1) to make
payment for such MA-affiliated eligible
hospitals to the qualifying MA
organization.
The formula for calculating the
hospital incentive payment under the
Medicare FFS hospital incentive
program is an initial amount of the sum
of the base amount of $2,000,000 per
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hospital plus an additional $200 per
discharge for discharges 1,150 through
23,000 for that hospital in that payment
year. This initial amount is then
multiplied by a transition factor and
then again by the Medicare share. These
last two numbers are fractions and will
tend to reduce the initial amount
computed in the first step.
Similar to the Medicare FFS EHR
hospital incentive program, we
proposed to use inpatient-bed-day data,
discharges, and other components of the
FFS calculation for each qualifying MAaffiliated eligible hospital from the
hospital-specific fiscal year that ends
during the FFY prior to the FFY that
serves as the payment year. To the
extent such data are not already
available to us through the normal
submission of hospital cost reporting
data; we proposed requiring qualifying
MA organizations seeking
reimbursement for their qualifying MAaffiliated eligible hospitals to submit
similar data.
We said we can only pay for
qualifying MA-affiliated eligible
hospitals under common corporate
governance based on inpatient-bed-days
computed on a fiscal year basis where
less than one third of the inpatient-beddays of Medicare patients are covered
under Medicare FFS—Part A. However,
it does not appear that reimbursement
only under the MA EHR incentive
program is required for qualifying MAaffiliated eligible hospitals that are
under common corporate governance.
Rather, section 1853(m)(3)(B), of the Act
only prohibits payment under the MA
EHR incentive program when Medicare
hospital inpatient-bed-days covered
under Part A exceed 33 percent of all
Medicare inpatient-bed-days. Although
eligibility under the MA EHR hospital
incentive program is not available to
qualifying MA organizations for any
specific hospital when FFS inpatientbed-days exceed 33 percent of the
Medicare total, a qualifying MA
organization could be reimbursed
through the Medicare FFS EHR hospital
incentive payment program for
qualifying hospitals under common
corporate governance even for hospitals
with very low ratios of FFS to MA
inpatient-bed days.
Given that the hospital incentive
payment methodology and payment
amount will be identical under the
Medicare FFS EHR incentive program
and the MA EHR incentive program,
and given that there is no statutory
prohibition on reimbursing a qualifying
MA-affiliated eligible hospital through
the Medicare FFS EHR incentive
program, for purposes of administrative
efficiency, and pursuant to our authority
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under section 1857(e) of the Act to add
new ‘‘appropriate’’ contract terms
(incorporated for Part D by section
1860D–12(b)(3)(D) of the Act), we
proposed requiring that qualifying MA
organizations receive incentive
payments for qualifying MA-affiliated
eligible hospitals through their affiliated
hospitals under the Medicare FFS EHR
incentive program if they are eligible for
such payments, rather than through the
MA EHR incentive program. We believe
this is the most efficient way in which
to administer the MA EHR hospital
incentive program in light of the
expected low volume of MA-affiliated
eligible hospitals (approximately 50
hospitals), and in light of preliminary
data which indicates that MA-affiliated
eligible hospitals already submit
Medicare cost reporting data to us from
which we can compute hospital
incentive payments due. To the extent
sufficient data do not exist to make such
payments under the Medicare FFS EHR
incentive program, qualifying MA
organizations will be required to submit
additional data to us.
We did not receive any comments on
these provisions and are finalizing them
as proposed.
To the extent payments are made to
qualifying MA organizations for
qualifying MA EPs or qualifying MAaffiliated eligible hospitals, we proposed
to conduct selected compliance reviews
to ensure that EPs and eligible hospitals
for which such organizations received
incentive payments were actually
meaningful users of certified EHR
technology, in accordance with our
existing authority in section 1857(d) of
the Act and 42 CFR 422.504 of the
regulations related to protections against
fraud. The reviews would include
validation of meaningful user
attestations, the status of the
organization as a qualifying MA
organization, and verification of both
meaningful use and data used to
calculate incentive payments. We
proposed requiring MA organizations to
maintain evidence of compliance with
all aspects of the MA EHR incentive
payment program for 10 years after the
date payment is made with respect to a
given payment year. Payments that
result from incorrect or fraudulent
attestations, cost data, or any other
submission required to establish
eligibility or to qualify for a payment,
will be recouped by CMS from the MA
organization.
We did not receive any comments on
these provisions and are finalizing them
as proposed.
Finally, as we indicated above in
section II.C.2. of this final rule, we are
modifying the regulation text at
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§ 495.204(b)(2) to be consistent with the
change to § 495.202(b)(3), since final
identification in § 495.202(b)(3) should
occur at the same time as final revenue
reporting under § 495.204(b)(2), in order
to ensure that calculations of payments
due under the MA EP incentive
payment program can be finalized.
4. Timeframe for Payment
For payments to qualifying MA EPs,
in § 495.206 we proposed the timeframe
for payment to be after the Medicare
FFS program computes incentive
payments due under the Medicare FFS
EHR incentive program—so the first
possible incentive payments would be
made sometime in early 2012. We
proposed that payments for qualifying
MA-affiliated eligible hospitals under
common corporate governance occur in
the same manner and in the same time
frame as payments made under the
Medicare FFS EHR incentive program to
‘‘subsection (d)’’ hospitals as discussed
in section II.B.2.d. of this final rule.
We proposed to define ‘‘payment
year’’ with respect to qualifying MA EPs
in § 495.200. Section 1853(l)(3)(C) of the
Act directs us to establish the same first
payment year for all EPs with respect to
any specific qualifying MA
organization. Consistent with the
statute, we proposed to pay a qualifying
MA organization on the same schedule
for all of its qualifying MA EPs. In other
words, the first year during which the
qualifying MA organization receives an
incentive payment for its qualifying EPs
will be considered the first payment
year for all of its qualifying EPs.
Accordingly, for purposes of
determining the applicable incentive
payment limits, the second, third,
fourth, and fifth years during which the
qualifying MA organization receives an
incentive payment for its qualifying EPs
will be considered the second, third,
fourth, and fifth payments years for each
of its qualifying EPs, regardless of
whether the MA organization claimed
an incentive payment for a particular EP
for a prior payment year. Such a
consistent payment cycle relative to
qualifying MA organizations and
qualifying MA EPs obviates the need to
track payment years and payment
adjustment years based on prior
payments or adjustments with respect to
any individual qualifying MA EP.
Rather, for purposes of payment years
and payment adjustment years, any EP
employed by or partnering with any
specific MA organization will be on the
same cycle with respect to that
organization.
We said that similar to the Medicare
FFS EHR incentive program, payment to
qualifying MA organizations for
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qualifying MA EPs and payment for
qualifying MA-affiliated eligible
hospitals is available only for a finite
number of years. As previously
discussed in the section on the
calculation of MA incentive payments,
above, a qualifying MA organization can
receive an incentive payment of up to
$18,000 for each of its qualifying MA
EPs for its first payment year if its first
payment year is 2011 or 2012, or up to
$15,000, if its first payment year is 2013,
or up to $12,000, if its first payment
year is 2014. Note that, similar to the
Medicare FFS EHR incentive program,
there would be no incentive payments
made with respect to a year after 2016.
We proposed to define ‘‘payment
year’’ with respect to qualifying MAaffiliated eligible hospitals in § 495.200.
For incentive payments for qualifying
MA-affiliated eligible hospitals, the first
year for which an MA organization may
claim payment is FY 2011. Similar to
the Medicare FFS EHR hospital
incentive program, we proposed to use
the hospital inpatient bed-days data
from the hospital FY that ends during
the FFY prior to the FY that serves as
the payment year. For qualifying MAaffiliated eligible hospitals, we proposed
to compute hospital EHR incentive
payments due in the same manner as
they are being computed in the
Medicare FFS hospital incentive
payment program. For qualifying MAaffiliated eligible hospitals for which the
first payment year is 2011 through 2013,
up to 3 additional years of incentive
payments are available. For qualifying
MA-affiliated eligible hospitals for
which the first payment year is after
2015, no EHR payment incentive can be
made for that year or any subsequent
year. Finally, for qualifying MAaffiliated eligible hospitals for which the
first payment year is 2014 or 2015, only
2 (or 1) additional year(s) of hospital
incentive payments will be available.
Unlike the fixed schedule for
application of limitation on incentive
payments for MA EPs discussed
previously in this section of the final
rule in which all employed/partnering
MA EPs will be paid on the same
schedule (first payment year, second
payment year, etc.) with respect to any
specific qualifying MA organization, we
proposed to make payments to MA
organizations for MA-affiliated eligible
hospitals on a hospital specific basis. In
other words, if a qualifying MA
organization has some MA-affiliated
eligible hospitals with a first payment
year of FY 2011, it may have other MAaffiliated eligible hospitals with a first
payment year of FYs 2012 through 2015.
Comment: Two commenters said that
payments to MA organizations will be
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delayed every year by an unspecified
amount of time. The commenters said
that it was understood that CMS is
charged by statute to avoid making
duplicate payments, however MA
organizations should be paid without
unspecified delay. A suggested
alternative by the commenters was to
permit MA organizations to attest that
their MA EPs will not seek any payment
under the Medicare FFS Incentive
Program. Alternatively, the commenters
suggested, CMS could use an
installment payment system (permitted
under statute as stated) for MA
organizations. The commenters said that
this would permit partial payment until
the resolution of the duplicate payment
issue and would avoid long delays in
paying MA incentives.
Response: We do not agree that MA
organization EHR incentive payments
are subject to ‘‘unspecified delay.’’
Rather, since MA organizations will be
paid for MA EPs only if such EPs were
not paid the maximum incentive
payment under the FFS EHR incentive
payment program, and since final
claims data will not be available until
two months after the close of the
payment year—see § 495.102(a)(2)—
CMS will not be able to compute MA EP
payments until the FFS EHR incentive
payment program has completed its
calculations. This will occur in the early
spring of the year after the close of a
payment year. Moreover, MA-affiliated
eligible hospitals will receive EHR
incentive payments on the same
schedule as other ‘‘subpart (d)’’
hospitals. Finally, note that MA EPs are
free to leave qualifying MA
organizations at any time, and since EPs
are also free to register for eligibility
under FFS Medicare or Medicaid EHR
incentive payments, an attestation by a
qualifying MA organization would have
little merit. For these reasons we cannot
accept the suggestion that qualifying
MA organizations receive interim or
partial mid-year payments for MA EPs.
After consideration of the public
comment received, we are
implementing these provisions as
proposed.
5. Avoiding Duplicate Payment
We proposed duplicate payment
avoidance provisions in § 495.208.
Section 1853(l)(3)(B) of the Act, as
added by the HITECH Act, is entitled
‘‘Avoiding Duplication of Payments.’’
Subclause (I) of clause (i) of this
paragraph of the Act states that to the
extent an MA EP is entitled to the
maximum incentive payment under
section 1848(o)(1)(A) of the Act, the
Medicare FFS EHR incentive payment
program, such incentive payment will
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only be made under the Medicare FFS
EHR incentive program. Therefore,
before payments can be made to
qualifying MA organizations for MA
EPs, we must first determine if a
maximum incentive payment under the
Medicare FFS program has been
previously earned by potential MA EPs.
Under the Medicare FFS incentive
payment program, incentive payment
calculations will not be completed for
the first payment year, 2011, until the
early part of 2012. Therefore, we said
we would not be able to make payments
to qualifying MA organizations for MA
EPs until claims submissions counted
for Medicare FFS incentive payments
for CY 2011 have been closed, and
payment calculations for participating
EP under the Medicare FFS EHR
incentive program have been completed.
This will occur in the early part of CY
2012. In the MA EHR incentive payment
program we proposed to follow the FFS
EHR incentive payment program
schedule—first computing Medicare
FFS incentive payments for EPs and
then computing and paying MA EP
incentive payments, where
appropriate—in all subsequent payment
years.
We went on to explain that subclause
(II) of section 1853(l)(3)(B)(i) of the Act
further states that to the extent an MA
EP is entitled to less than the maximum
incentive payment under the Medicare
FFS EHR incentive program, that
payment is to be made solely under the
MA provision. In other words, we will
need to withhold Medicare FFS
incentive payments from EPs of less
than the maximum to the extent such
professionals are also identified as MA
EPs under section 1853(l)(2) of the Act.
Again, we would need to await the
computation of payments due EPs under
the Medicare FFS EHR incentive
program before we can determine
whether the EP is entitled to less than
the maximum payment amount under
the Medicare FFS EHR program, in
which case any incentive payment for
the EP will only be made to the
qualifying MA organization under the
MA EHR program, and not to the EP
under the Medicare FFS EHR program.
We also said that section
1853(m)(3)(B) of the Act states that
incentive payments for qualifying MAaffiliated eligible hospitals are to be
made under either the Medicare FFS
hospital incentive payment program, or
under the MA hospital incentive
payment program. If more than 33
percent of discharges or bed-days of all
Medicare patients for a year are covered
under Part A, then payment for that year
is to only be made under section
1886(n) of the Act—the Medicare FFS
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EHR incentive program—and no
payment is to be made under the MA
hospital incentive payment program.
Otherwise, to the extent less than 33
percent of bed days of all Medicare
patients for an incentive payment year
are covered under Part A, then payment
for that incentive payment year may be
made under the MA EHR incentive
payment program.
Unlike the process we proposed to
follow related to qualifying EPs (where
we will wait for the Medicare FFS
incentive payment program to compute
eligible physician incentive payments
due under that program before
determining the amount due under the
MA EHR incentive program), we would
not need to rely on Medicare FFS EHR
incentive payment program calculations
before determining eligibility for MAaffiliated hospital incentive payments.
We said we would reimburse all
hospitals, including MA-affiliated
eligible hospitals, under the Medicare
FFS hospital incentive program. We
believe that by doing so, we will prevent
duplicate payments being made for the
same hospitals by Medicare FFS and the
MA incentive payment programs. To the
extent that qualifying MA organizations
are to receive incentive payments
through the MA program rather than
through their hospitals under the
Medicare FFS EHR incentive program
due to a lack of sufficient data to make
payments under the FFS program, we
would identify and reimburse only
appropriate qualifying MA
organizations for qualifying MAaffiliated eligible hospitals. Such
reimbursement will be in a manner
similar to the manner in which the
Medicare FFS EHR incentive program
will reimburse eligible hospitals due an
incentive payment under the Medicare
FFS EHR incentive program.
Finally, we said that in order to avoid
duplicate payments and in accordance
with section 1853(m)(3)(B)(ii)(II) of the
Act, we will not make MA EHR hospital
incentive payments to qualifying MA
organizations for MA-affiliated eligible
hospitals other than through the
Medicare FFS EHR hospital incentive
payment program without first ensuring
that no such payments under the
Medicare FFS EHR hospital incentive
payments were made.
We did not receive any comments on
these provisions and are finalizing them
as proposed.
6. Meaningful User Attestation
We proposed meaningful user
attestation requirements in § 495.210.
For each MA EP and MA-affiliated
hospital for which a qualified MA
organization seeks an incentive
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payment, the organization must attest,
in a form and manner specified by us,
that its MA EPs and MA-affiliated
eligible hospitals are meaningful EHR
users, as required by sections 1853(l)(6)
and 1853(m)(1) of the Act. We further
proposed to adopt the definitions of
meaningful user under the Medicare
FFS program related to EPs and eligible
hospitals in § 495.4. We are requiring
qualifying MA organizations to attest
each payment year whether each of its
MA EPs and MA-affiliated eligible
hospitals for which it is seeking an
incentive payment was a meaningful
EHR user for the EHR reporting period
for a payment year. A qualifying MA
organization must make this attestation
for each payment year for which it is
seeking an incentive payment for MA
EPs and MA-affiliated eligible hospitals.
We believe attestations should occur
toward the end of a year with respect to
that year, since qualifying MA
organizations will need to attest to,
based on our proposed rule, meaningful
use for the appropriate duration and
during the appropriate period related to
MA EPs and MA-affiliated eligible
hospitals before claiming incentive
payments for them.
In the proposed rule we said that
unlike the Medicare FFS EHR incentive
program, where we will require the
reporting of clinical quality measures—
see § 495.8—we will not require
qualifying MA organizations to submit
clinical quality measures per section
1848(o)(2)(B) of the Act, with respect to
EPs, and section 1886(n)(3)(B) of the
Act, with respect to eligible hospitals.
Consistent with sections
1848(o)(2)(B)(iii) and 1886(n)(3)(B)(iii)
of the Act, we note that qualifying MA
organizations sponsoring coordinated
care MA plans are already required to
submit Healthcare Effectiveness Data
and Information Set (HEDIS), Health
Outcomes Survey (HOS), and Consumer
Assessment of Healthcare Providers and
Systems (CAHPS) measures per
§ 422.152 and § 422.516. Coordinated
care MA plans include HMO, PPO and
RPPO (Regional PPO) plans. Beginning
with CY 2010, PFFS and MSA plans
will also be required to begin collecting
and submitting administrative HEDIS
measures.
We believe that all qualifying MA
organizations will be organizations
offering MA coordinated care plans, and
therefore; those MA organizations from
which we routinely receive complete
HEDIS dataset reporting. Pursuant to
sections 1848(o)(2)(B)(iii) and
1886(n)(3)(B)(iii) of the Act, for clinical
quality measures which overlap
between the existing MA quality
reporting program and under the EHR
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incentive program, we proposed to
allow qualifying MA organizations to
continue reporting under the existing
MA quality reporting program. For those
HITECH clinical quality measures that
do not overlap and that are appropriate
for the MA program, we are considering
requiring that qualifying MA
organizations that receive an incentive
payment report those measures to CMS.
This would ensure that clinical quality
measure reporting under HITECH is
consistent between the FFS program
and MA. An alternative approach would
be to require that qualifying MA
organizations that receive an incentive
payment report all of the HITECH
clinical quality measures under section
II.A.2 of this final rule that are
appropriate for the MA program directly
to CMS, while also reporting those
HEDIS, HOS, and CAHPS measures
under the existing MA quality program.
This may result in duplicative reporting
under the HITECH program and current
MA quality reporting, but may provide
us with more direct access to quality
data under the HITECH program. We
invite public comment on these
approaches, including alternative
methods to consistently treat MAaffiliated providers and FFS providers
under the HITECH Medicare incentive
program.
Comment: The meaningful use criteria
make reference to checking eligibility
electronically and submitting claims
electronically for 80 percent of patients
seen. This would not be possible for us
because, for most of our visits, there is
no insurance company with which to
check, and there is no eligibility to
submit claims to. We are a capitated
system and for most of the patient visits,
the concept of checking eligibility and
submitting claims in not relevant.
Response: This comment points out
the difficulty in adopting FFS Medicare
meaningful use measures for qualifying
MA organizations, MA-affiliated
hospitals and MA EPs. For purposes of
determining meaningful use in a
Medicare Advantage environment, we
agree that submitting claims
electronically is not a useful standard in
a capitated environment where virtually
all patients are members of the same
insurance plan.
Comment: One commenter said that
given the sensitivity of the data, and the
RHQDAPU program specifications, the
commenter believes CMS should never
request that hospitals submit patientlevel data to CMS, but that the data
submitted should always be at the
aggregated, summary level. The
commenter encouraged us to state
specifically that this is its intention in
FY 2012 and all future years of EHR
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incentive program reporting. Some other
commenters said that their health care
delivery systems were based on an
integrated care delivery model, where
coordination of care is supported
through program-wide EHR
implementation that enables a patient’s
medical record to be shared among the
members of the patient’s care team. The
commenters said they believed patientcentric electronic medical record
models that integrate clinical
information across providers align with
goals of ONC’s Strategic Plan and reform
efforts that seek to enable more patientcentric integration of care. The
commenters said that during any given
reporting period under the EHR
incentive payment program, patients
may receive health care services from
various providers (for example, the
primary care physician, one or more
specialists, nurse practitioners, etc.).
The commenters said they had adopted
program-wide policies and procedures
for using their EHR system to promote
coordinated delivery of care. Thus, the
commenters said they intended to use
their EHR system to support the
functionality and care delivery criteria
of meaningful use for all providers
across their organizations. Within their
organizations, they said, a single
provider is never solely responsible for
all the information in a given patient’s
electronic medical record. In fact, they
said, many providers may access the
patient’s electronic record to view or
add information, order tests or
medications, review results, etc. They
said the shared record makes it
extremely difficult to reliably track all
the meaningful use criteria to each EP
in their organizations without adding
additional administrative functionality
to their systems that would do nothing
to improve patient care. It would be
inappropriate and not the intent of the
EHR incentive payment program, they
said they believed, to add unnecessary
redundancy in care delivery (that is,
providers re-entering correct
demographic information to get ‘‘credit’’
for that measure). They said they
intended to participate in the EHR
incentive payment program under
provisions for Medicare Advantage
organizations. They went on to say that
since the proposed rule states, ‘‘the
qualifying MA organization must attest
to the fact that each MA EP is a
meaningful user of certified EHR
technology * * *, ’’ they believed such
attestation can be based on measuring
criteria at a MA organizational level.
While they acknowledged that meeting
basic eligibility criteria is appropriate
on an individual provider level (that is,
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the MA EP must meet the same
definition for EP under FFS, satisfy
minimum hours per week delivering
patient care services, not be hospitalbased, etc.), they said they should be
able to meet meaningful use criteria as
a MA organization on behalf of all of
their individual EPs, so long as they are
able to demonstrate that their EHR
system itself meets the criteria and its
use is pervasive and consistent
throughout their healthcare delivery
sites. They recommended that where a
patient’s electronic medical record is
shared among a team of providers
within a MA organization, the
meaningful use criteria be measured on
an organizational versus an individual
provider level. As an alternative they
proposed that for any provider who
treats a given patient, if the criterion is
met in that patient’s electronic record,
all EPs who are members of the patient’s
care delivery team would receive
‘‘credit’’ for meeting that measure.
Response: We agree with the
commenters in large part. We believe
that continued reporting by qualifying
MA organizations under the HEDIS
program is the most appropriate way to
protect personally identifiable patient
information. We also believe that in
integrated care delivery systems, it does
not make sense to require specific
individuals to enter specific data in
order to obtain meaningful user status—
especially in a Medicare Advantage
environment where we will require only
continued HEDIS reporting as a
demonstration of meaningful use.
Finally, we believe that reporting of
clinical quality measures at the MA
organization level is the most effective
and appropriate means of attaining the
ultimate goal of EHR adoption—
improved patient outcomes and reduced
healthcare costs.
Comment: Some commenters said that
the proposed rule states that, ‘‘unlike the
Medicare FFS EHR Incentive Program,
where we will require the reporting of
clinical quality measures * * * we will
not require qualifying MA organizations
to submit clinical quality measures
* * * with respect to EPs * * * and
with respect to eligible hospitals * * *.
[W]e note that qualifying MA
organizations sponsoring coordinated
care plans are already required to
submit Healthcare Effectiveness Data
and Information Set (‘‘HEDIS’’), Health
Outcomes Survey (‘‘HOS’’), and
Consumer Assessment of Healthcare
Providers and Systems (‘‘CAHPS’’)
measures.’’ The proposed rule suggests
allowing MA organizations to continue
reporting these measures, but also
considers requiring that MA
organizations report those HITECH
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clinical quality measures that do not
overlap with these currently reported
measures ‘‘and are appropriate for the
MA program.’’ We believe this current
reporting is both appropriate and
sufficient to measure the clinical quality
of MA programs and should be deemed
to satisfy the clinical quality reporting
requirements under the EHR incentive
payment program. HEDIS, HOS and
CAHPS reporting are well-established
and subject to audit. The measures are
specifically chosen to capture quality
within MA organizations, in particular
to measure the clinical quality of the
team approach we use to deliver care.
While we support consistency across
the EHR incentive payment program, we
are concerned that requiring MA
organizations to create new mechanisms
for this additional reporting would be
unduly burdensome, especially if these
additional measures would have to be
reported at the individual provider or
patient level. Another commenter said
that their considerable experience with
developing responses for new measures
demonstrated how resource and labor
intensive clinical quality measurement
can be. For example, the commenter
continued, during a recent effort to
automate ten TJC (The Joint
Commission) measures, we identified 87
data elements, only 37 of which are
captured as discrete data. Of the
remaining 50 measures, some are
captured using discrete data in different
places in the EHR, and some are
captured using free text (for example,
clinical trials and other irregular
exclusion criteria) and will require the
creation of new documentation tools.
We estimate it will take one to two years
of work for these ten measures to be
fully automated, despite our relatively
sophisticated use of data warehousing
tools and our high level of automation
in the data management process. The
burden is especially heavy when
measurement elements are ill-defined.
Under meaningful use clinical quality
reporting, over 120 measures have been
proposed. Of these, 94 would be
measures not currently calculated or
reported on a routine basis. We
anticipate a considerable increase in
workload to create and maintain these
measures. Adding new and duplicate—
possibly less reliable—measures and
reporting systems will be costly, timeconsuming and may not have an
incrementally significant impact on
improving patient care. While we are
not opposed to new metrics (those
without similar known specifications),
such measures should be field tested
prior to becoming requirements; in
particular, subject to rigorous testing of
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the electronic specifications. Such
measures should also be supported by
robust clinical evidence to show they
will impact clinical outcomes. MA
organizations should be deemed to have
satisfied all clinical quality reporting
required in the EHR incentive payment
program by meeting their current
reporting requirements. If additional
measures are required, we recommend
staged adoption, beginning with those
measures that MA organizations already
report or can report in the near future.
We recommend eliminating measures
that have little or no evidence to link
them to improved outcomes. Overall,
we strongly recommend that CMS
significantly reduce the overall number
of clinical quality measures that would
be required for meaningful use.
Response: We agree with the
commenters and believe that HEDIS,
HOS and CAHPS are the appropriate
means of reporting measures for both
MA EPs and MA-affiliated hospitals.
Where appropriate we will consider
adding elements to these already
existing quality reporting programs. We
will consider adding HEDIS elements
over time, as experience and clinical
data warrant.
Comment: One commenter said one of
the five priorities specified by CMS is to
improve care coordination. However,
the siloed nature of the incentive
payments, lack of a robust set of care
coordination measures, and the narrow
definition of eligible professionals do
not fully support this priority. The
commenter also said that the current
structure of the proposed incentive
program, as required by statute,
maintains the current siloed structure of
Medicare and Medicaid payments. The
selected functionality and quality
measures in large part do the same.
However, this siloed structure does not
support or encourage integrated
coordinated care across providers and
settings. As greater attention is paid to
improving care coordination and the
quality of care through integrated care
models (for example, accountable care
organizations, patient-centered medical
homes), greater attention should be
given to selecting measures that focus
on patient-centered episodes of care.
Furthermore, consideration should be
given to refining the incentive payment
structure to foster integration and
accountability among and across
providers and settings.
Response: We believe that HEDIS
reporting and other existing quality
reporting programs (that is, HOS and
CAHPS) go a long way toward assuring
that coordination and integration of care
will continue to occur in the Medicare
Advantage environment. One of the
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purposes of EHR adoption is to facilitate
the coordination of care in health care
environments where care coordination
is not currently perceived to occur. We
are asking providers to pick a program
through which they are most likely to be
eligible for EHR incentive payments. For
MA organizations that treat Medicare,
Medicaid and dually-eligible patients,
EHR incentive payments will be made
only under one program (Medicare or
Medicaid) with respect to any specific
EP. However care coordination should
occur regardless of health insurance or
EHR incentive payer. After
consideration of the public comments
received we are not changing our
proposed policy to allow qualifying MA
organizations to establish meaningful
use through attestation and to
demonstrate meaningful use through
continued HEDIS reporting.
Finally, we proposed requiring
qualifying MA organizations to submit
attestations to us related to meaningful
use by MA-affiliated hospitals within 30
days of the close of the FFY—which is
the payment year for MA-affiliated
hospitals—by October 30. We also
proposed requiring qualifying MA
organization to submit attestations to us
related to meaningful use by MA EPs
within 30 days of the close of the MA
EP payment year—which is a CY—by
January 30. In this final rule we are
modifying the regulation text at
§ 495.210(b) and (c) to be consistent
with the changes to § 495.204(b)(2) and
§ 495.202(b)(3), since the deadline for
attestations of meaningful use should be
consistent with deadlines for revenue
reporting for MA EPs, and final
identification of MA EPs and MAaffiliated hospitals. We are extending
the timeframe for reporting meaningful
use to 60 days after the close of the
payment year.
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7. Posting Information on the CMS Web
Site
In the proposed rule we said that
sections 1853(l)(7) and 1853(m)(5) of the
Act require us to post information on an
Internet Web site related to the receipt
of incentive payments under the MA
EHR incentive program. We said posted
information would include the names,
business addresses, and business phone
numbers of each qualifying MA
organization receiving an incentive
payment under this section for
qualifying MA EPs and hospitals. A list
of the names of each qualifying MA EP
and qualifying MA-affiliated eligible
hospital for which an incentive payment
has been made would also be posted.
Since this requirement is applicable to
other Medicare EPs and eligible
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hospitals, we have included this
requirement in § 495.108.
We did not receive any comments on
these provisions and are finalizing them
as proposed.
8. Limitation on Review
In the proposed rule we said that
section 1853(l)(8) of the Act states that
there shall be no administrative or
judicial review under section 1869 of
the Act, section 1878 of the Act, or
otherwise of the methodology and
standards for determining payment
amounts and payment adjustments
under the MA EHR EP incentive
program. We said this includes
provisions related to duplication of
payment avoidance and rules developed
related to the fixed schedule for
application of limitation on incentive
payments for all qualifying MA EPs
related to a specific qualifying MA
organization. This also includes the
methodology and standards developed
for determining qualifying MA EPs and
the methodology and standards for
determining a meaningful EHR user,
including the means of demonstrating
meaningful use and the selection of
measures. We proposed to codify these
requirements in § 495.212(b).
Section 1853(m)(6) of the Act, as
added by the HITECH Act, states that
there shall be no administrative or
judicial review under section 1869,
section 1878, or otherwise of the
methodology and standards for
determining payment amounts and
payment adjustments under the MA
EHR hospital incentive program. This
includes provisions related to
duplication of payment. This also
includes the methodology and standards
developed for determining qualifying
MA hospitals and the methodology and
standards for determining a meaningful
EHR user, including the means of
demonstrating meaningful use and the
selection of measures. We proposed to
codify these requirements in
§ 495.212(c).
We did not receive any comments on
these provisions and are finalizing them
as proposed.
9. Conforming Changes
In the proposed rule we said that
sections 4101(e) and 4201(d)(2) and (3)
of the HITECH Act provide conforming
amendments to Part C of the Social
Security Act. Therefore, we proposed
the following conforming changes to the
regulations text:
• Revising § 422.304 by adding a new
paragraph (f) to account for the
amendment to section 1853(a)(1)(A) of
the Act referencing the additional EHR
incentive payments that may be made to
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44481
qualifying MA organizations in the
section of the statute that provides for
monthly capitation payments to MA
organizations. (This addition would also
act as a cross-reference to MA EHR
incentive payment rules in subpart C of
part 495 of this chapter.)
• Revising § 422.306(b)(2) by adding a
new paragraph (iv) to address the
amendments to section 1853(c)(1)(D)(i)
of the Act which exclude the EHR
incentive payments made to EPs and
hospitals under the Medicare FFS
program from the computation of FFS
costs in a year for the purpose of
computing MA monthly capitation
amounts.
• Revising § 422.308 by adding a new
paragraph (a)(1) to address the
amendments to section 1853(c)(1)(D)(1)
and (c)(6)(A) of the Act regarding the
exclusion of FFS Medicare EHR
incentive payments and adjustments
from the calculation of the national per
capita growth percentage.
• Revising § 422.322 by adding a new
paragraph (a)(3) to account for the
amendments to section 1853(c)(6)(A)
and (f) of the Act specifying that the
source of EHR incentive payments to
qualifying MA organizations are from
the Federal Hospital Insurance Trust
Fund or the Supplementary Medical
Insurance Trust Fund.
• Revising § 422.322(b) by adding a
reference to § 495.204 to address the
amendment to section 1851(i)(1) of the
Act that indicates that EHR incentive
payments are instead of incentive
payments that would otherwise be
payable under original Medicare.
We did not receive any comments on
these provisions and are finalizing them
as proposed.
10. Payment Adjustment and Future
Rulemaking
In the proposed rule we said that in
future rulemaking we will develop
standards related to payment
adjustments to qualifying MA
organizations related to MA EPs and
MA-affiliated eligible hospitals that are
not meaningful users of certified EHR
technology. We solicited comment on
how we can most effectively and
efficiently apply payment adjustments
to qualifying MA organizations whose
MA eligible EPs and hospitals have not
successfully meaningfully used certified
EHR technology.
The statutory requirement related to
imposition of payment adjustments with
respect to MA EPs is set forth in section
1853(l) of the Act. Specifically, section
1853(l)(4) of the Act requires that
instead of applying the payment
adjustment in section 1848(a)(7) of the
Act, we apply the payment adjustment
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to the Medicare physician expenditure
proportion. This is our estimate of the
proportion of the expenditures under
Parts A and B paid to the qualifying MA
organization in the form of capitation
payments under section 1853 of the Act
that are not attributable to the EHR
incentive payment program, that are
attributable to expenditures for
physician services. In the case of a
qualifying MA organization that attests
that not all MA EPs of the organization
are meaningful EHR users with respect
to years beginning with 2015, we are
directed to apply the payment
adjustment on the proportion of the
capitation payment with respect to all
such EPs of the organization that are not
meaningful users for such year. The
adjustment amount is 1 percent for
2015, 2 percent in 2016, and 3 percent
in 2017 and subsequent years.
Comment: Two commenters said that
the EHR Incentive Program (the
Medicare component) is limited to
providers who bill for Part B covered
services under traditional FFS Medicare
or for MA organizations that provide
equivalent services to MA beneficiaries.
In addition to incentive payments, the
program will impose penalties on
providers who do not adopt technology
and meet criteria for meaningful use of
electronic health records; those
penalties will be in the form of
percentage reductions in Medicare
reimbursements, beginning in 2016.
Medicare section 1876 (of the Act) cost
contract programs by statute are not
eligible for the EHR Incentive Program.
The proposed rule does not expressly
state whether physicians paid under a
cost plan will be required to meet
meaningful use criteria to avoid the
payment adjustments that will take
effect after 2015. CMS should clearly
state that those providers who are not
eligible to participate in the EHR
Incentive Program will not be subject to
reductions in payment for not achieving
meaningful use, for instance any
providers reimbursed under Medicare
cost contract arrangements.
Response: While it is true that current
statute applies payment adjustments
beginning in 2015 only to FFS and MA
providers, it is also true that cost plan
providers might provide either FFS or
MA services to which adjustments
would apply. So, while it is true that
cost plan payments are unaffected, a
blanket statement that cost plan
providers are unaffected is not possible.
The statutory requirement related to
imposition of payment adjustments with
respect to MA-affiliated eligible
hospitals is provided in section 1853(m)
of the Act. Specifically, section
1853(m)(4) of the Act requires us to
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apply the adjustment to the hospital
expenditure proportion, which is our
estimate of the proportion of the
expenditures under Parts A and B paid
to the qualifying MA organization in the
form of capitation payments under
section 1853 of the Act that are not
attributable to the EHR incentive
payment program, that are attributable
to expenditures for inpatient hospital
services. In the case of a qualifying MA
organization that attests that not all MAaffiliated eligible hospitals of the
organization are meaningful EHR users
with respect to years beginning with
2015, we are directed to apply the
payment adjustment on the proportion
of all such MA-affiliated eligible
hospitals of the organization that are not
meaningful users for such year. The
adjustment amount is of three-fourths of
the market basket increase related to a
hospital by a 331⁄3 percent reduction in
2015, by a 662⁄3 percent reduction in
2016, and by a 100 percent reduction in
2017 and all subsequent years.
Effectively, the reduction is of all but 25
percent of the market basket increase for
a specific hospital in years after 2016.
We received no additional comments.
D. Medicaid Incentives
1. Overview of Health Information
Technology in Medicaid
Under the HITECH Act, State
Medicaid programs, at their option, may
receive Federal financial participation
(FFP) for expenditures for incentive
payments to certain Medicaid providers
to adopt, implement, upgrade, and
meaningfully use certified EHR
technology. Additionally, FFP is
available to States for reasonable
administrative expenses related to
administration of those incentive
payments as long as the State meets
certain conditions. Section
1903(a)(3)(F)(i) of the Act, as amended
by section 4201 of the HITECH Act,
establishes 100 percent FFP to States for
providing incentive payments to eligible
Medicaid providers (described in
section 1903(t)(2) of the Act) to adopt,
implement, upgrade, and meaningfully
use certified EHR technology. The
incentive payments are not direct
reimbursement for the purchase and
acquisition of such technology, but
rather are intended to serve as
incentives for EPs and eligible hospitals
to adopt and meaningfully use certified
EHR technology.
Section 1903(a)(3)(F)(ii) of the Act, as
amended by section 4201 of the HITECH
Act, also establishes 90 percent FFP to
States for administrative expenses
related to carrying out the substantive
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requirements associated with the
incentive payments.
Finally, as required by section
1903(t)(10) of the Act, CMS will be
reporting to Congress on the status,
progress, and oversight of the overall
EHR incentive program. These reports
will discuss steps taken to avoid
duplicate Medicare and Medicaid
incentive payments to EPs, the extent to
which Medicaid EPs and hospitals have
adopted certified EHR technology as a
result of the incentive payments, and
any improvements in health outcomes,
clinical quality, or efficiency resulting
from the adoption of such technology.
Comment: A commenter requested
additional discussion in the final rule of
the many challenges that exist to
adopting electronic health record
technology experienced by the Medicaid
Transformation Grantees.
Response: The primary challenges
faced by the Medicaid Transformation
Grantees involved assisting providers to
adopt the EHRs and to successfully
integrate utilization of the EHRs into
their practice workflow. Workflow
redesign is unique to each practice
based upon practice size, clinical
specialty area, practice operation (for
example, medical home teams or
specialty care) and the providers’
hardware and software. In addition,
Grantees reported that providers value
the EHRs only in so far as the patient
data in the EHR is timely and complete.
Therefore lagging data feeds or gaps in
data from certain sources, such as labs
or Part D claims for dual eligibles, were
observed to discourage providers from
investing their time and effort into
learning how to use the EHRs. Many
Grantees noted that early negative
experiences with workflow or with
timely and accurate access to relevant
data discouraged providers from using
the system. They reported needing to
dedicate significant time and resources
to provider outreach, technical
assistance and training. Some Grantees
focused on identifying or developing the
right EHR product only to conclude
afterwards that their focus needed to be
equally, if not more, on supporting their
providers’ use of the EHR, including
fostering health information exchange
through interface development. In
summary, the Medicaid Transformation
Grantees affirmed that the barriers faced
by Medicaid providers to EHR adoption
and use were not unique to Medicaid.
There were several challenges to HIT/
EHR implementation that were specific
to Medicaid programs that may be
useful for States in light of HITECH.
These include, integration of HIT into
the State Medicaid Management
Information System (MMIS); churning
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of Medicaid patients on/off Medicaid
eligibility; issues of consent with
patients with diminished capacity,
children and their parents and
caregivers, and foster children/wards of
the State; costs associated with
transaction fees for pharmacy hubs on a
statewide scale; and how to calculate
return on investment and quality
outcomes as a result of HIT programs
that are running concurrent with other
quality initiatives with the same goals,
such as the medical home model,
disease management/care coordination
and provider pay-for-performance.
While this information is valuable in
terms of understanding and addressing
the challenges to EHR adoption, we
continue to believe that the benefits of
meaningful use of EHRs far outweigh
the implementation challenges.
2. General Medicaid Provisions
In § 495.320 and § 495.322 we provide
the general rule that States, at their
option, may receive: (1) 90 percent FFP
for State expenditures related to the
administration of an EHR incentive
program for certain Medicaid providers
that are adopting, implementing, or
upgrading and meaningfully using
certified EHR technology; and (2) 100
percent FFP for State expenditures for
those incentive payments.
We did not receive any comments and
we are finalizing these provisions as
proposed.
3. Identification of Qualifying Medicaid
EPs and Eligible Hospitals
a. Overview
As specified in section 1903(t)(2) of
the Act, only certain Medicaid providers
will be eligible for incentive payments.
This section discusses some of these
eligibility requirements, including
requirements relating to patient volume,
whether a provider is hospital-based,
and whether an EP is practicing
predominantly in a federally-qualified
health center (FQHC) or a rural health
clinic (RHC). Regulations relating to
these requirements may be found at
§ 495.304 through § 495.306.
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b. Program Participation
As specified under section
1903(t)(2)(A) of the Act, Medicaid
participating providers who wish to
receive a Medicaid incentive payment
must meet the definition of a ‘‘Medicaid
EP.’’ This definition (1903(t)(3)(B) of the
Act) lists five types of Medicaid
professionals: Physicians, dentists,
certified nurse-midwives, nurse
practitioners, and physician assistants
practicing in an FQHC or RHC that is so
led by a physician assistant.
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Additionally, to qualify for incentives,
most Medicaid EPs cannot be ‘‘hospitalbased.’’ We will use the same definition
of ‘‘hospital-based’’ as used in the
Medicare EHR incentive program, as
sections 1848(o)(1)(C) and 1903(t)(3)(D)
of the Act use almost identical
definitions of the term. We refer readers
to section II.A. for a definition of
‘‘hospital-based,’’ and for a thorough
discussion of our methodology.
The only exception to this rule is that
Medicaid EPs practicing predominantly
in an FQHC or RHC are not subject to
the hospital-based exclusion.
Medicaid EPs must also meet the
other criteria for Medicaid incentive
payment eligibility, such as the patient
volume thresholds or practicing
predominantly in an FQHC or RHC, as
described in this subpart. Since the
statute at 1903(t)(2)(A)(iii) of the Act
does not define ‘‘practices
predominantly,’’ we specify that an EP
practices predominantly at an FQHC or
an RHC when the clinical location for
over 50 percent of his or her total
patient encounters over a period of 6
months occurs at an FQHC or RHC.
Acute care and children’s hospitals
are listed in section 1903(t)(2) of the Act
as the only two types of institutional
providers potentially eligible for
Medicaid incentive payments. These
terms are specific to the Medicaid EHR
incentive program and are not currently
defined in the Medicaid regulations.
Consequently, we define these terms in
§ 495.302.
As specified under section
1903(t)(2)(B) of the Act, to qualify for
incentive payments acute care hospitals
also must meet patient volume
threshold requirements, as specified in
§ 495.306. Children’s hospitals do not
have patient volume requirements for
Medicaid incentive program
participation.
Comment: Commenters expressed
confusion about the restrictions on
physician assistants’ (PAs)
participation. Numerous commenters
suggested that PAs should be eligible
without conditions, particularly the
condition that they are practicing in an
FQHC or RHC that is ‘‘so led by a
physician assistant’’ and/or CMS should
exercise flexibility in defining ‘‘so led,’’
in order to capture the highest number
of PAs. We received specific comments
on how to define ‘‘so led’’ to provide the
greatest flexibility to PAs. Suggestions
included allowing clinics under a larger
FQHC to be led by a PA, but not
necessarily the entire FQHC. Also,
commenters asked that we consider
‘‘led’’ to mean the dominant clinical
provider, which is the case for PAs in
many RHCs.
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Response: As stated in the statute at
1903(t)(3)(B)(v), regarding the program
eligibility for PAs, PAs are eligible when
they are a ‘‘physician assistant insofar as
the assistant is practicing in a rural
health clinic that is led by a physician
assistant or is practicing in a Federally
qualified health center that is so led.’’
These conditions on PAs’ eligibility
apply whether the PA is qualifying
because they meet Medicaid patient
volume requirements or if they are
qualifying because they practice
predominantly in an FQHC or RHC.
Since this language requiring that a PA
must be leading the FQHC or RHC is
derived from statute, we have no
flexibility to change or remove it.
However, we agree that we have the
authority to interpret what it means for
a PA to lead an FQHC or RHC, and we
believe a PA would be leading an FQHC
or RHC under any of the following
circumstances:
(1) When a PA is the primary provider
in a clinic (for example, when there is
a part-time physician and full-time PA,
we would consider the PA as the
primary provider);
(2) When a PA is a clinical or medical
director at a clinical site of practice; or
(3) When a PA is an owner of an RHC.
We agree that FQHCs and RHCs that
have PAs in these leadership roles can
be considered ‘‘PA-led.’’ Furthermore,
since RHCs can be practitioner owned
(FQHCs cannot), we will allow
ownership to be considered ‘‘PA-led.’’
With the exception of this
clarification of PA-led, we are adopting
this language as proposed. We have not
changed our regulatory language, as we
consider this clarification to be an
interpretation of our regulations as to
what it means to be a PA to be leading
an FQHC or RHC.
Comment: We received questions
about eligibility related to FQHC lookalikes, tribal clinics, and other similar
facilities.
Response: As previously mentioned,
in accordance with section 1903(t)(2)(B),
the only two facilities eligible for
incentives are acute care and children’s
hospitals. However, EPs at facilities
such as FQHCs, RHCs, and tribal clinics
may be eligible for participation when
they practice predominantly at an FQHC
or RHC or meet the other patient volume
requirements. The statute defines
FQHCs at 1905(l)(2)(B) and defines
RHCs at 1905(l)(1) by essentially
incorporating the definition in 1861(aa).
Comment: Numerous commenters
opposed the proposed definition for
‘‘hospital-based.’’
Response: This is a consideration for
Medicare and Medicaid and is
addressed in II.A.
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After consideration of the public
comments received, we are making
changes under II.A.
(1) Acute Care Hospitals
For purposes of Medicaid incentive
payments, we proposed to define an
‘‘acute care hospital’’ as a health care
facility where the average length of
patient stay is 25 days or fewer and with
a CCN that has the last four digits in the
series 0001 through 0879 (that is, shortterm general hospitals and the 11 cancer
hospitals in the United States).
We excluded from this proposed
definition a category of long-term care
hospitals, which are defined for
Medicare purposes in regulations at
§ 412.23(e). Specifically § 412.23(e)(2)(i)
states that the hospital must have an
average Medicare inpatient length of
stay of greater than 25 days (which
includes all covered and non-covered
days of stay of Medicare patients).
Comment: We received numerous
comments recommending that CAHs be
included in the definition of acute care
hospitals for purposes of the Medicaid
EHR incentive payment program.
Commenters pointed out that the CAHs
would qualify on all criteria except for
the requirement to have a CCN in the
range 0001–0879. CAHs have CCNs in
the range 1300–1399. Moreover, many
commenters pointed out that, because of
their rural location and distance from
other hospitals to which they frequently
transfer patients, the CAHs would
benefit from having electronic records
that could be shared with the
subsequent provider of care to the
patient. Commenters also asked what
reimbursement methodology CMS
would use if it decided to include CAHs
in the Medicaid incentive payment
program.
Response: We agree with the
commenters that CAHs conform to our
definitional criteria for acute care
hospital except for the CCN range.
Moreover, we recognize the positive
impact on quality that may ensue from
the CAH’s being able to electronically
communicate with the hospitals to
which it transfers patients. Therefore, in
the final rule, we are amending the
definition of acute care hospital for
purposes of the Medicaid EHR incentive
payment program as ‘‘those hospitals
with an average patient length of stay of
25 days or fewer, and with a CCN that
falls in the range 0001–0879 or 1300–
1399.’’ This definition will now
encompass general short-term hospitals,
cancer hospitals, and critical access
hospitals that meet the Medicaid patient
volume criteria. Since we are including
CAHs under the category of ‘‘acute care
hospital,’’ we are not developing a
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separate Medicaid incentive payment
calculation for CAHs. States will pay the
incentive payment to qualifying CAHs
using the acute care methodology
described at section 495.310(g). In
summary, CAHs will be eligible for the
Medicaid hospital incentive insofar as
they meet the requirements under an
acute care hospital described here.
While the statute issued specific
calculation requirements for CAHs
under Medicare, there is no special
Medicaid calculation. Like other acute
care hospitals, some CAHs may be
eligible for Medicare and Medicaid
incentives.
We will reflect this definitional
change in the final regulation at section
495.302.
Comment: Further guidance was
requested on the determination of
average length of stay. Commenters
questioned whether the average length
of stay should be calculated relative to
the fiscal year prior to the payment year
or relative to the calendar year prior to
the payment year. Commenters also
questioned whether outliers in terms of
extremely long length of stay could be
left out of the calculation, and if so,
could CMS provide detail on this and
any similar exclusions; for example,
other exclusions with respect to
observation stays.
Response: After consideration of these
comments, we believe the best policy is
to allow the States to decide whether
they will use a fiscal year or calendar
year for calculating length of stay, as the
State will be in the best position to
determine what documentation exists in
order to support any length of stay
calculation. With respect to outliers, we
point readers to the State Operations
Manual, page 303, Revision 57, dated
January 29, 2010 and we note that these
long (and short) stay outliers are
included in average length of stay
calculations for other purposes, such as
reporting statistics to States, Medicare,
and other payers. We do not find a basis
for excluding outliers from the average
length of stay for purposes of the
incentive payment. In fact, since acute
care hospitals have CCNs in either the
0001–0879 or the 1300–1399 range, and
length of stay is one of the definitional
criteria for CCNs in these ranges, all of
the acute care hospitals are very likely
to meet length of stay criteria.
Observation stays are considered to be
outpatient services and, therefore,
cannot be included in average length of
stay calculations. This is consistent with
the treatment of observation days under
Medicare.
In summary we are making no
revisions to the regulation as a result of
this comment.
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(2) Children’s Hospitals
For purposes of the Medicaid EHR
incentive program, in the proposed rule,
we proposed one definition to include
only separately certified children’s
hospitals, with CCNs in the 3300–3399
series in the definition of eligible
‘‘children’s hospital.’’ By defining
‘‘children’s hospital’’ in this way, we: (1)
Prevented general acute care hospitals,
which could not themselves qualify for
the incentive because they did not meet
the 10 percent Medicaid patient volume,
from using the fact that they have a
pediatric wing as justification for
requesting a Medicaid incentive
payment; (2) excluded many of the
facilities that are perceived by the
public as children’s hospitals, but do
not meet the Medicare standards as
either freestanding or hospital-withinhospital children’s hospitals; and (3)
excluded some pediatric specialty
hospitals which have CCNs as
psychiatric or rehabilitation hospitals.
An alternative definition of a
‘‘children’s hospital’’ was also proposed
to include those hospitals with
Medicare provider numbers in the
following series:
• 0001 through 0879—Short-term
(General and Specialty) Hospitals.
• 3025 through 3099—Rehabilitation
Hospitals (Excluded from Prospective
Payment Systems).
• 3300 through 3399—Children’s
Hospitals (Excluded from Prospective
Payment Systems).
• 4000 through 4499—Psychiatric
Hospitals (Excluded from Prospective
Payment Systems).
This definition, for the purposes of
the Medicaid HIT incentive payments,
applied only to those freestanding
hospitals within the above mentioned
series that exclusively furnish services
to individuals under age 21.
This broader definition still: (1)
Prevented acute care hospitals that
cannot independently qualify for the
incentive because they do not meet the
10 percent Medicaid patient volume
from using the fact that they have a
pediatric wing as justification for
requesting an HIT incentive payment;
(2) allowed for participation in the
incentive program by the greatest
number of children’s hospitals,
including rehabilitative and psychiatric
specialty hospitals; and (3) aligned with
Federal efforts aimed at improving
healthcare quality for all children,
including those with physical and
mental diseases/disabilities.
Comment: CMS received several
comments on this issue. Specifically,
the commenters stated that the proposed
rule limited the definition of children’s
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hospitals to those that provide care to
individuals under the age of 21; the
commenters stated that children’s
hospitals actually may provide care to
older individuals who have conditions
such as congenital cardiac problems,
sickle cell disease and cystic fibrosis.
Response: We agree with the
commenters that children’s hospitals do
on occasion treat patients who are over
the age of 21, especially if the patient is
on a continued course of treatment for
a condition that began in childhood,
such as those conditions mentioned.
Accordingly, in the proposed rule
published on January 13, 2010 at section
495.302, we defined a children’s
hospital for purposes of the HIT
incentive payment program as a hospital
that is separately certified as a
children’s hospital, with a CCN in the
3300–3399 series and predominantly
treats individuals under the age of 21.
We used the term ‘‘predominantly’’ to
recognize that not all patients of the
children’s hospital are in fact under age
21.
This definition addresses the
commenters’ concerns and we are not
revising it in the final rule. The
commenter’s may have been responding
to the alternate definition in which we
requested comments. While that
alternate definition mentioned specialty
hospitals that exclusively treat
individuals under the age of 21, we are
not adopting that definition in this final
rule, as noted in the response to the
comment below.
Comment: CMS also received a few
comments that supported our proposed
definition of children’s hospital as those
that are separately certified and
predominantly treating individuals
under 21 years of age. The commenters
urged us to adopt this definition rather
than the alternate definition discussed
in the proposed rule and on which we
requested comments.
Response: We agree with the
commenters and are adopting the
definition that we originally proposed at
section 495.302. See the response to the
comment below.
Comment: CMS received one
comment that recommended use of the
alternative definition as providing more
opportunity for hospital participation.
Response: We considered the merits
of both definitions and we have decided
to maintain the definition originally
proposed in section 495.302 as
representing the clearest definition of a
children’s hospital. As previously
stated, we only intend to include
children’s hospitals with CCNs within a
specific range; this will not include
pediatric wings of larger hospitals.
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In summary, after considering the
comments, we are adopting the
definition of children’s hospital as
originally proposed.
c. Medicaid Professionals Program
Eligibility
For Medicaid EPs, the general rule
(subject to the two exceptions listed
below) is that the EP must have at least
30 percent patient volume attributable
to those who are receiving Medicaid.
Section 1903(t)(2)(A)(i) of the Act
provides authority to the Secretary to
establish the methodology by which
such patient volume will be estimated;
our proposed methodologies which
follow, are based on this discretion. To
establish such patient volume, we
proposed that the EP have a minimum
of 30 percent of all patient encounters
attributable to Medicaid over any
continuous, representative 90-day
period within the most recent calendar
year prior to reporting. There are two
statutory exceptions to the general 30
percent rule discussed previously. The
first exception is that a pediatrician may
have at least 20 percent patient volume
attributable to those who are receiving
medical assistance under the Medicaid
program, as estimated in accordance
with a methodology established by the
Secretary (section 1903(t)(2)(A)(ii) of the
Act). Again, the method we proposed to
use was that the pediatrician have a
minimum 20 percent of all patient
encounters attributable to Medicaid over
any continuous, representative 90-day
period within the most recent calendar
year prior to reporting.
The second exception is that
Medicaid EPs practicing predominantly
in an FQHC or RHC must have a
minimum of 30 percent patient volume
attributable to ‘‘needy individuals.’’
Again, the method we would use is that
30 percent of all patient encounters be
attributable to needy individuals over
any continuous 90-day period within
the most recent calendar year prior to
reporting.
Section 1903(t)(3)(F) of the Act
defines needy individuals as
individuals meeting any of the
following three criteria: (1) They are
receiving medical assistance from
Medicaid or the Children’s Health
Insurance Program (CHIP); (2) they are
furnished uncompensated care by the
provider; or (3) they are furnished
services at either no cost or reduced cost
based on a sliding scale determined by
the individual’s ability to pay.
Comment: Many commenters
requested that CMS consider groups
outside of the statute eligible for
incentive payments. These facilities and
practitioners included: Community
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mental health centers and other
behavioral health providers (including
psychiatric clinics); nursing homes,
nursing facilities, and skilled nursing
facilities; long-term care providers
(community and institutional),
including home health care providers;
pharmacists and pharmacies; social
workers; blood centers; provider based
departments; professional societies;
Medicaid-participating health plans;
speech-language pathologists and
audiologists; FQHCs, RHCs, tribal
providers, and other community clinics;
health aides; and podiatrists. The
commenters included numerous
testimonials, research, and statements to
note that these providers are critical
partners in improving the quality and
coordination of care for the Medicaid
population. Some of the commenters
acknowledged that this is a statutory
issue but assert that exclusion of such
providers impacts Medicaid’s ability to
improve the quality and efficiency of
care. Furthermore, some of these
commenters based several additional
comments upon presumed eligibility.
For example, some commenters said
that social workers could not afford
EHRs and should not be required to
participate.
Another group of comments came
from health care professionals that
sought eligibility for incentives by
virtue of early adoption of EHRs but
who do not participate in either
Medicaid or Medicare. They suggested a
third incentive option available for
providers that either do not participate
with Medicaid/Medicare or would not
reach the threshold of patient visits to
receive Medicaid incentive payments.
Response: We note that the
commenters are correct to recognize that
this is a statutory issue. The definition
of a ‘‘Medicaid EP,’’ at 1903(t)(3)(B) of
the Act, lists five types of professionals
that are eligible for Medicaid incentive
payments: physicians, dentists, certified
nurse-midwives, nurse practitioners,
and physician assistants practicing in an
FQHC that is led by a physician
assistant or RHC that is so led.
Additionally, the statute at 1903(t)(2)(B)
designates acute care hospitals and
children’s hospitals as the only two
types of facilities eligible for the
Medicaid incentives. These providers
must also meet all other program
requirements, including Medicaid
patient volume thresholds.
Since the commenters recommend
including providers that are not among
those explicitly mentioned in the
statute, these providers cannot be
eligible for the incentive payments.
Additionally, professionals who do
not participate in either Medicaid or
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Medicare are also not eligible for
incentives due to the statutory
requirements associated with each
program. Specifically, the Medicaid
incentives program requires providers to
meet Medicaid patient volume
thresholds or practice predominantly in
an FQHC or RHC, where they must
serve needy individuals (as defined at
section 495.10). Additionally, the
hospital calculations for Medicare and
Medicaid are based, in part, on
Medicare or Medicaid inpatient beddays. For Medicare EPs, the incentive is
based on the associated Medicare
claims. Hence, these professionals
cannot meet the statutory requirements
for eligibility.
After consideration of these
comments, we are maintaining the list
of providers eligible for the Medicaid
incentive payment program as originally
proposed and as identified by statute.
It is worth noting that while the
facilities recommended for inclusion by
the commenters will not be considered
eligible to participate in these
incentives, some of the EPs at these
facilities may be eligible. One example
is that a psychiatrist (physician) or NP
is likely to treat individuals at a
behavioral health facility. Per our rules
at section 495.10, the EP must identify
a TIN to which the incentive payment
should be made. We believe that, in
accordance with 1903(t)(6)(A) of the
Act, an EP could reassign payment to a
TIN associated with his or her employer
or the facility in which she or he works.
This facility could be one of those
recommended for inclusion by the
commenters. Any reassignment of
payment must be voluntary and we
believe the decision as to whether an EP
does reassign incentive payments to a
specific TIN is an issue which EPs and
these other parties should resolve. Any
reassignment of payment must be
consistent with applicable laws, rules,
and regulations, including, without
limitation, those related to fraud, waste
and abuse.
We have provided clarifying language
at section 495.10(f) to further clarify the
reassignment of incentive payments by
EPs to specific TINs.
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d. Calculating Patient Volume
Requirements
As required by section 1903(t)(2) of
the Act and discussed in the previous
section, all EPs and the vast majority of
hospitals will need to meet certain
patient volume thresholds in order to be
eligible for incentive payments. (The
only exception to this rule is for
children’s hospitals, which have no
patient volume threshold requirement).
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In addition, where patient volume is
a criterion, most providers will be
evaluated according to their ‘‘Medicaid’’
patient volume, while some
professionals (those practicing
predominantly in an FQHC or RHC) will
be evaluated according to their ‘‘needy
individual’’ patient volume.
We define ‘‘patient volume’’ in
§ 495.302 to be a minimum participation
threshold for each individual Medicaid
provider (with the exception of
children’s hospitals). In the proposed
rule, we proposed methodologies for
estimating the patient volume
thresholds and listed them by entity
type.
Further, we proposed that States
could submit alternative approaches to
the established timeframe for estimating
patient volume, through their State
Medicaid HIT Plans (SMHP) and we
would make a determination of whether
it was an acceptable alternative.
In determining the ‘‘needy individual’’
patient volume threshold that applies to
EPs practicing predominantly in FQHCs
or RHCs, section 1902(t)(2) of the Act
authorizes the Secretary to require the
downward adjustment to the
uncompensated care figure to eliminate
bad debt data. We interpret bad debt to
be consistent with the Medicare
definition, as specified at § 413.89(b)(1).
In order to remain as consistent as
possible between the Medicare and
Medicaid EHR incentive programs,
States will be required to downward
adjust the uncompensated care figure.
Under Medicare, bad debts are amounts
considered to be uncollectible from
accounts and notes receivable that were
created or acquired in providing
services. ‘‘Accounts receivable’’ and
‘‘notes receivable’’ are designations for
claims arising from the furnishing of
services, and are collectible in money in
the relatively near future. Providers
should be required to use cost reports
(for FQHCs and clinics this would be
the Medicare 222–92 cost report, or the
most recent version of the 222), or other
auditable records to identify bad debts.
All information under attestation is
subject to audit. Our proposed
regulations on calculating the needy
individual patient volume can be found
at § 495.302 and § 495.306.
Further, in establishing the Medicaid
patient volume thresholds for EPs and
acute care hospitals, section 1902(t)(2)
of the Act requires that individuals
enrolled in a Medicaid managed care
plan be included. We interpret this to
mean that individuals enrolled in
MCOs, prepaid inpatient health plans
(PIHPs), or prepaid ambulatory health
plans (PAHPs), under 42 CFR Part 438
be included in the calculation.
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Therefore, in determining patient
volume, providers and States should be
aware that individuals enrolled in such
plans will be included in the patient
volume calculation. Acute care
hospitals have to meet the 10 percent
Medicaid volume threshold.
Comment: Commenters recommended
that CMS provide flexibility in the
specific volume thresholds required for
program participation (for example, 30
percent for most EPs, 20 percent for
pediatricians) and apply a lower
percentage or a minimum number of
encounters. Some commenters
referenced research stating that
practices with a 30 percent patient
volume may not be financially viable.
Response: The patient volume
thresholds of 30 percent and 20 percent
are required by statute and cannot be
changed in the rulemaking process.
After consideration of the public
comments received, we are not making
any changes to these statutory
requirements.
Comment: Commenters suggested that
CMS define ‘‘encounter’’ and take a
menu approach to patient volume to
allow States several options, based on
their data sources. Some commenters
provided specific suggestions for patient
volume ‘‘menu’’ items. Some
commenters further noted that there
were inconsistencies in how we applied
‘‘encounter’’ data. Finally, one
commenter noted that we should
consider how ‘‘encounter’’ data is
applied to EPs that bill services through
another provider (for example, PAs that
bill through MDs). Other commenters
asked for a clarification of how
‘‘encounters’’ would apply to the duallyeligible Medicare/Medicaid
beneficiaries. Additionally, several
commenters provided specific
suggestions for alternative methods
making an approximate determination
of providers’ patient volume by [not
using patient volume] and extending the
look-back period to two years.
Response: We agree with the
approach of offering at least some
options to States regarding patient
volume. This approach allows States to
audit their programs using the data
sources available to them, while also
including the largest number of
providers that may treat Medicaid
patients. We believe our new approach
will correct the inconsistencies in how
we applied ‘‘encounter.’’ Furthermore,
our new definition of encounter will
capture the dually-eligible beneficiaries,
as well as individuals who are in a Title
XIX-funded 1115 demonstration project.
Specifically, the statute at 1903(t)(2)
states that Medicaid patient volume will
be ‘‘attributable to individuals who are
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in the incentive program. We also do
not agree with allowing the provider to
consider a period longer than a year
prior to registering because that is not a
current, accurate portrayal of the
provider’s participation in Medicaid.
After consideration of the public
comments received, we are revising the
patient volume approach to the
following two options. The State may
choose one of the two options listed
below (or both options), or a Stateproposed alternative, if approved by
CMS. The State’s strategy must be
submitted for review and approval
through the SMHP, in accordance with
all requirements at section 495.332.
A Medicaid provider may
demonstrate patient volume by:
(1) Having patient encounters within
the 90-day period by using the same
methodology we proposed in the
proposed rule.
This first option preserves the
methodology we proposed in the
proposed rule, however we clarify
‘‘encounter’’ below. For the Medicaid
patient volume, the methodology for
estimating patient volume would
require calculation of a threshold
(represented below) using as the
numerator the individual hospital’s or
EP’s total number of Medicaid patient
encounters in any representative
continuous 90-day period in the
preceding calendar year and the
denominator is all patient encounters
for the same individual professional or
hospital over the same 90-day period.
We are not prescribing standards for
what is a ‘‘representative’’ period, but we
intend to apply a plain meaning test. In
other words, if a reasonable person
would not consider the selected period
to be representative (for example,
because the selected period included a
short-term temporary Medicaid outreach
program), then it would not support a
threshold calculation.
[Total (Medicaid) patient encounters
in any representative continuous 90-day
period in the preceding calendar year/
Total patient encounters in that same
90-day period] * 100
For the needy individual patient
volume, the methodology for estimating
patient volume would require the same
calculation, but with the numerator
equal to the EP’s total number of needy
individual patient encounters in any
representative 90-day period in the
preceding calendar year.
[Total (Needy Individual) patient
encounters in any representative
continuous 90-day period in the
preceding calendar year/Total patient
encounters in that same 90-day period]
* 100
Table 15, below, demonstrates the
above-referenced patient volume
thresholds. (This same Table appeared
in the proposed rule, with a few minor
clarifications included in this Table).
(2) Having a Medicaid enrollee on the
panel assigned to the EP (for example,
managed care or medical homes) within
that representative 90-day period.
With more than 70 percent of
Medicaid and CHIP enrollees receiving
care in a managed care delivery system,
and additional enrollees in medical
homes, we determined that it was
necessary to look for flexibility in how
we applied these requirements. Under
this option, we wanted to capture the
EP’s panel assignments, as well as any
additional unduplicated Medicaid
encounters. In other words, we do not
intend for the EP to count an assigned
patient who was also an encounter more
than once.
The methodology for estimating the
Medicaid patient volume threshold
(represented above) would use as the
numerator the individual hospital’s or
EP’s total number of Medicaid patients
assigned through a Medicaid managed
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receiving medical assistance under
[Title XIX],’’ and also states that the
patient volume calculation for those
practicing predominantly in an FQHC or
RHC will be ‘‘attributable to needy
individuals.’’ Needy individual is
defined at 1903(t)(3)(F) as ‘‘an
individual—(i) who is receiving
assistance under Title XIX; (ii) who is
receiving assistance under Title XXI;
(iii) who is furnished uncompensated
care by the provider; or (iv) for whom
charges are reduced by the provider on
a sliding scale basis based on the
individual’s ability to pay.’’ We believe
our final rule definition of ‘‘encounter’’
captures care to all of these individuals.
Additionally, consistent with the
statute, we expect providers and States
to make estimation in accordance with
the methodologies we established here.
This estimation would need to be made
with reasonable effort, using verifiable
data sources by the provider and the
State.
Finally, we do not agree with any of
the suggestions from commenters that
involve using a benchmark number of
Medicaid patients or other suggestions
that involve a deviation from the
statutory language. The statute is clear
that Medicaid patient volume must be
considered and explicitly specified
percentages of caseload mix
compositions attributable to either
Medicaid and/or ‘‘needy’’ individuals
that must be achieved for participation
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care panel, medical or health home
program panel, or similar provider
structure with capitation and/or case
assignment, plus all other Medicaid
encounters for that EP. The assignment
must be current within the 90-day
period and we will consider as a proxy
for this an encounter with any patient
on the panel within the previous
calendar year prior to the representative
90-day period when the patient was on
the panel. Note that, as stated above,
while the EP may add in encounters
with other, non-panel Medicaid patients
to the numerator, these encounters must
be patients who are not assigned to a
panel and would be encounters that
occurred during the representative 90day period. The denominator is all
patients assigned to the EP or hospital
for the same 90-day period, also with
whom the provider had at least one
encounter in the prior calendar year as
a proxy, as well as any other
unduplicated Medicaid encounters
during the representative 90-day period.
{[Total (Medicaid) patients assigned to
the provider in any representative
continuous 90-day period in the
preceding calendar year, with at least
one encounter taking place during the
calendar year preceding the start of the
90-day period] + [Unduplicated
(Medicaid) encounters in the same 90day period]/[Total patients assigned to
the provider in that same 90-day period,
with at least one encounter taking place
during the calendar year preceding the
start of the 90-day period] + [All
unduplicated encounters in that same
90-day period]} * 100
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For the needy individual patient
volume for EPs enrolled in managed
care and medical homes, the threshold
(represented below) would be calculated
in the same manner, but with the
numerator equal to the EP’s total
number of needy individuals assigned
to the patient panel in any
representative 90-day period in the
preceding calendar year with at least
one encounter within that year.
{[Total (Needy Individual) patients
assigned to the provider in any
representative continuous 90-day period
in the preceding calendar year, with at
least one encounter taking place during
the year preceding the 90-day period] +
[Unduplicated (Needy Individual)
encounters in the same 90-day period]/
[Total patients assigned to the provider
in that same 90-day period, with at least
one encounter taking place during the
year preceding the 90-day period] + [All
unduplicated encounters in that same
90-day period]} * 100
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Table 15 demonstrates the abovereferenced patient volume thresholds
per provider type.
In order to resolve any inconsistencies
with the definitions of ‘‘encounter,’’ for
purposes of EP patient volume, we have
allowed the following to be considered
Medicaid encounters:
(1) Services rendered on any one day
to an individual where Medicaid or a
Medicaid demonstration project under
section 1115 of the Act paid for part or
all of the service; or
(2) Services rendered on any one day
to an individual for where Medicaid or
a Medicaid demonstration project under
section 1115 of the Act paid all or part
of their premiums, co-payments, and/or
cost-sharing.
For purposes of calculating hospital
patient volume, we have allowed the
following to be considered Medicaid
encounters:
(1) Services rendered to an individual
per inpatient discharges where
Medicaid or a Medicaid demonstration
project under section 1115 paid for part
or all of the service;
(2) Services rendered to an individual
per inpatient discharge where Medicaid
or a Medicaid demonstration project
under section 1115 of the Act paid all
or part of their premiums, co-payments,
and/or cost-sharing;
(3) Services rendered to an individual
in an emergency department on any one
day where Medicaid or a Medicaid
demonstration project under section
1115 of the Act either paid for part or
all of the service; or
(4) Services rendered to an individual
in an emergency department on any one
day where Medicaid or a Medicaid
demonstration project under section
1115 of the Act paid all or part of their
premiums, co-payments, and/or costsharing.
We wanted to adequately reflect what
an encounter looked like for a hospital
and apply these concepts consistently
across the numerous areas of this final
rule. We used inpatient discharges and
emergency department services for the
hospitals because this is consistent with
how we will make hospital-based
determinations for EPs and how we
collect meaningful use information for
hospitals. We decided that services
rendered on one day would be an
encounter. An emergency department
must be part of the hospital under the
qualifying CCN.
For purposes of calculating needy
individuals patient volume, we have
allowed the following to be considered
needy patient encounters:
(1) Services rendered on any one day
to an individual where Medicaid or
CHIP or a Medicaid or CHIP
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demonstration project under section
1115 of the Act paid for part or all of
the service;
(2) Services rendered on any one day
to an individual where Medicaid or
CHIP or a Medicaid or CHIP
demonstration project under section
1115 of the Act paid all or part of their
premiums, co-payments, and/or costsharing; or
(3) Services rendered to an individual
on any one day on a sliding scale or that
were uncompensated.
We understand that multiple
providers may submit an encounter for
the same individual. For example, it
may be common for a PA or NP to
provide care to a patient, then a
physician to also see that patient. It is
acceptable in circumstances like this to
include the same encounter for multiple
providers when it is within the scope of
practice.
We considered whether Medicaid
providers or States should pick from the
two options provided above. Since
States are responsible for auditing the
program and must have reliable sources
of data, we agree with commenters that
it must be States that make a
determination as to whether either
option will be permitted (or both).
In the proposed rule, we also
proposed that if States had an
alternative approach for the timeframe
in accounting for the methodology, they
would be allowed to submit it in the
SMHP for review and approval. For the
final rule, we are modifying this option.
As stakeholders’ understanding of the
program matures and new technologies
become available, there may be new
solutions that we did not consider here,
but would be a better option for one or
several States. To that end, in this final
rule we are providing flexibility to
consider States’ alternative
methodologies for measuring not just
the timeframe that is used in
establishing patient volume, but all of
the elements included in the patient
volume calculation (except the
thresholds established by statute).
Therefore, we have revised our final
regulations to allow States to offer
alternatives regarding the methodology
used to establish patient volume, and
for the Secretary to adopt these options,
so that they may be used by other States
as well. An alternative would need a
verifiable data source. A State also
would need to provide us with an
analysis to demonstrate that the
methodology being proposed by the
State did not result, in the aggregate, in
fewer providers becoming eligible than
under the two options presented in this
final rule. Finally, if a State is reviewed
and approved for an alternative
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methodology, we will post this
alternative methodology on the CMS
internet Web site, and allow other States
to adopt the methodology as well,
thereby ensuring that the alternative is
a methodology that is ‘‘established by
the Secretary.’’ While we believe that
States will not submit alternative
methodologies until after the first year
of the program, allowing for such
alternatives will permit the patient
volume calculation to evolve along with
State and provider experience of the
program.
We believe that these solutions will
help address issues for providers
practicing across State lines, who may
have their Medicaid patient volume
derived from more than one State. We
encourage States to build partnerships,
particularly through data sharing
agreements. Medicaid providers must
still annually re-attest to meeting the
patient volume thresholds.
After consideration of the comments,
we are revising § 495.302, § 495.306,
and § 495.332 regarding patient volume,
patient encounters and the associated
revisions to the SMHP requirements.
Comment: Commenters asked CMS to
include all individuals receiving
services through section 1115
demonstrations as eligible encounters.
Response: Although the commenter
did not elaborate, we believe the
commenter is referring to section 1115
demonstrations under the authority of
section 1115(a)(2) of the Act. Our final
regulations allow two alternate methods
for States to estimate Medicaid patient
volume. Under both methods, however,
the State must review whether a
Medicaid ‘‘patient encounter’’ occurred.
Our regulations, at 495.306(e) state that
a Medicaid encounter will exist where
Medicaid (or a Medicaid demonstration
project approved under section 1115)
paid for part or all of the service; or
where Medicaid (or a Medicaid
demonstration project approved under
section 1115) paid all or part of the
individual’s premiums, co-payments
and/or cost-sharing. Because our
methodology is based upon Medicaid
payment for an encounter, and because
we believe it will be difficult or
impossible for EPs and eligible hospitals
to distinguish between payment that is
due to patients receiving medical
assistance under Title XIX and payment
that is due to expansion populations
(who are not receiving Title XIX
medical assistance), we will allow
providers to include in the patient
volume calculation individuals who are
part of expansion populations under
section 1115(a)(2) of the Act. The statute
confers broad authority on the Secretary
to establish the methodology that is
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used to estimate the patient volume
percentage. Thus, although individuals
in section 1115(a)(2) demonstrations are
not receiving Title XIX medical
assistance, we use our broad authority
to allow a methodology that considers
these individuals in the estimate that is
used. (Limited to Medicaid patient
volume determinations, the same
reasoning would not apply to CHIP
demonstrations or to State-only
programs, because no Title XIX funding
is received for these projects. However,
in calculating Needy Individual patient
volume, it is permissible to consider
Medicaid or CHIP demonstration
projects approved under section 1115.)
Our above discussion noting what will
be considered a patient encounter
includes encounters which were paid
for with Title XIX funds under a section
1115 Medicaid demonstration.
Comment: Several commenters asked
that CMS allow CHIP patients to be
considered in the Medicaid patient
volume requirements, particularly for
pediatricians.
Response: The requirement that the
methodology for estimating Medicaid
patient volume is based on Medicaid
and not CHIP is related to the statutory
language at section 1903(t)(2)(A)(i)–(ii)).
Such language requires that the
Secretary establish a methodology that
can be used to estimate ‘‘Medicaid’’
patient volume for those individuals
receiving medical assistance under Title
XIX. However, the statute at
1903(t)(2)(A)(iii) allows for an EP
practicing predominantly in an FQHC or
RHC to consider CHIP patients under
the needy individual patient volume
requirements.
After consideration of these public
comments, we are making no further
revisions to this section of the rule.
Comment: Many commenters urged
CMS to allow practice- or clinic-level
patient volume data to apply to
practitioners as a proxy to establish
patient volume. This would apply for
both Medicaid and needy individual
patient volume calculations. The
commenters stated that many clinics
and group practices do not necessarily
track the pay or data per EP and it
would be very disruptive to their
current practice to begin collecting data
like this.
Response: We agree with commenters
and acknowledge that it is not our intent
to disrupt the practice with new
additional burdens, but rather to
leverage efficiencies. We will allow
clinics and group practices to use the
practice or clinic Medicaid patient
volume (or needy individual patient
volume, insofar as it applies) and apply
it to all EPs in their practice under three
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44489
conditions: (1) The clinic or group
practice’s patient volume is appropriate
as a patient volume methodology
calculation for the EP (for example, if an
EP only sees Medicare, commercial, or
self-pay patients, this is not an
appropriate calculation); (2) there is an
auditable data source to support the
clinic’s patient volume determination;
and (3) so long as the practice and EPs
decide to use one methodology in each
year (in other words, clinics could not
have some of the EPs using their
individual patient volume for patients
seen at the clinic, while others use the
clinic-level data). The clinic or practice
must use the entire practice’s patient
volume and not limit it in any way. EPs
may attest to patient volume under the
individual calculation or the group/
clinic proxy in any participation year.
Furthermore, if the EP works in both the
clinic and outside the clinic (or with
and outside a group practice), then the
clinic/practice level determination
includes only those encounters
associated with the clinic/practice.
We have revised our regulations to
make clear that when patient volume is
calculated on a group-practice/clinic
level, the above rules will apply.
Comment: Similar to the last
comment, we received comments
requesting clarification on how the
patient volume requirements will apply
in States with seamless eligibility
determinations and payments for their
program. For example, some States have
streamlined their programs so that the
potential beneficiary is applying for any
public health care program for which
they might be eligible (for example,
Medicaid, CHIP, State-only) in one
application. Often these States have one
enrollment card as well. In other words,
it is likely that both the beneficiary and
the health care provider might have no
indication as to whether the beneficiary
is receiving assistance under Title XIX,
Title XXI, or State-only funds. This
becomes a problem when attempting to
determine if the provider meets the
patient volume requirements.
Response: If there is a combined
program like the one in the example,
this does not mean that all the
encounters are being paid for with Title
XIX funds (or the individual’s premium
or cost-sharing is funded through Title
XIX), which is how we explained we
would determine Medicaid patient
encounters. We do not believe it would
be reasonable to allow an encounter that
is paid for with Title XXI or State-only
funds to be considered a ‘‘Medicaid
encounter.’’ Thus, States with combined
programs (for example, Medicaid/CHIP
expansion programs), may indeed have
difficulty determining who is eligible
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for participation in this incentive
program.
Considering these States have made
enormous strides to reduce the
confusion and burden associated with
eligibility and payment for these
programs, and also to reduce the stigma
sometimes associated with Medicaid,
we want to support the work they have
done.
After consideration of the public
comments received, we believe that the
best course of action is to work with
these States on a case-by-case basis
through providing guidance as they
develop the SMHP. We believe that each
State will have different data and
information available to them. The
States should make sure that the health
IT coordinators are working closely with
the Medicaid (and CHIP, as it pertains
to this program) policy staff on all
aspects of the program. The goal will be
to find a solution that leverages the
State’s existing and/or future data
sources, as well as looking for flexible
alternatives, while still honoring
Congress’ intent for the patient volume
requirements, as established in the
statute.
Comment: Some commenters pointed
out that not all Medicaid providers use
an EHR or submit electronic claims,
making it tedious to capture a
numerator and denominator for patient
volume until the providers have
adopted an EHR. Additionally, some
commenters expressed concern about
how providers would determine the
denominator for patient volume and
how States would audit the resulting
percentage.
Response: While the commenters may
be correct about the assertion that not
all providers use an EHR or submit
electronic claims, we do not believe it
will prevent EPs and eligible hospitals
from participating. These providers are
businesses and there is an expectation
that they are tracking their receivables
from all entities (including Medicaid)
associated with specific patients. In
other words, we do not see a connection
between electronic claims and current
EHR use and calculation of the patient
volume. Furthermore, when EHRs are
used with practice management
systems, we believe that in most cases,
this data should be derived from the
electronic systems.
When States consider their audit
strategies, they should leverage existing
data sources to the extent possible, but
also consider future data sources. Part of
the Medicaid Information Technology
Architecture (MITA) principles
associated with the SMHP development
includes consideration of the ‘‘as is’’
world, as well as the ‘‘to be’’ world.
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While States may not have the systems
in place today for a complete picture,
we expect a longer-term strategy
leveraging better data systems.
After consideration of the public
comments received, we are not making
any change on the basis of this
comment. We provided additional
flexibility in the patient volume
requirements, which may help
providers more easily calculate their
patient volume and provide for
flexibility when States begin to audit
providers.
Comment: Commenters requested
clarification on how to determine
eligibility for the five types of Medicaid
EPs. Commenters also noted that there
was a potential difference between
Medicare and Medicaid for the
definition of ‘‘physician.’’ Finally, other
commenters were confused if, as a
specialty practitioner, they qualified as
one of the EP types.
Response: We agree with the
commenters that there is a distinction
between the Medicare and Medicaid
definitions of physician. The Medicare
statute at section 1848(o)(5)(C) defines
an eligible professional as including all
the professionals listed in section
1861(r) of the Act (which, generally
stated, includes podiatrists,
chiropractors and optometrists), the
Medicaid statute does not incorporate
all of 1861(r). Rather, the Medicaid
statute defines what are physician
services for purposes of qualifying as
medical assistance under section
1905(a)(5)(A) of the Act, and states that
physician services constitutes services
furnished by a physician as defined in
section 1861(r)(1) (which includes only
doctors of medicine or osteopathy
legally authorized to practice medicine
and surgery by their State). In addition,
section 1905(e) permits States the
option to consider optometrist services
as physician services. In this case, the
State plan must specifically provide that
the term ‘‘physicians’ services’’ includes
services of the type which an
optometrist is legally authorized to
perform.
Thus, in keeping with the statute, a
physician would be limited to doctors of
medicine or osteopathy legally
authorized to practice in their State,
and, in cases where States have
specifically adopted the option of
1905(e) in their State plans,
optometrists.
In addition, States would need to refer
to their own scope of practice rules to
determine whether an individual
qualifies as providing dental, nurse
practitioner, physician assistant, or
certified nurse midwife services. Also,
States and EPs would need to refer to
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CMS regulations. These regulations, at
42 CFR 440.60 require that practitioners
be licensed and that they are within the
scope of practice defined under State
law (see also 1905(a)(6)). 42 CFR
440.100(b), defines a dentist as an
individual licensed to practice dentistry
or dental surgery in his or her State. 42
CFR 440.165 defines a nurse midwife as
a registered professional nurse who
meets the following requirements: (1) Is
currently licensed to practice in the
State as a registered professional nurse;
(2) is legally authorized under State law
or regulations to practice as a nursemidwife, (3) has completed a program of
study and clinical experience for nursemidwives as specified in the State,
unless the State does not specify such
a program. (4) In the case where the
State has not specified a particular
program of study and clinical
experience, the regulation provides
alternative means for demonstrating this
training. See also section 1905(a)(17),
defining certified nurse midwife with
reference to section 1861(g). 42 CFR
440.166 contains a definition of what
qualifies as nurse practitioner services
and requires a nurse practitioner to be
a registered professional nurse who
meets the State’s advanced educational
and clinical practice requirements, if
any, beyond the 2 to 4 years of basic
nursing education required of all
registered nurse. States will have a
Medicaid State Plan (and often State
regulations) that designates how each
provider is eligible to participate in the
Medicaid program by practice type. All
of these practitioners must meet all
other eligibility requirements (including
Medicaid patient volume) in order to
participate.
Regarding the confusion by some
specialty providers (for example,
advanced practice nurses, pediatricians,
physician sub-specialties, etc.), so long
as an EP qualifies as a practitioner
within the State’s scope of practice rules
for each of the five EP types, they are
eligible for this program. In other words,
since pediatricians are physicians, they
must meet the physician scope of
practice rules and then they may be
eligible for an incentive when they meet
all other requirements. Advanced
practice nurses who meet their State’s
criteria for qualifying as a nurse
practitioner would qualify as nurse
practitioners. We believe most States
would recognize APNs as NPs within
their scope of practice rules. Eligible
provider types must be specified in a
State’s SMHP.
After consideration of the public
comments received, we are revising the
definition of these EPs under section
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495.304 to clarify additional scope of
practice requirements.
Comment: Commenters requested
clarification on how full- or part-time
status impacts an EP’s eligibility for
incentives.
Response: Full or part-time status
does not affect patient volume
calculations or whether an EP’s practice
is predominantly in an FQHC or RHC.
There is no mention of requisite number
of hours in the statute or this final rule
as a pre-condition for eligibility.
After consideration of the public
comments received, we are not making
any revisions to this section of the final
rule.
e. Entities Promoting the Adoption of
Certified EHR Technology
We define ‘‘promoting the adoption of
certified EHR technology’’ in § 495.302.
Under section 1903(t)(6)(A)(i), incentive
payments must generally be made
directly to the EP. Section
1903(t)(6)(A)(ii) of the Act provides an
exception to permit payment of
incentive payments to ‘‘entities
promoting the adoption of certified EHR
technology,’’ as designated by the State,
if participation in the payment
arrangement is voluntary for the EP
involved. Additionally, the entity must
not retain more than 5 percent of the
payment for costs unrelated to certified
EHR technology (and support services
including maintenance and training)
that is for, or is necessary for, the
operation of the technology. While the
Act authorizes States to designate these
entities, the Secretary nevertheless
retains authority to define what it means
to be ‘‘promoting the adoption of
certified EHR technology,’’ as specified
in section 1903(t)(6)(A)(ii) of the Act.
Section 1102 of the Act authorizes the
Secretary to ‘‘make and publish such
rules and regulations, not inconsistent
with this Act, as may be necessary to the
efficient administration of the functions
with which he or she is charged under
this Act.’’ Since one of our functions is
to approve Title XIX plans under
sections 1902(b) and 1116 of the Act,
and States would need to submit plans
as to how they would spend section
4201 of the HITECH Act funds, we have
the authority to determine whether a
State’s plan for allowing EPs to assign
their Medicaid incentive payments to
these entities is in compliance with our
interpretation of the Act.
We define ‘‘promoting’’ certified EHR
adoption to mean the enabling and
oversight of the business, operational
and legal issues involved in the
adoption and implementation of EHR
and/or exchange and use of electronic
health information between
participating providers, in a secure
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manner, including maintaining the
physical and organizational relationship
integral to the adoption of certified EHR
technology by EPs. Under
1903(t)(6)(A)(ii) of the Act and as
proposed in § 495.332, States must
establish verification procedures that
enable Medicaid EPs to voluntarily
assign payments to entities promoting
EHR technology. States must guarantee
that the assignment is voluntary and
that the entity does not retain more than
5 percent of those assigned Medicaid
incentive payments for costs unrelated
to certified EHR technology. We
proposed requiring States to publish
and make available to all Medicaid EPs
the procedures they developed for
assigning incentive payments to the
third party entities before payments can
be assigned. Such publication must also
include information about the State’s
verification mechanism. The State’s
method must assure compliance with
the requirement that no more than 5
percent of the Medicaid EP’s annual
incentive payment is retained by the
entity for costs not related to certified
EHR technology.
Although section 1903(t)(6)(A)(ii) of
the Act allows assignment of payment to
entities promoting the adoption of EHR
technology, we wish to clarify that such
assignment would not remove the
responsibility of the Medicaid EP to
individually demonstrate meaningful
use of the EHR technology (as discussed
in greater detail below). Therefore,
entities promoting the adoption would
not receive the assigned payments
unless the Medicaid EP meets all
eligibility criteria. Our definition for
promoting the adoption of certified EHR
technology is in § 495.302.
Comment: A commenter
recommended that CMS require that
entities designated by States that
promote the adoption of EHR
technology must use qualified EHR
technology and be able to capture, query
and/or exchange data from beyond a
practice or closed system in order to
foster interoperability, and to promote
competition among EHR vendors with
vendor-neutral and provider-neutral
solutions. The commenter
recommended that entities that promote
the adoption of certified EHR
technology be certified to an electronic
hub that permits the exchange of
electronic structured data on a providerneutral basis.
Commenters also requested that the
Regional Extension Centers funded by
ONC be permissible as entities
designated by the State to be eligible to
receive EPs assigned incentive
payments.
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Response: States will have the
discretion to identify entities that
promote the adoption of certified EHR
technology in accordance with our
definition in regulation. We do not agree
that the definition of ‘‘promotion of the
adoption of EHR technology’’ requires
the designated entity itself to utilize
certified EHR technology. A variety of
entities might offer services that meet
the language included in this final rule
defining promoting EHR adoption. We
wish to point out that there is also a
discussion of reassignment of payments
in Section II.B.1.d. of this rule.
After consideration of the comments,
we are adopting the language as written
with the additional clarification that we
encourage States to consider how they
will verify on an ongoing basis that the
entities that they designate are in fact
promoting EHR adoption, per the
requirements. Their responsibility to
audit this element might be a factor in
identifying which entities they wish to
designate, in terms of tangible EHR
promotion activities.
We agree that our definition of
‘‘promoting EHR adoption’’ does not
preclude the ONC-funded Regional
Extension Centers from being
designated by States for this role.
4. Computation of Amount Payable to
Qualifying Medicaid EPs and Eligible
Hospitals
The statute, at sections 1903(t)(1),
(t)(4), and (t)(5) of the Act, creates
different payment formulas for
Medicaid EPs versus hospitals. The
payment methodology for Medicaid
hospitals shares many aspects of the
methodology used for Medicare
hospitals.
a. Payment Methodology for EPs
(1) General Overview
Pursuant to section 1903(t)(1)(A) of
the Act, payment for EPs equals 85
percent of ‘‘net average allowable costs.’’
While the Secretary is directed to
determine ‘‘average allowable costs’’
based upon studies of the average costs
of both purchasing and using EHR
technology, the net average allowable
costs that set payment are capped by
statute. As discussed in more detail
further on, generally stated, these caps
equal $25,000 in the first year, and
$10,000 for each of 5 subsequent years
(there is an exception for pediatricians
with under 30 percent Medicaid patient
volume, whose caps are two-thirds of
these amounts). Thus, the maximum
incentive payment an EP could receive
from Medicaid equals 85 percent of
$75,000, or $63,750, over a period of 6
years. EPs must begin receiving
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(2) Average Allowable Costs
Section 1903(t)(4)(C) of the Act gives
the Secretary the authority to determine
average allowable costs. Specifically,
the Secretary is directed to study the
average costs associated with the
purchase, initial implementation, and
upgrade of certified EHR technology,
including support services, and integral
related training. The Secretary also is
directed to study the average costs of
operating, maintaining, and using
certified EHR technology. The statute
permits the Secretary to use studies
submitted by the States.
We conducted a literature review of
recent studies on EHR technology to
determine the average allowable cost of
implementing and using such
technology. We reviewed the results
from four recent, comprehensive
studies.
In conducting a review of the data, we
determined that the studies demonstrate
a cross-sectional view of small and large
practices and community health centers.
There was adequate data to support a
depiction of costs across multiple
provider types.
To summarize, we determined that
the average costs of EHRs vary greatly
because of the size and type of provider
practices, the differences in available
features of systems, and the additional
costs associated with licensing, support,
training, and maintenance. However,
based on the information reviewed, we
determined that the average costs for
initial EHR systems currently can range
from $25,000 to $54,000 in the
implementation year, per professional.
Since the average costs of EHR
technology in the first year can be as
much as $54,000 and no less than
$25,000, and since we believe the costs
of such technology will be increasing,
we set the average allowable cost at
$54,000. We established this average
allowable cost at the high end of the
range since the data we reviewed is
based on certification criteria that may
not be appropriate moving forward.
Specifically, since the ONC is
establishing new certification criteria for
EHR technology, we believe the average
cost of certified EHR technology
incorporating the new criteria will be
higher than the current costs of EHR
technology. It is our assumption that
making improvements to incorporate
the new certification standards into
current EHR technology will be costly.
Thus, we believe that establishing the
average allowable cost at $54,000 is
reasonable.
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Additionally, our analysis determined
that the range for subsequent incentive
payment year costs for most providers
will fall into a large range, based on a
number of factors. On one end of the
range, costs related to maintenance
could be as low as $3,000 to $9,000 per
provider, where other studies state that
maintenance will be as high as $18,000
to $20,610 per provider. Given the
requirements in the ONC interim final
rule for the adoption of an initial set of
standards, implementation
specifications, and certification criteria
for EHRs and the health measures data
discussed in this final rule that CMS
and the States will need to collect from
professionals, we believe that the costs
for maintaining certified EHR
technology will also be on the higher
end of the range at $20,610.
(3) Net Average Allowable Costs.
As originally required by section
1903(t)(3)(E) of the Act, in order to
determine ‘‘net’’ average allowable costs,
average allowable costs for each
provider must be adjusted in order to
subtract any payment that is made to
Medicaid EPs and is directly
attributable to payment for certified
EHR technology or support services of
such technology. The only exception to
this requirement is that payments from
State or local governments do not
reduce the average allowable costs. The
resulting figure is the ‘‘net’’ average
allowable cost, that is, average allowable
cost minus payments from other sources
(other than State or local governments).
The statute indicates that EPs may
receive 85 percent of a maximum net
average allowable cost in the first year
of $25,000 and a maximum net average
allowable cost of $10,000 in subsequent
years. This would mean that, as
required by the statute, the net average
allowable costs are capped at these
amounts.
Since we set the average allowable
cost at $54,000 in the first year, EPs
could receive as much as $29,000 in
funding from sources (other than from
State or local governments) as
contributions to the certified EHR
technology and the incentive payment
would still be based on 85 percent of the
maximum net average allowable cost of
$25,000 (or $21,250). This is appropriate
since $54,000 (the average allowable
cost) minus $29,000 (contributing
sources of funding from other than State
or local governments) equals $25,000.
Since $25,000 is equal to the level of the
maximum net average allowable cost or
capped amount discussed above,
providers could receive 85 percent of
$25,000 or $21,250 in year one as a
Medicaid incentive payment.
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The same logic would hold true for
subsequent years. Specifically, if in the
following years an eligible professional
received as much as $10,610 in
contributing funds from sources other
than State or local governments, the
maximum incentive payment of $8,500
would be unaffected in such subsequent
years. This result is due to the fact that
the average allowable costs of $20,610
for maintaining EHR technology minus
the $10,610 received would still equal
$10,000, the maximum net average
allowable costs permitted under the
statute.
In reviewing whether a reduction in
the net average allowable cost was
warranted based on other contributions
to EHR technology, we considered the
situation of EPs who may have been
provided with the actual certified EHR
technology, as well as training, support
services, and other services that would
promote the implementation and
meaningful use of such technology. In
some cases, we do not believe the
contribution would reduce average
allowable costs at all. For example, if an
FQHC or RHC has provided technology
to its staff EPs to use, we do not believe
that such technology provision would
be considered a ‘‘payment’’ from another
source that would reduce average
allowable costs. Moreover, we believe
the situations in which an EP has been
provided with the actual technology,
support service, or training from another
source are extremely limited in light of
the statutory prohibitions on
‘‘kickbacks’’ at Section 1128B(b) of the
Act.
Comment: Several commenters are
concerned that States are required to
develop a method to determine the
payment amount for each provider.
Commenters believed that incentive
payments should be based on the
maximum amount and that individual
calculations are cumbersome and a
difficult process for both States and
eligible professionals.
Response: We would like to clarify
the requirements in the statute and the
process by which incentive payments
will be established. Specifically, the
Secretary is directed to study the
average costs associated with the
purchase, initial implementation, and
upgrade of certified EHR technology,
including support services, and integral
related training. The Secretary is also
directed to study the average costs of
operating, maintaining, and using
certified EHR technology. The statute
permits the Secretary to use studies
submitted by the States. CMS conducted
a literature review of recent studies on
EHR technology to determine the
average allowable cost of implementing
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and using such technology. CMS
reviewed the results from four recent,
comprehensive studies and determined
that these costs are $54,000 per
professional. We recognize that this cost
is variable and since the ONC is
establishing certification criteria for
EHR technology, we believe this cost is
reasonable since we expect that current
EHR technology will need to be
upgraded in order to meet the new
certification criteria.
Next, in accordance with the statute,
in order to determine the net average
allowable costs for each provider,
average allowable costs for each
provider must be adjusted in order to
subtract any payment that is made to
Medicaid eligible professionals and is
directly attributable to payment for
certified EHR technology or support
services of such technology. The only
exception to this requirement, as
discussed above, is that payments from
State, or local governments do not
reduce the average allowable costs. The
resulting figure is the net average
allowable costs. The statute further
indicates that Medicaid eligible
professionals can receive up to 85
percent of a maximum of the net average
allowable cost. In year one the
maximum net average allowable cost is
$25,000 and in subsequent years is
$10,000. Additionally, the statute
indicates that Medicaid eligible
professionals are responsible for the
remaining 15 percent of the net average
allowable cost (1903(t)(6)(B)). We
believe the commenters are concerned
with the 85 percent of net average
allowable cost maximum incentive
payment amount and the responsibility
of the Medicaid professional for the
remaining 15 percent of the net average
allowable cost.
Since the statute is clear that to get to
the net average allowable cost,
payments made to the EP that are
directly attributable to the payment for
certified EHR technology or support
services for such technology for each
provider have to be subtracted from the
average allowable cost, this must be an
individual provider calculation. We do
not believe we have discretion to change
this netting process directed by the
Congress. We have provided an example
calculation so that in using the average
allowable cost established by the
Secretary of $54,000 professionals could
receive as much as $29,000 in payments
from outside sources and still receive 85
percent of the maximum capped net
average allowable cost of $25,000. We
have also required that States must have
a process in place and a methodology
for verifying that payment incentives are
not paid at amounts higher than 85
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percent of the net average allowable cost
and a process in place and a
methodology for verifying that
professionals pay 15 percent of the net
average allowable cost of the certified
EHR technology.
States may wish to establish a process
whereby individuals attest to having
completed their forms correctly and risk
the circumstance of audit in the event
the State has reason to believe
individuals did not complete the forms
appropriately. States could develop a
process for providers to attest to having
received no other sources of funding
from other than State and local
governments as payment that is directly
attributable to the cost of the
technology. States could select a
random sample of providers to audit
after the incentive payment has been
paid. Additionally, States could
determine that certain types of
providers should be selected for a more
extensive review since it may be true
that this particular provider group was
most likely to have received payment
for certified EHR technology from
sources other than State, or local
governments. This process could
eliminate some of the burden.
Comment: Commenters also asked
that we provide some examples of the
costs that must be subtracted to get to
the net average allowable cost and
therefore the incentive payment
amount. Commenters do not want to be
penalized because they did not have a
fair chance at understanding the rule
before participating in the program.
Commenters further argued that
reducing incentive payments due to
other non-State/local resources could
immobilize innovation and temper
research activities.
Response: When States begin to think
through the payments that are not
considered acceptable and that must be
subtracted from the average allowable
cost to get to the net average allowable
costs and consequently, the incentive
payment, we believe that States should
consider the situation in which
professionals may have been provided
with the certified EHR technology
through, for example, an employer/
employee relationship. We do not
believe in this case that there could be
any payments directly attributable to the
professional for the certified EHR
technology; therefore, there are no
payments that must be subtracted. This
situation would apply in the case of
clinics like FQHCs/RHCs or IHS
facilities. Additionally, States should
consider that any in-kind contributions
such as EHR technology or free software
provided by vendors are not cash
payments and therefore are also not
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costs that must be subtracted. Further,
in the case of grants like the HRSA
Capital Improvement Program grants
that are used to finance many projects
within an organization; for example,
research projects, infrastructure,
construction or repair and renovation of
health centers, health care services, etc.,
we do not believe these grants are
directly attributable as payments for the
certified technology but rather are
payments for several projects of the
organization. Again, we do not believe
that these costs are directly attributable
to payment costs for the certified
technology and therefore must be
subtracted. These are just some
examples but the clarifying point is that
any costs that are subtracted from the
average allowable cost to get to the net
average allowable cost have to be cash
payment that is ‘‘directly attributable to
the professional for the certified EHR
technology.’’ Aside from specific costs
related to computer hardware, software,
staff training, and/or upgrades of the
technology, we believe there are limited
situations that exist in which cash
payment has been made that is directly
attributable to the professional solely for
the purpose of certified EHR technology.
In any case, we are requiring that
States submit to CMS for review and
approval a description of their process
and methodology for verifying payment
incentives in State Medicaid HIT plans.
CMS has the flexibility to approve State
Medicaid HIT plans that require
provider attestation initially with
subsequent auditing of either a random
sample, or a sample of payment
incentive recipients most likely to have
received funding from other sources.
We also would like to provide
clarifying information concerning the
responsibility of the professional for 15
percent of the net average allowable
cost. Section 1903(t)(6)(B) of the Act
dictates that EPs are responsible for
payment of the remaining 15 percent of
the net average allowable cost and
States are responsible for ensuring that
the Secretary pays no more than 85
percent of the net average allowable cost
as incentive payments. In ensuring EPs’
responsibility for the remaining 15
percent, we believe States may consider
funding that the EP receives from other
sources as essentially meeting the EPs
responsibility. For example, as stated
earlier, States should consider the
previous examples of employer/
employee relationship, certain grants,
and in-kind contributions. Specifically,
if a professional is an employee at an
FQHC/RHC or IHS facility, since the
employer has provided the technology
to the employee it is assumed that the
employer has contributed the 15 percent
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should consider costs related to the
providers’ efforts to address workflow
redesign and training to facilitate
meaningful use of EHRs as contributing
to the providers’ 15 percent share.
Considering the costs of training,
preparing for, and installing or
upgrading EHR technology, we believe
the vast majority of EPs will spend, or
receive funding from other sources in
the amount of 15 percent of the
maximum net average allowable cost (or
$3,750 in the first year and $1,500 in
subsequent years). We also believe that
for providers’ first payment for having
adopted, implemented or upgraded
certified EHR technology, States should
take into consideration providers’
verifiable contributions up through the
date of attestation. For example, if a
provider adopted EHR technology for
$100 in January 2010 and then paid for
the upgrade to the newly certified
version for an additional $100 in
December of 2010, the sum of both
investments; that is, $200, should be
applicable to their 15 percent of the net
average allowable cost.
In summary, in response to these
comments, we are clarifying in the final
rule that State Medicaid HIT plans must
explain the process and methodology
States will put in place to ensure that
Medicaid eligible professionals comply
with this responsibility (see section
495.332). Additionally, we have
clarified the rules at section 495.310
that providers are responsible for 15
percent of the net average allowable
costs of the certified EHR technology.
The following chart is useful in
depicting the effect of this calculation.
Comment: Several commenters have
raised questions about the cost of the
certified EHR technology for hospitals.
Specifically, commenters believed that
$54,000 is identified as the initial costs
for providers with 20 percent per year
thereafter for ongoing costs; and $5
million for initial costs for hospitals
with 20 percent per year thereafter for
ongoing costs. The commenters believed
that the $54,000 assumption for
providers may be accurate; however, the
$5 million assumption for hospitals
could be off by a factor of 4 or 5. Other
commenters believed that even the
$54,000 assumption seriously
underestimates the total cost of
ownership for EHR systems and their
ongoing expenses and argued that this
assumption does not account for the
training and labor costs associated with
implementation of an EHR system, nor
does it account for the lost revenues
resulting from the decreases in
productivity during the initial
implementation phase. One commenter
questioned whether the $54,000 average
allowable cost for certified EHR
technology takes into account leasing of
an ASP (applicable service provider web
based) model as an allowable cost.
Response: As explained above, we
conducted a literature review of recent
studies on EHR technology and
determined that these costs are $54,000
per professional. We are not establishing
an average allowable cost for hospitals.
The reference to the costs of EHRs for
hospitals was only to make the point
that the costs of EHRs vary greatly
because of the size and type of provider
practices, differences in available
features of systems, and the additional
costs associated with licensing, support,
training and maintenance. Additionally,
there is no reason to establish the
average allowable costs of EHR
technology for hospitals since the
hospital incentive payments are based
on a formula that is defined in the
statute and that does not rely on the
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to the net average allowable cost on
behalf of the employee. Additionally, in
the case of in-kind contributions, the
professional’s 15 percent responsibility
to the net average allowable cost is of no
consequence since the entity has
assumed that responsibility for the
professional. It should be noted that in
the case of a vendor supplying the 15
percent on behalf of the EP because the
technology, training, support services,
etc. was either in-kind contributions or
free, conflict of interest safeguards apply
and the parties should be mindful of the
requirement to comply with applicable
fraud, waste, and abuse laws, rules, and
regulations.
In those cases in which the
professional himself must satisfy the
responsibility for the 15 percent net
average allowable costs, we believe in
determining the calculation, States
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reassignment of payments must be
consistent with applicable laws, rules,
and regulations, including, without
limitation, those related to fraud, waste,
and abuse. Incentive payments are
payments designed to promote the
adoption and meaningful use of
certified EHR technology and are not
payments for medical assistance
provided in the FQHC. We do not have
the authority under this program to
provide that these funds be the basis for
the State to reduce its per visit payment
to the FQHC.
After consideration of this comment,
we are making no further additions to
this section of the final rule.
(4) Payments for Medicaid Eligible
Professionals
One important difference we
proposed between the payments to
Medicaid EPs and hospitals is that
States would disburse the payments to
EPs in alignment with the calendar year,
whereas hospitals will receive payments
in alignment with the fiscal year, as
described in section II.D.4.b. of this final
rule. There are two primary reasons for
this. The first is to align Medicaid
incentive payment disbursements with
that of the Medicare program, in order
to support consistency between the two
programs, as well as among the States.
We will undertake national outreach
activities to encourage provider EHR
adoption and to align the annual
payment periods.
As previously discussed in this final
rule, based on the 85 percent threshold
applied to the net average allowable
costs, we proposed that most Medicaid
EPs may receive up to a maximum
incentive payment of $21,250 in the first
payment year.
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In subsequent years of payment,
Medicaid EPs’ incentive payments will
be limited to 85 percent of the $10,000
cap on net average allowable cost, or up
to a maximum of $8,500 annually for
most Medicaid EPs.
Since pediatricians are qualified to
participate in the Medicaid EHR
incentive program as physicians, and
therefore classified as Medicaid EPs,
they may qualify to receive the full
incentive (that is, the 85 percent
threshold applied to the net average
allowable cost) if the pediatrician is not
hospital-based and can demonstrate that
they meet the minimum 30 percent
Medicaid patient volume requirements
discussed in this subpart.
Pediatricians who are not hospitalbased, and have a minimum of 20
percent of their patient encounters paid
by Medicaid are also encouraged to
participate in the Medicaid EHR
incentive program. The maximum
payment amount for these pediatricians,
who meet the 20 percent Medicaid
patient volume, but fall short of the 30
percent patient volume, is reduced to
two-thirds of the net average allowable
cost, subject to the 85 percent threshold.
The reduction accounts for the reduced
patient volume, but the intent is to offer
an incentive to attract pediatricians to
participate. This means pediatricians
with a minimum 20 percent patient
volume may qualify for up to a
maximum of $14,167 in the first
incentive payment year and to up a
maximum of $5,667 in the 5 subsequent
incentive payment years, or no more
than $42,500 over the maximum 6 year
period.
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average allowable cost. In terms of the
$54,000 average allowable cost figure,
we indicated that we believe this is a
reasonable figure but recognize that
there are many variables to determining
the average allowable cost of certified
EHR technology because of practice
size, the differences in available features
of systems, and the additional costs
associated with licensing, support,
training and maintenance. The $54,000
average allowable cost figure does take
into account web based models since
the Secretary is tasked to study the
average costs associated with the
purchase, initial implementation, and
upgrade of certified EHR technology,
including support services, and integral
related training.
We are making no additional
revisions to this section of the final rule
as a result of this comment.
Comment: One commenter requested
that CMS make clear that any funding
an FQHC receives because the Medicaid
eligible professional voluntarily chooses
to reassign his/her incentive payment or
any funds the center may have received
through HRSA Capital Improvement
Funds cannot be the basis for a State
reducing its per visit payment to FQHCs
required under Section 1902(bb).
Response: We agree with the
commenter with respect to the incentive
payments authorized under section
1903(t); however, we are not addressing
the HRSA Capital Improvement funds,
as this funding is outside the scope of
this rulemaking. Since FQHCs are not
eligible providers, incentive payments
will not be made to FQHCs. It is true,
however, that an eligible professional
could choose to reassign his/her
incentive payment to the FQHC. Any
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program and then switched to Medicaid,
but then stopped meaningfully using the
certified EHR.
Response: The Medicaid program
does not have the payment adjustments
that apply, beginning in 2015, in the
Medicare program. However, all
Medicare providers will have a payment
reduction in 2015 if they are not
demonstrating meaningful use,
regardless of whether they participate in
the Medicare or Medicaid EHR
incentive program. Whether an EP,
hospital or CAH is a meaningful user of
certified EHR technology will continue
to be determined on a year-by-year
basis. A provider who stops
meaningfully using certified EHR
cannot receive an incentive payment.
This is discussed in greater detail in
II.A.
We are not making any changes to this
rule as a result of this comment.
(5) Basis for Medicaid EHR Incentive
Program First Payment Year and
Subsequent Payment Years
(i) Medicaid EP Who Begins
Adopting, Implementing or Upgrading
Certified EHR Technology in the First
Year
A Medicaid EP who begins by
adopting, implementing, or upgrading
certified EHR technology in the first
year will be eligible for the incentive
payments not in excess of the maximum
amount. Under section 1903(t)(4) of the
Act he or she is eligible to receive up
to the maximum first year Medicaid
incentive payments discussed in the
previous sections, plus additional
incentive payments for up to 5 years for
demonstrating meaningful use of
certified EHR technology. In other
words, these providers may participate
in the Medicaid EHR incentive program
for up to 6 years.
Table 17 demonstrates the payment
scenarios available to a Medicaid EP
who begins in their first year by
adopting, implementing, or upgrading
certified EHR technology, and receives
all six years of payments consecutively.
As can be seen from the table, the EP
can begin receiving payments as late as
2016, and still receive up to the
maximum payments under the program.
(ii) Medicaid EP who has Already
Adopted, Implemented or Upgraded
Certified EHR Technology and
Meaningfully Uses EHR Technology
For a Medicaid EP who has already
adopted, implemented, or upgraded
certified EHR technology and can
meaningfully use this technology in the
first incentive payment year, we
proposed that the Medicaid EP be
permitted to receive the same maximum
payments, for the same period of time,
as the Medicaid EP who merely
adopted, implemented or upgraded
certified EHR technology in the first
year. Section 1903(t)(6)(C)(ii) of the Act
states that for a Medicaid EP or hospital
who has completed ‘‘adopting,
implementing, or upgrading’’ certified
EHR technology ‘‘prior to the first year
of payment * * * clause (i)(I) shall not
apply and clause (i)(II) [discussing the
demonstration of meaningful use] shall
apply to each year of payment to the
Medicaid provider under this
subsection, including the first year of
payment.’’ We believe this provision
supports an interpretation that a
Medicaid EP who has already adopted
certified EHR technology, would still
receive a ‘‘first year’’ of payment under
section 1903(t)(4) of the Act, and like all
other first years of payment, this
payment could not exceed $21,250.
Then, under section 1903(t)(4)(A)(ii)
and (iii) of the Act, such Medicaid EPs
could receive an additional 5 years of
payment for subsequent years of
payment, with payments not exceeding
$8,500 in each of these 5 subsequent
years. This approach allows early
adopters of certified EHR to begin
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All State Medicaid EHR incentive
program calculations, payments, and
limits under this section are subject to
our review.
Comment: Commenters suggested that
CMS apply the health professional
shortage area (HPSA) bonus offered
under Medicare to Medicaid providers.
Response: There is no statutory
authority for HPSA bonuses in the
Medicaid incentive program. However,
it is worth noting that in comparing the
maximum participation period for EPs
in Medicare and Medicaid, EPs can earn
higher total incentive payments under
Medicaid, even when compared to the
Medicare payments with the HPSA
bonus.
We are not making any changes to this
rule as a result of this comment.
Comment: Commenters requested
clarification on how the Medicare
payment adjustments apply to Medicaid
providers. Commenters suggested that if
these apply to Medicaid providers, it
could be a reason not to participate. One
commenter asked about a provider who
began in the Medicare incentive
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44497
Thus, the maximum incentive
payments for Medicaid EPs
demonstrating that they are meaningful
users in the first payment year, would
be identical to the maximum payments
available to those demonstrating
adoption, implementation, or upgrading
certified EHR technology in the first
year, as depicted in Table 18.
We also requested comment on an
alternative approach that would limit
the incentive payment for Medicaid EPs
who have already adopted,
implemented, or upgraded certified EHR
technology to 5 years of payment, at a
maximum payment of $8,500 per year.
We refer readers to our proposed rule
(75 FR 1937) for a discussion of this
approach.
Medicaid EPs are not required to
participate on a consecutive annual
basis, however, the last year an EP may
begin receiving payments is 2016, and
the last year the EP can receive
payments is 2021. See our discussion on
consecutive versus non-consecutive
payments in section II.A. of this final
rule. We wish to point out to readers
that this is one area where the Medicare
and Medicaid incentive payment
programs differ. That is, Medicare EPs
do not have the same flexibility afforded
to Medicaid EPs, who are permitted to
participate in a non-consecutive annual
basis, or to skip years, in other words,
without the omitted years necessarily
reducing the total number of years for
which they may receive payment. The
tables in this section demonstrate how
a Medicaid EP would maximize the
aggregate incentive under different
scenarios, considering that a Medicaid
EP may initiate participation in 2011
through 2016. Additionally, these tables
do not include the alternative Medicaid
maximum incentive payment for
pediatricians discussed in the previous
section, which is two-thirds of the total
amount listed in Tables 27 through 30.
Finally, these tables do not represent
EPs whose incentive payments may be
reduced because net average allowable
costs may actually be lower than
$25,000 in the first year, or $10,000 in
subsequent years, due to payments from
other, non-State/local sources.
Comment: Some commenters rejected
the alternative scenario (including 5
years of payment instead of 6), as it
would effectively result in a penalty for
early adopters, and reward those who
delayed adoption.
Response: We agree that early
adopters should not be penalized.
Further, we agree that Medicaid EPs that
have adopted EHR technology before the
first year should have an opportunity for
the same maximum incentive payments
as EPs that are meaningful users in the
first year. Accordingly, the alternative
scenario we presented in Table 30 of the
proposed rule will not be used for
incentive payments.
As we are adopting our proposed
policy as final, we are not making any
changes to the regulations as a result of
this comment.
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b. Payment Methodology for Eligible
Hospitals
Statutory parameters placed on
Medicaid incentive payments to
hospitals are largely based on the
methodology applied to Medicare
incentive payments. The specifications
described in this section are limits to
which States must adhere when
developing aggregate EHR hospital
incentive amounts for Medicaid-eligible
hospitals. States will calculate hospitals’
aggregate EHR hospital incentive
amounts on the FFY to align with
hospitals participating in the Medicare
EHR incentive program.
States may pay children’s hospitals
and acute care hospitals up to 100
percent of an aggregate EHR hospital
incentive amount provided over a
minimum of a 3-year period and a
maximum of a 6-year period. Section
1905(t)(5)(D) requires that no payments
can be made to hospitals after 2016
unless the provider have been paid a
payment in the previous year; thus,
while Medicaid EPs are afforded
flexibility to receive six years of
payments on a non-consecutive, annual
basis, hospitals receiving a Medicaid
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meaningfully using technology, without
being at a competitive disadvantage, and
without losing incentive payments for
the previous costs associated with
adopting, implementing, or upgrading
certified EHR technology.
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incentive payment must receive
payments on a consecutive, annual basis
after the year 2016. Prior to 2016,
Medicaid incentive payments to
hospitals can be made on a nonconsecutive, annual basis. The
maximum incentive amounts for these
providers are statutorily defined by a
formula at section 1903(t)(5)(B) of the
Act. The statute requires that Medicaid
refer, with some adjustments, to the
calculation for the Medicare hospital
incentive payment described at sections
1886(n)(2)(A), 1886(n)(2)(C), and
1886(n)(2)(D) of the Act, to determine
the aggregate EHR amount allowable for
individual hospitals. The aggregate EHR
hospital incentive amount is calculated
using an overall EHR amount multiplied
by the Medicaid share.
States are responsible for using
auditable data sources to calculate
Medicaid aggregate EHR hospital
incentive amounts, as well as
determining Medicaid incentive
payments to those providers. Auditable
data sources include—
• Providers’ Medicare cost reports;
• State-specific Medicaid cost reports;
• Payment and utilization
information from the State’s MMIS (or
other automated claims processing
systems or information retrieval
systems); and
• Hospital financial statements and
hospital accounting records.
All State Medicaid EHR incentive
program calculations, payments, and
limits under this section are subject to
our review.
For purposes of the Medicaid EHR
hospital incentive program, the overall
EHR amount is equal to the sum over 4
years of (I)(a) the base amount (defined
by statute as $2,000,000); plus (b) the
discharge related amount defined as
$200 for the 1,150th through the
23,000th discharge for the first year (for
subsequent years, States must assume
discharges increase by the provider’s
average annual rate of growth for the
most recent 3 years for which data are
available per year): multiplied by (II) the
transition factor for each year equals 1
in year 1, 3⁄4 in year 2, 1⁄2 in year 3, and
1⁄4 in year 4.
The statute specifies that the payment
year is determined based on a Federal
fiscal year. Section 1886(n)(2)(C) of the
Act provides the Secretary with
authority to determine the discharge
related amount on the basis of discharge
data from a relevant hospital cost
reporting period, for use in determining
the incentive payment during a Federal
fiscal year. Federal fiscal years begin on
October 1 of each calendar year, and
end on September 30 of the subsequent
calendar year. Hospital cost reporting
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periods can begin with any month of a
calendar year, and end on the last day
of the 12th subsequent month in the
next calendar year. For purposes of
administrative simplicity and
timeliness, we require that States use
data on the hospital discharges from the
hospital fiscal year that ends during the
Federal fiscal year prior to the fiscal
year that serves as the first payment
year.
The discharge-related amount is $200
per discharge for discharges 1,150
through 23,000. To determine the
discharge-related amount for the 3
subsequent years that are included in
determining the overall EHR amount,
States should assume discharges for an
individual hospital have increased by
the average annual growth rate for an
individual hospital over the most recent
3 years of available data from an
auditable data source. Note that if a
hospital’s average annual rate of growth
is negative over the 3 year period, it
should be applied as such.
The overall hospital EHR amount
requires that a transition factor be
applied to each year. This transition
factor equals 1 for year 1, d for year 2,
c for year 3, and @ for year 4, as provided
for in sections 1886(n)(2)(A) and
1886(n)(2)(E) of the Act, and as
incorporated through section
1902(t)(5)(B) of the Act. We note that
although, for purposes of the Medicare
incentives, section 1886(n)(2)(E)(ii) of
the Act requires a transition factor of 0,
if the first payment year is after 2013,
we do not believe this rule would apply
in the context of the Medicaid incentive
payments. Nothing in section 1903(t) of
the Act specifically cross references this
0 transition factor, and, notably, section
1903(t) of the Act allows Medicaid
incentive payments to begin as late as
2016.
The ‘‘Medicaid Share,’’ against which
the overall EHR amount is multiplied, is
essentially the percentage of a hospital’s
inpatient, non-charity care days that are
attributable to Medicaid inpatients.
More specifically, the Medicaid share is
a fraction expressed as—
• Estimated Medicaid inpatient-beddays plus estimated Medicaid managed
care inpatient-bed-days;
Divided by;
• Estimated total inpatient-bed days
multiplied by ((estimated total charges
minus charity care charges) divided by
estimated total charges).
As indicated in the above formula, the
Medicaid share includes both Medicaid
inpatient-bed-days and Medicaid
managed care inpatient-bed-days. This
is in keeping with section 1903(t)(5)(C)
of the Act, which provides that in
computing inpatient-bed-days, the
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Secretary shall take into account
inpatient-bed-days that are paid for
individuals enrolled in a Medicaid
managed care plan under sections
1903(m) or 1932 of the Act. We
interpreted these managed care
individuals to be individuals enrolled in
an managed care organization (MCO),
prepaid inpatient health plan (PIHP), or
prepaid ambulatory health plan (PAHP)
under 42 CFR part 438.
Some Medicaid managed care entities
(that is, MCOs, PIHPs, and PAHPs with
risk contracts) provide substitute
services (or, ‘‘in-lieu-of services’’) in
more cost effective or efficient settings
than the State plan services in the
managed care contract. For example, in
a hospital inpatient setting, these
services could be in a different unit,
such as a sub-acute wing or skilled
nursing wing, so long as States and
contracting entities are in compliance
with the actuarial soundness rules in
§ 438.6(c), provision of substitute
services is allowed. Although we
understand that these substitute service
days may be used to achieve efficiency
and cost effectiveness, we do not believe
such substitute service days should
count as ‘‘inpatient-bed-days’’ in the
hospital EHR incentive payment
calculation. The statute requires us to
calculate the Medicaid share ‘‘in the
same manner’’ as the Medicare share
under section 1886(n)(2)(D) of the Act
and such substitute service days would
not be considered ‘‘in the same manner.’’
Thus, we proposed that for purposes of
the Medicaid formula, we would count
only those days that would count as
inpatient-bed-days for Medicare
purposes under section 1886(n)(2)(D) of
the Act.
In addition, because the formula for
calculating the Medicaid share requires
a determination of charity care charges,
States should use the revised Medicare
2552–10, Worksheet S–10 or another
auditable data source to determine the
charity care portion of the formula. In
the absence of sufficient charity care
data to complete the calculation, section
1886(n)(2)(D) of the Act, requires the
use of uncompensated care data to
derive an appropriate estimate of charity
care, including a downward adjustment
for bad debts. We interpreted bad debt
to be consistent with the Medicare
definition of bad debt as promulgated at
§ 413.89(b)(1).
Finally, per section 1886(n)(2)(D) of
the Act, to the extent there is simply not
sufficient data that would allow the
State to estimate the inpatient bed-days
attributable to Medicaid managed care
patients, the statute directs that such
figure is deemed to equal 0. Likewise, if
there is simply not sufficient data for
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use and other requirements under both
programs.
The last year that a hospital may
begin receiving Medicaid incentive
payments is FY 2016. States must make
payments over a minimum of 3 years
and a maximum of 6 years.
Additionally, in any given payment
year, no annual Medicaid incentive
payment to a hospital may exceed 50
percent of the hospital’s aggregate
incentive payment. Likewise, over a 2year period, no Medicaid payment to a
hospital may exceed 90 percent of the
aggregate incentive.
Table 19 demonstrates several
scenarios for Medicaid hospitals.
However, there are other scenarios not
included here. For example, this table
assumes that a hospital would
participate on a consecutive annual
basis until the incentive is exhausted.
The purpose of Table 19 is to illustrate
the general timeline for Medicaid
hospital incentives.
Comment: Many commenters
recommended that CMS instruct States
to provide hospitals the maximum
incentive payments possible in their
first two payment years. Commenters
provided many examples of how CMS
should instruct States to make
payments. For instance, commenters
suggested that CMS require States to pay
50 percent of hospitals’ aggregate
incentive payment in the first year and
another 40 percent in the second year—
as a limited source of capital for
adoption, implementation, and
upgrades. Many commenters stated that
it is critical that EHR incentive
payments be made in a timely manner
and not delayed or affected by State
budgetary problems or changes.
Response: After consideration of the
public comments received, we are
finalizing these provisions as originally
proposed, with one clarification to
ensure the statutory requirement that
eligible hospitals, after 2016, may not
receive an incentive payment, unless a
payment was received in the prior year.
The statute is imposing maximums on
what the State is authorized to pay
eligible hospitals. At section
1903(t)(5)(A) the statute requires that a
State can make no more than 50 percent
of the hospital’s aggregate incentive
payment in any one year. Likewise, over
a 2-year period, the State cannot pay
more than 90 percent of the aggregate
incentive. Finally, under 1903(t)(5)(D)
no more than six years of payment may
be made, and payment may not be paid
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the State to estimate the percentage of
inpatient bed days that are not charity
care (that is, [estimated total charges—
charity care charges]/estimated total
charges), the statute directs that such
figure is deemed to equal 1.
Unlike Medicaid EPs, who must
waive rights to duplicative Medicare
incentive payments, hospitals may
receive incentive payments from both
Medicare and Medicaid, contingent on
successful demonstration of meaningful
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for any year beginning after 2016, unless
the hospital was provided an incentive
payment for the preceding year.
However, these are limits on State
payments, not required minimums. We
believe that States should work with
their provider communities to
determine the best timeframes for
implementing their EHR programs and
making payments to providers.
Comment: Some commenters
indicated that incentive payments
should not be included in any
calculation of total Medicaid payments
for the purpose of determining Medicaid
shortfalls, disproportionate share
payments, upper payment limits, or any
general Medicaid program service.
Response: According to the statute,
Medicaid HIT incentive payments are
made to encourage the adoption and use
of certified EHR technology defined by
the statute, as well as support services
including maintenance and training that
is for, or is necessary for the adoption
and operation of, such technology.
Payments to providers under this rule
are not being made for the provision of
services or the cost of the provision of
services to Medicaid beneficiaries or the
uninsured. Therefore, we are clarifying
that EHR incentive payments made to
providers in accordance with the statute
and final regulation are not subject to
the same limits as payments for items
and services provided to Medicaid
beneficiaries and the uninsured
including Medicaid upper payment
limits and disproportionate share
hospital limits. This comment is also
addressed in the Medicare section at
II.B.4.b.
Comment: One commenter noted a
technical error in the proposed rule at
495.310 (g) (2) Medicaid Share. The
commenter questioned whether (2)(iii)
meant to qualify (2)(ii) or (2)(i), noting
that the latter would result in dual
eligibles being removed from Medicaid
days (the numerator) and would not
conform to the Act which would require
that they be removed from the
denominator.
Response: We agree that the
regulation includes a technical error,
and we read the statute as requiring that
dually eligible individuals be excluded
from the denominator. Section
1903(t)(5)(C) states that the Medicaid
share should be calculated using a
numerator that does not include
individuals ‘‘described in section
1886(n)(2)(D)(i).’’ Individuals described
in that section are individuals for whom
payment may be made under Medicare
Part A as well as individuals enrolled
with a Medicare Advantage
Organization under Part C. Thus, dually
eligible individuals are excluded from
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the numerator in determining the
Medicaid share.
We are therefore revising section
495.310(g)(2)(iii) to ensure that it refers
to clause (i), rather than clause (ii), of
§ 495.310(g)(2).
Comment: One commenter
highlighted a technical error in the
proposed rule at § 495.310(g)(1)(i)(B)
when he requested clarification for that
section which reads: ‘‘The discharge
related amount for a 12-month period
selected by the State but with the
Federal fiscal year before the hospital’s
fiscal year that serves as the payment
year.’’ He interpreted the language to
mean that if the payment year begins in
2011, the Federal fiscal year would be
2010; and the discharge related amount
would be for 2009.
Response: Section 495.310(g)(1)(i)(B)
is improperly worded in the proposed
rule and should read, ‘‘The discharge
related amount for a 12-month period
selected by the State, but ending in the
Federal fiscal year before the hospital’s
fiscal year that serves as the first
payment year.’’ For example: FY 2011
begins on October 1, 2010 and ends on
September 30, 2011. For an eligible
hospital with a cost reporting period
running from July 1, 2010 through June
30, 2011, the State would employ the
relevant data from the hospital’s cost
reporting period ending June 30, 2010 in
order to determine the EHR incentive
payment amount for the hospital.
We are revising this language in the
final rule at section 495.310(g)(1)(i)(B) to
be clear.
Comment: Some commenters
indicated that CMS should specify an
alternative source of charity care data
that States may use so that Medicare
and Medicaid incentive payments can
be determined appropriately. Others
commented that while CMS has
proposed the Medicare cost report,
Medicaid cost report data, MMIS data,
hospital financial statements, and
accounting records to determine
Medicaid EHR incentives, there is no
absence of State-level usable data to
implement this definition.
Response: We agree that there are a
number of data sources available at the
State and hospital levels that would
allow States to accurately capture
charity care data for the purposes of
calculating hospital EHR amounts.
However, we have no vehicle for
identifying which of these tools exist in
individual States or across the country.
Medicare cost reports, Medicaid cost
report data, MMIS data, hospital
financial statements, and accounting
records are all items that we feel
confident are accessible to all States and
providers. Additionally, we believe that
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States and their provider communities
are better versed at determining the
tools that will be most beneficial for
their individual programs. As such, we
included the standard items listed as
auditable data sources, but did not
prohibit the use of other appropriate
auditable data sources. States must
describe their auditable data sources in
their SMHP and submit to CMS for
review and approval.
After consideration of this comment,
we are making no further additions to
this section of the final rule.
Comment: One commenter asked
whether the criteria for determining
Medicaid eligible days and Medicaid
managed care days in the Medicaid
share portion of the hospital incentive
payment calculation is the same criteria
for determining Medicare DSH
payments.
Response: The criteria for determining
Medicaid eligible days and Medicaid
managed care days for Medicare DSH
and Medicaid managed care days for
EHR incentive payments are not the
same. Medicare DSH includes unpaid
days, while the EHR incentive payment
calculation requires the inclusion of
only paid inpatient-bed days.
After consideration of this comment,
we are making no further additions to
this section of the final rule.
Comment: One commenter asked for
clarification of the term ‘‘estimated’’
Medicaid inpatient bed days.
Response: We are unclear about the
commenter’s question. Specifically, the
statute permits the use of ‘‘estimated’’
days in the Medicaid share portion of
the EHR hospital incentive payment
calculation. Therefore, we refer the
reader to the hospital calculation at
section 1903(t)(5) and section 495.310 of
this rule.
After consideration of this comment,
we are making no further additions to
this section of the final rule.
Comment: One commenter requested
that for purposes of accurately
calculating and auditing the Medicaid
Share, CMS should eliminate data
provisions at 2080.18 of the State
Medicaid Manual.
Response: We disagree. The
provisions at 2080.18 of the State
Medicaid Manual do not adversely
impact the calculation or auditing of the
Medicaid Share.
We have not made any changes to the
regulation related to this comment.
Comment: On commenter requested
that we include as an auditable data
sources, data acquired through
authorized trading partners, such as
clearing houses, eligibility systems
maintained by CMS, state Medicaid
programs, and/or their agents.
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Response: We agree that there are a
number of data sources available that
would allow States to accurately data
for the purposes of calculating the
Medicaid Share. However, we have no
vehicle for identifying which of these
tools exist in individual States or across
the country. Medicare cost reports,
Medicaid cost report data, MMIS data,
hospital financial statements, and
accounting records are all items that we
feel confident are accessible to all States
and providers. Additionally, we believe
that States and their provider
communities are better versed at
determining the tools that will be most
beneficial for their individual programs.
As such, we included the standard
items listed as auditable data sources,
but did not prohibit the use of other
appropriate auditable data sources.
After consideration of this comment,
we are making no further additions to
this section of the final rule.
Comment: One commenter asked
whether the Medicaid payment is based
on an annually-calculated Medicaid
Share, or is the Medicaid Share
established in the base year only and to
be applied to the duration of payments.
Response: For purposes of calculating
the Medicaid hospital incentive, the
Medicaid Share is established in the
base year.
After consideration of this comment,
we are making no further additions to
this section of the final rule.
c. Alternative and Optional Early State
Implementation to Make Incentive
Payments for Adopting, Implementing,
or Upgrading Certified EHR Technology
Unlike Medicare, Medicaid has no
statutory implementation date for
making EHR incentive payments. In our
proposed rule we discussed the fact that
some States might be prepared to
implement their programs and make
EHR incentive payments to Medicaid
providers in 2010 for adopting,
implementing, or upgrading certified
EHR technology. We proposed to allow
States to initiate implementation of
these payments to Medicaid EPs and
hospitals after the effective date of the
final rule if they could successfully
demonstrate to CMS that they are ready
to make timely and accurate payments
through the SMHP. States would
include an additional attestation for
providers assuring that they are not
accepting payment in any other State.
We also proposed that to be approved
for early implementation, a State would
be required to have an electronic system
for provider registration capable of
collecting the relevant information (this
information is identified in section
II.A.5.c of this final rule, where we
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describe the data collection
requirements).
Participating States would be
responsible for transmitting the required
data to CMS so that CMS could ensure
that no duplicate payments were made
to providers. We proposed to use the
single provider election repository
described in section II.A.5.c. of this final
rule to assure no duplicative payments
were made between States.
We did not propose that States would
be able to make early payments to
meaningful users. Rather, our proposal
was intended to offer Medicaid
providers an early opportunity for
capital so that they would be more
likely to have the certified EHR
technology required to demonstrate
meaningful use in successive periods.
We stated that since hospitals may
qualify under both programs, we hoped
that they would use the early capital to
qualify as meaningful users under the
Medicare program in the first year.
Comment: We received comments
suggesting that our proposal on early
State implementation creates
unreasonable pressure on States,
particularly given the status and
timeline of the ONC rule on certification
criteria.
Response: We agree with commenters.
We proposed this option in order for
States with very mature programs to
proceed with early incentive payments
for adoption, implementation, and
upgrading certified EHR technology.
However, in considering the complexity
associated with States establishing an
electronic registration system (which
would only be temporary), as well as the
fact that very few providers (if any) will
have certified EHR technology early
enough for this option, we believe that
this may not be an efficient, costeffective option for many States.
Consequently, as a result of these
comments, we are removing this option.
States will not be permitted to make
payments until January 2011.
Additionally, we wish to reiterate that
States must have a SMHP approved by
CMS before making any payments to
EPs and eligible hospitals.
d. Process for Making and Receiving
Medicaid Incentive Payments
The process for making payments
involves coordination between
Medicare and State Medicaid agencies
to avoid duplication of payments,
prevent fraud and abuse, and create
program efficiencies to encourage
adoption. While we have responsibility
regarding payments to Medicare EPs
and eligible hospitals, State Medicaid
agencies (or their contractors) are fully
responsible for administering and
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44501
disbursing the incentive payments to
Medicaid eligible providers.
We proposed to require that EPs make
a selection between receiving incentive
payments through either the Medicare
or Medicaid EHR incentive programs.
Medicaid EPs who practice in multiple
States would be required to choose only
one State from which to receive
Medicaid incentive payments in each
payment year. (We note that readers
should also refer to section section II.A
of this final rule for additional
information regarding the EHR reporting
period and the single provider election
repository).
As we noted in the proposed rule, the
statute anticipates coordination between
the Medicare and Medicaid EHR
incentive programs to ensure no
duplicate payments are made to EPs (see
1903(t) and 1848(o)(1)(D)(iii).
Additionally, section 1848(o)(1)(B) of
the Act requires that Medicare incentive
payments for eligible professionals
begin no earlier than 2011. While the
Medicaid provisions have no statutory
start date, before States may begin
implementing the Medicaid EHR
incentives, CMS, and ONC need to
provide further direction to States in the
form of rulemaking and other policy
guidance. To that end, Medicaid will
not begin to provide 100 percent FFP for
incentive payments any earlier than
January 1, 2011. This also gives CMS,
ONC, and States an opportunity to
coordinate between Medicare and
Medicaid, which will simplify
administrative complexity in the EHR
incentive program and facilitate
provider adoption.
Under this final rule Medicaid EPs, as
discussed in section II.D.5 and II.A.5.c,
will enroll in the program through the
single provider election repository.
Once an EP selects the Medicaid EHR
incentive program, States must have a
system for reporting and tracking
necessary information to qualify an EP
for an incentive payment. In addition, as
detailed in § 495.316 States are required
to submit to CMS data on the number,
type and practice location(s) of
providers who qualified for an incentive
payment on the basis of having adopted,
implemented, or upgraded certified EHR
technology or who qualified for an
incentive payment on the basis of
having meaningfully used such
technology as well as aggregate deidentified data on meaningful use.
States’ systems and processes must
receive prior approval, concurrent with
the requirements described in section
II.D.8 of this final rule for review and
approval of the SMHP.
The specific timeframes for EPs and
eligible hospitals to report and submit
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the required information in order to
demonstrate they have adopted,
implemented, or upgraded certified EHR
technology, as well as meaningful use of
such EHR technology are discussed in
section II.A.1.e. of this final rule. As
discussed in that section, for the first
payment year based on meaningful use,
the reporting period for eligible
hospitals and EPs will be a continuous
90-day period that both starts and ends
within the payment year. As long as the
period spans the 90-day continuous
period and ends within the payment
year (fiscal year for hospitals, calendar
year for EPs), the reporting period can
begin at any time during such payment
year. States also are expected to process
payments on a rolling basis. We will
issue further guidance regarding the
timing expectations needed for State
systems to coordinate with CMS and
make timely payments
Comment: Several commenters were
concerned that Medicaid EPs and
eligible hospitals that qualify for
incentive payments in their first year by
adopting, implementing or upgrading
certified EHR technology are not
afforded the same flexibility as
Medicare EPs and eligible hospitals in
their second payment year. The
commenters wrote that they would be
required to demonstrate meaningful use
for the full year, rather than 90 days in
their second payment year, (even
though it will be their first year
demonstrating meaningful use). The
commenters recommended that
Medicaid EPs and eligible hospitals be
subject to a 90-day reporting period in
their second payment year when it is
the first year they are demonstrating
meaningful use.
Response: We agree with the
commenters and as discussed in section
II.A., we clarify that there is no EHR
reporting period for adopting,
implementing, or upgrading certified
EHR technology for Medicaid provider’s
first payment year. In order to offer
parity with Medicare providers who
must achieve meaningful use in the first
year over a 90-day period and over 12
months in subsequent years, the same
policy will apply to Medicaid providers.
In other words, Medicaid providers in
their second participation year (or in
their first payment year if they are
qualifying based on meaningful use)
shall demonstrate meaningful use over a
90-day reporting period and over 12months for their third and subsequent
years.
e. Avoiding Duplicate Payment
In our proposed rule, we discussed
the statutory requirement at section
1903(t)(7) of the Act that the Medicare
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and Medicaid programs coordinate
payments to avoid duplication, and that
CMS and the States coordinate
payments through a data matching
process, utilizing NPIs to the extent
practicable. We also discussed section
1903(t)(2) of the Act, which states that
Medicaid EPs must waive rights to
Medicare incentive payments under
sections 1848(o) and 1853(l) of the Act;
hospitals, however, may qualify for
incentives under both programs. We
also proposed requirements under the
review and approval of SMHPs in part
495 subpart D for States to verify that
providers meet these requirements.
In section II.A of this final rule, we
discuss the final requirements we are
adopting in order to avoid duplicate
payments in the Medicare and Medicaid
incentive programs. We also respond to
comments in that section (see section
II.A.5.c. of this final rule). As discussed
in that section of the final rule, to
ensure against duplicate incentive
payments, we believe three conditions
are required: (1) Knowing which EHR
incentive program a provider has
selected, (2) uniquely identifying each
provider participating in each incentive
program; and (3) ensuring that each
State has access to the information on
which EPs or hospitals intend to receive
incentive payments from another State,
or from the Medicare program.
To achieve all three of these
conditions, we will collect this data in
a single provider election repository.
Next, in administering each State
Medicaid EHR incentive program, States
will cross-check for potential
duplicative payments through the data
available to them through the single
provider election repository, which is
based on the NPIs. We believe that this
coordinates with our requirements that
a State must have an approved SMHP
that will include a mechanism for crosschecking this information prior to
payment.
f. Flexibility for EPs To Alternate
Between Medicare and Medicaid EHR
Incentive Programs One Time
We refer readers to section II.A.5.b of
this final rule, which discusses rules
that would allow Medicare and
Medicaid EPs to make one EHR
incentive program election change prior
to the 2015 payment year, and not to
permit any switching after the 2014
payment year. Under such a proposal,
even if an EP initially received incentive
payments under the Medicare program,
such an EP could still switch to the
Medicaid program one time prior to
2015 (assuming the professional meets
all eligibility criteria for the Medicaid
incentives program). Similarly, an EP
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who initially selected the Medicaid EHR
incentive program could switch to the
Medicare program one time prior to
2015. (In other words, the last payment
year an EP could switch would be the
2014 payment year.)
Comments received on these policies
are addressed in section II.A.5.b. of this
final rule.
g. One State Selection
In the proposed rule, we proposed
that EPs and hospitals with multi-State
Medicaid practice locations annually
pick only one State from which to
receive incentive payments. In other
words, a provider would not be able to
receive incentive payments from more
than one State in the same year.
Medicaid EPs and hospitals could
annually change the State they select
when they re-attest to program
requirements.
We considered the possible impact of
this proposed approach with respect to
patient volume calculations on
Medicaid EPs and hospitals in border
State areas, stating that because the
Medicaid incentive payment for EPs
will remain the same—regardless of
whether they receive payment from one
State or from multiple States—we did
not think the administrative complexity
associated with dividing and
administering payments between or
among more than one State could be
justified. We recommended, however,
that States consider border State
providers when developing their
policies on patient volume and the
attestation methodology. We afforded
additional flexibility in the patient
volume at proposed § 495.306 to
account for unique circumstances and
data collection.
Comment: Providers inquired whether
it is permissible for an EP who practices
in more than one State to aggregate
patient encounters in order to achieve
the 30 percent Medicaid patient volume
criteria.
Response: First, it is not clear that
aggregating patient volume across States
will be an issue once EPs actually begin
tallying up patient volume. Patient
volume is calculated as a percentage,
and not an absolute number. Thus, it
does not appear that, but for aggregating
patient volume across multiple States,
an EP would not be able to qualify for
incentive payments in any State. For
example, if an EP has 10 percent patient
volume in one State (10 of 100
encounters are Medicaid) and 20
percent patient volume in a second
State (20 of 100 encounters are
Medicaid), this does not add up to 30
percent patient volume (but, rather,
results in a 15 percent patient volume
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as a result of dividing 30 by 200). To
restate, we do not believe that an EP
will need to sum patient encounters
across multiple States in order to reach
the 30 percent patient volume—as in
order to reach this patient volume
threshold, the EP would likely meet the
30 percent in at least one State. Indeed,
it appears that the only benefit of
aggregating patient volume across States
would be to permit an EP who has more
than a 30 percent patient volume in one
State to receive incentive payments
from another State in which s/he does
not meet the 30 percent threshold.
Nevertheless, we recommend that
States consider the circumstances of
border State providers when developing
their policies and attestation
methodologies. To afford States
maximum flexibility to develop such
policies, we will not be prescriptive
about whether a State may allow a
Medicaid EP to aggregate his/her
patients across practice sites, if the State
has a way to verify the patient volume
attestation when necessary. States will
propose their policies and attestation
methodologies to CMS for approval in
their State Medicaid HIT plans.
We are making no additional
revisions to this section of the rule as a
result of this comment.
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5. Single Provider Election Repository
and State Data Collection
We refer readers to section II.A.5.c of
this final rule for a discussion of the
single provider election repository and
the comments received on this policy.
As discussed in that section, the
repository will collect a minimum
amount of information on all EPs and
hospitals to prevent duplicative
payments and coordinate technical
assistance.
6. Collection of Information Related to
the Eligible Professional’s National
Provider Identifier and the Tax
Identification Number
In our proposed rule, we proposed
that EPs in multiple group practices or
multiple types of practice locations
would be required to select one TIN for
Medicaid EHR payment disbursement.
In other words, such EPs would not be
permitted to require a State to divide
payments among different practices or
practice locations based upon group
TINs. We explained that requiring EPs
to use only one TIN would reduce
administrative complexity, as it would
ensure that States are not put in the
position of dividing payments in any
way an EP requests (such as by patient
encounters or amount contributed to
EHR technology). We also stated that
requiring reimbursement to be made to
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one TIN would reduce opportunities for
fraud or abuse, as States would be able
to cross-check EP and TIN combinations
more easily to verify EP attestations.
We also stated that although the State
would not divide payments among the
various TINs of an individual EP,
Medicaid EPs could, themselves, decide
to divide payment. These EPs could
independently distribute funds among
their respective group practices or
practice locations after the initial
disbursement from the State to their
designated TIN.
Comment: We received comments
suggesting that EPs should be allowed to
proportion their payments and give
multiple TINs.
Response: For these reasons advanced
in the proposed rule, we believe that
permitting an EP to divide the incentive
payment among multiple TINs would
introduce an unnecessary level of
administrative complexity into this
temporary program. It also could
increase the opportunities for fraud and
abuse as it would be more
administratively cumbersome for States
to track multiple payments (to ensure
correct payments) and to track and
verify multiple eligibility-related EP
attestations. Once a payment is
disbursed from the State, nothing
precludes the EP from further
disbursing the incentive payment,
subject to the applicable fraud, waste,
and abuse laws, regulations, and rules.
After consideration of the public
comments received, we are finalizing
these provisions as proposed.
44503
b. Definitions Related to Certified EHR
Technology and Adopting,
Implementing or Upgrading Such
Technology
(1) Certified EHR Technology
As noted previously, in order to
receive a Medicaid incentive payment
the EHR technology must be ‘‘certified.’’
Section 1903(t)(3) of the Act defines
‘‘certified EHR technology’’ as ‘‘a
qualified electronic health record (as
defined in section 3000(13) of the Public
Health Service Act) that is certified
pursuant to section 3001(c)(5) of such
Act as meeting standards adopted under
section 3004 of such Act that are
applicable to the type of record involved
(as determined by the Secretary), such
as an ambulatory electronic health
record for office-based physicians or an
inpatient hospital electronic health
record for hospitals).’’ In section II.A of
this final rule, for both Medicare and
Medicaid, we discussed incorporating
ONC’s definition of certified EHR
technology.
(2) Adopting, Implementing or
Upgrading
Unlike the Medicare incentive
programs, the Medicaid program allows
eligible providers to receive an
incentive payment even before they
have begun to meaningfully use
certified EHR technology. These
providers may receive a first year of
payment if they are engaged in efforts to
‘‘adopt, implement, or upgrade’’ certified
EHR technology. In proposed § 495.302,
we define adopting, implementing or
upgrading certified EHR technology as
the process by which providers have
installed and commenced utilization of
7. Activities Required To Receive
certified EHR technology capable of
meeting meaningful use requirements;
Incentive Payments
or expanded the available functionality
a. General Overview
and commenced utilization of certified
As we discussed in our proposed rule, EHR technology capable of meeting
meaningful use requirements at the
to qualify to receive a first year
practice site, including staffing,
Medicaid incentive payment, section
maintenance, and training.
1903(t)(6)(C)(i) of the Act indicates that
For the purposes of demonstrating
EPs and eligible hospitals must
that providers adopted, implemented, or
demonstrate that they are ‘‘engaged in
upgraded certified EHR technology, we
efforts to adopt, implement, or upgrade
proposed that Medicaid EPs and
certified EHR technology.’’ For providers hospitals would have to attest to having
who meet this standard in their first
adopted, (that is, acquired and installed)
year of participation in the Medicaid
or commenced utilization of (that is,
incentive program, in subsequent years
implemented) certified EHR technology;
of participation, they must then
or expanded (that is, upgraded) the
demonstrate ‘‘meaningful use of certified available functionality of certified EHR
EHR technology through a means that is technology and commenced utilization
approved by the State and acceptable to at their practice site. We proposed that
the Secretary,’’ and that may be based
States would be responsible for ensuring
upon the methods employed under the
that processes are in place to verify that
Medicare incentive payments to
providers have actually adopted,
physicians and hospitals, per sections
implemented or upgraded certified EHR
technology, patient volume, as well as
1848(o) or 1886(n) of the Act.
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other requirements in this section,
including verifying that attestations are
consistent with methodologies to
combat fraud and abuse (see proposed
§ 495.366 through 370, Financial
Oversight, Program Integrity, and
Provider Appeals). We proposed that
the State’s SMHP would detail these
processes.
The CMS Medicaid Transformation
Grants demonstrated the many
challenges that exist to adopting EHR
technology. EHR system availability is
not the same as EHR system utilization.
It is for that reason that we proposed to
include staff training and efforts to
redesign provider workflow under the
definition of implementing certified
EHR technology. We explained that
success is not simply defined by the
acquisition and installation of new or
upgraded certified EHR technology, but
more importantly by providers
demonstrating progress towards the
integration of EHRs into their routine
health care practices to improve patient
safety, care, and outcomes.
In establishing criteria for the
‘‘adoption’’ portion of the ‘‘adopt,
implement, or upgrade’’ requirement, we
proposed that there be evidence that a
provider demonstrated actual
installation prior to the incentive, rather
than ‘‘efforts’’ to install. We stated that
this evidence would serve to
differentiate between activities that may
not result in installation (for example,
researching EHRs or interviewing EHR
vendors) and actual purchase/
acquisition or installation. As Medicaid
incentive payments are intended to
stimulate meaningful use of EHR
technology, we stated our belief that the
payments need to result in tangible
adoption, implementation, or upgrading
of certified EHR technology. We stated
that States would be responsible for
verifying this evidence of EHR adoption.
In establishing criteria for the
‘‘implementation’’ portion of ‘‘adopt,
implement or upgrade’’ requirement, we
proposed that ‘‘implementation’’ mean
that the provider has installed certified
EHR technology and has started using
the certified EHR technology in his or
her clinical practice. Implementation
activities would include staff training in
the certified EHR technology, the data
entry of their patients’ demographic and
administrative data into the EHR, or
establishing data exchange agreements
and relationships between the
provider’s certified EHR technology and
other providers, such as laboratories,
pharmacies, or HIEs.
In establishing the criteria for the
‘‘upgrade’’ portion of ‘‘adopt, implement
or upgrade’’ requirement, we proposed
‘‘upgrade’’ to mean the expansion of the
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functionality of the certified EHR
technology, such as the addition of
clinical decision support, e-prescribing
functionality, CPOE or other
enhancements that facilitate the
meaningful use of certified EHR
technology. We proposed that States
describe in their SMHPs the process that
would be in place for ensuring that
providers have actually adopted,
upgraded or implemented certified EHR
technology. We encourage States to
consider the submission of a vendor
contract from providers to ensure the
existence of EHR technology.
Comment: Several commenters
recommended that CMS clarify if
‘‘upgrade’’ does or does not apply to an
already certified EHR. They
recommended that CMS confirm that an
upgrade is intended to enable a provider
to expand existing functionality of an
EHR so that it meets the new
certification criteria.
Response: To clarify this question, an
example of upgrading that would
qualify for the EHR incentive payment
would be upgrading from an existing
EHR to a newer version that is certified
per the EHR certification criteria
promulgated by ONC related to
meaningful use. Upgrading may also
mean expanding the functionality of an
EHR in order to render it certifiable per
the ONC EHR certification criteria.
We are making no additional
revisions to this section of the final rule
as a result of this comment.
Comment: Commenters wrote that
given that adopt/implement/upgrade
(AIU) involves significant practice
workflow redesign and that the States’
overarching goal is to increase the level
of provider participation, the
commenters recommended that CMS
require only AIU for participation Year
1 and Year 2. They further
recommended that CMS allow AIU
compliance to be further defined as the
provider developing, submitting, and
following a customized plan for the
necessary workflow changes with
timelines (whose development can be
assisted by the Regional Extension
Centers); the provider would have to
meet their timelines for each year in
Stage 1 to qualify for the incentive
payment; and the AIU plan timelines
would have to be structured so
submission of HIT and clinical quality
measures would begin in Stage 2.
Response: The statute at section
1903(t)(6)(C) permits Medicaid
providers to receive the EHR incentives
for adopting, implementing or
upgrading to certified EHR technology
in their first participation year. A
provider’s first participation year may
be any year between 2011 through 2016.
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In their State Medicaid HIT Plans, States
will propose to CMS how they will
audit and oversee Medicaid providers’
adoption, implementation or upgrading
to certified EHR technology. States
should propose further details to CMS
about how they will verify that
providers have met this requirement.
After consideration of the comments
received, we do not believe that just the
development and submission of an
implementation plan for EHR adoption
is a significant enough commitment to
warrant the AIU incentive payment.
There is nothing binding, nor is there
any financial contribution towards such
a plan.
We are making no additional
revisions to this section of the final rule
as a result of this comment.
Comment: Many commenters
suggested that they believe the goal of
this incentive is to help defray some of
the costs of adopting, implementing,
and upgrading to certified EHR
technology. As such, the commenters
believe ‘‘proof’’ of AIU should not
require completion of AIU but
demonstrated commitment to AIU. For
example, a proof of purchase, a
schedule for training and
implementation, and periodic reporting
from practices on progress on the
schedule could suffice. The commenters
requested that States have flexibility to
define what is sufficient to trigger
payment.
Response: States should provide
details to CMS on how they will audit
and oversee Medicaid providers’
adoption, implementation or upgrading
to certified EHR technology in their
SMHP. States’ SMHP should include
further details about how they will
verify that providers have met this
requirement. However, while States may
propose how they will determine what
AIU activities are sufficient for the EHR
incentive payment; CMS must approve
their proposals via the SMHP. The
definitions included in this final
regulation by CMS for adopt, implement
or upgrade do imply completion of at
least one of the three tasks. A proof of
purchase or signed contract would
likely be an acceptable indicator of EHR
adoption per the States. Implementation
is on-going, therefore working actively
with Regional Health IT Extension
Centers on implementation, completion
of specific benchmarks or other
activities towards implementation
would be acceptable.
We are making no additional
revisions to this section of the final rule
as a result of this comment.
Comment: A commenter
recommended that State Medicaid
agencies provide eligible hospitals with
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the maximum incentive payments for
their first two payment years as a
limited source of capital for AIU.
Response: The Medicaid hospital
calculation was part of the HITECH
statute and not defined by CMS. Eligible
Medicaid hospitals can receive their
first year’s payment for AIU and not
meaningful use, but must meet the
meaningful use requirement in their
second and subsequent participation
years.
We are making no additional
revisions to this section of the final rule
as a result of this comment.
Comment: A commenter
recommended that a Medicaid provider
be permitted to qualify for their first
year Medicaid EHR incentive even if
they have not actually installed certified
EHR technology but have spent or are
committed to spend an amount equal to
at least the lesser of $50,000 or 5 percent
of the Medicaid EHR incentive amount.
Response: In consideration of the
comments, we are clarifying that the
final definition of adopt, implement or
upgrade is inclusive of providers’
acquisition, such as a purchase, of a
certified EHR. Providers will be
responsible for providing
documentation which substantiates AIU
as required by the State Medicaid
Agency.
We are revising the definition of
adopt, implement, and upgrade as a
result of these comments, see section
495.302.
c. Other General Terminology
In our proposed rule, we proposed
definitions for ‘‘EHR reporting period’’
and ‘‘payment period,’’ stating that these
definitions relate to the requirements for
Medicaid EPs participating in the
Medicaid EHR incentive program. As
discussed previously, the reporting
period is significant for EPs and eligible
hospitals because it will define the
period during which the provider must
demonstrate meaningful use of certified
EHR technology. The reporting period
also is significant for States, because
States will refer to such reporting
periods in assuring us that providers are
eligible to participate in the Medicaid
EHR incentive program. (Requirements
relating to the components that must be
included in the SMHP were specified in
proposed § 495.332). In the proposed
rule, we specified that States would
need to refer to the providers’ reports of
the activities that establish their efforts
to adopt, implement, or upgrade
certified EHR technology. Similarly,
once meaningful use of EHR technology
is required, States would need to refer
to providers’ reports on meaningful use,
including reporting of clinical quality
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measures (see section II.A. of this final
rule for requirements for clinical quality
measures), in accordance with the
appropriate EHR reporting period.
States could not appropriately make
incentive payments in the absence of
such reporting.
We proposed that States would be
required to validate to us that the
Medicaid EPs and hospitals meet all of
the eligibility criteria to qualify for
Medicaid incentive payments, including
the applicable patient volume
thresholds, hospital-based requirements,
and all other requirements. States would
develop their own administration,
payment and audit processes, and as
described in § 495.332, we would
require that States include in their
SMHPs how they would obtain
Medicaid EPs’ and hospitals’
attestations of eligibility to qualify for
the Medicaid incentive payments. We
proposed that permissible means for
ensuring patient volume and all of the
requirements described in this section
would include survey, attestation, or the
creation of special codes on claims,
subject to our prior approval.
Section 1903(t)(6)(C)(ii) of the Act
also indicates that in the case of an early
adopter, that is, a Medicaid EP or
eligible hospital that has already
adopted certified EHR technology, such
provider would receive payment in the
first year and all subsequent years of the
incentive program by demonstrating
meaningful use.
In our proposed rule, we discussed
our expectation that the bar for
demonstrating meaningful use of
certified EHR technology will rise in
years to come. In this final rule,
meaningful use and its evolving criteria
are discussed in section II.A. In order to
receive Medicaid incentive payments,
providers will be required to
demonstrate (and States will be required
to track and validate) meaningful use, as
described in section II.A.2. of this final
rule. In section II.D.8 of this final rule,
we also discuss our policies regarding
States’ ability to require additional
objectives in the demonstration of
‘‘meaningful use,’’ or otherwise add to
the Federal definition of meaningful
use. We also discuss the requirement
that States receive prior approval of any
such additions.
As we discussed in the proposed rule,
we believe that States should carefully
consider how to build upon their
existing EHR activities and
infrastructure without deterring eligible
Medicaid providers from participating
by compelling them to use a particular
system. We encourage States that were
awarded Federal HIT/EHR grants, such
as the Medicaid Transformation Grants,
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to the extent practicable, to connect the
tools and infrastructure developed
under their Federal grant funds with
providers’ efforts to adopt, implement,
and upgrade certified EHR technology
and to become meaningful users of
certified EHR technology. We will be
evaluating States’ HIT Planning
Advanced Planning Documents (PAPDs)
and SMHPs with this objective in mind,
as described section II.D.8 of this final
rule.
As we discussed in the proposed rule,
States’ system requirements for
monitoring meaningful use must
include the capacity to determine the
appropriate stage of meaningful use and
the appropriate incentive payment
amount, depending upon the providers’
payment year. In other words, regardless
of the calendar year, a provider’s first
year as a participant in the Medicaid
EHR incentive program is when that
provider must demonstrate either
adoption, implementation, upgrading or
meaningful use of certified EHR
technology. States’ systems must be able
to track a provider’s year of entry into
the Medicaid EHR incentive program to
determine the correct eligibility criteria
and generate the appropriate Medicaid
incentive payments.
Once States are giving providers the
Medicaid EHR incentive payments for
being meaningful users of EHRs, and in
2012 begin receiving clinical quality
measures data from those providers, we
proposed that States would be required
to share any such reported data with
CMS in an aggregated, de-identified
manner, on an annual basis. The
timetable and format for sharing the
clinical quality measurement data
would be provided to States in future
policy guidance issued by CMS. States’
failure to submit these required reports
to us could result in discontinued
funding or disallowances. See the
discussion below regarding the SMHP
and the State reporting requirements.
We would use the States’ reports,
including data on meaningful use and
clinical quality measures, in order for
the Secretary to fulfill her
responsibilities to Congress under
section 1903(t)(10) of the Act. This
provision requires that the Secretary
report to Congress on the improvement
of health outcomes, clinical quality, or
efficiency as a result of implementing
this program. For hospitals eligible for
both the Medicare and Medicaid EHR
incentive programs, we proposed that
we would use the meaningful use
measures hospitals report to us to make
quality data on Medicaid eligible
hospitals available to States.
Comment: Commenters requested
clarification on the reporting period for
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adopting, implementing, and upgrading,
and whether this period is similar to the
90-day period for demonstrating
meaningful use in the first year.
Response: As discussed earlier, we are
clarifying that there is a no reporting
period for AIU for the providers’ first
participation year. However, there is a
90-day reporting period for the first
participation year in which Medicaid
providers qualify by demonstrating
meaningful use. The rationale is that we
understand that not all AIU activities
require 90 days, such as EHR
acquisition. States will determine how
they plan to implement this
requirement.
As a result of this comment and a
similar comment above, we are revising
section 495.4 to indicate that there is no
EHR reporting period for adopting,
implementing, or upgrading in
Medicaid providers’ first participation
year, if they qualify based on AIU, and
there is a 90-day reporting period for
both the first year that a Medicaid
provider demonstrates MU (regardless
of whether they demonstrated AIU in
their first participation year or are
qualifying based on MU in their first
participation year).
Comment: Several commenters
requested that CMS clarify the process
that will assure Medicaid access to
Medicare meaningful use data, at a
minimum for (1) hospitals who receive
both Medicaid and Medicare payments
and (2) eligible providers that may
switch once between the Medicaid and
Medicare incentive programs.
Commenters requested that CMS
provide States with Medicare quality
reporting/data in a timely fashion (for
example, within 30 days of receipt of
such information). Alternatively,
commenters suggested that the
providers could be required to report
separately to both Medicare and
Medicaid.
Response: We are finalizing our
policy as proposed. We believe that it
would represent an undue burden on
hospitals eligible for both EHR incentive
payments to report their data to both
CMS and the States. We will issue
further guidance about how States will
be able to access the meaningful use
data submitted to CMS by hospitals
eligible for both Medicare and Medicaid
EHR incentive payments in order for the
State to meet its audit and oversight
requirements. It is not clear to CMS why
a State would require access from CMS
to an eligible professional’s meaningful
use data if they were a Medicare EHR
Incentive Program participant in the
prior year. States can only base a
Medicaid provider’s EHR incentive
payment, as it pertains to meaningful
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use, on the current participation year’s
EHR reporting period.
We are making no additional
revisions to our regulations as a result
of this comment.
Other than the changes explained
above, we are finalizing the remainder
of our proposed policies as they were
proposed.
d. Quality Measures
We refer readers to section II.A.3 of
this final rule-for a discussion of the
clinical quality measure reporting
required for demonstrating meaningful
use of certified EHR technology. As
discussed previously, we intend to
update our definition of meaningful use
biennially, and we expect that our
updated, Stage 2 definition would
include additional Medicaid clinical
quality measures to be reported from
EHRs. We intend to work with the
quality measurement community to
develop these Stage 2 quality measures
(see section II.B.1.d. of this final rule).
Comment: Several commenters
believe that the current clinical
measures do not reflect key clinical
services and issues for the Medicaid
population, including behavioral health,
dental, long-term care, and care
coordination (particularly across
physical and behavioral health care).
The commenters recommend that
CMS work with the Medicaid Medical
Directors and ONC and consider the
development and inclusion of clinical
and non-clinical quality measures that
are more representative of the Medicaid
population. Alternatively they wrote
that CMS and ONC should have a
‘‘placeholder’’ to accommodate data and
interoperability for these measures.
Commenters wrote that the areas with
gaps are behavioral health, dental care,
long-term care, special needs
populations and care coordination,
particularly across physical and
behavioral health. The commenters
recommended that new clinical quality
measures be added as ‘‘placeholders’’ for
care provided by non-eligible, but
critical Medicaid providers, such as
Community Mental Health Centers,
Home Health, and Renal Dialysis
Centers.
Many commenters noted that with
regard to pediatric clinical quality
measures, they recommend that firstyear measures focus on immunizations,
diabetes, asthma, autism, and lead
screening. They also recommend
measures to introduce in 2012 and
beyond to include smoking, obesity,
disease- or condition-specific measures,
and measures aimed at reducing
disparities. They further recommended
measures to introduce in 2013 and
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beyond include the development of
clinical quality measures on
psychology, child abuse, developmental
delays, and efficiency measures.
Response: We agree that these
measures (listed directly above) have
clinical relevance for providers.
However we are aligning with the
Medicare Stage 1 meaningful use
provisions regarding publication and
opportunity for public comment on
quality measures before they are
finalized. We are not including
additional meaningful use objectives
and measures that were not discussed in
the proposed rule.
Comment: Several commenters
believed that the quality measures
proposed in the interim rule do not
match the quality measures that HRSA
currently requires FQHCs to report. The
commenters would like to work with
CMS and HRSA to move forward and
harmonize the quality measures by 2013
but requested that until quality
measures are harmonized across the
federal government system, FQHCs and
the EPs who qualify and assign their
Medicaid incentive payments to the
FQHC should be allowed to report on
the current HRSA measures.
Response: Meaningful use applies to
each individual EP. Therefore the HRSA
quality measures, which are facilitybased, not necessarily NQF-endorsed, or
reportable from EHRs are not an
acceptable alternative for EPs who
practice at an FQHC. Furthermore, as
explained in section II.A. of this final
rule, we are not including in the final
rule quality measures that were not
included in the proposed rule. To
ensure uniformity across both programs,
we have adopted this same policy for
Medicaid. We believe it is important to
offer Medicaid providers and
stakeholders the same opportunity for
public comment on quality measures.
We agree with the goal of
harmonizing quality measure reporting
across Federal programs and will engage
with stakeholders and experts to
address this priority as part of the
development of the Stage 2 definition of
meaningful use.
We are finalizing these provisions as
proposed and we will continue to work
to identify, and develop electronic
specifications for additional clinical
quality measures that address current
gaps, such as long-term care, behavioral
health, pediatrics and oral health for
Stage 2 of meaningful use. In particular,
we recognize the lack of endorsed oral
health clinical quality measures, with
identified and tested electronic
specifications. This poses a challenge
for dentists, who are eligible
professionals for the Medicaid EHR
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incentives, to demonstrate meaningful
use, other than with the general,
profession-neutral measures.
While an eligible professional can
report ‘‘zero’’ for the denominator of any
measure for which s/he does not have
any relevant patients, we will work to
include in Stage 2 of meaningful use,
clinical quality measures that would
provide useful data to CMS and States
on oral health care as reported by EHRs.
In addition, in order to minimize
provider burden, and to maximize
measure reporting efforts and resources,
we seek to align the quality measures for
the Stage 2 definition of meaningful use
with other quality measures
development and reporting related to
health care reform and other CMS
quality measures programs, as
appropriate and feasible. Stage 1 of
meaningful use is limited to objectives
and measures that are already in
existence, not those still under
development. Measures will be
included that have operational
relevance to the care provided to
Medicaid and CHIP beneficiaries by
eligible professionals and hospitals
defined in the HITECH Act.
8. Overview of Conditions for States To
Receive Federal Financial Participation
(FFP) for Incentive Payments and
Implementation Funding
Section 1903(a)(3)(F) of the Act
provides that States are eligible for 100
percent FFP for direct payment
expenditures to certain Medicaid EPs
and eligible hospitals to encourage the
adoption and use of certified EHR
technology. States are also eligible for
90 percent FFP for reasonable
administrative expenses, contingent on
State compliance with the following
requirements: (1) Using the funds to
administer Medicaid incentive
payments for certified EHR technology,
including tracking of meaningful use by
Medicaid EPs and eligible hospitals; (2)
conducting oversight of the Medicaid
EHR incentive program, including
routine tracking of meaningful use
attestations and reporting mechanisms;
and (3) pursuing initiatives to encourage
the adoption of certified EHR
technology for the promotion of health
care quality and the exchange of health
care information. (See 1903(t)(9) of the
Act.)
This section of the final rule discusses
the requirements for States to request
FFP from CMS for the Medicaid EHR
incentive program. Additionally, this
section is closely connected to the
requirements outlined in Financial
Oversight, Program Integrity and
Providers Appeals for purposes of
oversight and accountability.
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In proposed § 495.302, we defined
terms used in the Medicaid subpart of
the regulations governing State requests
for FFP. Although some of these terms
have been defined in other portions of
our regulations, for ease of reference,
and in order to define the terms in this
specific context, we proposed to
separately include definitions in part
495.
We proposed to include in our
regulations the requirements that in
order to qualify to receive FFP for
administering the incentive program,
States must develop a SMHP, an HIT
Planning APD (PAPD), and an HIT
Implementation APD (IAPD). These
documents lay out the process used by
States to implement and oversee the
EHR incentive program, and will help
States to construct an HIT roadmap to
develop the systems necessary to
support eligible providers in their
adoption and meaningful use of
certified EHR technology. The
development of a SMHP (see also
§ 495.332) provides States with the
opportunity to analyze and plan for how
EHR technology, over time, can be used
to enhance quality and health care
outcomes, while reducing overall health
care costs. The uses of EHR technology
can be integrated with existing State
resources to achieve these goals.
We provided guidance in a State
Medicaid Director’s (SMD) letter on
September 1, 2009, on this process and
the State efforts necessary to receive the
90 percent FFP for planning-related
expenditures. As stated in that letter,
and as further required through this
rulemaking, our review process ensures
that States are complying with
requirements of the HITECH Act, and
that they demonstrate to the
‘‘satisfaction of the Secretary’’ that they
are using the funds in the manner
anticipated by the law. For example,
because of our oversight
responsibilities, simply proposing
activities would not ensure the 90
percent FFP. As explained in the letter,
and as further reflected in this
rulemaking, we must review and prior
approve all elements of the State’s
SMHP, and APD documents, and work
with States to determine the appropriate
level and type of FFP.
States are required to submit these
advance planning documents in order
for us to approve receipt of the 90
percent Federal match. Specifically,
prior approval is required for the HIT
PAPD (see also § 495.336). The
deliverable resulting from the HIT PAPD
is the SMHP. The SMHP must be
reviewed and approved before it is
included in an IAPD (see also
§ 495.338). The IAPD also must be prior
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approved. Until approval is granted
States cannot draw down funds.
For purposes of the Medicaid EHR
incentive program, we believe there are
two high-level phases in the process of
planning and implementing the
incentive program, as well as the
promoting the adoption of EHR. Phase
I includes initial planning, including an
assessment of the State EHR
environmental landscape, and
development of the SMHP. As
explained in our September 1, 2009
letter, the vehicle for informing us of
Phase I activities is the HIT PAPD, and
indeed, over 40 States have already
submitted their PAPDs and have
received funding to begin Phase I
activities. Phase II then involves further
development and full implementation of
the SMHP. Consequently, the HIT IAPD
is the vehicle for reporting of Phase II
activities. As discussed in the SMD
letter, and as further reflected in this
final rule, States need to receive prior
approval of their planning documents.
In fact, we have already worked closely
with the majority of States in
developing their HIT PAPDs, prior to
them initiating their EHR planning
activities, and we expect this close
coordination to continue between the
States and CMS.
Also, as proposed, in this final rule
we will require States to obtain prior
written approval of funding, planning
documents, proposed budgets, project
schedules, and certain implementation
activities that a State may wish to
pursue in support of the Medicaid EHR
incentive program to encourage the
adoption and use of certified EHR
technology in line with the 90 percent
FFP available to States. To minimize the
burden on States, we designed the prior
approval conditions, and the prior
approval process, to mirror what is
presently used in support of acquiring
automated data processing equipment
and services in conjunction with
development and operation of State
MMIS (the State’s automated
mechanized claims processing and
information retrieval system approved
by CMS).
As proposed, this final rule (at
495.348) will require State Medicaid
programs to comply with current
procurement standards. Specifically, at
495.348 we have included language that
accords with the procurement
requirements in 45 CFR part 95 subpart
F and incorporates many of the
procurement standards previously
contained in 42 CFR part 74. Inclusion
of these procurement requirements
maintains the long-standing
procurement standards and policies for
State information technology contracts.
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Under these standards the State must
ensure that when procuring HIT
equipment and/or services, there is
maximum practical open and free
competition, and that any procured
materials or services are obtained in a
cost-effective manner. The regulations
also make clear that the State, as the
grantee, is responsible for meeting its
contractual responsibilities under any of
its procurements, and will not have
recourse to the Federal government to
settle or satisfy its contractual and
administrative issues. Further, States
must have written standards of conduct
regarding the performance of its
employees that are engaged in the award
and administration of the HIT
equipment/services contracts (including
conflict of interest rules contained in
495.348(c)). States must have written
procurement procedures that accord
with 495.348(e) and a system for
administering contracts in accordance
with 495.348(f). Procurement contracts
must meet the additional requirements
contained in 495.348(g) as well as
describe the conditions under which the
contract may be terminated for default
or because of circumstances beyond the
control of the contractor (see
495.348(h)). Procurement contracts must
include provisions allowing State and
Federal access to the materials and staff
of the contractor, in accordance with
495.348(i).
As was proposed, our final
regulations at 495.346 also will require
the State agency to allow the
Department access to all records and
systems operated by the State in support
of the program. Final regulations at
495.352 impose reporting requirements
on States to submit to the Department,
on a quarterly basis, a progress report
documenting specific implementation
and oversight activities performed
during the quarter. Regulations at
495.354 through 495.360 contain rules
for charging equipment, nondiscrimination requirements,
requirements for cost allocation plans,
and requirements for ownership rights
in software. Our rules would require
termination of FFP in the case of States
failing to provide access to information
relating to any of the requirements we
have included in this subpart. We
believe the procurement and other rules
discussed above are authorized under
section 1902(a)(4) of the Act, as well as
under section 1903(t)(9) of the Act
requiring a State to conduct adequate
oversight of its program, and use its
funds to administer the incentive
payments. In addition, any reporting
and other requirements will assist us in
submitting the reports that are required
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under section 1903(t)(10) of the Act,
which requires us to monitor and report
on the progress of implementation of the
EHR provisions.
As proposed, State Medicaid agencies
will be required to attest, as required by
section 1903(t)(6)(A)(i) of the Act, that
States make Medicaid incentive
payments to a Medicaid EP or eligible
hospital directly (or to an employer or
facility to which such Medicaid EP or
eligible hospital has assigned their
Medicaid incentive payments) without
any deduction or rebate. States must
also attest that payments to an entity
promoting the adoption of certified EHR
technology, as designated by the State,
will only be made if participation in
such a payment arrangement is
voluntary for the Medicaid EP involved,
and if such entity does not retain more
than 5 percent of such assigned
Medicaid incentive payments for costs
not related to such technology. (See
495.332 of our final rules). States are
required to attest that the entire
incentive payment has been forwarded
to the eligible Medicaid provider, and
that no Medicaid eligible professional or
hospital is required to return any
portion of the incentive payment to the
State Medicaid agency. States must
establish a process to ensure that any
existing fiscal relationships with eligible
professionals or hospitals to disburse
the Medicaid incentive payments
through Medicaid managed care plans
does not result in payments that exceed
105 percent of the capitation rate, in
order to comply with the Medicaid
managed care incentive payment rules
at § 438.6(c)(5)(iii) and a methodology
for verifying such information.
Additionally, we are requiring that
termination of funding approved under
this proposed Part 495 subpart D or
disallowance of FFP may result if the
State fails to meet the requirements and
undertakings of the approved PAPD,
SMHP, and IAPD, or fails to provide
access to the required information.
Since section 4201 of the HITECH Act
amends section 1903(a)(3) of the Act to
provide for 90 percent FFP for costs
associated with certain administrative
activities performed by a State, we have
allowed for claiming of such reasonable
costs incurred on or after February 18,
2009, prior to publication of the final
rule. Specifically, a State that can show
that initial planning stages of moving
the State in the direction of meaningful
use of certified EHR technology through
such activities as training efforts, staff
support, or contracting with a vendor
may potentially receive retroactive FFP
back to the date in which these efforts
began, with CMS approval, but not
before February 18, 2009.
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Comment: Several commenters
expressed concerns about the timing of
planning and implementation and
request flexibility in this area.
Commenters indicated that there will be
a need for ongoing planning while rules
and guidelines are being promulgated.
Commenters indicated that they
envision a phased approach to
implementation, and request that CMS
permit simultaneous expenditure of
both planning and implementation
funds.
Response: We proposed specific
requirements for States to request FFP
from CMS for the Medicaid EHR
incentive program modeled on the
process States use to request FFP from
CMS for Medicaid Management
Information Systems technology
projects. CMS proposed to utilize
information and documentation that
will result from the process described in
this section to evaluate approaches
proposed by States, track and monitor
progress of implementation, and
perform the statutory program and
financial oversight required for this new
program.
In establishing the requirements we
believe States will have flexibility to
request FFP for planning and
implementation activities to implement
the provisions of the EHR incentive
program in a manner that is similar to
and consistent with current approaches
to receive enhanced FFP for MMIS
systems under the Medicaid program.
This will enable States to modify or
adapt as changes occur during the
planning and implementation phases
envisioned under this proposed rule.
Further, we believe that the information
required is consistent with section
1903(t)(9) of the Act that States must
demonstrate to the satisfaction of the
Secretary that the State is conducting
adequate oversight.
We agree with the need for flexibility
in planning for the Medicaid incentive
program, and the conduct of
implementation activities to ensure the
program is successful in the long-term.
We have added additional clarifying
information in the sections regarding
the HIT PAPD, HIT IAPD, As-needed
HIT PAPD update and as-needed HIT
IAPD update, Annual HIT IAPD
requirements, and SMHP requirements.
These clarifications are consistent with
guidance issued in our State Medicaid
Director’s letter on September 1, 2009,
which indicated that CMS anticipates a
phased approach to planning and
implementation activities.
Finally, for the final rule we are
making numerous changes in order to be
more specific and provide additional
clarity regarding certain terms and
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requirements. These revisions are
reflected here; however, regulations text
is not updated since the concepts of
these terms remain the same.
Clarifications are as follows:
We have further defined the terms
‘‘service oriented architecture (SOA)’’, or
‘‘service component based architecture’’
to indicate that they are a means of
organizing and developing information
technology capabilities as collaborating
services that interact with each other
based on open standards. We are
defining this term in the context of
health IT projects authorized under the
Act to ensure that different systems and
programming languages provide a basis
for interoperability among and between
applications that may reside on different
platforms through a communication
protocol to achieve health information
exchange required under the Act. CMS
anticipates that States will describe
proposed HIT projects in the context of
SOA principles, and intends to evaluate
plans for health information exchange,
and interoperable health IT based on
these commonly used information
technology principles.
We have also further defined the term
‘‘State self-assessment (SS–A),’’ a
component of MITA, as a process that
a State will use to review its Medicaid
information technology strategic goals
and objectives, measure its current
baseline business processes and
capabilities against defined MITA
business capabilities, and develop
targeted future capabilities to transform
the Medicaid enterprise to be consistent
with the MITA principles of
interoperability and exchange of health
information. Although we are including
a definition of State self assessment in
this final rule, we are deleting the
requirement that a State provide the
MITA SS–A, as we believe the as-is
assessment supercedes the need for a
separate MITA SS–A. However, we
believe it is important to keep a
definition of SS–A, because there is an
inter-connection between activities
accomplished under the Medicaid EHR
Incentive Program and States’ MMIS
enhancements. For example, data
exchanges between various State
systems that comprise the Medicaid
enterprise of the State might also
support the State’s administration of the
EHR Incentive Program.
We are further defining MITA,
because we expect that States will
describe proposed health IT projects as
well as their ‘‘as is’’ landscapes using
MITA concepts and principles. We
intend to evaluate States’ proposed
strategies and plans for development of
Medicaid health information exchange
and interoperable health IT using these
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MITA principles, as applicable. These
strategies and plans must be included in
the State Medicaid Health Information
Technology Plan (SMHP), a term
discussed below. We have previously
published a document entitled ‘‘MITA
Framework 2.0’’ on the CMS Web site at
https://www.cms.hhs.gov/
MedicaidInfoTechArch. The MITA
Framework 2.0 was developed by CMS
in collaboration with State Medicaid
agencies and information technology
vendors to facilitate the adoption of
information technology principles and
practices that will lead to increased
deployment of state-of-the-art
technologies and improved management
of the Medicaid program. States
presently are utilizing MITA and the
SS–A for Medicaid IT projects approved
by CMS, and application of these
principles for activities required under
this proposed rule will not add
additional burden to State efforts to
adopt HIT as envisioned under the
Section 1903(a)(3)(F) of the Act.
The MITA principles and tools foster
integrated business processes and IT
transformation for all States. It achieves
this in part by demonstrating that
planned enhancements to Medicaid
systems, including MMIS, support State
and Medicaid strategic goals and how
intra-state systems other than the MMIS
have been considered in developing the
solutions. We believe that as States and
providers implement EHRs, it will be
necessary and essential to plan
technology upgrades that will facilitate
health information exchange with
Medicaid providers receiving incentive
funding.
We are further clarifying that we are
defining the Medicaid Management
Information System (MMIS) as it relates
to specific requirements for Medicaid
claims processing and information
retrieval contained in current
regulations at 42 CFR part 433, subpart
C. We proposed a definition of the term
MMIS because it is the common term
that CMS, State Medicaid agencies, and
industry use to refer to the Mechanized
Claims Processing and Information
Retrieval Systems specified in section
1903(a)(3) of the Social Security Act.
MMIS means the system of software and
hardware used to process Medicaid
claims from providers of medical care
and services for the medical care and
services furnished to recipients under
the medical assistance program and to
retrieve and produce service utilization
and management information required
by the Medicaid single State agency and
Federal Government for program
administration and audit purposes. The
objectives of the MMIS include claims
processing and retrieval of utilization
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and management information necessary
for program administration and audit
and must coordinate with other
mechanized systems and subsystems
that perform other functions, such as
eligibility determination. The MMIS is
also compatible with the claims
processing and information retrieval
systems used in the administration of
the Medicare program.
We believe that States will utilize
their MMIS extensively in administering
the provisions of this proposed rule,
including but not limited to payment
and tracking of Medicaid incentive
payments, access to data and
information necessary to establish the
vision for Medicaid health IT, and
achieving interoperability and health
information exchange envisioned in the
Act.
In the proposed regulation at
§ 495.332 we proposed a definition of
the term State Medicaid Health
Information Technology Plan (SMHP) as
an integral part of planning and
implementation of the EHR incentive
program. The SMHP is a comprehensive
document that describes the State’s
current and future health IT activities in
support of the Medicaid EHR incentive
program. We further clarify that we
require that the SMHP will be
developed by the State Medicaid
agency, after consulting with other
stakeholders across the State. The
SMHP will be reviewed and approved
by CMS prior to any activities described
in the SMHP being funded and
implemented. We anticipate State
agencies will engage a wide range of
stakeholders within and outside of State
and Federal government to develop a
vision of how the Medicaid EHR
incentive program will operate in
concert with the larger health system
and statewide efforts. The SMHP is
required to participate in the Medicaid
incentive program because we believe
that States must develop a strategic
vision and plan that includes clear
targets and measurable outcomes to be
consistent with the intent of section
1903(a)(3)(F) of the Act to encourage the
adoption and meaningful use of
certified EHR technology.
The SMHP is intended to serve as the
vision for developing the desired future
state for the Medicaid IT environment
that furthers the goals of health
information exchange and meaningful
use envisioned under the Act. The
SMHP should be coordinated and
integrated with the Statewide plan for
health IT developed under section 3013
of the Public Health Service Act, which
is developed by the designated
statewide entity. To ensure that the
SMHP is coordinated and integrated
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with the Statewide plan, we will
develop criteria and processes for the
evaluation of the SMHP consistent with
ONC’s review of the Statewide plans.
The SMHP must contain: (a) A current
health IT landscape assessment; (b) a
vision of the State’s HIT future
landscape, and (c) the specific actions
necessary to implement the incentive
payments program, including a health
IT roadmap to achieve those actions.
This deliverable will be the ‘‘plan’’ to
determine how the incentive payments
will be administered; however, it is not
the implementation of such plan. The
SMHP must include all of the elements
listed in 495.332; however, we realize
that States may not have all of the
answers initially. States will not be
permitted to make incentive payments
to providers unless they have a
comprehensive EHR incentive payment
program established. However, if States
are not completely clear, for example,
about their ‘‘to be’’ world at the time of
the submission of their SMHP, States
can present the components that are
finalized and revise the SMHP to further
discuss their ‘‘to be’’ world at a later
time. Additionally, as stated previously
in this final rule, we have revised the
rule to include a requirement that the
SMHP must describe the process in
place and the methodology for verifying
that eligible professionals meet their
responsibility for 15 percent of the net
average allowable cost for certified EHR
technology and that the SMHP include
information about how States will
validate the patient volume consistent
with the menu of options listed in
§ 495.306.
For this final rule, we are also
explaining our understanding that the
elements of the SMHP, as listed in
§ 495.332, may be separated into four
categories, as follows:
(1) Assessment and Planning. This
category of SMHP elements addresses
requirements in the Act relating to
increasing the use of health IT,
including EHR, ensuring
interoperability, and meaningful use of
certified EHRs. As proposed, States will
perform comprehensive assessments of
the current health IT landscape
environment in the State, including the
inventory of existing health IT in the
State, including ‘‘as is’’ and ‘‘to be’’
landscape assessments. Also, as
proposed, States will develop a 5-year
strategic plan, and a description of how
the State Medicaid HIT plan will be
planned, designed, developed and
implemented, including how it will be
implemented, and a description of how
intrastate systems, including the MMIS,
and other claims systems, have been
considered in developing a health IT
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solution. The SMHP will include a
description of data-sharing components
of proposed health IT solutions,
including security provisions, and
description of how the State will
support integration of clinical and
administrative data.
(2) Ensuring improvements in health
outcomes, clinical quality, and
efficiency. This category of SMHP
elements will address requirements in
the Act relating to improving healthcare
quality and lowering costs. As
proposed, States will include
components that describe a process for
ensuring improvements in health
outcomes, clinical quality, or efficiency
resulting from the adoption of certified
EHR technology by recipients of
Medicaid EHR incentive payments and
a methodology for verifying such
information. As proposed, we are
requiring a description of how the State
will address, in the long-term, the needs
of underserved and vulnerable
populations such as children,
individuals with chronic conditions,
Title IV–E foster care children,
individuals in long-term care settings
and the aged, blind, and disabled. We
proposed that in order to obtain
approval for their SMHP and
implementation funding, a State would
have to detail how their EHR Incentive
Program addressed the concepts of selfdirection including budget development
and expenditure tracking for persons
with disabilities. After additional
consideration, CMS decided that these
concepts are not directly applicable to
electronic health records or meaningful
use, per se, and while important, are
more associated with other e-Health
tools, such as personal health records.
Furthermore, the provider types to
whom this is most directly relevant,
such as home, institutional and
community-based providers and
facilities, are not eligible for EHR
incentives so including planning for this
issue was not perceived as rising to the
level of a requirement. It is anticipated
that Stage 2 of meaningful use will
include greater levels of patient
engagement, including via personal
health records. However, we think it is
premature to require that States fully
address this issue in their SMHPs order
to initiate their EHR Incentive Programs
for Stage 1.
As proposed, we will also require a
description of the process in place for
ensuring that any certified EHR
technology used as the basis for
incentive payments to Medicaid
providers is compatible with State or
Federal administrative management
systems, including the MMIS, or other
automated claims processing system or
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information retrieval system, and a
methodology for verifying such
information.
(3) Interoperability and Health
Information Exchange. This category of
SMHP elements will address
requirements in the Act relating to
ensuring interoperability and increasing
health information exchange. We
proposed a series of elements that
explain how the State will adopt
national data standards for health and
data exchange and open standards for
technical solutions as they become
available. These elements of the SMHP
also are included in our final rule.
(4) Administration and Oversight.
This category of SMHP elements
address the requirements in the Act
relating to implementation and financial
oversight of the program. For provider
eligibility, we proposed that States
provide a description of the process
they will use for ensuring that each EP
and eligible hospital meets provider
enrollment eligibility criteria upon
enrollment and re-enrollment to the
Medicaid EHR payment incentive
program, and the process for ensuring
patient volume consistent with the
criteria in § 495.304 and § 495.306, and
for ensuring that each Medicaid EP is
not hospital-based and that there is a
methodology in place used to verify
such information. We are finalizing
most of these requirements, as
proposed. However, in response to
comments suggesting that CMS define
the term ‘‘encounter’’ and take a menu
approach to patient volume to allow
States several options, based on their
data sources, CMS has included changes
to the SMHP requirements for the
patient volume requirement in
§ 495.302, § 495.306, and § 495.332.
These changes are discussed under the
patient volume section of this final rule.
We note that States that wish to offer an
alternative for estimating patient
volume would be required to involve
key stakeholders in the determination of
such alternative. We also proposed, and
are finalizing, specific elements in the
SMHP relating to monitoring and
validation of information, including a
method of ensuring all information from
provider attestations is captured, stored,
and verified, and any information added
to the CMS Single Provider Repository
is all true and accurate. We also
proposed, and are finalizing, that States
include a list of the specific actions
planned to implement the EHR
incentive program, including a
description and organizational charts for
workgroups within State government
and external partners. As proposed,
States will need to describe the process
they have in place to ensure that no
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amounts higher than 100 percent of FFP
will be claimed for reimbursement of
expenditures for State payments to
Medicaid eligible providers for the
certified EHR incentive payment
program, and a methodology for
verifying such information is available
and the process to ensure that no
amounts higher than 90 percent of FFP
will be claimed for CMS-approved
administrative expenses in
administering the certified EHR
technology incentive payment program,
including a methodology for verifying
such information. As proposed, States
will need to include mechanisms for
making timely and accurate payments
and a requirement that providers attest
that they are not receiving a payment in
any other State under the Medicaid EHR
incentive program. This category also
includes elements relating to financial
management and auditing necessary to
ensure the proper and efficient
management and oversight of the
program and FFP.
Finally, we proposed that the States
may propose in the SMHP alternatives
to measuring patient volume or
achieving meaningful use. The rules for
proposing alternatives are discussed
elsewhere in this final rule.
We are further clarifying the
definition of Health Information
Technology Planning Advance Planning
Document (HIT PAPD) (and any
necessary update documents) to mean a
plan of action that requests FFP and
approval to initiate and accomplish
planning activities necessary for a State
agency to determine the need for and
plan the acquisition of HIT equipment
and services, and to acquire information
necessary to prepare a HIT
Implementation Advanced Planning
Document (HIT IAPD), described below,
or common procurement instruments,
such as requests for proposals, or
requests for qualifications and
quotations, necessary to implement the
SMHP. CMS is including a definition of
the HIT PAPD so that States may submit
proposed resources and planning
activities, which are described in further
detail in our State Medicaid Director’s
letter on September 1, 2009, to receive
the 90 percent FFP match for initial
planning activities related to the
Medicaid EHR incentive payment
program. In order to qualify for the 90
percent FFP administrative match,
section 1903(t)(9) of the Act requires a
State to demonstrate, to the satisfaction
of the Secretary, compliance with three
specific criteria:
(A) The State uses the funds for
purposes of administering the incentive
payments, including the tracking of
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meaningful use of certified EHR
technology by Medicaid providers;
(B) The State conducts adequate
oversight of the incentive program,
including routine tracking of
meaningful use attestations and
reporting mechanisms; and
(C) The State pursues initiatives to
encourage adoption of certified EHR
technology to promote health care
quality and the exchange of health care
information under Medicaid, subject to
applicable laws and regulations
governing such exchange, while
ensuring privacy and security of data
provided to its data exchange partners.
We are further clarifying the
definition of Health Information
Technology Implementation Advance
Planning Document (HIT IAPD) (and
any necessary update documents) to
mean a plan of action that requests
approval of FFP to acquire necessary
resources to implement and administer
the activities and objectives of the
State’s proposed SMHP, once the SMHP
is approved by CMS, including the
allocation or acquisition of human
resources, services and equipment. To
qualify to receive FFP for administering
the incentive program, States must
develop an HIT PAPD, SMHP, and an
HIT IAPD. These documents would lay
out the process States will use to
implement and oversee the EHR
incentive program, and would help
States to construct and maintain a
health IT roadmap to develop the
systems necessary to support providers
in their adoption and meaningful use of
certified EHR technology.
With respect to FFP under the
Medicaid incentive program, we are
clarifying that the incentive payments to
providers are matched at 100 percent
FFP as described above, and therefore
there is no non-Federal share for these
payments. However, there is a nonFederal share necessary for the
administration of the payment
incentives. That is, CMS is reimbursing
States at 90 percent FFP for reasonable
expenses related to the administration
of the payment incentives. States must
fund the 10 percent non-Federal share
of Medicaid health information
technology (health IT) administrative
payments consistent with existing rules
and regulations regarding funding of the
non-Federal share. We review nonFederal share funding sources to ensure
compliance with existing statute and
regulations. Consistent with current
practice, we will review non-Federal
share funding sources on an individual
basis using information provided by the
State and gathered by CMS staff.
Existing rules permit States to provide
the non-Federal share of administrative
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44511
claims through various sources,
including appropriations,
intergovernmental transfers, certified
public expenditures, bona fide
donations, and permissible health care
related taxes. CMS’ regional financial
management staff will review funding
sources and will review the Medicaid
Budget and Expenditure System to
ensure that all claims for reimbursement
are appropriate. Additionally, States are
required to submit SMHPs outlining
their process for making payments and
ensuring that all claims for
reimbursement are appropriate to CMS
for review and approval.
At § 495.324 we proposed to review
and prior approve all elements of the
State’s APD documents and SMHP
described in this rule to ensure that all
of the intended objectives of the
program are addressed. We are
finalizing this proposal. States are
required to submit these APD
documents and the SMHP in order for
us to approve FFP. Specifically, prior
approval is required for the HIT PAPD
(see also § 495.336). The deliverable
resulting from the HIT PAPD is the
SMHP. The SMHP will be reviewed and
approved before it is included in an HIT
Implementation APD (HIT IAPD) (see
also § 495.338). The HIT IAPD also must
be prior approved. After a HIT PAPD is
approved for planning activities, and
these planning activities are complete,
we anticipate that in certain cases,
States may decide to submit the SMHP
and HIT IAPD together in one
submission for CMS review and
approval. In all cases, until approval is
granted, States cannot draw down
Federal funds. We envision that the
prior approval process described at
§ 495.324 will permit States to work
closely with CMS in developing the HIT
PAPD prior to initiating EHR planning
activities and prior to submission of the
initial HIT PAPD.
We are defining ‘‘as needed’’ and
‘‘annual’’ updates to the HIT PAPD and
HIT IAPD at § 495.340 and § 495.342. In
consultation with States and other key
stakeholders, CMS has determined that
planning and implementing the
Medicaid EHR incentive payment
program will be a complex process that
will result in a need for ‘‘as needed’’ and
‘‘annual’’ updates to the original scope of
work. Therefore, we proposed that the
APD process would allow States to
update their APD documents when they
anticipate changes in the amount of
FFP, duration of the project, or scope of
work or activities under the APD. We
are finalizing this proposal, as it allows
States flexibility to add additional tasks
and milestones as the project evolves, as
determined since the date the APD was
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initially approved or since the most
recently updated and approved APD.
We initially proposed that we
envision two phases in the process of
planning and implementing the
incentive program, as well as the
promotion of adoption and meaningful
use of EHR. We are further clarifying
that based on submission of HIT PAPDs
in response to guidance provided in our
State Medicaid Director’s letter of
September 1, 2009, initial planning
timelines are ranging from 6 months to
18 months to develop the SMHP. CMS
envisions that States will begin to
administer the EHR incentive program
on January 1, 2011, once the SMHP and
IAPD are approved. As proposed, we
will issue additional written guidance,
similar to our earlier SMD letter,
concerning timelines for
implementation of the EHR incentive
program as States develop the SMHP.
We require the HIT IAPD as the
vehicle for informing us of Phase II
activities. We anticipate that States will
also have ongoing planning needs as
implementation activities, once
approved under the IAPD, are under
way. We further envision that the IAPD
‘‘annual’’ or ‘‘as needed’’ updates may
also include requests for approval of
FFP for other Phase II that are necessary
to continue planning and development
for the ongoing implementation phases
of the program. In section 495.388, we
proposed to require that States submit
information in the IAPD regarding an
estimate of prospective cost allocation
(OMB Circular A–87, Cost Principles for
State, Local, and Indian Tribal
Governments) to the various State and
Federal funding sources and the
proposed procedures for distributing
costs including a detailed payment list
file to include NPI, name, and type of
provider for which the State will
provide incentive payments. For the
final rule, we are continuing to require
the estimate of prospective cost
distribution and the procedures for
distributing costs; however, we are
eliminating the requirement that States
have to submit NPI, name and provider
type as part of the estimates for cost
distribution since we realize that in
continuing to require this information
States will not be able to submit
approvable IAPDs to CMS because
States will not have this information at
the time of submittal; hence, States will
not be successful in implementing this
program.
We wish to further clarify that in
proposing termination of funding if the
State fails to meet the requirements and
undertakings of the approved HIT
PAPD, SMHP, and HIT IAPD, or fails to
provide access to the required
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information, this requirement is
necessary to ensure the proper and
efficient use of FFP and is consistent
with present authority under the Act
and existing regulations that are
promulgated by CMS, including at 45
CFR Part 95, Subpart F.
Comment: One commenter questioned
whether the EHR incentive payments
will be required to be processed through
the Medicaid Management Information
System (MMIS).
Response: Payments under the
Medicaid EHR incentive program are
authorized under Title XIX of the Social
Security Act as part of the Medicaid
program. We require that States have an
automated claims processing and
information and retrieval system,
known as MMIS to manage health care
provider payments for health care
services, and provide information for
program management, administration,
and auditing. As such, we believe that
most States will choose to process,
monitor, and report Medicaid incentive
payments to eligible professionals and
hospitals participating in the Medicaid
EHR incentive program using the MMIS.
States may propose alternative methods
to process, monitor, and report
Medicaid incentive payments in their
SMHP. Any proposed method to
process, monitor, and report Medicaid
incentive payments, including
utilization of the State’s MMIS, must be
approved by CMS. Through guidance
issued in a State Medicaid Directors
Letter and via case by case analysis of
APDs, CMS will collaborate with States
to approve system development and
enhancement expenditures under the
most appropriate funding source,
HITECH or MMIS.
Comment: One commenter provided
comments on § 495.348(d), Procurement
standards; Competition, and
§ 495.360(a). The commenter agrees that
procurement transactions are conducted
to provide, to the maximum extent
practicable, open and free competition
and recommends that procurement
transactions require that bidders bid
specifically for the EHR portion of any
project (to ensure that the discrete costs
are clearly identified), (2) no certified
EHR technology may be excluded from
bidding, and (3) all projects must be
both EHR-neutral and provider-neutral.
They further comment that CMS could
consider having either a cap or
percentage limits on the amount of
administrative costs or consulting fees
to ensure that the bulk of the award is
used for the hard costs of the project:
equipment, connectivity, and training.
Response: The requirement in
§ 495.348(d) is limited to States and
other grantees of Federal funds
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authorized under Title XIX of the Social
Security Act and does not apply to
procurement standards for vendors
bidding on EHR technology for eligible
providers. However, CMS will
encourage States to include adoption of
interoperable solutions that align with
the MITA principles that address IT
architectural and platform neutrality.
We are making no additional
revisions to this section of the rule as a
result of this comment.
Comment: One commenter
recommended that CMS reconsider the
general rule set forth in § 495.360 that
‘‘the State or local government must
include a clause in all procurement
instruments that provides that the State
or local government will have all
ownership rights in software or
modifications thereof and associated
documentation designed, developed or
installed with FFP under this Subpart.’’
The commenter states that it is typical
for the vendor to own the underlying
software, and State or local governments
are provided a license to use the
software, and this is contrary to the
proposed general rule.
Response: We disagree with the
recommendation to exclude a clause in
all State procurement instruments that
provides that the State or local
government will have all ownership
rights in software developed or
modified using Federal funding. This is
a long-standing principal for use of FFP
associated with the development of
information technology solutions that
may be licensed for use by other State
or Federal government agencies to
benefit the Medicaid program, at no
additional cost for the license. CMS
clarifies that costs of the license
agreements for proprietary software may
be reimbursable under the provisions of
1903(a)(3)(F)(ii) of the Act that provides
for 90 percent FFP for costs associated
with certain administrative activities
performed by a State. However, costs
associated with developing or
modifying software may not be funded
with Federal funds unless the State has
ownership rights to that software. This
provision does not apply to eligible
providers or hospitals purchasing
software for which Federal funding has
been provided by States through the
Medicaid EHR incentive program.
Proposed costs may be submitted for
review and consideration for approval
by CMS as part of the HIT PAPD and
HIT IAPD requirements described in
this proposed rule under § 495.336 and
§ 495.338.
We are making no additional
revisions to this section of the rule as a
result of this comment.
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Comment: One commenter indicated
that the process for State Medicaid
plans seems to be lengthy, with no
timeframes specified for initial
submission from the State to the
Department, nor is there a timeline for
the approval process from CMS back to
the State. There is also no timeline for
the implementation of the health IT
programs after a State receives approval.
The commenter also notes that with the
burden for administration on the States,
there may not be adequate time to get
all of the activities completed to have
infrastructure and processes in place to
accept data or attestations from the
Eligible Providers and Eligible
Hospitals.
Response: We provided specific
guidance on timelines and process prior
to the initial planning period regarding
State planning activities and
administrative expenses for provider
incentive payments in our State
Medicaid Director’s letter on September
1, 2009. We also indicated in our letter
that CMS will work with States to
determine when each State is ready to
begin making payments. We have
provided additional rationale about the
process for submitting documents and
required content in the final rule. In the
near future, CMS will issue more
guidance on specific implementation
activities and timelines, prior to States
submission of their SMHP and IAPD.
We are making no additional
revisions to this section of the rule as a
result of this comment.
Comment: One commenter requested
that CMS require that States pass
through the matching funds to
providers.
Response: The regulation at section
495.366 requires that States have a
process in place to assure that Medicaid
EHR incentive payments are made
without reduction or rebate, have been
paid directly to an eligible provider or
to an employer, a facility, or an eligible
third party entity to which the Medicaid
eligible provider has assigned payments.
This language is consistent with the
statutory language at 1903(t)(6). We will
require that this process be established
in the SMHP.
We are making no additional
revisions to this section of the rule as a
result of this comment.
Comment: One commenter requested
that CMS clarify that use of certified
public expenditures (CPE) or
intergovernmental transfers in the
context of the Medicaid EHR incentive
payments would be inappropriate, since
these payments do not have a nonfederal share. If CMS does permit use of
CPEs in the Medicaid EHR incentive
program context, CMS must require that
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States pass through the matching funds
to providers.
Response: We believe the commenter
is not clear. As explained above
incentive payments to providers are
matched at 100 percent; thus, there is no
non-Federal share for these payments.
However, there is a non-Federal share
necessary for the administration of the
payment incentives. CMS is reimbursing
States at 90 percent for reasonable
expenses related to the administration
of the payment incentives and States
must fund the 10 percent non-Federal
share of Medicaid health information
technology administrative payments
consistent with existing rules and
regulations regarding funding of the
non-Federal share. Please see our above
discussion of this issue for further
detail.
We are making no additional
revisions to this section of the rule as a
result of this comment.
Comment: One commenter questioned
why Medicaid is allowed to determine
its own requirements and the impact
this may have on other stakeholders.
Response: We are clarifying that we
have provided specific guidance for
State planning activities that must be
addressed in order to qualify to receive
FFP for administering the incentive
program. We provided guidance in a
State Medicaid Director’s letter
published on September 1, 2009, on this
process. CMS intends to require
submission of documentation that will
enable the agency to evaluate whether
the activities for which FFP was, or may
be approved for, are being completed
according to Federal requirements,
including any terms and conditions of
FFP approval. States must develop a
HIT PAPD, a SMHP, and a HIT IAPD.
These documents would describe the
processes and resources States will use
to implement and oversee the EHR
incentive program, and would help
States to construct an health IT roadmap
to develop the systems necessary to
support providers in their adoption and
meaningful use of certified EHR
technology. The development of a
SMHP (see also § 495.332) also provides
States with the opportunity to analyze
and plan for how EHR technology, over
time, can be used to enhance quality
and health care outcomes and reduce
overall health care costs. Our review
process ensures that States are
complying with requirements in the
Act, and that they demonstrate to the
‘‘satisfaction of the Secretary’’ that they
are using the funds in the manner
anticipated by the law. For example,
because CMS is responsible for
overseeing States in their administration
of the Medicaid program, as well as
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ensuring the overall financial integrity
of the program, States cannot simply
propose activities in order to secure the
90 percent FFP. We propose to review
and prior approve all elements of the
State’s SMHP, and APD documents
described in this rule to ensure that all
of the intended objectives of the
program are addressed. One of the key
components of the SMHP is stakeholder
collaboration and coordination to
ensure that an integrated strategy is
developed addressing stakeholder
needs.
We are making no additional
revisions to this section of the rule as a
result of this comment.
Comment: One commenter
recommended that all the source
materials needed to create the quality
measure registry, is submitted to the
MITA Information Architecture Review
Board (IARB) for approval as a MITA
standard and all the source materials be
added to the MITA artifact repository.
Doing this will prevent duplicative
efforts and associated expense both by
CMS and the participating States.
Response: We agree with the
commenter. We support the concept
that States should apply MITA
principles to any IT development work
performed for the EHR incentive
program, where applicable. If a State
chooses to integrate a clinical data
warehouse into its MMIS system, all
recommended steps, and required
approvals, for MMIS development,
including application of MITA
guidelines, should apply. The goal of
MITA is not to focus on creating new
standards so much as utilizing data
standards developed by other national
organizations, such as those responsible
for implementation of HITECH and also
defining information requirements for
new business processes. If a State is
going to develop its own clinical data
repository to store Medicaid providers’
submitted clinical quality measures data
(one of the MU objectives), then use of
the MITA Governance boards would be
a recommended approach. States whose
SMHPs successfully apply MITA to
their EHR incentive program systems
are encouraged to store approved
artifacts in the Clemson University
MITA repository so that other States
may benefit: https://mita.clemson.edu.
We are making no additional
revisions to this section of the rule as a
result of this comment.
Comment: One commenter, as a large
pediatric provider with five physicians
and four nurses in a relatively rural
area, is concerned that States have not
yet sent, or had approved by CMS, the
State’s Medicaid requirements.
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Response: States are in the process of
developing their SMHPs. States could
not be approved to start offering
incentives prior to a final rule becoming
effective.
We are making no additional
revisions to this section of the rule as a
result of this comment.
Comment: Some commenters asked
for clarification on how managed care
entities would be involved in this
program besides potentially being used
to disburse incentive payments, as
mentioned in the proposed rule.
Examples included things like
monitoring providers in the health plans
to ensure compliance. The commenters
suggested that any work done by the
managed care entity should be reflected
in the capitation rate.
Response: Service agreements
between States and their managed care
contractors are not governed by this
regulation, but must be in compliance
with 42 CFR part 438. We agree there
are many opportunities to leverage the
efficiencies of the managed care entities’
activities and role with the larger goals
and State responsibilities for
administering the payments. We suggest
that activities like distributing
informational materials about the
incentive program and health IT to
health plan providers and enrollees
would fall under most current contracts
and would be considered part of the
cost of doing business, which may be
reflected in the administrative portion
of the capitation rate.
If more significant activities are
expected, such as monitoring and
reporting information on the providers,
health plans may exceed the normal
costs of doing business and what would
be adequately reflected in the
administrative portion of the capitation
rate. An alternative option would be for
the State and managed care organization
to have contractual requirements and
deliverables separate from the capitation
rate, including the administrative
component. In the latter scenario, it
would be acceptable to develop a
contract amendment specifying the
terms.
We are making no additional
revisions to this section of the rule as a
result of this comment.
Comment: A commenter asked
whether or not a State would need to
file a State Plan Amendment that
incorporates the SMHP into their State
Plan, or if the SMHP can stand alone.
The commenter further asked that if the
SMHP can stand alone, then would the
state need to file a State Plan
Amendment that references the SMHP
in their plan.
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Response: CMS clarifies that the State
does not need to file a State Plan
Amendment or reference the SMHP in
their State Plan. As part of the Advance
Planning Document process, the SMHP
is a deliverable that is submitted to CMS
for review and approval prior to
expending funds for the incentive
program implementation activities.
We are making no additional
revisions to this section of the rule as a
result of this comment.
9. Financial Oversight, Program
Integrity and Provider Appeals
Pursuant to section 1903(t)(9) of the
Act, which requires States to conduct
adequate oversight of the incentive
program, and in order to ensure that
ARRA funds are expended wisely and
in a manner that impedes waste, fraud
or abuse of Federal taxpayer money, at
§ 495.366, we proposed requirements for
States’ financial oversight and
monitoring of expenditures.
Additionally, we proposed at § 495.368
to provide State requirements for
combating fraud and abuse.
Specifically, States would be
responsible for estimating the
expenditures for the Medicaid EHR
incentive program on the State’s
quarterly budget estimate reports. These
reports are used as the basis for
Medicaid quarterly grant awards that
would be advanced to the State for the
Medicaid EHR incentive program. The
State submits this Form electronically to
CMS via the Medicaid and State CHIP
Budget and Expenditure System (MBES/
CBES). States must assure that requests
for reimbursement of FFP comply with
all sections of this new part and that the
amounts reported on the Form CMS–64
and its attachments represent actual
expenditures for which all supporting
documentation, in readily reviewable
form, has been compiled and which is
available at the time the claim for
reimbursement of provider payment
incentives and administration funding
is filed.
We would assure that State
expenditures claimed for Federal
matching under the Medicaid program
are programmatically reasonable,
allowable, and allocable in accordance
with existing Federal laws, regulations,
and policy guidance. States would be
responsible for establishing policies,
computer systems, edits to process
Medicaid EHR incentive payments; and
for conducting analyses of providers’
patterns of practice (data-mining) and
taking other reasonable steps to ensure
that no duplicate or otherwise improper
EHR incentive payments have been
made. States will be responsible for
ensuring that provider information,
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including but not limited to,
attestations, survey, and any
information added to CMS’ single
provider election repository indicates
that any falsification of documentation
or concealment of material facts may be
prosecuted under Federal and State
laws. States would be responsible for
recovering and returning to CMS FFP
for any HIT incentive payments that are
discovered to be improper. State
Agencies must have information
processing systems, which may include
an MMIS—the automated mechanized
claims processing and information
retrieval system, to process Medicaid
EHR incentive payments. MMIS systems
can also help to manage information for
program administration and audit
purposes.
States must assure that any requests
for reimbursement of the 90 percent
Federal match for administration of the
program are being requested only
because the State has used the funds for
purposes related to administering
payments to qualified Medicaid
providers for certified EHR technology,
including for tracking of meaningful use
of such technology, is conducting
adequate oversight of the program
including routine tracking of
meaningful use attestations and
reporting mechanisms; and is pursuing
initiatives to encourage the adoption of
certified EHR technology to promote
health care quality and the exchange of
health care information because of such
technology. Any initiatives for health
information exchange must be
consistent with Federal laws and
regulations governing the exchange.
We would monitor State Agency
compliance through systems
performance reviews, on-site reviews,
and audits of the APD process.
Additionally, we would monitor
provider demonstration of meaningful
use.
As a result of the authority extended
to the Secretary under section 1902(a)(4)
of the Act requiring the effective and
efficient administration of the State
plan, as well as section 1903(t)(9) of the
Act, requiring that a State demonstrate
to the satisfaction of the Secretary that
it is conducting adequate oversight of
the program, we also are requiring
States to establish § 495.370, Provider
Appeals. This section specifies that
Medicaid providers who believe that
they have been denied an incentive
payment or have received an incorrect
payment amount under this part
because of incorrect determinations of
eligibility, including, but not limited to,
measuring patient volume;
demonstrating meaningful use of, or the
efforts to adopt, implement, or upgrade
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to, certified EHR technology; whether
the professional is hospital-based;
whether the professional is practicing
predominantly in an FQHC or RHC;
whether the hospital qualifies as an
acute care or children’s hospital; or
whether the provider is already
participating in the Medicare incentive
program and therefore ineligible
duplicate Medicaid incentive program
payments can appeal the decision using
current Federal processes established at
§ 447.253(e).
Comment: One individual commented
on potential fraud and abuse
opportunities if large amounts of
medical data can be mined, as a result
of electronic health records.
Response: First, it is important to note
that as part of demonstrating meaningful
use providers will be submitting only
aggregated, not individually identifiable
data, to States. Second, we wish to
clarify that providers will be required to
comply with the Health Insurance
Portability and Accountability Act of
1996 (HIPAA) to the extent that they are
covered entities. States must provide
CMS with details about how their
implementation of the EHR incentive
program will address Federal and State
privacy laws and how all data will be
secured in the SMHP.
Additionally, the act of preventing
fraud should be paramount in
implementing this program. In
accordance with Section 1903(t)(9) of
the Social Security Act, States must
demonstrate to the satisfaction of the
Secretary that they are conducting
adequate oversight of this program and
that they are complying with Federal
requirements to: (a) Ensure the
qualifications of providers who request
Medicaid EHR incentive payments, (b)
detect improper payments and (c) refer
suspected cases of fraud and abuse to
the Medicaid fraud control unit. In
conducting required oversight
responsibilities, States can receive 90
percent matching funds for allowable
expenditures. States are required to
assure CMS through the State’s
Medicaid HIT plan that they have
processes in place to prevent against
fraud and abuse. CMS will review and
approve each State’s Medicaid HIT plan.
We are making no additional
revisions to this section of the rule as a
result of this comment.
Comment: One commenter noted that
use of electronic health records may
provide claims adjudication auditors
with documentation to verify that items
or services provided are reasonable and
necessary, supporting an upfront clean
claims process and the opportunity to
conduct pre- and post-pay audits
without the need to request
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documentation in retrospect. Another
commenter wanted an assurance that
CMS will perform audits of a random
sample of attestation surveys and that
any providers that are found to be
making false claims would be penalized
and listed in a public report posted on
CMS’ Web site.
Response: We thank the commenter
for the comments, but point out that
meaningful use currently would not
include using EHRs to provide
electronic documentation in support of
claims adjudication. We do, however,
want to address the issue of pre- and
post-audits. While one commenter is
concerned with the process for
adjudicating claims, the other
commenter is concerned that there are
other areas of this program that will
necessitate pre- and post-pay audits. For
Medicaid, States are required to provide
information to CMS in the State
Medicaid HIT plan outlining the
processes and methodologies they will
use to ensure that payments are being
made to the right person, at the right
time, for the right reason. Specifically,
in year one in order to receive an
incentive payment, providers will be
attesting to, among other things,
whether they are using a certified EHR,
demonstrating meaningful use,
demonstrating adopting, implementing
or upgrading certified EHR technology,
etc. States will be required to ‘‘look
behind’’ provider attestations. We
believe that this will require audits both
pre- and post-pay. CMS believes a
combination of approaches is in order
which should result in accurate
payments. CMS wishes to point out that
States must provide assurances to CMS
that they are conducting adequate
oversight in order to receive the 90
percent FFP for administration of the
incentive payments. Additionally, it
should be noted that this program is
consistent with other programs under
Title XIX. States must properly
administer the program or risk FFP. All
costs claimed under the program are
subject to review or audit. Furthermore,
CMS’ approval of the State Medicaid
HIT plan does not relieve the State of its
responsibility to comply with changes
in Federal laws and regulations and to
ensure that claims for Federal funding
are consistent with all applicable
requirements. We should point out that
for Medicaid there is no statutory
requirement to post individual
provider’s name and/or incentive
payment program information to the
CMS Web site.
We are making no additional
revisions to this section of the rule as a
result of this comment.
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Comment: One commenter is
concerned about the circumstances
under which Medicaid is required to
recoup incentive payments from
providers. Specifically, the commenter
requests clarification on the scenario in
which a provider receives a payment for
demonstrating adoption,
implementation, or upgrading EHR
technology in year one, demonstrating
meaningful use in years two and three,
but receives no payment in year four
because the provider could not
demonstrate meaningful use. The
commenter is concerned that Medicaid
will be responsible for recouping
payments made in years one, two, and
three.
Response: First, it should be noted
that it is possible for a provider to be
able to demonstrate meaningful use in
one year, but not others. Thus, the
failure of the provider to demonstrate
meaningful use in year four would not
necessarily mean that the provider
failed to demonstrate meaningful use in
prior years, although it could possibly
alert the State to more closely review a
specific provider’s prior year
attestations or demonstrations of
meaningful use. For hospitals
demonstrating meaningful use in both
the Medicare and Medicaid incentive
payment programs, CMS will issue
further guidance about how States will
be able to access the meaningful use
data submitted to CMS in order for the
State to meet its audit and oversight
requirements. States will be required to
outline in the SMHP the process for
‘‘looking behind’’ provider attestations
and the demonstration of meaningful
use including any record retention
requirements.
In accordance with section 1903(t)(9)
of the Social Security Act and
§ 495.332(c) and (e) of the regulations as
well as § 495.368, States are required to
include in their State’s Medicaid HIT
plan processes for detecting improper
payments and for combating fraud and
abuse. This would mean that States will
be responsible for conducting audits of
providers and ensuring that any
requests for reimbursement for FFP
meet all requirements of this subpart.
When States conduct audits and
determine that improper payments have
been made, States are responsible for
recovering and returning to CMS FFP
for any incentive payments that are
discovered to be improper.
We are making no additional
revisions to this section of the rule as a
result of this comment.
Comment: Another commenter is
concerned with a similar issue. That is,
the commenter requested that CMS
identify and develop ‘‘safe harbor’’
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processes and methods for
administering the incentive program
that would assure States that if these
processes/methods are used, States
would not be at risk if the processes/
methods are less successful than
anticipated. An example would include
a process for auditing the adoption,
implementation, and upgrading process.
If an audit approach was agreed to but
ended up being less than effective when
applied, the State should not be
responsible for re-auditing providers for
previous years, nor would it be denied
participation in the incentive program
and lose the FFP. Another commenter is
similarly concerned that this is a new
program and they requested that CMS
explicitly recognize the States’ ability to
revise and redirect the program without
penalty from CMS.
Response: Our focus is on ensuring
that EHR incentive payments are made
to the eligible provider, and are for the
correct amount in the appropriate
payment year (or payment cycle). CMS
will ensure that State expenditures
claimed for Federal matching under the
Medicaid program are programmatically
reasonable, allowable, and allocable in
accordance with existing Federal laws,
regulations, and policy guidance.
States can receive FFP if they are
conducting adequate oversight and
States must provide their plans for
financial oversight and the processes
and methodologies they will use to
verify provider information to CMS for
review and approval as part of its State’s
Medicaid HIT plan. We believe States
may want to consider multiple ways in
which to audit their providers; for
example, to ensure that a provider is not
excluded from the program, the State
should review on a prepay basis the
Office of the Inspector General’s List of
Excluded Individuals and Entities to
determine if providers are excluded.
Additionally, States may wish to
consider attestation in year one for
demonstrating adopting, implementing,
or upgrading or meaningfully using
certified EHR technology. States will
have to ‘‘look behind’’ these attestations
and we assume this will be done on a
post-pay basis. One size does not fit all
and we believe several audit options
should be used by States to ensure
‘‘adequate oversight.’’ However, if it is
determined that the State’s audit
methodologies are proving to be less
than effective we will require that the
State update its State Medicaid HIT plan
and present more effective audit
strategies that will work to accomplish
conducting adequate oversight of the
program. States must ensure due
diligence in conducting adequate
oversight and all requirements of this
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subpart must be met or FFP could be at
risk.
We are making no additional
revisions to this section of the rule as a
result of this comment.
Comment: One commenter requested
information regarding the appeals
process.
Response: For Medicaid, CMS has
specified the appeals process for a
Medicaid provider receiving electronic
health record incentive payments in
§ 495.370. Specifically, the State must
have a process in place consistent with
the requirements established at
§ 447.253(e) to allow for providers to
appeal incentive payments, incentive
payment amounts, provider eligibility
determinations, and the demonstration
of adopting, implementing or upgrading
and meaningful use of certified EHR
technology. CMS is requiring that the
State Medicaid HIT plan describe the
process in place for provider appeals.
We believe the States, not the Federal
government, are in the best position to
determine the administrative process
that would best meet their needs and we
believe States are in a position to design
an effective appeal procedure; thus, we
are providing for a great deal of State
flexibility. Within the parameters of the
regulation, States are free to establish
reasonable criteria for appeals, to limit
the issues on appeal that may be
appropriate, or to adopt other
procedures to prevent frivolous appeals.
However, State appeal processes should
be consistent with the requirement in
§ 447.253(e) for prompt administrative
review. (States define what would
constitute a prompt review, and we
have not specified a time period for
conducting or concluding a provider
appeal.) This requirement is in keeping
with providing States flexibility while
retaining for providers an opportunity to
avail themselves of an exception process
when they believe an exception is
warranted. Additionally, § 447.253(e)
provides that the Medicaid agency must
allow providers an opportunity to
submit additional evidence. Our
regulations at § 495.370 also require that
the appeals processes established by the
States comply with the State’s own
administrative procedure laws and that
the State provide any additional appeal
rights that would otherwise be available
under the procedures established by the
State.
We are making no additional
revisions to this section of the rule as a
result of this comment.
III. Information Collection
Requirements
Under the Paperwork Reduction Act
of 1995, CMS is required to provide 60-
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day notice in the Federal Register and
solicit public comment before a
collection of information requirement is
submitted to the Office of Management
and Budget (OMB) for review and
approval. In order to fairly evaluate
whether an information collection
should be approved by OMB, section
3506(c)(2)(A) of the Paperwork
Reduction Act of 1995 requires that
CMS solicit comment on the following
issues:
• The need for the information
collection and its usefulness in carrying
out the proper functions of our agency.
• The accuracy of our estimate of the
information collection burden.
• The quality, utility, and clarity of
the information to be collected.
• Recommendations to minimize the
information collection burden on the
affected public, including automated
collection techniques.
The following is a discussion of the
requirements we believe are subject to
PRA and collection of information
requirements as a result of this final
rule. This analysis finalizes our
projections which were proposed in the
January 13, 2010 Federal Register (75
FR 1844 through 2011). The projected
numbers of EPs and eligible hospitals,
MA organizations, MA EPs and MAaffiliated hospitals are based on the
numbers used in the impact analysis
assumptions as well as in Table 32 in
section IV of this final rule.
A. ICRs Regarding Demonstration of
Meaningful Use Criteria (§ 495.8)
Section 495.8(a)(1) of the proposed
rule contained requirements for EPs, in
CY 2011, to attest, through a secure
mechanism, to meeting meaningful use
criteria. As described in the proposed
rule (75 FR 1949), we divided
meaningful use objectives/measures into
Sets A and B. We estimated that the
total burden for an EP to attest to
§ 495.8(a)(1)(i) and (ii) for Set A
meaningful use objectives/measures and
ambulatory quality measures would be
one hour. For all 442,600 non-hospitalbased Medicare and Medicaid EPs
(323,500 Medicare EPs, 80,900 dual
Medicare/Medicaid EPs, and 38,200
Medicaid-eligible-only EPs), the burden
therefore equaled 442,600 hours. We
estimated that the associated cost
burden was $79.33 for an EP to attest to
§ 495.8(a)(1)(i) and (ii) for Set A
meaningful use objectives/measures and
ambulatory quality measures, and the
total associated annual cost burden for
all EPs to attest was $35,111,458. We
invited comments on the estimated
percentages and the numbers of
(registered) EPs that will attest to the
above including Set A meaningful use
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objectives/measures in CY 2011, but did
not receive any on this issue.
In the proposed rule, we also
estimated that it would take 8 hours for
an EP to attest to meeting the Set B
meaningful use objectives/measures. We
estimated that the total annual burden
for all 442,600 non-hospital-based EPs
to attest to Set B meaningful use
objectives and measures was 3,540,800
hours. We estimated the associated cost
burden for an EP to attest was $634.64
and the total cost burden for all nonhospital-based EPs to attest was
$280,891,664. We solicited comments
on the estimated percentages and the
numbers of (registered) EPs that will
attest to Set B objectives and measures
in CY 2011, but did not receive any on
this issue.
Although, as we proposed, we
continue to have an attestation
requirement in § 495.8(a)(1), we are
revising the burden estimates for two
reasons. First, as described elsewhere in
this final rule, the definition of hospitalbased EP has changed, resulting in
about 73,000 outpatient hospital EPs
becoming potentially eligible to
participate in the EHR incentive
program. Therefore, we are increasing
the number of EPs in our burden
estimates. We estimate that in CY 2011,
there will be 521,600 non-hospitalbased Medicare and Medicaid EPs
(382,000 Medicare EPs, 95,500 dual
Medicare/Medicaid EPs, and 44,100
Medicaid-eligible-only EPs)
participating in the EHR incentive
program. Second, in response to public
comments, we have made significant
changes in § 495.6 meaningful use
objectives and measures for EPs, eligible
hospitals and CAHs, which has changed
the burden estimates.
In section II.A.2.d. of this final rule,
Stage 1 Criteria for Meaningful Use in
this final rule, we have re-categorized
meaningful use objectives/measures as
core criteria and menu criteria. Unless
an exception applies, § 495.6(a) requires
that an EP must meet all 15 Stage 1
meaningful use core criteria under
§ 495.6(d) and 5 out of 10 meaningful
use menu criteria under § 495.6(e). The
burden associated with the
requirements in § 495.8 and § 495.6 is
the time and effort required to attest to
the required elements.
To comply with § 495.8(a)(1), we
estimate that it would take an EP 8
hours 52 minutes to prepare and attest
that during the EHR reporting period,
the EP used certified technology, specify
the technology, and satisfied all 15
mandatory Stage 1 meaningful use core
criteria. We estimate that it would take
an EP an additional 0.5 hours to select
and attest to the clinical quality
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measures, in the format and manner
specified by CMS. We estimate the total
burden associated with this requirement
for an EP is 9 hours 22 minute (8 hours
52 minutes + 0.5 hours) and the total
burden for all the EPs to attest to these
requirements is 4,855,827 hours
(521,600 EPs × 9 hours 22 minutes). We
estimate the associated cost burden for
an EP to attest to these requirements is
$743.08 (9 hours 22 minutes × $79.33
(mean hourly rate for physicians based
on the May 2008 Bureau of Labor
Statistics)), and the total cost burden for
all EPs to attest to these requirements is
$387,592,672 (4,855,827 hours ×
$79.33).
We recognize that some Stage 1
meaningful use menu set measures are
easier to accomplish than others. We
cannot predict which of the measures in
the menu set an EP will select.
Therefore, our burden estimates are
based on two scenarios to illustrate how
different scenarios would impact the
burden incurred. Our ‘‘least
burdensome’’ or ‘‘low’’ scenario of
meaningful use demonstration assumes
that an EP defers the five most
burdensome objectives/measures while
our ‘‘most burdensome’’ or ‘‘high’’
scenario of meaningful use
demonstration assumes that an EP
defers the five least burdensome
meaningful use menu set measures. We
recognize that in reality, nothing is
absolute, and we have no basis for
estimating the ‘‘all low’’ or ‘‘all high’’
scenario and have therefore created
estimates for both. To compensate for
the uncertainties of selection of
meaningful use criteria by an EP, we use
the averages of the ‘‘high’’ and ‘‘low’’
scenario estimates in Table 33. Section
495.6(a) requires that an EP must meet
five out of 10 Stage 1 meaningful use
menu set measures (unless exceptions
apply). The burden involved is the time
and effort to select and attest to the
meaningful use menu set measures. In
the ‘‘low’’ scenario, we estimate that an
EP may defer the five most burdensome
meaningful use measures. We estimate
it will take an EP 42 minutes to comply
with the remaining five Stage 1
meaningful use menu set measures. We
estimate the total burden for all 521,600
EPs to comply with the meaningful use
menu set criteria is 365,120 hours
(521,600 EPs × 42 minutes). In the high
scenario, we estimate that an EP may
defer the five least burdensome
meaningful use criteria. We estimate
that it will take an EP 2 hours 40
minutes to comply with the remaining
five Stage 1 meaning use menu
measures. We estimate that the total
burden for all 521,600 EPs to comply
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44517
with the meaningful use menu set
criteria is 1,390,586 hours (521,600 EPs
× 2 hours 40 minutes). Based on the two
scenarios, the average burden for an EP
to comply with meaningful use menu
set criteria is 1 hour 41 minutes ((42
minutes + 2 hours 40 minutes)/2). Based
on the two scenarios, the average
burden for all EPs to comply with
meaningful use menu set criteria is
877,853 hours ((365,120 hours +
1,390,586 hours)/2). We estimate the
cost burden for an EP to comply with
the ‘‘low’’ scenario Stage 1 meaningful
use menu criteria is $55.53 (42 minutes
× $79.33 (mean hourly rate for
physicians based on the May 2008
Bureau of Labor Statistics)), and the
total cost burden for all 521,600 EPs to
comply is $28,964,970 (521,600 EPs ×
$55.53). We estimate that the cost
burden for an EP to comply with the
‘‘high’’ scenario Stage 1 meaningful use
menu criteria is $211.49 (2 hours 40
minutes × $79.33), and the total cost
burden for all EPs is $110,315.156
(521,600 EPs × $211.49). The average
cost burden estimate for an EP to
comply with the meaningful use menu
set criteria is $133.51 (($55.53 +
$211.49)/2). The average cost burden
estimate for all 521,600 EPs to comply
with meaningful use menu set criteria is
$69,640,063 (($28,964,970 +
$110,315.156)/2).
In the proposed rule, we expected that
there would be steady growth in the
number of participating EPs. We
estimated that in 2012, there would be
447,400 non-hospital-based Medicare,
and Medicaid EPs (326,900 Medicare
EPs, 81,700 dual Medicare/Medicaid
EPs and 38,800 Medicaid-eligible-only
EPs) qualified to receive EHR incentive
payment. We estimated that the burden
for meeting § 495.8(a)(2), which
required attestation for most meaningful
use measures, and electronic reporting
of clinical quality measures in CY 2012,
would be 0.5 hours for an EP to attest
to the Set A objectives and measures
and 8 hours to gather information and
attest to the Meaningful Use Set B
objectives/measures. For burden
estimate purposes, we estimated that all
447,400 non-hospital-based Medicare,
and Medicaid EPs might attest. We
estimated that the total annual
attestation burden for all EPs was
223,700 hours for the Set A objectives/
measures and 3,579,200 hours for Set B
objectives/measures. We estimated that
the associated cost burden was $39.67
for the Set A meaningful use objectives/
measures and $634.64 for the Set B
meaningful use objectives/measures.
The total cost burden for all EPs was
$17,746,121 for Set A and $283,937,936
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for Set B. We invited comments on the
estimated percentages and the numbers
of registered EPs that would attest to
EHR technology used and Meaningful
Use Set A and Set B objectives/measures
in CY 2012, but we did not receive any
comments on this issue.
We expect steady growth in EPs in CY
2012. In the final rule, based on
legislation altering the definition of
‘‘hospital-based,’’ we are increasing our
estimates of participating EPs, and
estimate that in CY 2012, there will be
about 527,254 non-hospital-based
Medicare and Medicaid EPs (385,954
Medicare EPs, 96,500 dual Medicare/
Medicaid EPs and 44,800 Medicaideligible-only EPs) who are qualified to
receive EHR incentive payments. The
Stage 1 meaningful use criteria (core
and menu sets) are the same for CY 2011
and CY 2012. We estimate that it would
take 8 hours 52 minutes for an EP to
attest that during the EHR reporting
period, the EP used certified technology,
specify the technology, and satisfied all
15 mandatory Stage 1 meaningful use
core criteria. We estimate the total
burden associated with this requirement
for all EPs is -4,675,161 hours (527,254
EPs × 8 hours 52 minutes). The
associated cost burden for an EP to
comply with this requirement is $703.42
(8 hours 52 minute × $79.33) and the
associated cost burden for all EPs is
$370,880.589 (44,675,161 hours ×
$79.33 (mean hourly rate of physicians
based on the May 2008 Bureau of Labor
Statistics)).
The Stage 1 meaningful use objectives
and measures are the same for CY 2011
and CY 2012. Therefore, in CY 2012, the
burden associated with attesting to
Stage 1 meaningful use core and menu
criteria for an EP is the same as CY
2011. Again, we cannot predict which of
the measures in the menu set will be
selected by an EP. Therefore, as
explained above, we use a ‘‘low’’ and
‘‘high’’ scenario to estimate burden. For
the ‘‘low’’ scenario, we estimate it will
take an EP 42 minutes to attest to five
Stage 1 meaningful use menu-set
measures. The total burden for all
527,254 EPs, therefore, would be
estimated at 369,078 hours (527,254 EPs
× 42 minutes). Under the ‘‘high’’
scenario, we estimate it will take 2
hours 40 minutes for an EP to attest to
five Stage 1 meaningful use menu-set
criteria. The total burden for all 527,254
EPs, therefore, is estimated to be
1,405,659 hours (527,254 EPs × 2 hours
40 minutes). Based on the two
scenarios, the average burden hours for
an EP to attest to meaningful use menu
set measures is 1 hour 41 minutes ((42
minutes + 2 hours 40 minutes)/2), and
the total average burden for all EPs is
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887,369 hours ((369,078 hours +
1,405,659 hours)/2). Under the ‘‘low
scenario,’’ we estimate that the cost
burden for an EP is $55.53 (42 minutes
× $79.33 (mean hourly rate for
physicians based on the May 2008
Bureau of Labor Statistics)), and the
total cost burden for all 527,254 EPs to
comply with is $29,278,942 (527,254
EPs × $55.53). For the ‘‘high scenario,’’
we estimate that the cost burden is
$211.49 (2 hours 40 minutes × $79.33),
and the total cost burden for all EPs is
$111,510,942 (527,254 EPs × $211.49).
The average cost burden is $133.51
(($55.53 + $211.49)/2). The average cost
burden for all 527,254 EPs is
$70,394,942 (($29,278,942 +
111,510,942)/2).
Section 495.8(a)(2)(iii) requires that
for CY 2012, EPs must report
electronically to CMS, or, in the case of
Medicaid EPs, the States, clinical
quality information in the form and
manner specified by CMS. We have
limited the required measures only to
those that can be automatically
calculated by a certified EHR, and to
those for which we have electronic
specifications currently available and
we are able to post as final by the date
of display of this final rule. The burden
associated with this requirement is the
time and efforts to report the required
clinical quality measures. We estimate
the burden for an EP to comply with
this requirement is 0.5 hours and the
total burden for all EPs to comply with
this requirement is 263,627 hours
(527,254 EPs × 0.5 hours). We believed
that an EP may assign a medical
secretary to submit the specific clinical
quality measures to CMS or the States.
We estimate the cost burden for an EP
to comply with this requirement is
$7.40 (0.5 hours × $14.81 (mean hourly
rate of medical secretaries based on the
May 2008 Bureau of Labor Statistics))
and the cost burden for all EPs to
comply with this requirement is
$3,904,316 (263,627 hours × $14.81).
To estimate capital costs for EPs, we
assume a certified EHR system will cost
roughly $54,000. If 521,600 EPs adopt
these EHRs, total capital costs prior to
incentives would be roughly $23.9
billion. We also estimate that in 2011,
$0.2 billion of Medicare incentive
payments and $0.2 billion of Medicaid
incentive payments would be provided
to EPs under a low scenario, and $0.6
billion Medicare incentive payments
and $0.9 billion of Medicaid incentive
payments would be provided to EPs
under a high scenario to help offset
those costs. Therefore, we estimate that
total net capital costs for EPs in 2011
would be $23.5 billion ($23.9
billion¥$0.2 billion¥$0.2 billion)
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under a low scenario and $22.4 billion
($23.9 billion¥$0.6 billion¥$0.9
billion). These capital costs would
decrease over the course of the EHR
incentive programs as additional
incentives are provided. Therefore, in
2012, the total net capital costs for EPs
would be $22.1 billion ($23.5
billion¥$1.0 billion of Medicare
incentives¥$0.4 billion of Medicaid
incentives) under the low scenario and
419.0 billion ($22.4 billion¥$2.3
billion¥$1.1 billion) under the high
scenario.
As with EPs, for eligible hospitals and
CAHs, we proposed, at section 495.8(b)
of the proposed rule, that hospitals
demonstrate they are meaningful EHR
users through an attestation mechanism.
As with EPs, we divided meaningful use
criteria into Sets A and B. We estimated
that it would take an eligible hospital or
CAH 0.5 hours to attest to the
requirements in § 495.8(b)(1)(i) and (ii)
including the Set A meaningful use
objectives/measures, .0.5 hours to select
and attest to the hospital quality
measures, and 7 hours to comply with
gathering the information, attesting and
reporting Set B objectives/measures.
Therefore, the estimated the total
burden for all 5,011 Medicare and
Medicaid eligible hospitals and CAHs
(3,620 acute care hospitals, 1,302
critical access hospitals, 78 Medicaid
children’s hospitals, and 11 Medicaid
cancer hospitals) equaled 5,011 hours.
For Set B objectives and measures, we
estimated the total burden at 35,077
hours.
We believed that an eligible hospital
or CAH might assign an attorney to
attest on their behalf. We estimated the
cost burden for an eligible hospital or
CAH to attest to the Set A and hospital
quality requirements was $59.98 and the
total estimated annual cost burden for
all eligible hospitals and CAHs to attest
was $300,560. For Set B objectives/
measures, we estimated a per-hospital
cost burden of $419.86, and a total cost
burden of $2,103,918, not including
capital costs. We solicited public
comments on the estimated percentages
and the numbers of (registered) eligible
hospitals and CAHs that would attest in
FY 2011, but we did not receive any
comments on this issue. We also invited
comments on the type of personnel or
staff that would mostly likely attest on
behalf of eligible hospitals and CAHs,
but we did not receive any comments on
this issue.
For the final rule, as proposed,
§ 495.8(b) will require demonstration of
meaningful use through an attestation
mechanism. However, as with EPs, we
have revised the burden estimates due
to the changes in meaningful use
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objectives and measures, in response to
comments. Unless an exception applies,
§ 495.6(b) requires that an eligible
hospital or CAH must meet all 14 Stage
1 meaningful use core criteria under
§ 495.6(f) and five out of 10 meaningful
use menu criteria under § 495.6(g). The
burden associated with the
requirements in § 495.8 and § 495.6 is
the time and effort required to attest to
the required elements.
To comply with § 495.8(b)(1), we
estimate that it would take an eligible
hospital or CAH 8 hours 42 minutes to
prepare and attest that during the EHR
reporting period, the hospital or CAH
used certified technology, specify the
technology, and satisfied all 14
mandatory Stage 1 meaningful use core
criteria. We estimate that it will take an
eligible hospital or CAH an extra 0.5
hours to select and attest to the hospital
quality measure, in the format and
manner specified by CMS. We estimate
the total burden associated with this
requirement for an eligible hospital or
CAH is 9 hours 12 minutes (8 hours 42
minutes + 0.5 hours) and the total
burden all eligible hospitals and CAHs
to attest to these requirements is 46,101
hours (9 hours 12 minutes × 5,011
hospitals). We believe an eligible
hospital or CAH may use an attorney to
attest on their behalf. We estimate the
associated cost burden for an eligible
hospital or CAH to attest to these
requirements is $551.82 (9 hours 12
minutes × $59.98 (mean hourly rate for
attorneys based on the May 2008 Bureau
of Labor Statistics)) and the total cost
burden for all eligible hospitals and
CAHs to attest to these requirements is
$2,765,150 ($551.82 × 5,011 hospitals
and CAHs)).
We recognize that some Stage 1
meaningful use menu criteria are easier
to accomplish than others. Therefore, as
with the EPs, our burden estimates are
based on a ‘‘low’’ and ‘‘high’’ scenario.
Unless an exception applies, § 495.6(b)
requires that an eligible hospital or CAH
must meet five out of 10 Stage 1
meaningful use menu criteria. The
burden involved is the time and effort
to select and attest to the meaningful
use menu-set measures. Under the ‘‘low’’
scenario, we estimate it will take an
eligible hospital or CAH 42 minutes to
attest to five Stage 1 meaningful use
menu-set measures, resulting in a total
burden for all 5,011 eligible hospitals
and CAHs of 3,508 hours (5,011
hospitals × 42 minutes). Under the high
scenario, we estimate it will take an
eligible hospital or CAH 3 hours 30
minutes to attest to five Stage 1
meaningful use menu-set measures,
resulting in a total burden for all 5,011
eligible hospitals and CAHs of 17,539
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hours (5,011 hospitals × 3 hours 30
minutes). Based on the two scenarios,
the average burden is 2 hours 6 minutes
(42 minutes + 3 hours 30 minutes)/2),
and the average burden for all eligible
hospitals and CAHs is 10,523 hours
(3,508 hours + 17,539 hours)/2).
We believe an eligible hospital or
CAH may use an attorney to attest on
their behalf. For menu-set meaningful
use criteria, low scenario, we estimate
the associated cost burden for an
eligible hospital or CAH is $41.99 (42
minutes × $59.98 (mean hourly rate for
attorneys based on the May 2008 Bureau
of Labor Statistics)) and the total cost
burden for all eligible hospitals and
CAHs is $210,392 ($41.99 × 5,011
hospitals and CAHs). For menu-set
meaningful use criteria, high scenario,
we estimate the associated cost burden
for an eligible hospital or CAH is
$209.93 (3 hours 30 minutes × $59.98)
and the total cost burden for all eligible
hospitals and CAHs is $1,051,959
($209.93 × 5,011 hospitals and CAHs).
Based on the two scenarios, the average
cost burden for an eligible hospital or
CAH to attest to meaningful use menu
set criteria is $125.96 (($41.99 +
$209.93)/2). The average burden for all
eligible hospitals and CAHs to attest to
meaningful use menu set criteria is
$631,176 (($210,392 + $1,051,959)/2).
As with EPs, our proposed regulations
(at § 495.8(b)(2)) required that for FY
2012 and subsequent years, eligible
hospitals and CAHs demonstrate
meeting most meaningful use criteria
through attestation, and electronically
report hospital quality measures. As
with EPs, we divided meaningful use
objectives and measures into Sets A and
B. For Set A, we estimated that it would
take an eligible hospital or CAH 0.5
hours to attest to the requirements in
§ 495.8(b)(2). For Set B, we estimated it
would take an eligible hospital or CAH
7 hours to gather information and attest.
Assuming that 5,011 hospitals might
attest, we estimated that the total annual
attestation burden for all eligible
hospitals and CAHs was 2,506 hours
(Set A) and 35,077 hours (Set B). We
estimated the total annual cost burden
for all eligible hospitals and CAHs to
attest was $150,310 (Set A) and
$2,103,918 (Set B). We invited public
comments on the estimated percentages
and the numbers of registered EPs that
would attest to EHR technology used in
CY 2012, but we did not receive any
comments on this issue.
In the final rule, we also require that
for FY 2012, eligible hospitals and
CAHs demonstrate meeting meaningful
use criteria through attestation, except
for clinical quality measures, which
must be electronically reported to CMS
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44519
or the States. We do not expect growth
in the number of eligible hospitals or
CAHs. The meaningful use criteria (core
and menu sets) are the same for FY 2011
and FY 2012. To comply with
§ 495.8(b)(1), we estimate that it would
take an eligible hospital or CAH 8 hours
41 minutes to prepare and attest that
during the EHR reporting period, the
eligible hospital or CAH used certified
technology, specify the technology, and
satisfied all 14 mandatory Stage 1
meaningful use core criteria. We
estimate the total burden associated
with this requirement for all eligible
hospitals and CAHs to attest to these
requirements is 43,596 hours (8 hours
42 minutes × 5,011 hospitals). We
believe an eligible hospital or CAH may
use an attorney to attest on their behalf.
We estimate the associated cost burden
for an eligible hospital or CAH to attest
to these requirements is $521.83 (8
hours 42 minutes × $59.98 (mean hourly
rate for attorneys based on the May 2008
Bureau of Labor Statistics)) and the total
cost burden for all eligible hospitals and
CAHs to attest to these requirements is
$2,614,870 ($521.83 × 5,011 hospitals
and CAHs).
We recognize that some Stage 1
meaningful use menu criteria are easier
to accomplish than others. We cannot
predict which of the measures in the
menu criteria will be selected by an
eligible hospital or CAH. Therefore, as
with EPs, our burden estimates are
based on a ‘‘low’’ and ‘‘high’’ scenario.
Unless an exception applies, § 495.6(b)
requires that an eligible hospital or CAH
must meet five out of 10 Stage 1
meaningful use menu criteria. The
burden involved is the time and effort
to select and attest to the meaningful
use menu criteria. Under the ‘‘low’’
scenario, we estimate it will take an
eligible hospital or CAH 42 minutes to
attest to five Stage 1 meaningful use
menu-set measures, resulting in a total
burden of 3,508 hours (5,011 hospitals
× 42 minutes). Under the high scenario,
we estimate it will take an eligible
hospital or CAH 3 hours 30 minutes to
attest to five Stage 1 meaningful use
menu-set measures, resulting in a total
burden of 17,539 hours (5,011 hospitals
× 3 hours 30 minutes). Based on the two
scenarios, the average burden for an
eligible hospital or CAH to attest to
meaningful use menu set criteria is 2
hours 6 minutes ((42 minutes + 3 hours
30 minutes)/2), and the average burden
hours for all eligible hospitals and CAHs
is 10,523 hours ((3,508 hours + 17,539
hours)/2).
We believe an eligible hospital or
CAH may use an attorney to attest on
their behalf. For menu-set meaningful
use criteria, low scenario, we estimate
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the associated cost burden for an
eligible hospital or CAH is $41.99 (42
minutes × $59.98) and the total cost
burden for all eligible hospitals and
CAHs is $210,392 ($41.99 × 5,011
hospitals and CAHs). For menu-set
meaningful use criteria, high scenario,
we estimate the associated cost burden
for an eligible hospital or CAH is
$209.93 (3 hours 30 minutes × $59.98)
and the total cost burden for all eligible
hospitals and CAHs is $1,051,959
($209.93 × 5,011 hospitals and CAHs).
Based on the two scenarios, the average
cost burden for an eligible hospital or
CAH to attest to meaningful use menu
set criteria is $125.96 (($41.99 +
$209.93)/2). The average burden for all
eligible hospitals and CAHs to attest to
meaningful use menu set criteria is
$631,175 (($210,392 + $1,051,959)/2).
Section 495.8(b)(2)(iii) requires that
for FY 2012, eligible hospitals or CAHs
must report electronically to CMS, or, in
the case of Medicaid hospitals, the
States, clinical quality information in
the format and manner specified by
CMS. Given that we limit the required
measures only to those that can be
automatically calculated by a certified
EHR and to those for which we have
electronic specifications currently
available that we are able to post as final
by date of display of this final rule. The
burden associated with this requirement
is the time and effort to report the
required hospital quality measures. We
estimate the burden for an eligible
hospital or CAH to comply with this
requirement is 0.5 hours and the total
burden for all eligible hospitals or CAHs
to comply with this requirement is
2,506 hours (5,011 hospitals and CAHs
× 0.5 hours). We believe that an eligible
hospital or CAH may assign a medical
secretary to submit the specific hospital
clinical quality measures to CMS or the
States. We estimated the cost burden for
an eligible hospital or CAH to comply
with this requirement is $7.40 (0.5
hours × $14.81 (mean hourly rate of
medical secretary based on May 2008
Bureau of Labor Statistics)) and the cost
burden for all eligible hospitals or CAHs
to comply with this requirement is
$37,107 (2,506 hours × $14.81).
To estimate capital costs for eligible
hospitals and CAHs, consistent with the
sources cited in section V.G.4 of this
final rule, we assume that achieving
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meaningful use will require roughly a
$5 million capital investment for the
average hospital. If 5,011 hospitals
adopt these EHRs, total capital costs
prior to incentives would be roughly
$25.1 billion. We also estimate that in
2011, $0.2 billion of Medicare incentive
payments and $0.4 billion of Medicaid
incentive payments would be provided
to eligible hospitals and CAHs under the
low scenario, and $0.5 billion of
Medicare incentive payments and $0.8
billion of Medicaid incentive payments
would be provided to eligible hospitals
and CAHs under the high scenario to
help offset those costs. Therefore, we
estimate that total net capital costs for
hospitals in 2011 would be $24.5 billion
($25.1 billion¥$0.2 billion¥$0.4
billion) under the low scenario and
$23.8 billion ($25.1 billion¥$0.5
billion¥$0.8 billion) under the high
scenario. These capital costs would
decrease over the course of the EHR
incentive programs as additional
incentives are provided. Therefore, in
2012, the total net capital costs for
hospitals would be $23.5 billion ($24.5
billion¥$0.9 billion of Medicare
incentives¥$0.1 billion of Medicaid
incentives) under the low scenario, and
$21.4 billion ($23.8 billion¥$2.1 billion
of Medicare incentives¥$0.3 billion of
Medicaid incentives) under the high
scenario.
Comment: Some commenters believed
that CMS grossly underestimated the
cost and hour burden for EPs, eligible
hospitals and CAHs to comply with
meaningful use Set A and Set B
measures. Some commenters stated that
we should take into consideration all
the time required to prepare all
attestation of meaningful use measures,
including the manual counting of
numerators and denominators in our
burden estimates.
Response: Prior to and after the
publication of the proposed rule, we
have worked with ONC to ensure that
our meaningful use objectives/measures
are well aligned with certified EHR
technology. In the final rule, we only
require meaningful use measures that
can be achieved by the functionality and
capability of certified EHR technology.
Furthermore, based on comments, we
have explained in section II.A.2.d. of
this final rule that we are including a
substantial amount of flexibility in the
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final rule to lower the burden for EPs,
eligible hospitals and CAHs in meeting
the attestation and demonstration of
meaningful use criteria. Some examples
of such flexibility are the categorization
of Stage 1 meaningful use core and
menu (optional) criteria, reducing the
number of meaningful use objectives/
measures for 2011 and 2012, limiting
the denominators, in certain cases, only
to patients whose records are
maintained using certified EHR
technology, and lowering thresholds for
many of the meaningful use measures.
We believe these changes reduce burden
without compromising the intent of the
Congress, and the ability of EHR
technology to begin to improve health
care quality, efficiency, and outcomes.
We have considered the comments and
we have made some revisions on our
previous burden estimates. While this
requirement is subject to PRA, we have
no way of accurately quantifying the
burden. We will continue to monitor the
burden associated with the
implementation of EHR technology as
our experience continues to grow and as
EHR technology continues to evolve.
Comment: CMS received numerous
comments regarding the burden
(economic and other) of reporting on the
large number of measures and the
overall quality reporting burden this
will add to EPs and other healthcare
providers. Others suggested reporting on
significantly smaller set of measures.
Response: As we have explained in
section II.A.3.(d) of this final rule, we
have reduced the reporting burden by
decreasing the number of required
clinical quality measures and limiting
measures to those that can be
automatically calculated by a certified
EHR. We believe that the proposed
burden estimate, which was estimated
to be an additional 0.5 hours in 2011
and 2012, is reasonable and we are
finalizing it.
Table 20 below lists the objectives
and associated measures in which we
estimate the burden to fulfill ‘‘core set,’’
‘‘menu set’’, and clinical quality
measures requirements. Estimates of
total capital costs at the bottom of Table
20 are derived from the estimates used
in the ‘‘Industry Costs’’ section in
Section V.G.4. of this final rule.
BILLING CODE 4120–01–P
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B. ICRs Regarding Participation
Requirements for EPs, Eligible
Hospitals, and CAHs (§ 495.10)
Since the EHR incentive payment
program is new, we do not have enough
information to estimate the information
collection requirements burden beyond
the first payment year for an EP, eligible
hospital, or CAH for this provision.
Furthermore, the EPs, eligible hospitals,
and CAHs can enroll any time during
the first 5 years; therefore, it is difficult
to predict with certainty the burden
beyond the first payment year as the
burden depends on the number of
participants. Therefore, we provide a
best estimate of what we believe the
burden associated with this provision
might be.
For the proposed rule, § 495.10(a)
through (c), we estimated that all
442,600 non-hospital-based Medicare,
and Medicaid EPs would register in
2011 to receive an EHR incentive
payment, and that it would take no
more than 0.5 hours to complete the
registration, resulting in a total
estimated annual registration burden for
all EPs of 221,300 hours (442,600 EPs ×
0.5 hours). As we could not predict
whether an EP or a medical secretary
(on the EP’s behalf) would register, we
did one high-end and one low-end
burden estimate. The cost burden for an
EP who chose to register in the EHR
incentive payment program himself or
herself was $39.67 (0.5 hours × $79.33
(mean hourly rate for physicians based
on the May 2008 Bureau of Labor
Statistics)), with a total estimated
annual cost burden for all EPs of
$17,555,729 (221,300 hours × $79.33).
Similarly, the cost burden for an EP who
chose to use a medical secretary to
register on their behalf was $7.41 (0.5
hours × $14.81), with a total estimated
annual cost burden for all EPs of
$3,277,453 (221,300 hours × $14.81). We
used the average of the two estimates in
the tally in Table 34 of the proposed
rule. We invited comments on whether
we should use the higher cost burden
estimate ($17,555,729) or the lower cost
burden estimate ($3,277,453), but we
did not receive any comments on this
issue. We invited public comments on
the estimated percentages or the
numbers of EPs that will register in CY
2011 and subsequent years, but we did
not receive any comments on this issue.
We are finalizing both the lower cost
estimate using the medical secretary as
the personnel registering for the EP and
the high cost estimate of the EP
registering him or herself. Due to the
revised estimates of non-hospital-based
EPs eligible for the EHR incentive
program, we are revising our burden
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estimates to reflect this change. In the
final rule, we estimate that 521,600 nonhospital-based Medicare, and Medicaid
EPs may register in CY 2011 to receive
an EHR incentive payment. We believe
that an EP may use a medical secretary
to register on his/her behalf (low
burden) or the EP may register him or
herself (high burden). We estimate that
it would take no more than 0.5 hours to
complete the registration. The low cost
burden for a medical secretary to
register an EP is $7.41 (0.5 hours ×
$14.81 (mean hourly rate of medical
secretaries based on the May 2008
Bureau of Labor statistics)). The total
estimated annual registration burden
hours for the low cost estimate is
260,800 (521,600 EPs × 0.5 hours) in the
first payment year. The total estimated
low cost burden for all EPs to register in
CY 2011 is $3,862,448 (260,800 hours ×
$14.81). The high cost burden for an EP
to register him or herself is $39.67 (0.5
hours × $79.33 (mean hourly rate for
physicians based on the May 2008
Bureau of Labor Statistics)). In the first
payment year, the total estimated
annual registration burden hours for the
high cost estimate is 260,800 (521,600
EPs × 0.5 hours). The total estimated
high cost burden for all EPs to register
in CY 2011 is $20,689,264 (260,800
hours × $79.33). We only use the
average of the two estimates in the tally
in Table 34.
Section 495.10(d) proposed that if
there were subsequent changes in the
initial registration information, the EP
was responsible for providing us with
updated changes in the manner
specified by us. Based on our
experience with provider enrollment,
we estimated that about 11 percent of
the Medicare and Medicaid EPs might
need to update their registration
information during a 1-year period. We
estimated that 49,214 EPs (11 percent)
might only have one occasion that
required updating of information in a
given year. For each occasion, we
estimated that it would take no more
than 0.5 hours to notify us of the
changes. With that, we estimated that
the annual total burden hours for 49,214
EPs to update changes were 24,607.
However, we could not predict if the EP
would update the registration
information himself or herself or assign
a medical secretary to do it. Therefore,
we did two burden estimates for an EP
and his/her medical secretary. The cost
burden for an EP who chose to update
the registration information himself or
herself was $39.67. The total estimated
annual cost burden for all 49,214 EPs to
update registration information
themselves was $1,952,073. Similarly,
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the cost burden for the EP who chose to
use a medical secretary to update
registration information on his/her
behalf was $7.41. The total estimated
annual cost burden for 49,214 EPs who
chose to use medical secretaries to
update registration information on their
behalf was $364,429. We used the
average of the two estimates in the tally
in Table 34. We invited comments on
whether we should use the higher cost
burden estimate ($1,952,073) or the
lower cost burden estimate ($364,429)
but we did not receive any comments on
this issue. We also invited public
comments on the estimated percentages
and the numbers of EPs that will need
to submit subsequent registration
changes to us over the course of the EHR
incentive payment program but we did
not receive any comments on this issue.
We are finalizing both the lower cost
estimate using the medical secretary as
the personnel to update registration
information for the EP and the high cost
estimate of the EP updating their
registration information. Due to the
revised estimates of non-hospital-based
EPs eligible for the EHR incentive
program pursuant to legislative
inclusion of EPs who practice in
outpatient hospital setting, we are
revising our burden estimate for this
requirement to reflect this change. In the
final rule, we estimate that about 11
percent of the Medicare and Medicaid
EPs may need to update their
registration information during a 1-year
period. We estimate that 57,998 EPs
(527,254 (revised estimated number of
EPs for CY 2012) × 11 percent) may only
have one occasion that requires them to
update their information in a given year.
For each occasion, we estimate that it
will take no more than 0.5 hours to
notify us of the changes. With that, we
estimate that the annual total burden
hours for 57,998 EPs to update
registration changes are 28,999. The
lower cost burden estimate for a medical
secretary to update an EP’s registration
is $7.41 ($14.81 (mean hourly rate for
medical secretary based on the May
2008 Bureau of Labor Statistics) × 0.5
hours). The total lower cost burden for
all EPs to update registration
information is $429,475 (28,999 hours ×
$14.81). The high cost burden for an EP
to update their own registration
information is $39.67 (0.5 hours ×
$79.33 (mean hourly rate for physicians
based on May 2008 Bureau of Labor
Statistics)). The total estimated annual
high cost burden to update registration
information is $2,300,491 (28,999 hours
× $79.33). We only use the average of
the two estimates in the tally in Table
34.
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In § 495.10(a) and (b), we estimate
that in FY 2011, there are 5,011
Medicare and Medicaid eligible
hospitals, and CAHs that may be
qualified to receive EHR incentive
payment. Since we cannot predict how
many eligible hospitals, and CAHs will
participate in the EHR incentive
payment program, we estimate that all
5,011 hospitals may register for the
incentive program for burden estimate
purposes. We estimate that it would
take no more than 0.5 hours for an
eligible hospital or CAH to register. We
estimate the total annual burden hours
for registration will be 2,506 (5,011
hospitals × 0.5 hours). Once the
decision to participate in the incentive
program is made, we believe eligible
hospitals or CAHs may assign a medical
secretary to submit the registration
information. The cost burden for an
eligible hospital or CAH to register is
$7.41 (0.5 hours × $14.81 (mean hourly
rate for medical secretaries based on the
May 2008 Bureau of Labor Statistics)).
We estimate that the total annual cost
burden for eligible hospitals and CAHs
to register is $37,106 (5,011 hospitals ×
0.5 hours × $14.81) (mean hourly rate
for medical secretaries based on the May
2008 Bureau of Labor Statistics)). We
invited public comments on the
estimated percentages or the number of
eligible hospitals and CAHs that will
register for the EHR incentive payment
program in 2011 and subsequent years
but we did not receive any comments on
this issue. We are finalizing the burden
estimates as proposed.
In § 495.10(d), we proposed that if
there were subsequent changes in the
initial registration information, the
eligible hospital or CAH was
responsible for providing us with
updated information in the manner
specified by us. Based on our
experience with provider enrollment,
we estimated that about 8 percent of the
Medicare and Medicaid eligible
hospitals and CAHs (5,011 hospitals and
CAHs × 8 percent = 401 hospitals) might
need to update their registration
information during a 1-year period. We
estimated that eligible hospitals in this
8 percent pool might only have 1
occasion that required updating of
registration information in a given year.
For each occasion, we estimated that it
would take no more than 0.5 hours to
notify us of the changes. With that, we
estimated that the total annual burden
hours for eligible hospitals and CAHs to
update CMS of registration changes
were 201 (401 hospitals and CAHs × 0.5
hours). We believe that eligible
hospitals or CAHs might assign a
medical secretary to update the
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registration information. We estimated
the total annual cost burden for eligible
hospitals and CAHs to update CMS of
registration changes is $2,969 (401
hospitals and CAHs × 0.5 hours ×
$14.81) (mean hourly rate for medical
secretaries based on the May 2008
Bureau of Labor Statistics)). We invited
public comments on the estimated
percentages and the numbers of eligible
hospitals and CAHs that will submit
subsequent registration changes to us
over the course of the EHR incentive
payment program but we did not receive
any comments on this issue. We are
finalizing the estimated burden for
hospitals and CAHs that will be making
subsequent registration changes for FY
2012 as proposed.
In § 495.10(e)(1), we proposed that for
participation in the EHR incentive
payment programs, prior to the first
payment year, an EP must notify us in
a specified manner as to whether he or
she elects to participate in the Medicare
or Medicaid EHR incentive program. We
estimated that in 2011, there would be
about 80,900 dual Medicare/Medicaid
EPs who might make the initial
Medicare and Medicaid program
selection. The standard full amount of
Medicaid incentive payments that an EP
could receive is larger than the standard
full amount for the Medicare EP
incentive payments. Therefore, for
burden estimate purposes, we believed
that all of the 80,900 dual Medicare/
Medicaid EPs might make the Medicaid
program selection. We estimated that it
would take no more than 0.5 hours to
submit the initial Medicare or Medicaid
selection notification to us. We could
not predict if the EP would submit the
notification to CMS himself or herself or
assign a secretary to do it. Therefore, we
did one high end estimate and one low
end burden estimate for an EP and a
medical secretary respectively. The total
estimated burden hours for all the dual
Medicare/Medicaid EPs to notify CMS
of program selection were 40,450 in the
first payment year. The cost burden for
these EPs who notify CMS of Medicare
or Medicaid program selection himself
or herself was $39.67. The total
estimated annual cost burden for all
dual Medicare/Medicaid EPs to notify
CMS of program selection themselves
was $3,208,899. Similarly, the cost
burden for an EP who chose to use a
medical secretary to notify CMS of
program selection was $7.41. The total
estimated annual cost burden for all
dual Medicare/Medicaid EPs who use
medical secretaries to notify CMS of
program selection was $599,065. We
used the average of the two estimates in
the tally in Table 34. We invited
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comments on whether we should use
the higher cost burden estimate
($3,208,899) or the lower cost burden
estimate ($599,065), but we did not
receive any comments on this issue. We
also invited public comments on the
estimated percentages and the number
of dual Medicare/Medicaid EPs that
would submit initial Medicare or
Medicaid program selection in 2011,
2012, 2013, or 2014 but we did not
receive any comments.
In the final rule, we are finalizing
both the low burden cost estimate using
a medical secretary for dual-Medicare/
Medicaid EPs to notify CMS of program
selection and the high burden cost
estimate of an EP who may do this him
or herself. We have revised the total
number of dual-Medicare/Medicaid EPs
and the associated burden estimates
pursuant to the legislative inclusion of
EPs, who practice in outpatient hospital,
in the incentive program. We estimate
that in CY 2011, there will be 95,500
dual Medicare/Medicaid EPs who may
use a medical secretary to notify CMS of
the initial Medicare and Medicaid
program selection. We estimate that it
would take no more than 0.5 hours to
submit the initial Medicare or Medicaid
selection notification to us. The
estimated burden for all the dualMedicare/Medicaid EPs to comply with
this requirement is 47,750 hours (95,500
EPs × 0.5 hours). The associated low
cost burden for a dual-Medicare/
Medicaid EP is $7.41 (0.5 hours ×
$14.81 (mean hourly rate for medical
secretaries based on May 2008 Bureau of
Labor Statistics) and the total low cost
burden for all the dual-Medicare/
Medicaid EPs is $707,178 (47,750 hours
× $14.81). The associated high cost
burden for a dual-Medicare/Medicaid
EP is $39.67 (0.5 hours × $79.33 (mean
hourly rate for physicians based on the
May 2008 Bureau of Labor Statistics))
and the total high cost burden estimate
for all dual-Medicare/Medicaid EPs is
$3,788,008 (47,750 hours × $79.33). We
only use the average of the two
estimates in the tally in Table 34.
In § 495.10(e)(2) we proposed that EPs
might switch from Medicare to
Medicaid EHR incentive program or
vice versa one time, and only for
payment year 2014 or earlier. The
burden associated with this requirement
was the time required for the EP to make
the Medicare/Medicaid program
selection. Since we had no knowledge
of how many EPs will make the
subsequent changes in program
selection, we assumed that all 81,700
(estimated number of dual-Medicare/
Medicaid EPs for CY 2012) dual
Medicare/Medicaid EPs might make
subsequent program selection changes
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for burden estimate purposes. We
estimated that it would take no more
than 0.5 hours to submit the Medicare/
Medicaid selection change to us. We
could not predict if the EP would
submit the change to CMS himself or
herself or assign a secretary to do it.
Therefore, we did one high end burden
estimate for an EP and one low end
estimate for a medical secretary. We
used the average of the two estimates in
the tally in Table 34. The total estimated
burden hours for all dual-Medicare/
Medicaid EPs to notify CMS of program
changes were 40,850 in a given year.
The higher cost burden for the EP who
chose to notify CMS of Medicare/
Medicaid program change him or herself
was $39.67. The total estimated annual
cost burden for all dual Medicare/
Medicaid EPs to notify CMS of program
changes themselves was $3,240,630.
Similarly, the lower cost burden for an
EP who chose to use a medical secretary
to notify CMS of program changes was
$7.41. The total estimated annual cost
burden for all dual-Medicare/Medicaid
EPs who use medical secretaries to
notify CMS of program changes was
$604,989. We invited comments on
whether we should use the higher cost
burden estimate ($3,240,630) or the
lower cost burden estimate ($604,989)
but we did not received any comments
on this issue. We also invited comments
on the estimated percentages and the
number of dual-Medicare/Medicaid EPs
that would submit initial Medicare or
Medicaid program changes in 2012,
2013, or 2014 but we did not receive
any comments on this issue.
We are finalizing both the lower cost
burden for EPs for may assign medical
secretaries as the personnel to submit
Medicare/Medicaid program selection
changes to CMS and the high cost
burden for EPs who may do this him or
herself. We revised our burden
estimates and the number of dualMedicare/Medicaid EPs, pursuant to
legislative inclusion of EPs who practice
at outpatient hospital setting in the
incentive program. For CY 2012, we
estimate that there will be 96,500 dualMedicare/Medicaid EPs. The
notification will take 0.5 hours and the
total burden for all dual-Medicare/
Medicaid EPs will be 48,250 hours
(96,500 EPs × 0.5 hours). The lower cost
burden for each EP is $7.41 (0.5 hours
× $14.81 (mean hourly rate for medical
secretaries based on the May 2008
Bureau of Labor Statistics) and the total
lower cost burden for all the dualMedicare/Medicaid EPs will be
$714,583 (48,250 hours × $14.81). The
high cost burden for each EP is $39.67
(0.5 hours × $79.33 (mean hourly rate
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for physicians based on the May 2008
Bureau of Labor Statistics)) and the total
high cost burden for all dual-Medicare/
Medicaid EPs is $3,827,673 (48,250
hours × $79.33). We only use the
average of the two estimates in the tally
in Table 34.
C. ICRs Regarding Identification of
Qualifying MA Organizations, MA–EPs
and MA-Affiliated Eligible Hospitals
(§ 495.202)
Section 495.202(a)(1) states that
beginning with bids due in June 2011
(for plan year 2012), MA organizations
seeking reimbursement for qualifying
MA EPs and qualifying MA-affiliated
eligible hospitals under the MA EHR
incentive program are required to
identify themselves to CMS in a form an
manner specified by CMS, as part of
submissions of initial bids under section
1854(a)(1)(A) of the Act. There is no
burden associated with this requirement
for qualifying MA organizations offering
MA HMO plans, since they are deemed
to meet the definition of HMO in 42
U.S.C. 300gg–91(b)(3) of the PHS Act in
accordance with § 495.202(a)(2).
However, per § 495.202(a)(3), for MA
organizations offering types of MA plans
other than HMOs, the burden is the
amount of time it will take them to
attest to the fact that they meet the
definition of HMO in 42 U.S.C. 300gg–
91(b)(3). We believe the burden
associated with this requirement for MA
organizations not offering HMO type
plans would be approximately 1 hour
per MA organization. We do not believe
that there are any MA organizations that
are not offering MA HMO type plans
that will request reimbursement for
qualifying MA EPs or MA-affiliated
eligible hospitals under the MA EHR
incentive payment program. Although
the timeframe goes beyond the effective
date of the proposed information
collection period (3 years from the
effective date of the final rule), we do
not believe there are any MA
organizations with potentially
qualifying MA EPs or potentially
qualifying MA-affiliated eligible
hospitals that will need to report to us
beginning in 2014 (for plan year 2015)
per § 495.202(a)(4). Therefore, we
believe there will be no burden
associated with identification of
qualifying MA organizations per
§ 495.202(a)(1) through (4).
Section 495.202(b)(1) and (2) require
a qualifying MA organization, as part of
its initial bid starting with its bid for
plan year 2012, to make preliminary
identification of potentially qualifying
MA EPs and potentially qualifying MAaffiliated eligible hospitals for which the
organization is seeking incentive
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payments for the current plan year
(2011). The burden associated with this
requirement would be the time required
for a MA organization to identify their
MA-affiliated hospitals to CMS. In the
proposed rule, we explained that when
MAOs identify amounts of
compensation per § 422.204(b)(2) and
(5) they will also be identifying MA EPs
per this requirement, and therefore there
is will be no additional burden related
to this requirement with respect to MA
EPs. There are approximately 29 MAaffiliated eligible hospitals and
approximately 12 MA organizations, or
an average of 2.42 eligible hospitals for
each MA organization. In the proposed
rule, we estimated that the total burden
hours for all MA organizations to
identify their affiliated hospitals to CMS
would be 3 hours. We believe a MA
organization may use a billing clerk to
identify the eligible hospital to us. The
total cost burden for all MA
organizations to identify their eligible
hospitals to us would be $46.32.
Sections 495.202(b)(1) and (2), state
that a MA organization, as part of its
initial bid starting with plan year 2012,
must make a preliminary identification
of potentially qualifying MA EPs and
potentially qualifying MA-affiliated
eligible hospitals for which the
organization is seeking incentive
payments for the current plan year. A
qualifying MA organization must
provide the following information on
their MA-affiliated EPs and eligible
hospitals: (A) name of the EP or eligible
hospital; (B) address of the EP’s practice
or eligible hospital’s location; and (C)
NPI. We believe that it is within the
customary business practices of an MA
organization to keep the information in
(A), (B), and (C) on file. The burden
associated with this requirement would
be the time required to provide this
information to CMS along with an
attestation that the MA EPs or MAaffiliated eligible hospitals meet the
eligibility criteria. In the proposed rule,
we estimated that it would take 0.5
hours for a MA organization to comply
with this attestation requirement. We
estimated that the total burden for all
MA organizations to attest would be
6 hours. We believe that MA
organizations may use an attorney to
attest on their behalf. In the proposed
rule, we estimated that the cost burden
for a MA organization to attest is $29.99
and the total estimated cost burden for
all MA organizations to attest would be
$359.88.
Section 495.202(b)(4) states that all
qualifying MA organizations, as part of
their initial bids in June 2015 for plan
year 2016, must identify potentially
qualifying MA EPs and potentially
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qualifying MA-affiliated eligible
hospitals. An attestation that each
professional or hospital either meets or
does not meet the eligibility criteria
must be included as part of the
identification submission. We cannot
estimate the collection burden for this
requirement as the timeframe goes
beyond the scope of the effective date of
the proposed information collection
period (3 years from the effective date
of the final rule).
D. ICRs Regarding Incentive Payments
to Qualifying MA Organizations for MA–
EPs and Hospitals (§ 495.204)
Section 495.204(b)(2) requires a
qualifying MA organization to report to
CMS within 60 days of the close of the
calendar year, the aggregate annual
amount of revenue attributable to
providing services that would otherwise
be covered as professional services
under Part B received by each qualifying
MA EP for enrollees in MA plans of the
MA organization in the payment year.
Since the tracking of salaries or
compensation for MA EPs constitutes
usual and customary business practices,
the only burden associated with this
requirement would be the time required
to submit the aggregated annual amount
of revenue received by each qualifying
MA EP for enrollees in MA plans of the
MA organization. In the proposed rule,
we estimated that there were 12 MA
organizations and 28,000 MA EPs. We
believe that it will take a MA
organization 40 hours annually to report
the required aggregate revenue data for
all its salaried MA EPs, given that all the
data are readily available. The total
estimated annual burden hours for all
MA organizations to comply with this
requirement would be 480. We believe
MA organizations may involve a billing
clerk to report the required data to CMS.
We estimated that the cost burden for a
MA organization to report was $617.6
(40 hours × $15.44 (mean hourly rate of
billing clerk based on the May 2008
Bureau of Labor Statistics)) and we
estimated the total annual cost burden
for all MA organizations to comply with
this requirement would be $7,411.
Section 495.204(b)(4) states that for
qualifying MA EPs who are
compensated on a salaried basis, CMS
requires the qualifying MA organization
to develop a methodology for estimating
the portion of each qualifying MA EP’s
salary attributable to providing services
that would otherwise be covered under
Part B to MA plan enrollees of the MA
organization. The methodology: (i) Must
be approved by CMS; (ii) may include
an additional amount related to
overhead, where appropriate, estimated
to account for the MA-enrollee related
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Part B practice costs of the salaried
qualifying MA EP; and (iii)
methodological proposals must be
submitted to CMS by June of the
payment year and must be auditable by
an independent third party. CMS will
review and approve or disapprove such
proposals in a timely manner. In the
proposed rule, we estimated that it
might take a MA organization one and
a half hour to develop the methodology.
We estimated that there are about two
MA organizations that may have the
need to develop the methodology. We
estimated the total burden hours for the
two MA organizations to develop the
methodology would be 3 hours. We
believed that a MA organization may
use an accountant to develop the
methodology. We estimated the cost
burden for a MA organization was
$47.48 (1.5 hours × $31.65 (mean hourly
rate for accountants based on the May
2008 Bureau of Labor Statistics)), and
the total cost burden for the two MA
organizations to develop the
methodology would be $94.95 (47.48 ×
2 MA organizations).
Section 495.204(b)(5) states that for
qualifying MA EPs who are not salaried,
qualifying MA organizations may obtain
and submit to CMS, attestations from
such qualifying MA EPs as to the
amount of compensation received by
such EPs for MA plan enrollees of the
MA organization. We estimate that
about 10 percent of the MA EPs were
not salaried and that was an average of
233 non-salaried EPs in each MA
organization. Further, we estimate that
it might take 0.25 hour to electronically
obtain and compile each attestation into
a document for transmission to CMS.
We estimate the total burden hours for
a MA organization would be 58.3, and
the total estimated burden hours for all
MA organizations would be 699.6 (58.3
hours × 12 MA organizations). We
believe an MA organization may involve
a billing clerk to compile and submit the
compensation information from such
attestations. We estimate the cost
burden for a MA organizations to
comply with this requirement would be
$900.15 (58.3 hours × $15.44 (mean
salary of a billing clerk based on the
May 2008 Bureau of Labor Statistics)).
We estimate the total annual cost
burden for all MA organizations to
comply with this requirement would be
$10,801.82 ($900.15 × 12 MA
organizations).
Section 495.204(b)(6) states that for
qualifying MA EPs who are not salaried,
qualified MA organizations may also
have qualifying MA EPs send MA
organization compensation information
directly to CMS. We estimated the
burden associated with this requirement
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44535
is the time it would take the MA EP to
send the information directly to CMS.
However, we believe that the nonsalaried MA EPS are employed by a
third-party physician group which will
be responsible for sending the required
information to CMS. Again, we estimate
that about 10 percent of the MA EPs are
not salaried and that there is an average
of 233 non-salaried EPs in each of the
third-party physician groups. Further,
we estimate that it might take 0.25 hour
to electronically obtain and compile the
information into a document for
transmission to CMS. We estimate the
total burden hours for a third-party
physician group will be 58.3, and the
total estimated burden hours for all
third-party physician groups will be
699.6 (58.3 hours × 12 third-party
physician group). We believe a thirdparty physician group may involve a
billing clerk to compile and submit the
compensation information. We estimate
the cost burden for a third-party
physician group to comply with this
requirement will be $900.15 (58.3 hours
× $15.44 (mean salary of a billing clerk
based on the May 2008 Bureau of Labor
Statistics)). We estimate the total annual
cost burden for all third-party physician
groups to comply with this requirement
will be $10,801.82 ($900.15 × 12 thirdparty physician groups). Note that this
is the same burden we estimate with
respect to § 422.204(b)(5). Further, an
MAO will either submit non-salary
information directly to CMS, or it will
have someone else do it on behalf of the
MA EPs with respect to that MAO. We
believe the burden related to
§ 422.204(b)(6) is counted in the burden
we already projected with respect to
§ 422.204(b)(5). We do not believe any
MAO will submit under both
§ 422.204(b)(5) and (6).
E. ICRs Regarding Meaningful User
Attestation (§ 495.210)
Section 495.210(b) requires qualifying
MA organizations to attest within 60
days after the close of a calendar year
whether each qualifying MA EP is a
meaningful EHR user. We anticipate
that the adopted EHR technology will
capture the data for determination
whether each qualifying MA EP is a
meaningful EHR user. We estimate the
burden associated with this requirement
would be the time necessary to attest to
the required information. We estimated
that there were approximately 12 MA
organizations and approximately 28,000
MA EPs, or an average of approximately
2,333 MA EPs affiliated with each
qualifying MA organization. We believe
that it would take a MA organization
about 40 hours annually to attest
whether each qualifying MA EP is a
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meaningful user, given that all the data
are captured in the certified EHR
technology and that meaningful use will
be demonstrated through the continued
reporting of HEDIS data. We estimate
the total estimated annual burden hours
for all MA organizations to comply with
this requirement will be 480. We believe
MA organizations might involve an
attorney to attest on their behalf. We
estimate the cost burden for a MA
organization to attest will be $2,399 (40
hours × $59.98 (mean hourly rate of
attorney based on the May 2008 Bureau
of Labor Statistics)). We estimate the
total annual cost burden for all MA
organizations to comply with attestation
for MA EPs will be $28,790.
Section 495.204(c)(2) states that to the
extent data are available, qualifying MA
organizations must receive hospital
incentive payments through their
affiliated hospitals under the Medicare
FFS EHR hospital incentive program,
rather than through the MA EHR
hospital incentive program. Under
§ 495.210(c), we proposed that
qualifying MA organizations be required
to attest within 60 days after the close
of a calendar year whether each
qualifying MA-affiliated eligible
hospital is a meaningful EHR user.
While the EHR incentive payments for
Medicare FFS and MA-affiliated
hospitals are treated the same as all
Medicare-certified MA affiliated
hospitals they will demonstrate clinical
quality measures through the continued
reporting of HEDIS data. This means
that § 495.210(c) generally applies to a
MA-affiliated hospital that is not
Medicare certified, and such a type of
hospitals does not exist currently. We
do not expect there to be any MAaffiliated hospitals that will not be
covered under the Medicare FFS EHR
hospital incentive program because
section 1852(a)(1)(A) of the Act requires
MA organizations to provide Part A
inpatient services solely through
providers that meet applicable
requirements of the Medicare program.
We have already addressed the
attestation burden on hospitals,
including MA-affiliated hospitals under
§ 495.10(b)(2)(i)(ii) and through our
existing PRA package related to HEDIS
reporting by MA organizations—OMB
control number 0938–NEW.
F. ICRs Regarding Establishing Patient
Volume (§ 495.306)
This section of the final rule contains
patient volume requirements, and
requires EPs and certain hospitals to
attest to meeting such requirement using
representative periods in order to
qualify for a Medicaid EHR incentive.
The minimum patient volume
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requirements are as follows: 30 percent
Medicaid patient volume for most EPs,
20 percent Medicaid patient volume for
pediatricians, 30 percent needy
individual patient volume for EPs
practicing predominantly in an FQHC or
RHC, and 10 percent Medicaid patient
volume for acute-care hospitals. The
burden associated with the
requirements in this section is the time
and effort necessary to submit the
information to CMS. In the proposed
rule, in each instance, we estimated it
would take no longer than 0.5 hours to
submit the necessary information to
CMS. We estimated that 119,000 entities
would submit the required information
to meet 30 percent (or 20 percent
pediatrician) requirements for most EPs.
We estimated the total annual burden to
be 59,500 hours, with total labor cost
amounting to $4,720,135 (assuming that
physicians (rather than staff assistants)
establish patient volume ($79.33 mean
hourly rate for physicians based on May
2008 Bureau of Labor Statistics).
For hospitals to attest to patient
volume, we estimated that 3,631 entities
would submit required information, and
estimated a total burden of 1,815.50
hours (3,631 entities × .5 hours). The
total labor cost associated with this
requirement is $25,617. This cost
burden was based on a secretary
reporting patient volume on behalf of
the acute care hospital at $14.11 (mean
hourly rate for secretaries based on May
2008 Bureau of Labor Statistics).
We received no comments on this
section; however, since we have revised
our definition of hospital-based EP, the
burden is revised to account for the
additional number of Medicaid EPs that
could now be eligible to receive
Medicaid incentive payments. We
currently estimate that there are an
additional Medicare/Medicaid 75,700
EPs that could be eligible for an
incentive payment because of the new
definition of hospital-based EP. We
believe there are 553,200 Medicare EPs
of which 86 percent are non-hospital
based or 477,500. We believe 20 percent
or 95,500 will meet patient volume
requirements, and therefore, potentially
qualify for Medicaid EHR incentive
payments. Additionally, there are
44,100 Medicaid-only EPs (nurse
practitioners, certified nurse-midwives,
dentists, and physician assistants) that
we believe will meet patient volume.
Specifically, we believe that 139,600
EPs (95,500 + 44,100) could be reporting
patient volume information. Thus, the
updated annual burden associated with
the requirements in § 495.306 at 0.5
hours for EPs is 69,800.
The total labor cost associated with
the requirement is (69,800 × 79.33)
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$5,537,234. The total labor cost
associated with each requirement is
$5,537,234.
For hospitals reporting patient
volume, we have updated the burden to
account for the additional CAHs that
meet the definition of acute care
hospital. Specifically, there are 3,620
acute care hospitals, 11 cancer
hospitals, and 1,302 CAHs that must
report 10 percent Medicaid patient
volume, or 4,933 entities. The updated
annual burden associated with the
requirement, at 0.5 hours is 2,466.5
(4,933 × .05). The total labor cost is
$34,803.30.
G. ICRs Regarding Process for Payments
(§ 495.312)
Section 495.312(b) states that in order
to receive a Medicaid EHR incentive
payment, a provider must report all
necessary data (including data required
by subpart A of the regulations, such as
meaningful use data) within the EHR
reporting period. We believe the
information collections associated with
this requirement are discussed in the
relevant sections discussing each
particular requirement that would
necessitate data reporting (for example,
the burden for demonstrating
meaningful use is discussed in the
information collection section on
meaningful use). Therefore, we have not
calculated a separate information
collection burden for this requirement.
H. ICRs Regarding Activities Required
To Receive an Incentive Payment
(§ 495.314)
Section 495.314(a)(1) states that in the
first payment year, to receive an
incentive payment, the Medicaid EP or
eligible hospital must meet one of the
following criteria. The Medicaid EP or
eligible hospital must demonstrate that
during the EHR reporting period for a
payment year, it has adopted,
implemented, or upgraded certified EHR
technology, as defined in § 495.302; or,
the Medicaid EP or eligible hospital
must demonstrate that during the EHR
reporting period for a payment year it is
a meaningful user of certified EHR
technology as defined in § 495.4.
The burden associated with the
requirements in proposed
§ 495.314(a)(1) is the time and effort
necessary for a Medicaid EP or eligible
hospital to demonstrate that it meets
one of the criteria in § 495.314(a)(1)(i)
through (ii). We believe we already
accounted for this burden in the earlier
discussion of the burden associated
with § 495.8.
Section 495.314(a)(2) states that a
provider may notify the State of its
nonbinding intention to participate in
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the incentives program prior to having
fulfilled all of the eligibility criteria.
This requirement constitutes a thirdparty disclosure. The burden associated
with this requirement is the time and
effort necessary for a provider to send
notification to the State. We estimated
that this burden will be the same burden
associated with § 495.10 since the
information necessary to notify the State
of the providers non-binding intention
to participate in the program could be
the same information as submitted by
those providers that have committed to
participating in the program, that is, the
National Provider Identifier, the tax
identification number, etc.
Section 495.314(b)(1) states that in the
second, third, fourth, fifth, and sixth
payment years, to receive an incentive
payment, the Medicaid EP or eligible
hospital must demonstrate that during
the EHR reporting period for the
applicable payment year, it is a
meaningful user of certified EHR
technology, as defined in § 495.4. The
burden associated with this requirement
is the time and effort necessary for a
Medicaid EP or eligible hospital to
demonstrate that it is a meaningful user
of certified EHR technology. We
discussed the burden associated with
this requirement in our discussion of
the burden associated with § 495.6 and
495.8.
We did not receive any comments on
the information collection burdens we
estimated for the proposed rule.
srobinson on DSKHWCL6B1PROD with RULES2
I. ICRs Regarding State Monitoring and
Reporting Regarding Activities Required
To Receive an Incentive Payment
(§ 495.316)
Section 495.316(a) requires States to
be responsible for tracking and verifying
the activities necessary for a Medicaid
EP or eligible hospital to receive an
incentive payment for each payment
year, as described in § 495.314. Burden
is calculated for each State’s process for
the administration of the Medicaid
incentive payments, including tracking
of attestations and oversight, and the
process for approving, processing, and
making timely payments.
For the proposed rule, we estimated
that it would take 5 hours per State to
accomplish this. The estimated annual
burden for States associated with the
aforementioned submission
requirements is 280 hours (56 StatesTerritories × 5.0 hours/State-Territory).
The cost burden was estimated based on
an employee contracting with the State
Agency. The burden associated with
§ 495.316 is already in the OMB
approval process. We announced the
information collection in a Federal
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Register notice that published on
September 11, 2009 (74 FR 467330).
Comment: Some commenters asked
CMS to clarify if States are responsible
for collecting the MU measure data or if
providers will report data directly to
CMS. If the collection and reporting of
MU data are States’ responsibility, this
would create tremendous burden on
States. The commenters also asked CMS
to clarify if States are responsible for
validating attestations by eligible
providers.
Response: For EPs and some
hospitals, States are responsible for
collecting the MU measure data; for
hospitals that are eligible for both the
Medicare and Medicaid incentives,
hospitals that meet the Medicare MU
objectives are deemed to have met MU
for Medicaid; thus, since hospitals are
required to report MU data to CMS for
the Medicare EHR incentives program,
these hospitals do not, in addition, have
to report MU data to States. States are
required to submit a State Medicaid HIT
plan to CMS for review and approval
outlining their methodology for
collecting MU measure data and other
required information outlined in this
final rule. States are also responsible for
validating attestations by providers. We
do not believe collecting data or
validating attestations is a tremendous
burden on States as noted by our
estimates. States can receive 90 percent
FFP for administering the incentive
payments to providers and for
conducting adequate monitoring and
oversight. In addition, it should be
noted that States voluntarily participate
in the Medicaid EHR incentive program.
J. ICRs Regarding State Responsibilities
for Receiving FFP (§ 495.318)
Section 495.318 states that in order to
be provided FFP under section
1903(a)(3)(F) of the Act, a State must
demonstrate to the satisfaction of the
Department, that the State is conducting
the activities listed at § 495.318(a)
through (c). This burden is the same as
that listed above in the burden
discussion for § 495.316.
K. ICRs Regarding Prior Approval
Conditions (§ 495.324)
Section 495.324(a) requires a State to
obtain prior written approval from the
Department as specified in paragraph (b)
of this section, when the State plans to
initiate planning and implementation
activities in support of Medicaid
provider incentive payments
encouraging the adoption and use of
certified EHR technology with proposed
Federal financial participation (FFP).
Specifically, § 495.324(b) states that to
receive 90 percent match, each State
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44537
must receive prior approval for all of the
requirements listed in § 495.324(b)(1)
through (3).
Section 495.324(c) requires a State to
obtain prior written approval from the
Department of its justification for a sole
source acquisition, when it plans to
acquire non-competitively from a
nongovernmental source HIT equipment
or services, with proposed FFP under
subpart D of Part 495 in the regulations,
if the total State and Federal acquisition
cost is more than $100,000. Burden
must be calculated for State Medicaid
Agencies to submit the planning and
implementation documents and the
SMHP to CMS. This burden is the same
as that listed above in the burden
discussion for § 495.316.
L. ICRs Regarding Termination of
Federal Financial Participation (FFP) for
Failure To Provide Access to
Information (§ 495.330)
Section 495.330(a) states that the
Department can terminate FFP at any
time if the Medicaid agency fails to
provide State and Federal
representatives with full access to
records relating to HIT planning and
implementation efforts, and the systems
used to interoperate with electronic
HIT, including on-site inspection.
Section 495.330(b) states that the
Department may request such access at
any time to determine whether the
conditions in this subpart are being met.
The burden associated with the
requirements in this section is the time
and effort necessary to make the
information available to the Department
upon request so it can monitor
compliance. The Department estimated
that it will make 1 request per State/
Territory per year for information and
that it will take each State 5 hours to
compile and furnish the information.
For States to collect and submit the
information required, we estimated it
would take 5 hours per State. The
estimated annual burden for States
associated with the aforementioned
submission requirements is 280 hours
(56 States-Territories × 5.0 hours/StateTerritory).
The annual cost burden for a State
employee to provide the above
information is $9,904 (280 hours ×
$35.37 (mean hourly rate for a
management analyst based on the May
2008 Bureau of Labor Statistics)). We
believe that a secretary may compile
State information and provide the
information to the Department. In that
case the annual cost burden for the
secretary to provide this information is
$3,951 (280 hours × $14.11 (mean
hourly rate for secretaries based on the
May 2008 Bureau of Labor Statistics)).
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M. ICRs Regarding State Medicaid
Agency and Medicaid EP and Hospital
Activities (§ 495.332 Through § 495.344)
The burden associated with this
section is the time and effort associated
with completing the single provider
election repository and each State’s
process for the administration of the
Medicaid incentive payments, including
tracking of attestations and oversight;
the submission of the State Medicaid
HIT Plan and the additional planning
and implementation documents;
enrollment or reenrollment of providers,
and collection and submission of the
data for providers to demonstrate that
they have adopted, implemented, or
upgraded certified EHR technology or
that they are meaningful users of such
technology. We believe much of the
burden associated with these
requirements has already been
accounted for in our discussion of the
burden for § 495.316.
srobinson on DSKHWCL6B1PROD with RULES2
N. ICRs Regarding Access to Systems
and Records (§ 495.346)
Section 495.346 states that the State
agency must allow the Department
access to all records and systems
operated by the State in support of this
program, including cost records
associated with approved administrative
funding and incentive payments to
Medicaid providers. State records
related to contractors employed for the
purpose of assisting with
implementation or oversight activities
or providing assistance, at such
intervals as are deemed necessary by the
Department to determine whether the
conditions for approval are being met
and to determine the efficiency,
economy, and effectiveness of the
program.
The Department believes that the
burden associated with maintaining the
records is exempt under 5 CFR
1320.3(b)(2) as this burden is part of a
usual and customary business practice;
the time, effort, and financial resources
necessary to comply with a collection of
information that would be incurred by
persons in the normal course of their
activities (for example, in compiling and
maintaining business records) will be
excluded from the ‘‘burden’’ if the
agency demonstrates that the reporting,
recordkeeping, or disclosure activities
needed to comply are usual and
customary.
However, there is burden associated
with making the information available
to the Department upon request. This
burden is described in the burden
discussion for § 495.330.
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O. ICRs Regarding Procurement
Standards (§ 495.348)
Section 495.348(c) states that a
grantee must maintain written standards
of conduct governing the performance of
its employees engaged in the award and
administration of contracts. Although
most States may already have these
written standards of conduct, we have
estimated the burden associated with
this requirement as the time and effort
necessary for a grantee to develop and
maintain written standards of conduct.
We estimate it will take each of the 56
grantees 0.5 hours to develop and
maintain standards of conduct. The total
estimated annual burden is 28 hours (56
grantees × 0.5 hours). The annual cost
burden for a grantee to develop and
maintain standards of conduct is $990
(28 hours × $35.37 (mean hourly rate for
a management analyst based on the May
2008 Bureau of Labor Statistics)).
Section 495.348(e) requires that all
grantees establish written procurement
procedures. At a minimum, the
standards must provide for the
information listed in § 495.348(e)(1)
through (13). The burden associated
with this requirement is the time and
effort necessary for a grantee to develop
and maintain written procurement
procedures. Although most States
probably have these procedures already,
we estimate that it will take each of the
56 grantees 0.5 hours to develop and
maintain written procurement
procedures. The total estimated annual
burden is 28 hours (56 grantees × 0.5
hours). The annual cost burden for a
grantee to develop and maintain written
procurement procedures is $990 (28
hours × $35.37 (mean hourly rate for a
management analyst based on the May
2008 Bureau of Labor Statistics)).
Section 495.348(f) imposes
recordkeeping requirements. This
section states that a system for contract
administration must be maintained to
ensure contractor performance with the
terms, conditions and specifications of
the contract and to ensure adequate and
timely follow up on all purchases. The
burden associated with this requirement
is the time and effort necessary to
develop and maintain a system for
contract administration. We estimate
that it will take each of the 56 grantees
5 hours to develop and maintain a
system for contract administration. The
total estimated annual burden is 280
hours (56 grantees × 5 hours). The
annual cost burden for a grantee to
develop and maintain a system for
contract administration is $9,904 (280
hours × $35.37 (mean hourly rate for a
management analyst based on the May
2008 Bureau of Labor Statistics)).
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P. ICRs Regarding State Medicaid
Agency Attestations (§ 495.350)
Section 495.350 requires States to
provide assurances to the Department
that amounts received with respect to
sums expended that are attributable to
payments to a Medicaid provider for the
adoption of EHR are paid directly to
such provider, or to an employer or
facility to which such provider has
assigned payments, without any
deduction or rebate. The burden
associated with this requirement is the
time and effort necessary for a State to
verify that the sums expended are
attributable to payments to a Medicaid
provider for the adoption of EHR are
paid directly to such provider, or to an
employer or facility to which such
provider has assigned payments,
without any deduction or rebate.
Additionally, there is burden associated
with submitting an attestation to the
Department to that effect. The estimated
burden associated with these
requirements is 0.5 hours to verify the
information and 0.5 hours to submit the
attestation to the Department, for a total
of 1 hour. The estimated annual burden
for States associated with the
aforementioned submission
requirements is 56 hours (56 StatesTerritories × 1 hour State-Territory). The
annual cost burden for a State employee
to provide the above information is
$1,981 (56 hours × $35.37 (mean hourly
rate for a management analyst based on
the May 2008 Bureau of Labor
Statistics)). We believe that that a
secretary may compile State information
and provide the information to the
Department. In that case the annual cost
burden for the secretary to provide this
information is $790 (56 hours × $14.11
(mean hourly rate for secretaries based
on the May 2008 Bureau of Labor
Statistics)).
Q. ICRs Regarding Reporting
Requirements (§ 495.352)
Section 495.352 requires each State to
submit to the Department on a quarterly
basis a progress report documenting
specific implementation and oversight
activities performed during the quarter,
including progress in implementing the
State’s approved Medicaid HIT plan.
The burden associated with this
requirement is the time and effort
necessary for a State to draft and submit
quarterly progress reports to the
Department. For States to collect and
submit the information required, we
estimate it will take 5 hours per State.
The estimated annual burden for States
associated with the aforementioned
submission requirements is 280 hours
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(56 States-Territories × 5 hours/StateTerritory).
The annual cost burden for a State
employee to provide the above
information is $9,904 (280 hours ×
$35.37 (mean hourly rate for a
management analyst based on the May
2008 Bureau of Labor Statistics)). We
believe that a secretary may compile
State information and provide the
information to the Department. In that
case the annual cost burden for the
secretary to provide this information is
$3,951 (280 hours × $14.11 (mean
hourly rate for secretaries based on the
May 2008 Bureau of Labor Statistics)).
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R. ICRs Regarding Retroactive Approval
of FFP With an Effective Date of
February 18, 2009 (§ 495.362)
Section 495.362 states that for
administrative activities performed by a
State, without obtaining prior approval,
which are in support of planning for
incentive payments to providers, a State
may request consideration of FFP by
recorded request in a HIT planning
advance planning document or
implementation advance planning
document update. While this
requirement is subject to the PRA, we
believe the burden is already covered in
the discussion of proposed § 495.332
through § 495.344.
S. ICRs Regarding Financial Oversight
and Monitoring Expenditures
(§ 495.366)
Section 495.366(a)(2) requires a State
to have a process in place to report
actual expenditures for the Medicaid
EHR incentive program using the
Medicaid Budget Expenditure System.
Since States already have to report
Medicaid expenditures to the Medicaid
Budget and Expenditure System, there
is no need for States to develop and
implement a reporting process.
However, States will need to estimate
and report the expenditures related to
the provider incentive payments and the
cost of the administration of the
incentive payments. The estimated
annual burden for States associated with
the aforementioned requirements is 280
hours (56 States-Territories × 5 hours
State-Territory).
The annual cost burden for a State
employee to provide the above
information is $9,904 (280 hours ×
$35.37 (mean hourly rate for a
management analyst based on the May
2008 Bureau of Labor Statistics)). We
believe that a secretary may compile
State information and provide the
information to the Department. In that
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case the annual cost burden for the
secretary to provide this information is
$3,951 (280 hours × $14.11 (mean
hourly rate for secretaries based on the
May 2008 Bureau of Labor Statistics)).
Section 495.366(a)(3) requires a State
to have an automated payment and
information retrieval mechanized
system, (Medicaid Management
Information System) to make EHR
payment incentives, to ensure Medicaid
provider eligibility, to ensure the
accuracy of payment incentives, and to
identify potential improper payments.
Since States already have an automated
payment and information retrieval
system, there is no need to estimate this
burden.
Section 495.366(b) lists the
information collection requirements
associated with provider eligibility as a
basis for making payment. States must,
subject to § 495.332, collect and verify
information on Medicaid providers.
This burden is the same as that listed
above in the discussion of § 495.316.
Section § 495.366(c)(1) states that
subject to § 495.332, the State must
annually collect and verify information
regarding the efforts to adopt,
implement, or upgrade certified EHR
technology and the meaningful use of
said technology before making any
payments to providers. This burden has
already been discussed in our burden
explanation for § 495.8.
Section 495.366(d)(1) states that
subject to paragraph § 495.332, the State
must assure that State expenditures are
claimed in accordance with, including
but not limited to, applicable Federal
laws, regulations and policy guidance.
Section 495.366(d)(2) specifies that
subject to § 495.332, the State must have
a process in place to assure that
expenditures for administering the
Medicaid EHR incentive payment
program will not be claimed at amounts
higher than 90 percent of the cost of
such administration. Section
495.366(d)(3) states that subject to
§ 495.332, the State must have a process
in place to assure that expenditures for
payment of Medicaid EHR incentive
payments will not be claimed at
amounts higher than 100 percent of the
cost of such payments to Medicaid
providers. This burden is the same as
that listed above in the discussion of
§ 495.316.
Section 495.366(e) discusses the
information collection requirements
associated with improper Medicaid
electronic health record payment
incentives. The burden associated with
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44539
the requirements listed in proposed
§ 495.366(e)(1) through (7) is the time
and effort necessary to develop
processes to provide the necessary
assurances discussed in this section.
This burden is the same as that listed
above in the discussion of § 495.316.
T. ICRs Regarding Appeals Process for
a Medicaid Provider Receiving
Electronic Health Record Incentive
Payments (§ 495.370)
Section 495.370(a) requires states to
have a process in place consistent with
the requirements established in
§ 447.253(e) for a provider or entity to
appeal incentive payments, incentive
payment amounts, provider eligibility
determinations, and the demonstration
of adopting, implementing, or upgrading
and meaningful use of certified EHR
technology. This burden is the same as
that listed above in the discussion of
§ 495.316.
We continue to believe that these
numbers are subject to a substantial
amount of uncertainty and actual
experience may be significantly
different. The range of possible
experience is greater than under most
other rules for the following reason;
specifically, this rule provides the
option for States to participate in the
Medicaid certified electronic health
record technology incentive payment
program. To the extent that States
participate more or less than assumed
here (that is, the number of States, EPs
and hospitals) the burden associated
may be greater than or less than
estimated.
U. General Comments Regarding the
Information Collection Requirements
Comment: Some commenters
recommended that EPs and eligible
hospitals should start tracking time and
resources estimates on their overall cost
for complying with all the required data
collection to achieve meaningful use
during the reporting period. They
believed the information is beneficial
for CMS in developing and assessing
future meaningful use objectives and
measures.
Response: We welcome provider
input on the required resources to
comply with the meaningful use
requirements. We believe the
information would help us to fine-tune
burden estimates for future rulemaking
for subsequent stages of meaningful use
demonstration.
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We will accept comments on the
aforementioned information collection
requirements for 60 days from the date
of display for this final rule. At the
conclusion of the 60-day comment
period, we will publish an additional
notice announcing the submission of the
information collection request
associated with this final rule for OMB
approval. At that time, the public will
have an additional 30 days to submit
public comments to OMB for
consideration.
To obtain copies of the supporting
statement associated with the
information collection requirements
contained herein, access CMS’ Web site
at https://www.cms.hhs.gov/
PaperworkReductionActof1995, or Email your request, including your
address, phone number, OMB number,
and CMS document identifier, to
Paperwork@cms.hhs.gov, or call the
Reports Clearance Office on (410) 786–
1326.
In commenting on the information
collection requirements, please
reference the information collection
request identifier (CMS–10336). To be
assured consideration, comments and
recommendations must be submitted in
one of the following ways by September
13, 2010:
1. Electronically. You may submit
your comments electronically to https://
www.regulations.gov. Follow the
instructions for ‘‘Comment or
Submission’’ or ‘‘More Search Options’’
to find the information collection
document(s) accepting comments.
2. By regular mail. You may mail
written comments to the following
address: CMS, Office of Strategic
Operations and Regulatory Affairs,
Division of Regulations Development,
Attention: Document Identifier/OMB
Control Number, Room C4–26–05, 7500
Security Boulevard, Baltimore,
Maryland 21244–1850.
IV. Regulatory Impact Analysis
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A. Overall Impact
We have examined the final impacts
of this rule as required by Executive
Order 12866, the Regulatory Flexibility
Act, section 1102(b) of the Social
Security Act regarding rural hospital
impacts, the Unfunded Mandates
Reform Act, Executive Order 13132 on
Federalism, and the Congressional
Review Act.
Executive Order 12866 directs
agencies to assess all costs and benefits
of available regulatory alternatives and,
if regulation is necessary, to select
regulatory approaches that maximize
net benefits (including potential
economic, environmental, public health
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and safety effects, distributive impacts,
and equity). A regulatory impact
analysis (RIA) must be prepared for
rules with economically significant
effects ($100 million or more in any 1
year). This final rule is anticipated to
have an annual effect on the economy
of $100 million or more, making it an
economically significant rule under the
Executive Order and a major rule under
the Congressional Review Act.
Accordingly, we have prepared a RIA
that to the best of our ability presents
the costs and benefits of the final rule.
This final rule is one of three
coordinated rulemakings undertaken to
implement the goals and objectives of
the HITECH Act related to the adoption
and meaningful use of certified EHR
technology. The other two are HHS’s
interim final rule establishing
certification criteria, standards, and
implementation specifications for
certification of EHR systems, and HHS’
final rule on EHR certification programs.
Each rule assessed the direct economic
effects of its provisions. This final rule
on Medicare and Medicaid EHR
Incentive Programs addresses the
impacts related to the actions taken by
EPs or eligible hospitals, or CAHs to
demonstrate meaningful use of certified
EHR technology, including purchasing
or developing in-house certified EHR
technology or EHR technology modules.
A number of factors will affect the
adoption of EHR systems and
demonstration of meaningful use. Many
of these are addressed in this final
analysis, but also the final provisions of
the other rules. Readers should
understand that these forecasts are also
subject to substantial uncertainty since
demonstration of meaningful use will
depend not only on the standards and
requirements for FYs 2011 and 2012 for
eligible hospitals and CYs 2011 and
2012 for EPs, but on future rulemakings
issued by the HHS.
The HITECH Act provides Medicare
and Medicaid incentive payments for
the meaningful use of certified EHR
technology. Additionally, the Medicaid
program also provides incentives for the
adoption, implementation, and upgrade
of certified EHR technology. Payment
adjustments are incorporated into the
Medicare program for providers unable
to demonstrate meaningful use. The
absolute and relative strength of these is
unclear. For example, a provider with
relatively small Medicare billings will
be less disadvantaged by payment
adjustments than one with relatively
large Medicare billings. Another
uncertainty arises because there are
likely to be ‘‘bandwagon’’ effects as the
number of providers using EHRs rises,
thereby inducing more participation in
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the incentives program, as well as
greater adoption by entities (for
example, clinical laboratories) that are
not eligible for incentives or subject to
penalties, but do business with EHR
adopters. It is impossible to predict
exactly if and when such effects may
take hold.
One legislative uncertainty arises
because under current law, physicians
are scheduled for payment reductions
under the sustainable growth rate (SGR)
formula for determining Medicare
payments. Under the current law,
physician payments were reduced by 23
percent beginning December 1, 2010,
and are scheduled for further reductions
in CY 2011. Such reductions could
cause major changes in physician
behavior, enrollee care, and other
Medicare provider payments, but the
specific nature of these changes is
exceptionally uncertain. Under a
current law scenario, the EHR
incentives or payment adjustments
would exert only a minor influence on
physician behavior relative to these very
large payment reductions. However, the
Congress has legislatively avoided
physician payment reductions in each
of the past 7 years. Behavioral changes
resulting from these scheduled
Medicare physician payment reductions
are not included in our estimate and
likewise we do not assume any
additional behavioral changes from EHR
incentive payments for Medicare
physicians.
All of these factors taken together
make it impossible to predict with
precision the timing or rates of adoption
and ultimately meaningful use.
Therefore, we show two scenarios,
which illustrate how different scenarios
would impact overall costs. Our ‘‘high’’
scenario of meaningful use
demonstration assumes that roughly a
decade from now, nearly 100 percent of
hospitals and 70 percent of EPs will be
‘‘meaningful users.’’ This estimate is
based on the substantial economic
incentives created by the combined
direct and indirect factors affecting
providers. We appreciate that in the real
world nothing is ever 100 percent, and
can even identify factors that would
certainly lead providers to forego
implementing an EHR. For example, a
physician nearing retirement with a low
Medicare caseload might well decide to
accept the relatively low adverse
consequences of declining to
demonstrate meaningful use of certified
EHR technology. Alternatively, EPs,
eligible hospitals and CAHs may choose
not to adopt and meaningfully use EHRs
if the total costs of purchasing certified
EHRs and the total costs of complying
with this rule are higher than the value
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of the total EHR incentive payments
(and adjustments, if applicable).
However, we have no reliable basis for
estimating the rate of such ‘‘holdouts.’’
To emphasize the uncertainties
involved, we have also created a ‘‘low’’
scenario estimate for the demonstration
of meaningful use each year, which
assumes less robust adoption and
meaningful use. Our ‘‘low’’ scenario of
meaningful use demonstration assumes
that roughly a decade from now, nearly
95.6 percent of hospitals and 36 percent
of EPs will be ‘‘meaningful users.’’
Both the high and low scenario
estimates are based on current law,
which includes a scheduled physician
payment cut of 23 percent on December
1, 2010. Such a reduction could cause
major changes in physician behavior,
enrollee care, and other Medicare
provider payments, but the specific
nature of these changes is exceptionally
uncertain. In our estimates, we did not
assume changes in physician behavior
as a result of these payment cuts, as this
reflects the standard practice used in
forecasts of government spending
(including effects on the private sector)
by the Boards of Trustees for the
Hospital Insurance and Supplementary
Medical Insurance Trust Funds, and the
Office of the Actuary in HHS.
Since this RIA was published in the
proposed rule, legislation has been
enacted that increases the number of
EPs that may be eligible to receive an
incentive payment by changing the
determination of hospital-based. A
complete discussion of the issue,
including comments and responses are
available in section 2 of this rule stated.
The determination of whether an EP is
hospital-based will be based upon
whether substantially all of the EP’s
services are furnished in places of
service classified under place of service
codes 21 (Inpatient Hospital) or 23
(Emergency Room, Hospital). Previously
under the old definition, CMS estimated
that 27 percent of EPs would meet the
definition of hospital-based, however,
now, under this final definition of
hospital-based EPs, about 14 percent of
Medicare EPs would be considered
hospital-based and thus not eligible to
receive any incentive payments.
There are many estimates of current
EHR adoption and usage rates. There is
one EHR function—e-prescribing—for
which adoption and usage rates for both
physicians and hospitals may exceed 50
percent. However, high estimates are
misleading because they focus on
particular elements, not on
comprehensive systems that provide a
full range of functions, similar in scope
to those established in ONC’s final rule
that adopts standards, implementation
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specifications, and certification criteria
for the technical requirements and
capabilities that EHR systems will need
to meet in order to be certified. Based
on several peer-reviewed studies, only a
small proportion of physicians and
hospitals have invested in EHR
technology that encompasses such a
broad range of functions. For example,
a study entitled ‘‘Electronic Health
Records in Ambulatory Care—A
National Survey of Physicians’’
(Catherine DesRoches et al., New
England Journal of Medicine, July 3,
2008), found that in 2007 only ‘‘four
percent of physicians reported having
an extensive, fully functional electronicrecords system, and 13 percent reported
having a basic system.’’ (Additional
results from the same survey can be
found at the Department’s Health IT
Adoption Initiative Web site at https://
healthit.hhs.gov/portal/server.pt?open=
512&mode=2&cached=true&objID=
1152.) Another study entitled ‘‘Use of
Electronic Health Records in U.S.
Hospitals’’ (Ashish Jha et al., New
England Journal of Medicine, April 16,
2009) found that in 2007 ‘‘only 1.5
percent of U.S. hospitals have a
comprehensive electronic-records
system * * * and an additional 7.6
percent have a basic system.’’
Computerized order entry (CPOE) for
drugs was fully implemented in only 17
percent of hospitals.
Most physicians and hospitals have
not yet invested in the hardware,
software, testing and training to
implement advanced EHRs for a number
of reasons—lack of standards, lack of
interoperability, limited physician
acceptance, fear of maintenance costs,
and lack of capital. Perhaps most
importantly, adoption of EHR
technology necessitates major changes
in business processes and practices
throughout a provider’s office or facility.
Business process reengineering on such
a scale is not undertaken lightly.
However, the availability of the HITECH
Act incentives, grants for technical
support, more consistent use of
standards and specified certification
criteria, and other factors addressed in
this RIA are likely to increase the
adoption of EHR technology very
substantially over the next 10 years—
perhaps approaching complete adoption
for physicians, hospitals, and many
other types of providers, despite, as
those providers have commented, not
being included in this final rule.
Overall, we expect spending under
the EHR incentive program for transfer
payments to Medicare and Medicaid
providers over 10 years to be $9.7
billion under the low scenario, and
$27.4 billion under the high scenario
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44545
(these estimates include net payment
adjustments for Medicare providers who
do not achieve meaningful use in 2015
and beyond in the amount of $3.9
billion under the high scenario and $8.1
billion under the low scenario). We
have also estimated ‘‘per entity’’ costs for
EPs, eligible hospitals, and CAHs. We
estimate also that adopting entities will
achieve dollar savings at least equal to
their total costs, and that there will be
additional benefits to society. We
remain persuaded after consideration of
the public comments that
implementation costs will be significant
for each participating entity because
providers who would like to qualify as
meaningful users of EHRs will need to
purchase certified EHR technology. We
further acknowledge that certified EHRs
may differ in many important respects
from the types of EHRs noted in these
comments and the functionalities they
contain may differ. However, we still
anticipate that the short-term costs to
demonstrate meaningful use of certified
EHR technology will be outweighed by
the long-term benefits, including
practice efficiencies and improvements
in medical outcomes. Thus it remains
that although both cost and benefit
estimates are highly uncertain, the RIA
that we have prepared to the best of our
ability presents the costs and benefits of
the final rulemaking.
B. Regulatory Flexibility Analysis
The Regulatory Flexibility Act
requires agencies to prepare an Initial
Regulatory Flexibility Analysis to
describe and analyze the impact of the
final rule on small entities unless the
Secretary can certify that the regulation
will not have a significant impact on a
substantial number of small entities. In
the healthcare sector, Small Business
Administration size standards define a
small entity as one with between $7
million and $34 million in annual
revenues. For the purposes of the
Regulatory Flexibility Act, essentially
all non-profit organizations are
considered small entities, regardless of
size. Individuals and States are not
included in the definition of a small
entity. Since the vast majority of
Medicare providers (well over 90
percent) are small entities within the
Regulatory Flexibility Act’s definitions,
it is the normal practice of HHS simply
to assume that all affected providers are
‘‘small’’ under the Regulatory Flexibility
Act. In this case, most EPs, eligible
hospitals, and CAHs are either nonprofit or meet the SBA’s size standard
for small business. We also believe that
the effects of the incentives program on
many and probably most of these
affected entities will be economically
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significant. Accordingly, this RIA
section, in conjunction with the
remainder of the preamble, constitutes
the required Initial Regulatory
Flexibility Analysis. We believe that the
adoption and meaningful use of EHRs
will have an impact on virtually every
EP and eligible hospital, as well as
CAHs and some EPs and hospitals
affiliated with MA organizations. While
the program is voluntary, in the first 5
years it carries substantial positive
incentives that will make it attractive to
virtually all eligible entities.
Furthermore, entities that do not
demonstrate meaningful use of EHR
technology will be subject to significant
Medicare payment reductions after the
fifth year. The anticipation of these
Medicare payment adjustments will also
motivate EPs, eligible hospitals, and
CAHs to adopt and meaningfully use
certified EHR technology.
For some EPs, CAHs and eligible
hospitals the EHR technology that they
have in place before the HITECH
requirements will be able to be
upgraded to meet the criteria for
certified EHR technology as defined for
this program. These costs may be
minimal, involving no more than a
software upgrade. ‘‘Home-grown’’ EHR
systems that might exist may also
require an upgrade to meet the HITECH
certification requirements.
We believe that most EPs using EHR
systems will require significant changes
to achieve certification and that EPs,
CAHs and eligible hospitals will have to
make process changes to achieve
meaningful use. Further, given what we
know about the current low levels of
EHR adoption we believe that the
majority of EPs will need to purchase
certified EHR technology, implement
this new technology, and train their staff
on its use. The costs for implementation
and complying with the criteria of
meaningful use could lead to higher
operational expenses. However, we
believe that the combination of payment
incentives and long-term overall gains
in efficiency will compensate for the
initial expenditures.
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1. Number of Small Entities
In total, we estimate that there are
approximately 624,000 healthcare
organizations (EPs, eligible hospitals, or
CAHs that will be affected by the
incentive program. These include
hospitals and physician practices as
well as doctors of medicine or
osteopathy, dental surgery or dental
medicine, podiatric medicine,
optometry or a chiropractor.
Additionally, eligible nonphysicians
(such as certified nurse-midwives, etc.)
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will be eligible to receive the Medicaid
incentive payments.
Of the 624,000 healthcare
organizations we estimate will be
affected by the incentive program, we
estimate that 94.71 percent will be EPs,
0.8 percent will be hospitals, and 4.47
percent will be MAO physicians or
hospitals. We further estimate that EPs
will spend approximately $54,000 to
purchase and implement a certified EHR
and $10,000 annually for ongoing
maintenance according to the CBO. In
that paper, Evidence on the Costs and
Benefits of Health Information
Technology, May 2008, in attempting to
estimate the total cost of implementing
health IT systems in office-based
medical practices, recognized the
complicating factors of EHR types,
available features and differences in
characteristics of the practices that are
adopting them. The CBO estimated a
cost range of $25,000 to $45,000 per
physician. For all eligible hospitals, the
range is from $1 million to $100 million.
Though reports vary widely, we
anticipate that the average would be $5
million to achieve meaningful use. We
estimate $1 million for maintenance,
upgrades, and training each year. See
the Costs of EHR adoption in section a
under Background and Assumptions
portion of this analysis for a discussion
regarding the costs of adoption and
variation by size and details on our
estimates for the number of entities that
are eligible for the incentive within each
eligibility type category.
Comment: One commenter suggested
that the Regulatory Flexibility Act
analysis did not include an assessment
of the cost to implement the rule at state
and local health departments. State and
local health departments do operate
clinics and provide care to the public.
Some state and local health departments
would be considered small businesses
under the Regulatory Flexibility Act and
an assessment of the implementation
costs for these entities would allow us
to work together to identify possible
funding sources and cost savings
strategies.
Response: Under Medicaid, clinics
such as rural health clinics or FQHCs
are not eligible providers that can
receive incentive payments. However,
EPs within these clinics can receive
incentive payments if they meet all
other eligibility requirements. The
Federal costs and payments associated
with EHR implementation for EPs are
captured on in Tables 32 and 33.
2. Alternatives Considered
This final rule implements new
provisions of the Act for providing
incentives for EPs, eligible hospitals,
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and CAHs that adopt and demonstrate
meaningful use of certified EHR
technology. HHS has no discretion to
change the incentive payments or
Medicare payment reductions specified
in the statute for providers that adopt or
fail to adopt EHR and achieve
meaningful use of EHR technology. The
only substantial alternatives within the
discretion of the Department revolve
around how best to meet the
requirements of the HITECH Act
through the definition of meaningful use
for FY 2011 and beyond. Requirements
that are too stringent could have the
adverse effect of preventing many EPs,
eligible hospitals, and CAHs from
achieving meaningful use and thus
preventing them from receiving an
incentive payment. Our meaningful use
requirements for 2011 are designed to
encourage more widespread adoption of
certified EHR technology and allow
more EPs, eligible hospitals, and CAHs
to qualify for incentives while they are
also adjusting their practice patterns
and training staff to operate the EHR
technology in preparation for more
stringent meaningful use requirements
over time. We recognize that there may
be incremental costs that result from
requiring additional functionality over
the base level defined in the HITECH
Act. We note that with regard to
reporting of clinical quality measures
for purposes of demonstrating
meaningful use, we initially considered
requiring EPs, eligible hospitals, and
CAHs to report quality measures
electronically in the initial year of the
program; however, ultimately we
determined that many providers would
not be able to comply with a
requirement to report all quality
measures at the beginning of the
program. The alternative approach,
consistent with the requirements of this
final rule, is to require reporting of
quality measures in phases. In 2011,
there will be a requirement to report
clinical quality measures through
attestation with a numerator,
denominator, and exclusions. Electronic
clinical quality measure reporting will
begin in FY 2012 for hospitals and CY
2012 for EPs. We expect that additional
clinical quality measure reporting will
be added in later years.
Under Medicaid, we considered
numerous alternatives regarding how to
demonstrate eligibility for the incentive
payments as well as adoption and
meaningful use of the certified EHR
technology. These alternatives,
including the time period for
demonstrating adequate patient volume,
and the requirements and methods for
demonstrating meaningful use are
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discussed in section II.D. of this final
rule.
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3. Conclusion
As discussed later in this analysis, we
believe that there are many positive
effects of adopting EHR on health care
providers, quite apart from the incentive
payments to be provided under this
rule. While economically significant, we
do not believe that the net effect on
individual providers will be negative
over time except in very rare cases. (The
statute provides for hardship exemption
in such cases.) Accordingly, we believe
that the object of the Regulatory
Flexibility Act to minimize burden on
small entities are met by this rule as
final.
Comment: Commenters cited the
variation in the costs of EHR adoption
across EP settings. For example, smaller
practices believe their costs of EHR
adoption to be higher per physician
than larger counterparts. They believe
they cannot realize the staff reductions
and related cost savings from EHR
adoption due to greater crossfunctionality for their staff.
Response: We acknowledge the
different experiences EPs have with
EHR adoption and implementation. Two
additional studies relating to the costs of
adoption among small practices (Miller
et al. (2005) ‘‘The Value Of Electronic
Health Records In Solo Or Small Group
Practices’’ Health Affairs 24(5): 1127–
1137, and Zaroukian and Sierra (2006)
‘‘Benefiting from Ambulatory EHR
Implementation: Solidarity, Six Sigma,
and Willingness to Strive’’ The Journal
of Healthcare Information Management
20(1): 53–60) estimate the cost per
physician to be $44,000 per year with
roughly $8,500 to $13,000 in ongoing
maintenance. However, even among
these studies there was still variation in
experience. The per provider design of
meaningful use incentive payments and
orientation of other government health
IT grant programs is to facilitate
adoption and positive return on
investment across health care settings.
Thus we continue to hold that our cost
estimates are reasonable estimations of
provider experience while
acknowledging that variations in
experiences will be inevitable.
C. Small Rural Hospitals
Section 1102(b) of the Act requires us
to prepare a RIA if a rule would have
a significant impact on the operations of
a substantial number of small rural
hospitals. This analysis must conform to
the provisions of section 604 of the
Regulatory Flexibility Act. For purposes
of section 1102(b) of the Act, we define
a small rural hospital as a hospital that
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is located outside of a metropolitan
statistical area and has fewer than 100
beds. This final rule would affect the
operations of a substantial number of
small rural hospitals because they are
required to adopt certified EHR
technology by 2015, or face adjusted
Medicare payments. As stated above, we
have determined that this final rule
would create a significant impact on a
substantial number of small entities,
and have prepared a Regulatory
Flexibility Analysis as required by the
Regulatory Flexibility Act and, for small
rural hospitals, section 1102(b) of the
Act. Furthermore, any impacts that
would arise from the implementation of
certified EHR technology in a rural
eligible hospital would be positive, with
respect to the streamlining of care and
the ease of sharing information with
other EPs to avoid delays, duplication,
or errors.
Comment: Several commenters have
disagreed with our assessment, noting
that the unique circumstances of small
rural hospitals will not lead to
efficiency and lower costs as it might
with urban hospitals, but would lead to
increased costs related to loss of
productivity among the staff for
implementing and learning an EHR
system, and in later years, Medicare
payment adjustments because of the
lack of broadband access in these areas
among other reasons.
Response: Although we agree that
small rural hospitals will have
challenges inherent in their location,
size and staffing complexity, we also
acknowledge that smaller, more rural
hospitals could experience added
burden in achieving meaningful use.
Supplemental funding to Regional
Extension Centers to assist CAHs will
work to lessen disparity between urban
and rural hospitals. We also believe that
the presence of incentive payments,
market demands and rewards for data
exchange, and future cost savings
resulting from meaningful use will
increase hospital adoption and
meaningful use of EHRs.
D. Unfunded Mandates Reform Act
Section 202 of the Unfunded
Mandates Reform Act of 1995 (UMRA)
requires that agencies assess anticipated
costs and benefits before issuing any
rule whose mandates would require
spending in any 1 year $100 million in
1995 dollars, updated annually for
inflation. In 2010, that threshold is
approximately $135 million. UMRA
does not address the total cost of a rule.
Rather, it focuses on certain categories
of cost, mainly those ‘‘Federal mandate’’
costs resulting from—(1) imposing
enforceable duties on State, local, or
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44547
tribal governments, or on the private
sector, or (2) increasing the stringency of
conditions in, or decreasing the funding
of, State, local, or tribal governments
under entitlement programs.
This rule imposes no substantial
mandates on States. This program is
voluntary for States and States offer the
incentives at their option. The State role
in the incentive program is essentially
to administer the Medicaid incentive
program. While this entails certain
procedural responsibilities, these do not
involve substantial State expense. In
general, each State Medicaid Agency
that participates in the incentive
program will be required to invest in
systems and technology to comply—
States will have to identify and educate
providers, evaluate their attestations
and pay the incentive. However, the
Federal government will fund 90
percent of the State’s related
administrative costs, providing controls
on the total State outlay.
The investments needed to meet the
meaningful use standards and obtain
incentive funding are voluntary, and
hence not ‘‘mandates’’within the
meaning of the statute. However, the
potential reductions in Medicare
reimbursement after FY 2015 are
effectively mandates. We note that we
have no discretion as to those potential
payment reductions. Private sector EPs
that voluntarily choose not to
participate in the program may
anticipate potential costs in the
aggregate that may exceed $135 million;
however, because EPs may choose for
various reasons not to participate in the
program, we do not have firm data for
the percentage of participation within
the private sector.
This RIA, taken together with the
remainder of the preamble, constitutes
the analysis required by UMRA.
E. Federalism
Executive Order 13132 establishes
certain requirements that an agency
must meet when it promulgates a final
rule that imposes substantial direct
requirement costs on State and local
governments, preempts State law, or
otherwise has Federalism implications.
This final rule would not have a
substantial direct effect on State or local
governments, preempt State law, or
otherwise have a Federalism
implication. Importantly, State
Medicaid agencies are receiving 100
percent match from the Federal
government for incentives paid and a 90
percent match for expenses associated
with administering the program. As
previously stated, we believe that State
administrative costs are minimal. We
note that this final rule does add a new
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business requirement for States, because
of the systems that will need to be
implemented to track and report on
provider attestations, applications, and
payments. States will also expend funds
on the systems that must be built to
conduct the tracking and reporting
activities. States will interface with the
NLR since registration of providers will
be stored in the NLR. For tracking and
making payments, we believe that most
States will use their current MMIS
system to make payments. States must
inform us of their plans for payments,
systems, etc, via the SMHP, PAPD and
IAPD; additionally, States will indicate
the costs associated with these activities
in their PAPD and IAPD. CMS is
providing 90 percent FFP to States for
building the interface and/or for updates
to the MMIS related to EHR incentive
payment administration. We believe the
Federal share of the 90 percent match
will protect the States from burdensome
financial outlays and, as noted above,
States offer the Medicaid EHR incentive
program at their option.
F. Anticipated Effects
The objective of the remainder of this
RIA is to summarize the costs and
benefits of the HITECH incentive
program for the Medicare FFS,
Medicaid, and Medicare Advantage
(MA) programs. We also provide
assumptions and a narrative addressing
the potential costs to the industry for
implementation of this technology.
G. HITECH Impact Analysis
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1. Need for Regulation
This final rule would implement the
provisions of the American Recovery
and Reinvestment Act of 2009 (ARRA)
(Pub. L. 111–5) that provide incentive
payments to EPs, eligible hospitals, and
CAHs participating in Medicare and
Medicaid programs that adopt and
meaningfully use certified EHR
technology. The final rule specifies the
initial criteria that an EP, eligible
hospital, or CAH must meet in order to
qualify for the incentive payment;
calculation of the incentive payment
amounts; payment adjustments under
Medicare for covered professional
services and inpatient hospital services
provided by EPs, and eligible hospitals
failing to meaningfully use certified
EHR technology; and other program
participation requirements. As noted
earlier in this RIA, changes both in
legislation and policy based on
comments from the public have been
taken into account for the preparation of
this final impact analysis.
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2. Alternatives Considered
As previously discussed in the
alternatives section of the regulatory
flexibility analysis, HHS has no
discretion to change the incentive
payments or payment reductions
specified in the statute for providers
that adopt or fail to adopt EHR and
demonstrate meaningful use of certified
EHR technology. However, we have
discretion around how best to meet the
HITECH Act requirements for
meaningful use for FY 2011 and beyond,
which we have exercised in this final
rule. Additionally, we have used our
discretion to appropriately time the
registration, attestation and payment
requirements to allow EPs and eligible
organizations as much time as possible
in coordination with the anticipated
certification of EHR technology to
obtain and meaningfully use certified
EHRs. We recognize that there may be
additional costs that result from various
discretionary policy choices such as
requiring additional functionality over
the base level defined in the HITECH
Act, however, those costs cannot be
estimated and are not captured in this
analysis.
3. Background and Assumptions
The principal costs of this final rule
are the additional expenditures that will
be undertaken by eligible entities in
order to obtain the Medicare and
Medicaid incentive payments to adopt,
implement or upgrade and/or
demonstrate meaningful use of certified
EHR technology, and to avoid the
Medicare payment adjustments that will
ensue if they fail to do so. The estimates
for the provisions affecting Medicare
and Medicaid EPs, eligible hospitals,
and CAHs are somewhat uncertain for
several reasons: (1) The program is
voluntary although payment
adjustments will be imposed on
Medicare providers who are unable to
demonstrate meaningful use starting in
2015; (2) the criteria for the
demonstration of meaningful use of
certified EHR technology has been
finalized for stage one but will change
over time; (3) the HHS certification
process although defined, has yet to be
implemented;, and, (4) the impact of the
financial incentives and payment
adjustments on the rate of adoption of
certified EHR technology by EPs,
eligible hospitals, and CAHs is difficult
to predict. The net costs and savings
shown for this program represent two
possible scenarios and actual impacts
could differ substantially.
As written in the preamble, this final
rule describes the incentive payments
for EPs, eligible hospitals, and CAHs for
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adopting and demonstrating meaningful
use of certified EHR technology. This
impact analysis addresses the costs and
benefits to the Medicare and Medicaid
programs, as well as general
implementation costs for eligible
hospitals, CAHs and EPs.
Detailed information about the
incentive program, the specific payment
amounts and how those payments will
be paid, is provided in section II of this
final rule. Based on input from a
number of internal and external sources,
including the Government
Accountability Office (GAO) and CBO,
we calculated the numbers of EPs and
eligible hospitals, including CAHs
under Medicare, Medicaid, and MA and
used them throughout the analysis.
• About 553,200 Medicare FFS EPs in
2011 (some of which will also be
Medicaid EPs).
• About 14 percent of the total EPs
are hospital-based Medicare EPs, and
are not eligible for the program. This
leaves approximately 477,500
nonhospital-based Medicare EPs in
2011.
• Twenty percent of the nonhospitalbased Medicare EPs (approximately
95,500 Medicare EPs in 2011) are also
eligible for Medicaid (meet the 30
percent Medicaid patient volume
criteria), but can only be paid under one
program. We assume that any EP in this
situation will choose to receive the
Medicaid incentive payment, because it
is larger.
• About 44,100 non-Medicare eligible
EPs (such as dentists, pediatricians, and
eligible non-physicians such as certified
nurse-midwives, nurse practitioners and
physicians assistants) will be eligible to
receive the Medicaid incentive
payments.
• 5,011 eligible hospitals comprised
of the following:
++ 3,620 acute care hospitals.
++ 1,302 CAHs
++ 78 children’s hospitals (Medicaid
only).
++ 11 cancer hospitals (Medicaid
only).
• All eligible hospitals, except for
children’s and cancer hospitals, may
qualify and apply for both Medicare and
Medicaid incentive payments.
• 12 MA Organizations (about 28,000
EPs, and 29 hospitals) would be eligible
for incentive payments.
• Payments can begin as early as third
quarter FY 2011.
4. Industry Costs and Adoption Rates
To estimate the impact on healthcare
providers we used information from
four studies cited previously. Based on
these studies, we continue to estimate
for EPs, the average adopt/implement/
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upgrade cost is $54,000 per physician
FTE, while annual maintenance costs
average $10,000 per physician FTE.
For all eligible hospitals, the range is
from $1 million to $100 million.
Although reports vary widely, we
anticipate that the average would be $5
million to achieve meaningful use,
because providers who would like to
qualify as meaningful users of EHRs will
need to purchase certified EHRs. We
further acknowledge that ‘‘certified
EHRs’’ may differ in many important
respects from the EHRs currently in use
and may differ in the functionalities
they contain. We estimate $1 million for
maintenance, upgrades, and training
each year. Industry costs are important,
in part, because EHR adoption rates will
be a function of these industry costs and
the extent to which the costs of
‘‘certified EHRs’’ are higher than the total
value of EHR incentive payments
available to EPs and eligible hospitals
(as well as adjustments, in the case of
the Medicare EHR incentive program)
and any perceived benefits including
societal benefits. Because of the
uncertainties surrounding industry cost
estimates, we have made various
assumptions about adoption rates in the
following analysis in order to estimate
the budgetary impact on the Medicare
and Medicaid programs.
For an eligible Medicaid EP, the first
year incentive can be based on
adoption, implementation, and upgrade
costs. Previously, we noted that section
1903(t)(4)(C) of the Act gives the
Secretary the authority to determine
average allowable costs for certified
EHR technology. The Secretary studied
average costs associated with the
purchase, initial implementation, and
upgrade of certified EHR technology,
including support services and initial
training.
Sections 1903(t)(1)(A) and 1903(t)(4)
of the Act specify that EPs may not
receive incentive payments in excess of
85 percent of the net average allowable
costs of certified EHR technology, with
such net average allowable costs capped
at $25,000 in the first year (and $10,000
in each of the subsequent years).
a. Costs of EHR Adoption for EPs
Previously, we described four studies
used to estimate costs of
implementation including the purchase
and installation of hardware and
software, training, as well as
productivity losses associated with
implementation and training. Each of
these studies was conducted several
years ago, and did not control for type
of EHR, functionality, physician
practice type or size. Furthermore, EHRs
were not being built against any
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particular consensus standard, nor was
the concept of ‘‘meaningful use’’ a factor.
Thus, the cost of implementing and
maintaining certified EHR technology
which meets the requirements
established in this regulation might
exceed the estimates from these studies.
One average estimate of the cost per
physician for implementation is around
$35,000. A similar study of community
health centers estimated costs to average
$54,000 per physician FTE. In this
study, the authors explained that
implementation costs varied between
entities for hardware, software,
installation, and training. After
implementation, there were ongoing
operating costs estimated at $21,000 per
year for a practice of four physicians.
The CBO paper, Evidence on the Costs
and Benefits of Health Information
Technology, May 2008, in attempting to
estimate the total cost of implementing
health IT systems in office-based
medical practices, recognized the
complicating factors of EHR types,
available features and differences in
characteristics of the practices that are
adopting them. The CBO estimated a
cost range of $25,000 to $45,000 per
physician. In the CBO study, operating
costs added $3,000 to $9,000 per
physician per year. Finally, a 2005
paper from AHRQ stated that the
average purchase and implementation
cost of an EHR could be $32,606 per
FTE physician. Maintenance costs were
an additional $1,500 per physician, per
month, or $18,000 per year. Smaller
practices had the highest
implementation costs per physician at
$37,204. Based on the studies cited,
eligible providers will be eligible to
receive the maximum incentive
permitted under the statute, because the
implementation and maintenance costs
we have estimated exceed the caps for
net average allowable costs set in the
statute.
In calculating the impact of the EHR
incentive program for Medicaid EPs, we
assumed that approximately 20 percent
of the EPs eligible for the Medicare
incentive payment program are also
eligible for Medicaid EHR incentive
payments (about 95,500 in 2011). Since
the Medicaid incentive payments are
higher than those for Medicare and EPs
can only receive payments from one
program, we assume the dually eligible
EPs will receive their payments through
the Medicaid program. It is also
important to note that just as there is
overall variation in state Medicaid
programs, we anticipate there will be
variation in the design and timing of
state Medicaid EHR incentive programs.
New data on the pace of state planning
for meaningful use was used to adjust
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Medicaid adoption scenarios. Thus,
how and when providers apply for
meaningful use through Medicaid will
likely differ by state. Medicaid also
offers incentive payments for dentists,
certified nurse-midwives, nurse
practitioners and certain physicians’
assistants. While minimal, we have
incorporated the sum of these groups in
Table 51. We have estimated a range of
Medicaid EPs that will be meaningful
users each calendar year. The last line
represents the range of predicted
meaningful EHR users each calendar
year. The Medicaid penetration rate for
EPs is consistent with the analysis that
was used for the Medicare EPs, but
without the behavioral limitations
imposed by the Medicare current statute
SGR payment reductions. We assumed a
modest behavioral response by
Medicaid EPs to the Medicaid incentive
payments resulting in an increase over
baseline participation.
b. Costs of EHR Adoption for Eligible
Hospitals
The American Hospital Association
(AHA) conducts annual surveys that
among other measures, track hospital
spending. We have updated these data
to reflect the latest figures from the 2008
AHA Survey. Costs at these levels of
adoption were significantly higher in
2008 than 2007. This may better reflect
the costs of implementing additional
functionalities. We have also updated
the number of discharges using the most
recent cost report data available. The
range in yearly information technology
spending among hospitals is large—
from $36,000 to over $32 million based
on 2007 and 2008 AHA data. EHR
system costs specifically were reported
by experts to run as high as $20 million
to $100 million; HHS discussions with
experts led to cost ranges for adoption
that varied by hospital size and level of
EHR system sophistication. Research to
date has shown that adoption of
comprehensive EHR systems is limited.
In the aforementioned AHA study, 1.5
percent of these organizations had
comprehensive systems, which were
defined as hospital-wide clinical
documentation of cases, test results,
prescription and test ordering, plus
support for decision-making that
included treatment guidelines. Some
10.9 percent have a basic system that
does not include physician and nursing
notes, and can only be used in one area
of the hospital. Applying a similar
standard to the 2008 AHA data results
in roughly 3–4 percent of hospitals
having comprehensive systems and 12
to 13 percent having basic systems.
According to hospital CEOs, the main
barrier to adoption is the cost of the
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systems, and the lack of capital.
Hospitals have been concerned that they
will not be able to recoup their
investment, and they are already
operating on the smallest of margins.
Because uptake of advanced systems is
low, it is difficult to get a solid average
estimate for implementation and
maintenance costs that can be applied
across the industry. In addition, we
recognize that there are additional
industry costs associated with adoption
and implementation of EHR technology
that are not captured in our estimates
that eligible entities will incur. Because
the impact of those activities, such as
reduced staff productivity related to
learning how to use the EHR
technology, the need to add additional
staff to work with HIT issues,
administrative costs related to reporting,
and the like are unknown at this time
and difficult to quantify.
5. Medicare Incentive Program Costs
a. Medicare Eligible Professionals (EPs)
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In the proposed rule, CMS said that
an EP would be a hospital-based EP and
therefore ineligible to receive a
Medicare or Medicaid EHR incentive
payment if more than 90 percent of their
services are provided in the following
place of service (POS) codes for HIPAA
standard transactions: 21—Inpatient
Hospital, 22—Outpatient Hospital, 23—
Emergency Room.
However, as previously noted here
and discussed elsewhere in this final
rule, Congress amended the law to
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include only POS codes 21 (inpatient)
and 23 (emergency room), excluding 22
(outpatient hospital), thereby permitting
some hospital-based EPs to qualify for
the incentive payment. Accordingly we
have updated our tables to reflect the
increased number of EPs that may now
qualify for the incentive payments, and
those revisions to the numbers flow
throughout these updated tables.
To determine the estimated costs of
the Medicare incentives for EPs we first
needed to determine the EPs with
Medicare claims. Then, we calculated
that about 14 percent of those EPs are
hospital-based, based on the definition
final in § 495.4, and therefore, do not
qualify for incentive payments. This
percentage of EPs were subtracted from
the total number of EPs who have
claims with Medicare. These numbers
were tabulated from Medicare claims
data.
We have also estimated that about 20
percent of EPs that are not hospitalbased will qualify for Medicaid
incentive payments and will choose that
program because the payments are
higher. Of the remaining EPs, we have
estimated the percentage which will be
meaningful users each calendar year. As
discussed previously our estimates for
the number of EPs that will successfully
demonstrate meaningful use of certified
EHR technology is uncertain, so we
established high and low scenarios to
account for high and low rates of
demonstration of meaningful use.
The percentage of Medicare EPs who
will satisfy the criteria for
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demonstrating meaningful use of
certified EHR technology and will
qualify for incentive payments is a key,
but a highly uncertain factor. Our
Medicare EHR adoption assumptions for
EPs are also affected by the current
situation with Medicare physician fee
schedule payment rates. As noted
previously, under current law (that is,
the SGR system formulas), physician
payments will be reduced by 21.3
percent beginning June 1, 2010, and are
scheduled to be further reduced
beginning in CY 2011. Such reductions
would almost certainly cause major
changes in physician behavior, enrollee
care, and other Medicare provider
payments, but the specific nature of
these changes is exceptionally
uncertain. Under a current law scenario,
the EHR incentives or Medicare
payment adjustments would exert only
a minor influence on physician behavior
relative to these very large payment
reductions. Behavioral changes resulting
from these scheduled payment
reductions are not included in our
estimate and likewise do not assume
any additional behavioral changes from
EHR incentive payments. Accordingly,
the estimated number of non-hospital
based Medicare EPs, (including those
additional EPs who may now qualify
under the revised definition), who will
demonstrate meaningful use of certified
EHR technology over the period CYs
2011 through 2019 is as shown in Table
22.
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Under the HITECH Act, EPs can
receive up to 5 years of Medicare
incentive payments for the
demonstration of meaningful use of
certified EHR technology. These
payments are the lesser of 75 percent of
the physician’s allowed charges for the
year or a specified maximum amount,
which declines from a possible $18,000
incentive payment for the first payment
year (2011 or 2012) to a $2,000 incentive
payment for the fifth payment year. EPs
in HPSAs receive incentives that are 10
percent higher than the maximum
amounts. Hospital-based EPs are not
eligible for the Medicare EP incentive
payments. EPs may choose to receive
incentive payments from either
Medicare or Medicaid, (with some
limitations on switching programs) but
not from both.
The standard full amount of Medicaid
incentive payments that an EP could
receive is larger than the standard full
amount for the Medicare EP incentive
payments: of $63,750 versus $44,000 for
Medicare. Medicare incentive payments
can first be paid to EPs in CY 2011; and
2012 is the last year that an EP can start
to receive incentives and obtain the full
5 years of payments. EPs who first
qualify in CY 2013 would be limited to
an incentive of $15,000 for the first year,
and may be eligible to receive 4 years
of incentive payments. EPs who first
qualify in CY 2014 would be limited to
an incentive of $12,000 for the first year
and may be eligible to receive 3 years
of incentive payments. For the Medicare
program, incentives are not payable
after CY 2016, and EPs who first
demonstrate meaningful use in CY 2015
or later are not eligible for EHR
incentive payments.
Medicare payment adjustments will
apply in CY 2015 and later to EPs who
cannot demonstrate meaningful use of
certified EHR technology, regardless of
whether they received an EHR incentive
payment or not. Specifically, the
Medicare Physician Fee Schedule
payments for an EP who cannot
demonstrate meaningful use of certified
EHR technology would be reduced by 1
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percentage point in CY 2015, two
percentage points in CY 2016, and 3
percentage points in CY 2017, and
between 3 and 5 percentage points
starting in CY 2018. The HITECH Act
gives the Secretary the authority,
beginning in CY 2018, to increase these
reductions by 1 percentage point each
year, but not more than 5 percentage
points overall, if the Secretary finds the
proportion of EPs who are meaningful
EHR users is less than 75 percent.
Each year a transfer will be made
between the general fund of the
Treasury and the Part B account of the
Supplemental Medical Insurance (SMI)
trust fund to offset the incentives paid
or payment adjustments made during
the year. In this way, the Part B
beneficiary premium will not be
affected by the EP payment incentives.
We estimate that there are 12 MA
organizations that might be eligible to
participate in the EHR incentive
program. Those plans have about 28,000
EPs.
Our estimates of the incentive
payment costs and payment adjustment
savings reflect our assumptions about
the proportion of EPs who will
demonstrate meaningful use of certified
EHR technology. These assumptions
were developed based on a review of
recent studies and discussions with
subject matter experts. We project that
a growing proportion of EPs will adopt
certified EHR technology that meets the
standards even in the absence of the
legislated incentives. This number
could be higher or lower depending on
the final meaningful use definition
adopted, physicians’ access to capital
and implementation expertise, the
success of the other HITECH programs
in reaching physicians, and other
factors.
Specifically, our assumptions are
based on literature estimating current
rates of physician EHR adoption and
rates of diffusion of EHRs and similar
technologies. There are a number of
studies that have attempted to measure
the rate of adoption of electronic
medical records (EMR) among
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44551
physicians prior to the enactment of the
HITECH Act (see, for example, Funky
and Taylor (2005) The State and Pattern
of Health Information Technology
Adoption. RAND Monograph MG–409.
Santa Monica: The RAND Corporation;
Ford, E.W., Menachemi, N., Peterson,
L.T., Huerta, T.R. (2009) ‘‘Resistance is
Futile: But it is Slowing the Pace of EHR
Adoption Nonetheless’’ Journal of the
American Informatics Association 16(3):
274–281). We started with the estimated
rate of EHR adoption from the study
with the most rigorous definition, but
note that the meaningful criteria are not
equivalent to a fully functional system
as defined in this study. (DesRoches,
CM, Campbell, EG, Rao, SR et al. (2008)
‘‘Electronic Health Records in
Ambulatory Care—A National Survey of
Physicians’’ New England Journal of
Medicine 359(1): 50–60). For the low
scenario, we then inflated that number
(4 percent) to a 2011 baseline using the
numbers of physicians reporting in that
survey that they had EHR
implementation underway. We assumed
that the same proportion of them would
be implementing fully-functional EHRs
as in the baseline (30 percent of those
with basic systems.) We then trended
this number forward using the trajectory
mapped out by Ford et al. using the data
from the period prior to FY 2004 since
the slower rate of adoption during the
FY 2005 through 2007 period was
thought to be caused by policy
uncertainty which this regulation
should resolve.
Given the revisions to the meaningful
use criteria in this final rule and the
nationwide implementation of the
Regional Extension Center Program, the
likelihood of reaching the high scenario
has increased. However, actual adoption
trends could be significantly different
from these assumptions, given the
elements of uncertainty we describe
throughout this analysis.
Net costs for the low scenario of the
Medicare EP portion of the HITECH Act
are shown in Table 23.
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The estimated net costs for the high
scenario of the Medicare EP portion of
the HITECH Act are shown in Table 24.
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44553
formula, based on its admission
numbers (total patients and Medicare
patients). The total incentive payments
potentially payable over a 4-year period
vary significantly by hospitals’ inpatient
caseloads, ranging from a low of about
$11,000 to a high of $12.9 million, with
the median being $3.8 million. The
potential Medicare incentive payments
for each eligible hospital were compared
with the hospital’s expected cost of
purchasing and operating certified EHR
technology. Costs of adoption for each
hospital were estimated using data from
the 2008 AHA annual survey and IT
supplement. Estimated costs varied by
size of hospital and by the likely status
of EHR adoption in that class of
hospitals. Hospitals were grouped first
by size (CAHs, non-CAH hospitals
under 400 beds, and hospitals with 400
or more beds) because EHR adoption
costs do vary by size: namely, larger
hospitals with more diverse service
offerings and powerful physician staffs
generally implement more customized
systems than smaller hospitals that
might purchase off-the-shelf products.
We then calculated the proportion of
hospitals within each class that were at
one of three levels of EHR adoption: (1)
Hospitals which had already
implemented relatively advanced
systems that included CPOE systems for
medications; (2) hospitals which had
implemented more basic systems
through which lab results could be
shared, but not CPOE for medications;
and (3) hospitals starting from a base
level either neither CPOE or lab
reporting. The CPOE for medication
standard was chosen because expert
input indicated that the CPOE standard
in the final meaningful use definition
will be the hardest one for hospitals to
meet. Table 25 provides these
proportions.
We then calculated the costs of
moving from these stages to meaningful
use for each class of hospital, assuming
that even for hospitals with CPOE
systems they would incur additional
costs of at least 10 percent of their IT
budgets. These costs were based on
cross-sectional data from the AHA
survey and thus do not likely represent
the true costs of implementing systems.
We have updated these data to reflect
the latest figures from the 2008 AHA
Survey. Costs at these levels of adoption
were significantly higher in 2008 than
2007. This may better reflect the costs
of implementing additional
functionalities. We have also updated
the number of discharges using the most
recent cost report data available. Under
the HITECH Act, an eligible hospital can
receive up to 4 years of Medicare
incentive payments for the
demonstration of meaningful use of
certified EHR technology. These
payments reflect the ratio of Medicare
inpatient days to total inpatient days
and are adjusted by transition factors of
100, 75, 50, and 25 percent for the first
through fourth implementation years
respectively. [Medicare incentive
payments can first be paid to hospitals
in FY 2011, and FY 2013 is the last year
that a hospital can start to receive
incentives and obtain the full 4-year
transition rates.] Eligible hospitals that
first qualify in FY 2014 or FY 2015 will
only receive the transition portions that
apply to eligible hospitals who
implement their EHR in FY 2013 (for
example, 75 percent in FY 2014 and 50
percent in FY 2015). Eligible hospitals
first demonstrating meaningful use in
FY 2016 or later are not eligible for
incentive payments. Medicare payment
adjustments will be applied beginning
in FY 2015 to eligible hospitals that
cannot demonstrate meaningful use of
certified EHR technology. Special rules
apply to CAHs.
We estimate that there are 12 MAOs
that might be eligible to participate in
the incentive program. Those plans have
29 eligible hospitals. The costs for the
MA program have been included in the
overall Medicare estimates.
Again to illustrate the uncertainty, we
are providing two scenarios for our
estimates. Our high scenario estimated
net costs for section 4102 of the HITECH
Act are shown in Table 26: Estimated
costs (+) and savings (¥) for eligible
hospitals adopting certified EHRs. This
provision is estimated to increase
Medicare hospital expenditures by a net
total of $10.1 billion during FYs -2011
through 2019.
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b. Medicare Eligible Hospitals and
CAHs
In brief, the estimates of hospital
adoption were developed by calculating
projected incentive payments (which
are driven by discharges), comparing
them to projected costs of attaining
meaningful use, and then making
assumptions about how rapidly
hospitals would adopt given the fraction
of their costs that were covered. In
addition, our estimates have been
updated to reflect that the additional
challenges likely to be experienced in
the adoption of EHRs among CAHs will
be partially ameliorated by supplements
to Regional Extension Center funding to
assist CAHs with EHR adoption.
Specifically, the first step in preparing
estimates of Medicare program costs for
eligible hospitals was to determine the
amount of Medicare incentive payments
that each hospital in the country could
potentially receive under the statutory
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We are also providing the estimates
for a low scenario in Table 27.
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44555
implement an EHR system if they
perceive that a large portion of the costs
will be covered by the incentive
payments. Table 28 shows the high
scenario estimates:
imposed on eligible hospitals that are
unable to demonstrate meaningful use
beginning in FY 2015. Specifically, the
Medicare ‘‘market basket’’ payment
updates would be reduced (on a
noncumulative basis) by one-fourth,
one-half, and three-fourths for FYs 2015,
2016, and 2017 and later, respectively,
for eligible hospitals that were not
meaningful users of certified EHR
technology. However, we heard from
industry experts that issues surrounding
the capacity of vendors and expert
consultants to support implementation,
issues of access to capital, and
competing priorities in responding to
payer demand will limit the number of
hospitals that can adopt advanced
systems in the short-term. Therefore, we
cannot be certain of the adoption rate
for hospitals due to these factors and
others previously outlined in this
preamble, and so we provide two
scenarios which are examples of what
we believe are possible low rates and
high rates of adoption.
Table 29 shows the low scenario
estimates.
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ER28JY10.078
2018. As indicated, eligible hospitals
that could cover the full cost of an EHR
system through Medicare incentive
payments were assumed to implement
them relatively rapidly, and vice-versa.
In other words, eligible hospitals will
have an incentive to purchase and
For instance, under the high scenario
50 percent of eligible hospitals whose
incentive payments would cover
between 75 percent and 100 percent of
the cost of a certified EHR system were
assumed to have a certified system in
FY 2011. In FY 2012, 65 percent of
those hospitals were assumed to have a
certified EHR system. All such hospitals
were assumed to have a certified EHR
system in FY 2015 and thereafter.
High rates of EHR adoption are
anticipated prior to FY 2015 due to the
large payment adjustments that will be
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Based on the comparison of Medicare
incentive payments and
implementation/operating costs for each
eligible hospital, (described above), we
made the assumptions shown in Table
28, related to the prevalence of certified
EHR technology for FY 2011 through
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will be paid. In FY 2015 under the high
scenario, 92.6 percent of the total
amount of incentive payments which
could be payable will be for hospitals
who have certified EHR systems, but
some of those eligible hospitals would
have already received 4 years of
incentive payments, and therefore 54.2
percent of all possible incentive
payments actually paid in that year.
Table 31 shows the low scenario
estimates.
The estimated payments to eligible
hospitals were calculated based on the
hospitals’ qualifying status and
individual incentive amounts under the
statutory formula. Similarly, the
estimated penalties for nonqualifying
hospitals were based on the market
basket reductions and Medicare
revenues. The estimated savings in
Medicare eligible hospital benefit
expenditures resulting from the use of
hospital certified EHR systems are
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EHR technology by FY 2019. Table 30
shows our high scenario estimated
percentages of the total potential
incentive payments associated with
eligible hospitals that could
demonstrate meaningful use of EHR
systems. Also shown are the estimated
percentages of potential incentives that
would actually be paid each year.
ER28JY10.079
assumptions about incentive payments
as percentages of EHR technology costs
in Table 29, we estimated that the great
majority of eligible hospitals would
qualify for at least a portion of the
Medicare incentive payments that they
could potentially receive, and only a
modest number would incur penalties.
Nearly all eligible hospitals are
projected to have implemented certified
For instance in FY 2012 under the
high scenario, 53.5 percent of the total
amount of incentive payments which
could be payable in that year would be
for eligible hospitals who have
demonstrated meaningful use of
certified EHR technology and therefore
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For large, organized facilities such as
hospitals, we believe that the revenue
losses caused by these payment
adjustments would be a substantial
incentive to adopt certified EHR
technology, even in instances where the
Medicare incentive payments would
cover only a portion of the costs of
purchasing, installing, populating, and
operating the EHR system. Based on the
Federal Register / Vol. 75, No. 144 / Wednesday, July 28, 2010 / Rules and Regulations
discussed under ‘‘general
considerations’’ at the end of this
section. We assumed no future growth
in the total number of hospitals in the
U.S. because growth in acute care
hospitals has been minimal in recent
years.
Comment: The AHA surveyed 795
hospitals in January 2010 asking
whether their EHR systems could meet
each of the meaningful use objectives
now and in coming years: 45 percent
reported they could meet all Stage 1
objectives by 2015 meaning that the
remainder might be subject to penalties.
Response: Their survey was based on
our proposed definition of meaningful
use. The definition of meaningful use in
this final rule offers more flexibility and
lower thresholds which we believe will
make it easier for eligible hospitals to
qualify for incentives. However we do
acknowledge that the meaningful use
criteria described in this final rule may
still challenge hospitals to use their IT
in ways that improve patient care and
outcomes. We also acknowledge that
smaller, more rural hospitals could
experience added burden in achieving
meaningful use related to timing and
costs of implementation. Supplemental
funding to Regional Extension Centers
to assist CAHs will work to lessen
disparity between urban and rural
hospitals. We also believe that the
presence of incentive payments, market
demands and rewards for data
exchange, and future cost savings
resulting from meaningful use will
increase hospital adoption and
meaningful use of EHRs.
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c. Critical Access Hospitals (CAHs)
We estimate that there are 1,302 CAHs
eligible to receive EHR incentive
payments. Given the financial assistance
available under HITECH for Regional
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Extension Centers, whose priorities
include assisting CAHs in EHR
adoption, we estimate that the 19
percent of CAHs with relatively
advanced EHR systems will achieve
meaningful use before 2016. We also
estimate that most of the remaining
CAHs that have already adopted some
kind of EHR system (48 percent of
CAHs) will also achieve meaningful use
by 2016. Our estimates regarding the
incentives that will be paid to CAHs are
incorporated into the overall Medicare
and Medicaid program costs.
We note that in response to comments
this final rule amends the definition of
acute care hospital for purposes of the
Medicaid EHR incentive payment
program to generally include critical
access hospitals that meet the Medicaid
patient volume criteria. Thus, the
change in the definition has required
that we update our tables to reflect the
increased number of hospitals that now
may qualify for the Medicaid EHR
incentive payment program under this
new definition. The numbers and
percentages from the revised tables are
reflected throughout this final impact
analysis. Additionally, EHR adoption
rates have been adjusted now that CAHs
will be eligible for both Medicare and
Medicaid EHR incentive payments.
6. Medicaid Incentive Program Costs
Under section 4201 of the HITECH
Act, States can voluntarily participate in
the Medicaid incentive payment
program and we have based our
Medicaid incentive program costs on all
States participating. Eligible hospitals
and EPs can qualify for a Medicaid
incentive payment for adopting,
implementing, or upgrading in their first
participation year, or for meaningful
use, and up to an additional 5 years of
incentive payments for demonstrating
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44557
meaningful use of certified EHR
technology. Under Medicaid, EPs
include physicians (including
pediatricians), dentists, certified nursemidwives, nurse practitioners, and
certain physician assistants. Initial
incentive payments are available
through 2016, and incentive payments
cannot be made after 2021. The
Medicaid hospital incentives are similar
to those specified in section 4102 of the
HITECH Act for Medicare, except that
they must be paid out over at least 3
years and are spread out over a
maximum of 6 years, are based on the
ratio of Medicaid inpatient days to total
days, and are not phased down as
quickly as the Medicare payments based
on the first year of payment. Medicaid
hospitals can begin incentive payments
through 2016, and incentive payments
cannot be made after 2021. There are
also additional hospitals, such as
children’s and cancer hospitals that are
only eligible for Medicaid incentives.
EPs may qualify for Medicaid
incentive payments if at least 30 percent
of their patient volume is from
Medicaid. (Separate rules apply for
pediatricians.) As mentioned above, the
Medicaid maximum incentive payments
are larger than the corresponding
Medicare payments. Various maximums
are specified for eligible hospital and EP
incentive payments. There are no
Medicaid penalties for non-adoption of
EHR systems or for failing to
demonstrate meaningful use. The
Federal costs for Medicaid incentive
payments to providers who can
demonstrate meaningful use of EHR
technology were estimated similarly to
the estimates for Medicare eligible
hospital and EP. Table 32 shows our
high estimates for the net Medicaid
costs for eligible hospitals and EP.
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indicated above, we assumed that 20
percent of the non-hospital-based
Medicare EPs would meet the
requirements for Medicaid incentive
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payments (30 percent of patient volume
from Medicaid). All of these EPs were
assumed to choose the Medicaid
incentive payments, as they are larger.
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ER28JY10.082
a. Medicaid EPs
To determine the Medicaid EP
incentive payments, we first determined
the number of qualifying EPs. As
ER28JY10.081
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Table 33 shows the low estimates for
Medicaid costs and savings.
Federal Register / Vol. 75, No. 144 / Wednesday, July 28, 2010 / Rules and Regulations
44559
Medicare EPs, we are providing high
and low scenario estimates for Medicaid
EPs.
Our high scenario estimates are listed
in the Table 34.
demonstrated a meaningful use or
because he or she has adopted,
implemented, or upgraded certified EHR
technology, these participation rates
include not only meaningful users but
eligible providers implementing
certified EHR technology as well. Table
35 shows our low scenario estimates.
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ER28JY10.083
ER28JY10.084
nurse-midwives, nurse practitioners and
physicians assistants. As noted
previously there is much uncertainty
about the rates of demonstration of
meaningful use that will be achieved.
Therefore, as we estimated for the
It should be noted that since the
Medicaid EHR incentive payment
program provides that a Medicaid EP
can receive an incentive payment in
their first year because he or she has
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In addition, the total number of
Medicaid EPs was adjusted to include
EPs who qualify for the Medicaid
incentive payments but not for the
Medicare incentive payments, such as
most pediatricians, dentists, certified
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b. Medicaid Hospitals
Medicaid incentive payments to most
acute-care hospitals were estimated
using the same adoption assumptions
and methodology as described
previously for Medicare eligible
hospitals and shown in Table 36.
Because hospitals’ Medicare and
Medicaid patient loads differ, we
separately calculated the range of
percentage of total potential incentives
that could be associated with qualifying
hospitals, year by year, and the
corresponding actual percentages
payable each year. Acute care hospitals
and children’s hospitals can spread
aggregate Medicaid incentive payments
over no less than 3 years, but no more
than 6 years of payments, and acute care
hospitals may qualify to receive both the
Medicare and Medicaid incentive
payments.
As stated previously, the estimated
eligible hospital incentive payments
were calculated based on the hospitals’
qualifying status and individual
incentive amounts payable under the
statutory formula. The estimated savings
in Medicaid benefit expenditures
resulting from the use of certified EHR
technology are discussed under ‘‘general
considerations.’’ We estimated the
Medicaid incentives payable to
children’s hospitals as an add-on to the
base estimate, using data on the number
of children’s hospitals compared to nonchildren’s hospitals.
programs. We believe that the first 5
years of the incentive program will be
dedicated to implementation activities,
from installation of the technology to
training to operational and behavioral
changes. Information on the costs and
benefits of adopting systems specifically
meeting the requirements in this rule
does not yet exist—and information on
costs and benefits overall is limited
(Goldzweig et al. 2009 ‘‘Costs and
Benefits of Health Information
In this final rule we have not
quantified the overall benefits to the
industry, nor to eligible hospitals, or
EPs in the Medicare, Medicaid, or MA
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ER28JY10.086
7. Benefits for All EPs and All Eligible
Hospitals
ER28JY10.085
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Table 37 shows our low scenario
estimates.
Federal Register / Vol. 75, No. 144 / Wednesday, July 28, 2010 / Rules and Regulations
Technology: New Trends from the
Literature’’ Health Affairs.)
Nonetheless, we believe there are
benefits that can be obtained by eligible
hospitals and EPs, including: reductions
in medical record-keeping costs,
reductions in repeat tests, decreases in
length of stay, and reduced errors.
Furthermore, there is limited but
growing evidence to support the costsaving benefits anticipated from wider
adoption of EHRs. For example, at one
hospital emergency room in Delaware,
the ability to download and create a file
with a patient’s medical history saved
the ER $545 per use, mostly on reduced
waiting times. A pilot study of
ambulatory practices found a positive
ROI within 16 months and annual
savings thereafter (Greiger et al. 2007, A
Pilot Study to Document the Return on
Investment for Implementing an
Ambulatory Electronic Health Record at
an Academic Medical Center https://
www.journalacs.org/article/S10727515%2807%2900390-0/abstractarticle-footnote-1s.) Some vendors have
estimated that EHRs could result in cost
savings of between $100 and $200 per
patient per year. As adoption increases,
there will be more opportunities to
capture and report on cost savings and
benefits. A number of relevant studies
are required in the HITECH Act for this
specific purpose, and the results will be
made public, as they are available.
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8. Benefits to Society
According to the recent CBO study
‘‘Evidence on the Costs and Benefits of
Health Information Technology’’ https://
www.cbo.gov/ftpdocs/91xx/doc9168/0520-HealthIT.pdf when used effectively,
EHRs can enable providers to deliver
health care more efficiently. For
example, the study states that EHRs can
reduce the duplication of diagnostic
tests, prompt providers to prescribe
cost-effective generic medications,
remind patients about preventive care
reduce unnecessary office visits and
assist in managing complex care.
Further, the report claims that there is
a potential to gain both internal and
external savings from widespread
adoption of health IT, noting that
internal savings would likely be in the
reductions in the cost of providing care,
and that external savings could accrue
to the health insurance plan or even the
patient, such as the ability to exchange
information more efficiently. The
benefits resulting specifically from this
final regulation are even harder to
quantify because they represent, in
many cases, adding functionality to
existing systems and reaping the
network externalities created by larger
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numbers of providers participating in
information exchange.
Since the CBO study, additional
research has emerged documenting the
association of EHRs with improved
outcomes among diabetics (Hunt, JS et
al. (2009) ‘‘The impact of a physiciandirected health information technology
system on diabetes outcomes in primary
care: a pre- and post-implementation
study’’ Informatics in Primary Care
17(3):165–74; Pollard, C et al. (2009)
‘‘Electronic patient registries improve
diabetes care and clinical outcomes in
rural community health centers’’ Journal
of Rural Health 25(1):77–84) and trauma
patients (Deckelbaum, D. et al. (2009)
‘‘Electronic medical records and
mortality in trauma patients ‘‘The
Journal of Trauma: Injury, Infection, and
Critical Care 67(3): 634–636), enhanced
efficiencies in ambulatory care settings
(Chen, C et al. (2009) ‘‘The Kaiser
Permanente Electronic Health Record:
Transforming and Streamlining
Modalities Of Care.’’Health Affairs
28(2):323–333), and improved outcomes
and lower costs in hospitals
(Amarasingham, R. et al. (2009)
‘‘Clinical information technologies and
inpatient outcomes: a multiple hospital
study’’ Archives of Internal Medicine
169(2):108–14).
9. General Considerations
The estimates for the HITECH Act
provisions were based on the economic
assumptions underlying the President’s
2011 Budget. Under the statute,
Medicare incentive payments for
certified EHR technology are excluded
from the determination of MA
capitation benchmarks. As noted
previously, there is considerable
uncertainty about the rate at which
eligible hospitals, CAHs and EPs will
adopt EHRs and other HIT. Nonetheless,
we believe that the Medicare incentive
payments and the prospect of significant
payment penalties for not demonstrating
meaningful use will result in the great
majority of hospitals implementing
certified EHR technology in the early
years of the Medicare EHR incentive
program. We expect that a steadily
growing proportion of practices will
implement certified EHR technology
over the next 10 years, even in the
absence of the Medicare incentives.
Actual future Medicare and Medicaid
costs for eligible hospital and EP
incentives will depend in part on the
standards developed and applied for
assessing meaningful use of certified
EHR technology. We expect to
administer the requirements in such a
way as to encourage adoption of
certified EHR technology and facilitate
qualification for incentive payments,
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44561
and expect to adopt progressively
demanding standards at each stage year.
Certified EHR technology has the
potential to help reduce medical costs
through efficiency improvements, such
as prompter treatments, avoidance of
duplicate or otherwise unnecessary
services, and reduced administrative
costs (once systems are in place), with
most of these savings being realized by
the providers rather than by Medicare or
Medicaid. To the extent that this
technology will have a net positive
effect on efficiency, then more rapid
adoption of such EHR systems would
achieve these efficiencies sooner than
would otherwise occur, without the
EHR incentives.
The CBO has estimated a modest level
of such savings attributable to EHRs,
with much of the amount associated
with reductions in adverse drug-to-drug
interactions. We expect a negligible
impact on benefit payments to hospitals
and EPs from Medicare and Medicaid as
a result of the implementation of EHR
technology.
In the process of preparing the
estimates for this rule, we consulted
with and/or relied on internal CMS
sources, as well as the following
sources:
• Congressional Budget Office (staff
and publications).
• American Medical Association
(staff and unpublished data).
• American Hospital Association.
• Actuarial Research Corporation.
• RAND Health studies on:
++ ‘‘The State and Pattern of Health
Information Technology Adoption’’
(Fonkych & Taylor, 2005);
++ ‘‘Extrapolating Evidence of Health
Information Technology Savings and
Costs’’ (Girosi, Meili, & Scoville,
2005); and
++ ‘‘The Diffusion and Value of
Healthcare Information Technology’’
(Bower, 2005).
• Kaiser Permanente (staff and
publications).
• Miscellaneous other sources (Health
Affairs, American Enterprise Institute,
news articles and perspectives).
As noted at the beginning of this
analysis, it is difficult to predict the
actual impacts of the HITECH Act with
much certainty at this time. We believe
the assumptions and methods described
herein are reasonable for estimating the
financial impact of the provisions on the
Medicare and Medicaid programs, but
acknowledge the wide range of possible
outcomes.
All financial analysis is calculated
over a 10-year planning horizon,
because though the incentive payments
for Medicare EPs, CAHs and eligible
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hospitals will only be paid for 5 years,
the Medicaid incentives will cease in
CY 2021. Starting in CY 2015, Medicare
payment adjustments will begin.
10. Summary
The total cost to the Medicare and
Medicaid programs is estimated to be
$9.7 billion in transfers under the low
scenario, and $27.4 billion under the
high scenario, over a 10-year timeframe.
The main reasons for the changes from
the proposed rule are revised definitions
of hospital-based eligible professional
and Medicaid acute care hospitals, and
11. Explanation of Benefits and Savings
Calculations
the Medicare EP payment adjustments.
Expected qualitative benefits, such as
improved quality of care, better health
outcomes, and the like, are still unable
to be quantified at this time.
In our analysis, we assume that
benefits to the program would accrue in
the form of savings to Medicare, through
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H. Accounting Statement
Whenever a rule is considered a
significant rule under Executive Order
12866, we are required to develop an
Accounting Statement indicating the
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Table 39 shows the total costs from
2011 through 2019 for the high scenario
updated data on discharges and costs of
adoption among hospitals. We do not
estimate total costs to the provider
industry, but rather provide a possible
per EP and per eligible hospital outlay
for implementation and maintenance
operations.
Federal Register / Vol. 75, No. 144 / Wednesday, July 28, 2010 / Rules and Regulations
44563
classification of the expenditures
associated with the provisions of this
final rule. Monetary annualized benefits
and nonbudgetary costs are presented as
discounted flows using 3 percent and 7
percent factors. Additional expenditures
that will be undertaken by eligible
entities in order to obtain the Medicare
and Medicaid incentive payments to
adopt and demonstrate meaningful use
of certified EHR technology, and to
avoid the Medicare payment
adjustments that will ensue if they fail
to do so are noted by a placeholder in
the accounting statement. We are not
able to explicitly define the universe of
those additional costs, nor specify what
the high or low range might be to
implement EHR technology in this final
rule.
Expected qualitative benefits include
improved quality of care, better health
outcomes, reduced errors and the like.
Private industry costs would include the
impact of EHR activities such as
temporary reduced staff productivity
related to learning how to use the EHR,
the need for additional staff to work
with HIT issues, and administrative
costs related to reporting.
In accordance with the provisions of
Executive Order 12866, this final rule
was reviewed by the Office of
Management and Budget.
(HMO), Medicaid, Medicare, Penalties,
Privacy, Reporting and recordkeeping
requirements.
■ For the reasons set forth in the
preamble, the Centers for Medicare &
Medicare Services amends 42 CFR
Chapter IV as follows:
§ 412.64 Federal rates for inpatient
operating costs for Federal fiscal year 2005
and subsequent fiscal years.
42 CFR Part 412
Administrative practice and
procedure, Health facilities, Medicare,
Puerto Rico, Reporting and
recordkeeping requirements.
srobinson on DSKHWCL6B1PROD with RULES2
42 CFR Part 413
Health facilities, Kidney diseases,
Medicare, Reporting and recordkeeping
requirements.
42 CFR Part 422
Administrative practice and
procedure, Health facilities, Health
maintenance organizations (HMO),
Medicare, Penalties, Privacy, Reporting
and recordkeeping requirements.
42 CFR Part 495
Administrative practice and
procedure, Electronic health records,
Health facilities, Health professions,
Health maintenance organizations
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PART 412—PROSPECTIVE PAYMENT
SYSTEMS FOR INPATIENT HOSPITAL
SERVICES
1. The authority citation for part 412
continues to read as follows:
■
Authority: Secs. 1102 and 1871 of the
Social Security Act (42 U.S.C. 1302 and
1395hh).
Subpart D—Basic Methodology for
Determining Prospective Payment
Federal Rates for Inpatient Operating
Costs
2. Section 412.64 is amended as
follows:
■ A. Revising paragraph (d)(2)(i)(B).
■ B. Adding new paragraphs (d)(2)(i)(C)
and (d)(3).
The revision and additions read as
follows:
■
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*
*
*
*
(d) * * *
(2) * * *
(i) * * *
(B) For fiscal year 2007 through 2014,
by 2 percentage points.
(C) For fiscal year 2015 and
subsequent fiscal years, by one-fourth.
*
*
*
*
*
(3) Beginning in fiscal year 2015, in
the case of a ‘‘subsection (d) hospital,’’
as defined under section 1886(d)(1)(B)
of the Act, that is not a meaningful
electronic health record (EHR) user as
defined in part 495 of this chapter,
three-fourths of the applicable
percentage change specified in
paragraph (d)(1) of this section is
reduced—
(i) For fiscal year 2015, by 331⁄3
percent;
(ii) For fiscal year 2016, by 662⁄3
percent; and
(iii) For fiscal year 2017 and
subsequent fiscal years, by 100 percent.
*
*
*
*
*
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PART 413—PRINCIPLES OF
REASONABLE COST
REIMBURSEMENT; PAYMENT FOR
END-STAGE RENAL DISEASE
SERVICES; OPTIONAL
PROSPECTIVELY DETERMINED
PAYMENT RATES FOR SKILLED
NURSING FACILITIES
3. The authority citation for part 413
continues to read as follows:
■
Authority: Secs. 1102, 1812(d), 1814(b),
1815, 1833(a), (i), and (n), 1861(v), 1871,
1881, 1883, and 1886 of the Social Security
Act (42 U.S.C. 1302, 1395d(d), 1395f(b),
1395g, 1395l(a), (i), and (n), 1395x(v),
1395hh, 1395rr, 1395tt, and 1395ww); and
sec. 124 of Public Law 106–133 (113 Stat.
1501A–332).
Subpart E—Payments to Providers
4. Section 413.70 is amended as
follows:
■ A. Revising paragraph (a)(1).
■ B. Adding new paragraphs (a)(5),
(a)(6) and (a)(7).
The revision and additions read as
follows:
■
srobinson on DSKHWCL6B1PROD with RULES2
§ 413.70
Payment for services of a CAH.
(a) Payment for inpatient services
furnished by a CAH (other than services
of distinct part units). (1) Effective for
cost reporting periods beginning on or
after January 1, 2004, payment for
inpatient services of a CAH, other than
services of a distinct part unit of the
CAH and other than the items included
in the incentive payment described in
paragraph (a)(5) of this section and
subject to the adjustments described in
paragraph (a)(6) of this section, is 101
percent of the reasonable costs of the
CAH in providing CAH services to its
inpatients, as determined in accordance
with section 1861(v)(1)(A) of the Act
and the applicable principles of cost
reimbursement in this part and in part
415 of this chapter, except that the
following payment principles are
excluded when determining payment
for CAH inpatient services:
(i) Lesser of cost or charges;
(ii) Ceilings on hospital operating
costs;
(iii) Reasonable compensation
equivalent (RCE) limits for physician
services to providers; and
(iv) The payment window provisions
for preadmission services, specified in
§ 412.2(c)(5) of this subchapter and
§ 413.40(c)(2) of this part.
*
*
*
*
*
(5) A qualifying CAH receives an
incentive payment for the reasonable
costs of purchasing certified EHR
technology in a cost reporting period
during a payment year as determined
under § 495.106 of this chapter in lieu
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of payment for such reasonable costs
under paragraph (a)(1) of this section.
(6)(i) For cost reporting periods
beginning in or after FY 2015, if a CAH
is not a qualifying CAH, as defined in
§ 495.106(a) of this chapter, then
notwithstanding the percentage
applicable in paragraph (a)(1) of this
section, the reasonable costs of the CAH
in providing CAH services to its
inpatients are adjusted, by the following
applicable percentage:
(A) For cost reporting periods
beginning in FY 2015, 100.66 percent.
(B) For cost reporting periods
beginning in FY 2016, 100.33 percent.
(C) For cost reporting periods
beginning in FY 2017 and each
subsequent fiscal year, 100 percent.
(ii) A CAH may, on a case-by case
basis, be exempt from the application of
the adjustments made under this
paragraph, if CMS or its Medicare
contractors determine, on an annual
basis, that requiring the CAH to become
a qualifying CAH under § 495.106 of
this chapter would result in a significant
hardship, such as in the case of a CAH
in a rural area without sufficient
Internet access.
(iii) In no case may a CAH be granted
an exemption under this paragraph
(a)(6) for more than 5 years.
(7) There is no administrative or
judicial review under section s1869 and
1878 of the Actor otherwise of the
following:
(i) The methodology and standards for
determining the amount of payment
under paragraph (a)(5) of this section,
including the calculation of reasonable
costs under § 495.106(c) of this chapter.
(ii) The methodology and standards
for determining the amount of payment
adjustments made under paragraph
(a)(6).
(iii) The methodology and standards
for determining a CAH to be a qualifying
CAH under § 495.106 of this chapter.
(iv) The methodology and standards
for determining if the hardship
exemption applies to a CAH under
paragraph (a)(6)(ii) of this section.
(v) The specification of the cost
reporting periods, payment years, or
fiscal years as applied under this
paragraph.
*
*
*
*
*
PART 422—MEDICARE ADVANTAGE
PROGRAM
Subpart G—Payments to Medicare
Advantage Organizations
6. Section 422.304 is amended by
adding a new paragraph (f) to read as
follows:
■
§ 422.304
Monthly payments.
*
*
*
*
*
(f) Separate payment for meaningful
use of certified EHRs. In the case of
qualifying MA organizations, as defined
in § 495.200 of this chapter, entitled to
MA EHR incentive payments per
§ 495.220 of this chapter, such payments
are made in accordance with sections
1853(l) and (m) of the Act and subpart
C of Part 495 of this chapter.
■ 7. Section 422.306 is amended as
follows:
■ A. Removing ‘‘and’’ from the end of
paragraph (b)(2)(ii).
■ B. Removing the period at the end of
paragraph (b)(2)(iii) and adding ‘‘; and’’
in its place.
■ C. Adding a new paragraph (b)(2)(iv).
The addition reads as follows:
§ 422.306
Annual MA capitation rates.
*
*
*
*
*
(b) * * *
(2) * * *
(iv) Adjusted to exclude costs
attributable to payments under sections
1848(o) and 1886(n) of the Act of
Medicare FFS incentive payments for
meaningful use of electronic health
records.
*
*
*
*
*
■ 8. Section 422.308 is amended as
follows:
■ A. Redesignating paragraph (a) as
paragraph (a)(1).
■ B. Adding a new paragraph (a)(2).
The addition reads as follows:
§ 422.308 Adjustments to capitation rates,
benchmarks, bids, and payments.
*
*
*
*
*
(a) * * *
(2) The amount calculated in
paragraph (a)(1) of this section must
exclude expenditures attributable to
sections 1848(a)(7) and (o) and sections
1886(b)(3)(B)(ix) and (n) of the Act.
*
*
*
*
*
■ 9. Section 422.322 is amended as
follows:
■ A. Adding paragraph (a)(3).
■ B. Revising paragraph (b).
The addition and revision read as
follows:
■
§ 422.322 Source of payment and effect of
MA plan election on payment.
Authority: Secs. 1102 and 1871 of the
Social Security Act (42 U.S.C. 1302 and
1395hh).
(a) * * *
(3) Payments under subpart C of part
495 of this chapter for meaningful use
of certified EHR technology are made
5. The authority citation for part 422
continues to read as follows:
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from the Federal Hospital Insurance
Trust Fund or the Supplementary
Medical Insurance Trust Fund. In
applying section 1848(o) of the Act
under sections 1853(l) and 1886(n)(2)of
the Act under section 1853(m) of the
Act, CMS determines the amount to the
extent feasible and practical to be
similar to the estimated amount in the
aggregate that would be payable for
services furnished by professionals and
hospitals under Parts B and A,
respectively, under title XVIII of the
Act.
(b) Payments to the MA organization.
Subject to § 412.105(g), § 413.86(d), and
§ 495.204 of this chapter and §§ 422.109,
422.316, and 422.320, CMS’ payments
under a contract with an MA
organization (described in § 422.304)
with respect to an individual electing an
MA plan offered by the organization are
instead of the amounts which (in the
absence of the contract) would
otherwise be payable under original
Medicare for items and services
furnished to the individual.
*
*
*
*
*
SUBCHAPTER G—STANDARDS AND
CERTIFICATIONS
10. A new part 495 is added to read
as follows:
■
PART 495—STANDARDS FOR THE
ELECTRONIC HEALTH RECORD
TECHNOLOGY INCENTIVE PROGRAM
Subpart A—General Provisions
Sec.
495.2 Basis and purpose.
495.4 Definitions.
495.6 Meaningful use objectives measures
for EPs, eligible hospitals, and CAHs.
495.8 Demonstration of meaningful use
criteria.
495.10 Participation requirements for EPs,
eligible hospitals, and CAHs.
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Subpart B—Requirements Specific to the
Medicare Program
495.100 Definitions.
495.102 Incentive payments to EPs.
495.104 Incentive payments to eligible
hospitals.
495.106 Incentive payments to CAHs.
495.108 Posting of required information.
495.110 Preclusion on administrative and
judicial review.
Subpart C—Requirements Specific to
Medicare Advantage (MA) Organizations
495.200 Definitions.
495.202 Identification of qualifying MA
organizations, MA–EPs, and MAaffiliated eligible hospitals.
495.204 Incentive payments to qualifying
MA organizations for MA–EPs and MAaffiliated eligible hospitals.
495.206 Timeframe for payment to
qualifying MA organizations.
495.208 Avoiding duplicate payment.
495.210 Meaningful EHR user attestation.
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495.212
Limitation on review.
Subpart A—General Provisions
Subpart D—Requirements Specific to the
Medicaid Program
495.300 Basis and purpose.
495.302 Definitions.
495.304 Medicaid provider scope and
eligibility.
495.306 Establishing patient volume.
495.308 Net average allowable costs as the
basis for determining the incentive
payment.
495.310 Medicaid provider incentive
payments.
495.312 Process for payments.
495.314 Activities required to receive an
incentive payment.
495.316 State monitoring and reporting
regarding activities required to receive
an incentive payment.
495.318 State responsibilities for receiving
FFP.
495.320 FFP for payments to Medicaid
providers.
495.322 FFP for reasonable administrative
expenses.
495.324 Prior approval conditions.
495.326 Disallowance of FFP.
495.328 Request for reconsideration of
adverse determination.
495.330 Termination of FFP for failure to
provide access to information.
495.332 State Medicaid health information
technology (HIT) plan requirements.
495.334 Reserved.
495.336 Health information technology
planning advance planning document
requirements (HIT PAPD).
495.338 Health information technology
implementation advance planning
document requirements (HIT IAPD).
495.340 As-needed HIT PAPD update and
as-needed HIT IAPD update
requirements.
495.342 Annual HIT IAPD requirements.
495.344 Approval of the State Medicaid
HIT plan, the HIT PAPD and update, the
HIT IAPD and update, and the annual
HIT IAPD.
495.346 Access to systems and records.
495.348 Procurement standards.
495.350 State Medicaid agency attestations.
495.352 Reporting requirements.
495.354 Rules for charging equipment.
495.356 Nondiscrimination requirements.
495.358 Cost allocation plans.
495.360 Software and ownership rights.
495.362 Retroactive approval of FFP with
an effective date of February 18, 2009.
495.364 Review and assessment of
administrative activities and expenses of
Medicaid provider health information
technology adoption and operation.
495.366 Financial oversight and monitoring
of expenditures.
495.368 Combating fraud and abuse.
495.370 Appeals process for a Medicaid
provider receiving electronic health
record incentive payments.
Authority: Secs. 1102 and 1871 of the
Social Security Act (42 U.S.C. 1302 and
1395hh).
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§ 495.2
Basis and purpose.
This part implements the following:
(a) Section 1848(o) of the Act by
establishing payment incentives under
Medicare Part B for eligible
professionals who adopt and
meaningfully use certified electronic
health record (EHR) technology.
(b) Section 1853(1) of the Act to
provide incentive payments to Medicare
Advantage organizations for certain
affiliated professionals who
meaningfully use certified EHR
technology and meet certain other
requirements.
(c) Section 1886(n) of the Act by
establishing incentives payments for the
meaningful use of certified EHR
technology by subsection (d) hospitals,
as defined under section 1886(d)(1)(B)
of the Act, participating in the Medicare
FFS program.
(d) Section 1814(l) of the Act to
provide an incentive payment to critical
access hospitals that meaningfully use
certified EHR technology based on the
hospitals’ reasonable costs.
(e) Section 1853(m) of the Act to
provide incentive payments to MA
organizations for certain affiliated
hospitals that meaningfully use certified
EHR technology.
(f) Sections 1903(a)(3)(F) and 1903(t)
of the Act to provide 100 percent
Federal financial participation (FFP) to
States for incentive payments to certain
eligible providers participating in the
Medicaid program to purchase,
implement, and operate (including
support services and training for staff)
certified EHR technology and 90 percent
FFP for State administrative expenses
related to such incentive payments.
(g) Sections 1848(a)(7), 1853(l)(4),
1886(b)(3)(B)(ix)(I), and 1853(m)(4) of
the Act, providing for payment
reductions for inpatient services
furnished on or after October 1, 2014 to
Medicare beneficiaries by hospitals that
are not meaningful users of certified
EHR technology, and for covered
professional services furnished on or
after January 1, 2015 to Medicare
beneficiaries by certain professionals
who are not meaningful users of
certified EHR technology.
§ 495.4
Definitions.
In this part, unless otherwise
indicated—
Certified electronic health record
technology has the same definition as
this term is defined at 45 CFR 170.102.
Critical access hospital (CAH) means
a facility that has been certified as a
critical access hospital under section
1820(e) of the Act and for which
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Medicare payment is made under
section 1814(l) of the Act for inpatient
services and under section 1834(g) of
the Act for outpatient services.
EHR reporting period means either of
the following:
(1) For an eligible professional (EP)—
(i) For the first payment year, any
continuous 90-day period within a
calendar year;
(ii)(A) Except as specified in
paragraph (1)(ii)(B) of this definition, for
the second, third, fourth, fifth, or sixth
payment year, the calendar year.
(B) For Medicaid providers who are
demonstrating they are meaningful EHR
users for the first time in their second
payment year, the EHR reporting period
during such second payment year is any
continuous 90-day period within the
calendar year.
(2) For an eligible hospital or a CAH—
(i) For the first payment year, any
continuous 90-day period within a
federal fiscal year; and
(ii)(A) Except as specified in
paragraph (2)(ii)(B) of this definition, for
the second, third, fourth, fifth, or sixth
payment year, the Federal fiscal year.
(B) For Medicaid providers who are
demonstrating they are meaningful EHR
users for the first time in their second
payment year, the EHR reporting period
during such second payment year is any
continuous 90-day period within the
Federal fiscal year.
Eligible hospital means an eligible
hospital as defined under § 495.100 or
Medicaid eligible hospital under
subpart D of this part.
Eligible professional (EP) means an
eligible professional as defined under
§ 495.100 or a Medicaid eligible
professional under subpart D of this
part.
Hospital-based EP is an EP (as defined
under this section) who furnishes 90
percent or more of his or her covered
professional services in a hospital
setting in the year preceding the
payment year. For Medicare, this will be
calculated based on the Federal FY prior
to the payment year. For Medicaid, it is
at the State’s discretion if the data is
gathered on the Federal FY or CY prior
to the payment year. A setting is
considered a hospital setting if it is a
site of service that would be identified
by the codes used in the HIPAA
standard transactions as an inpatient
hospital, or emergency room setting.
Meaningful EHR user means:
(1) Subject to paragraph (3) of this
definition, an EP, eligible hospital or
CAH that, for an EHR reporting period
for a payment year, demonstrates in
accordance with § 495.8 meaningful use
of certified EHR technology by meeting
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the applicable objectives and associated
measures under § 495.6; and
(2)(i) Except as specified in paragraph
(2)(ii) of this definition, a Medicaid EP
or Medicaid eligible hospital, that meets
the requirements of paragraph (1) of this
definition and any additional criteria for
meaningful use imposed by the State
and approved by CMS under § 495.316
and § 495.332.
(ii) An eligible hospital or CAH is
deemed to be a meaningful EHR user for
purposes of receiving an incentive
payment under subpart D of this Part, if
the hospital participates in both the
Medicare and Medicaid EHR incentive
programs, and the hospital meets the
requirements of paragraph (1) of this
definition.
(3) To be considered a meaningful
EHR user, at least 50 percent of an EP’s
patient encounters during the EHR
reporting period during the payment
year must occur at a practice/location or
practices/locations equipped with
certified EHR technology.
Payment year means:
(1) For an EP, a calendar year
beginning with CY 2011; and
(2) For a CAH or an eligible hospital,
a Federal fiscal year beginning with FY
2011.
Qualified EHR has the same definition
as this term is defined at 45 CFR
170.102.
First, second, third, fourth, fifth, or
sixth payment years mean as follows:
(1) The first payment year is: with
respect to an EP, the first calendar year
for which the EP receives an incentive
payment under this part; and with
respect to an eligible hospital or CAH,
the first FY for which the hospital
receives an incentive payment under
this part.
(2) The second, third, fourth, fifth, or
sixth payment year is:
(i) With respect to a Medicare EP, the
second, third, fourth or fifth successive
CY immediately following the first
payment year; and with respect to a
Medicare eligible hospital or CAH, the
second, third, or fourth successive
Federal FY immediately following the
first payment year. (Note: Medicare EPs
are not eligible for a sixth payment year
and Medicare eligible hospitals are not
eligible for a fifth or sixth payment
year.)
(ii)(A) With respect to a Medicaid EP,
the second, third, fourth, fifth, or sixth
CY for which the EP receives an
incentive payment under subpart D,
regardless of whether the year
immediately follows the prior payment
year; and
(B) With respect to a Medicaid eligible
hospital, for years prior to FY 2017, the
second, third, fourth, fifth, or sixth
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Federal FY for which the hospital
receives an incentive payment under
subpart D of this part, regardless of
whether the year immediately follows
the prior payment year. Beginning with
FY 2017, payments to Medicaid eligible
hospitals must be consecutive, and the
hospital is not eligible for an incentive
payment under subpart D of this part
unless it received such incentive
payment for the prior fiscal year.
§ 495.6 Meaningful use objectives and
measures for EPs, eligible hospitals, and
CAHs.
(a) Stage 1 criteria for EPs—(1)
General rule regarding Stage 1 criteria
for meaningful use for EPs. Except as
specified in paragraphs (a)(2) and (a)(3)
of this section, EPs must meet all
objectives and associated measures of
the Stage 1 criteria specified in
paragraph (d) of this section and five
objectives of the EP’s choice from
paragraph (e) of this section to meet the
definition of a meaningful EHR user.
(2) Exclusion for non-applicable
objectives. (i) An EP may exclude a
particular objective contained in
paragraphs (d) or (e) of this section, if
the EP meets all of the following
requirements:
(A) Must ensure that the objective in
paragraph (d) or (e) of this section
includes an option for the EP to attest
that the objective is not applicable.
(B) Meets the criteria in the applicable
objective that would permit the
attestation.
(C) Attests.
(ii) An exclusion will reduce (by the
number of exclusions applicable) the
number of objectives that would
otherwise apply. For example, an EP
that has an exclusion from one of the
objectives in paragraph (e) of this
section must meet four (and not five)
objectives of the EP’s choice from such
paragraph to meet the definition of a
meaningful EHR user.
(3) Exception for Medicaid EPs who
adopt, implement or upgrade in their
first payment year. For Medicaid EPs
who adopt, implement, or upgrade
certified EHR technology in their first
payment year, the meaningful use
objectives and associated measures of
the Stage 1 criteria specified in
paragraphs (d) and (e) apply beginning
with the second payment year, and do
not apply to the first payment year.
(b) Stage 1 criteria for eligible
hospitals and CAHs—(1) General rule
regarding Stage 1 criteria for meaningful
use for eligible hospitals or CAHs.
Except as specified in paragraphs (b)(2)
and (b)(3) of this section, eligible
hospitals and CAHs must meet all
objectives and associated measures of
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the Stage 1 criteria specified in
paragraph (f) of this section and five
objectives of the eligible hospital’s or
CAH’s choice from paragraph (g) of this
section to meet the definition of a
meaningful EHR user.
(2) Exclusions for nonapplicable
objectives. (i) An eligible hospital or
CAH may exclude a particular objective
that includes an option for exclusion
contained in paragraphs (f) or (g) of this
section, if the hospital meets all of the
following requirements:
(A) The hospital meets the criteria in
the applicable objective that would
permit an exclusion.
(B) The hospital so attests.
(ii) An exclusion will reduce (by the
number of exclusions received) the
number of objectives that would
otherwise apply. For example, an
eligible hospital that is excluded from
one of the objectives in paragraph (g) of
this section must meet four (and not
five) objectives of the hospital’s choice
from such paragraph to meet the
definition of a meaningful EHR user.
(3) Exception for Medicaid eligible
hospitals that adopt, implement or
upgrade in their first payment year. For
Medicaid eligible hospitals that adopt,
implement, or upgrade certified EHR
technology in their first payment year,
the meaningful use objectives and
associated measures of the Stage 1
criteria specified in paragraphs (f) and
(g) of this section apply beginning with
the second payment year, and do not
apply to the first payment year.
(c) Many of the objective and
associated measures in paragraphs (d)
through (g) of this section rely on
measures that count unique patients or
actions.
(1) If a measure (or associated
objective) in paragraphs (d) through (g)
of this section references paragraph (c)
of this section, then the measure may be
calculated by reviewing only the actions
for patients whose records are
maintained using certified EHR
technology. A patient’s record is
maintained using certified EHR
technology if sufficient data was entered
in the certified EHR technology to allow
the record to be saved, and not rejected
due to incomplete data.
(2) If the objective and associated
measure does not reference this
paragraph (c) of this section, then the
measure must be calculated by
reviewing all patient records, not just
those maintained using certified EHR
technology.
(d) Stage 1 core criteria for EPs. An EP
must satisfy the following objectives
and associated measures, except those
objectives and associated measures for
which an EP qualifies for an exclusion
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under paragraph (a)(2) of this section
specified in this paragraph:
(1)(i) Objective. Use computerized
provider order entry (CPOE) for
medication orders directly entered by
any licensed healthcare professional
who can enter orders into the medical
record per state, local and professional
guidelines.
(ii) Measure. Subject to paragraph (c)
of this section, more than 30 percent of
all unique patients with at least one
medication in their medication list seen
by the EP have at least one medication
order entered using CPOE.
(iii) Exclusion in accordance with
paragraph (a)(2) of this section Any EP
who writes fewer than 100 prescriptions
during the EHR reporting period.
(2)(i) Objective. Implement drug-drug
and drug-allergy interaction checks.
(ii) Measure. The EP has enabled this
functionality for the entire EHR
reporting period.
(3)(i) Objective. Maintain an up-todate problem list of current and active
diagnoses.
(ii) Measure. More than 80 percent of
all unique patients seen by the EP have
at least one entry or an indication that
no problems are known for the patient
recorded as structured data.
(4)(i) Objective. Generate and transmit
permissible prescriptions electronically
(eRx).
(ii) Measure. Subject to paragraph (c)
of this section, more than 40 percent of
all permissible prescriptions written by
the EP are transmitted electronically
using certified EHR technology.
(iii) Exclusion in accordance with
paragraph (a)(2) of this section Any EP
who writes fewer than 100 prescriptions
during the EHR reporting period.
(5)(i) Objective. Maintain active
medication list.
(ii) Measure. More than 80 percent of
all unique patients seen by the EP have
at least one entry (or an indication that
the patient is not currently prescribed
any medication) recorded as structured
data.
(6)(i) Objective. Maintain active
medication allergy list.
(ii) Measure. More than 80 percent of
all unique patients seen by the EP have
at least one entry (or an indication that
the patient has no known medication
allergies) recorded as structured data.
(7)(i) Objective. Record all of the
following demographics:
(A) Preferred language.
(B) Gender.
(C) Race.
(D) Ethnicity.
(E) Date of birth.
(ii) Measure. More than 50 percent of
all unique patients seen by the EP have
demographics recorded as structured
data.
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(8)(i) Objective. Record and chart
changes in the following vital signs:
(A) Height.
(B) Weight.
(C) Blood pressure.
(D) Calculate and display body mass
index (BMI).
(E) Plot and display growth charts for
children 2–20 years, including BMI.
(ii) Measure. Subject to paragraph (c)
of this section, more than 50 percent of
all unique patients age 2 and over seen
by the EP, height, weight and blood
pressure are recorded as structured data.
(iii) Exclusion in accordance with
paragraph (a)(2) of this section. Any EP
who either see no patients 2 years or
older, or who believes that all three vital
signs of height, weight, and blood
pressure of their patients have no
relevance to their scope of practice.
(9)(i) Objective. Record smoking status
for patients 13 years old or older.
(ii) Measure. Subject to paragraph (c)
of this section, more than 50 percent of
all unique patients 13 years old or older
seen by the EP have smoking status
recorded as structured data.
(iii) Exclusion in accordance with
paragraph (a)(2) of this section. Any EP
who sees no patients 13 years or older.
(10)(i) Objective. Report ambulatory
clinical quality measures to CMS or, in
the case of Medicaid EPs, the States.
(ii) Measure. Subject to paragraph (c)
of this section, successfully report to
CMS (or, in the case of Medicaid EPs,
the States) ambulatory clinical quality
measures selected by CMS in the
manner specified by CMS (or in the case
of Medicaid EPs, the States).
(11)(i) Objective. Implement one
clinical decision support rules relevant
to specialty or high clinical priority
along with the ability to track
compliance with that rule.
(ii) Measure. Implement one clinical
decision support rule.
(12)(i) Objective. Provide patients
with an electronic copy of their health
information (including diagnostics test
results, problem list, medication lists,
medication allergies) upon request.
(ii) Measure. Subject to paragraph (c)
of this section, more than 50 percent of
all patients who request an electronic
copy of their health information are
provided it within 3 business days.
(iii) Exclusion in accordance with
paragraph (a)(2) of this section. Any EP
that has no requests from patients or
their agents for an electronic copy of
patient health information during the
EHR reporting period.
(13)(i) Objective. Provide clinical
summaries for patients for each office
visit.
(ii) Measure. Subject to paragraph (c)
of this section, clinical summaries
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provided to patients for more than 50
percent of all office visits within 3
business days.
(iii) Exclusion in accordance with
paragraph (a)(2) of this section. Any EP
who has no office visits during the EHR
reporting period.
(14)(i) Objective. Capability to
exchange key clinical information (for
example, problem list, medication list,
allergies, and diagnostic test results),
among providers of care and patient
authorized entities electronically.
(ii) Measure. Performed at least one
test of certified EHR technology’s
capacity to electronically exchange key
clinical information.
(15)(i) Objective. Protect electronic
health information created or
maintained by the certified EHR
technology through the implementation
of appropriate technical capabilities.
(ii) Measure. Conduct or review a
security risk analysis in accordance
with the requirements under 45 CFR
164.308(a)(1) and implement security
updates as necessary and correct
identified security deficiencies as part
of its risk management process.
(e) Stage 1 menu set criteria for EPs.
An EP must meet five of the following
objectives and associated measures, one
of which must be either paragraph (e)(9)
or (e)(10) of this section, except that the
required number of objectives and
associated measures is reduced by an
EP’s paragraph (a)(2) of this section
exclusions specified in this paragraph:
(1)(i) Objective. Implement drugformulary checks.
(ii) Measure. The EP has enabled this
functionality and has access to at least
one internal or external formulary for
the entire EHR reporting period.
(2)(i) Objective. Incorporate clinical
lab-test results into EHR as structured
data.
(ii) Measure. Subject to paragraph (c)
of this section, more than 40 percent of
all clinical lab tests results ordered by
the EP during the EHR reporting period
whose results are either in a positive/
negative or numerical format are
incorporated in certified EHR
technology as structured data.
(iii) Exclusion in accordance with
paragraph (a)(2) of this section. An EP
who orders no lab tests whose results
are either in a positive/negative or
numeric format during the EHR
reporting period.
(3)(i) Objective. Generate lists of
patients by specific conditions to use for
quality improvement, reduction of
disparities, research, or outreach.
(ii) Measure. Subject to paragraph (c)
of this section, generate at least one
report listing patients of the EP with a
specific condition.
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(4)(i) Objective. Send reminders to
patients per patient preference for
preventive/follow-up care.
(ii) Measure. Subject to paragraph (c)
of this section, more than 20 percent of
all patients 65 years or older or 5 years
old or younger were sent an appropriate
reminder during the EHR reporting
period.
(iii) Exclusion in accordance with
paragraph (a)(2) of this section. An EP
who has no patients 65 years old or
older or 5 years old or younger with
records maintained using certified EHR
technology.
(5)(i) Objective. Provide patients with
timely electronic access to their health
information (including lab results,
problem list, medication lists, and
allergies) within 4 business days of the
information being available to the EP.
(ii) Measure. At least 10 percent of all
unique patients seen by the EP are
provided timely (available to the patient
within four business days of being
updated in the certified EHR
technology) electronic access to their
health information subject to the EP’s
discretion to withhold certain
information.
(iii) Exclusion in accordance with
paragraph (a)(2) of this section. Any EP
that neither orders nor creates any of the
information listed at 45 CFR 170.304(g)
during the EHR reporting period.
(6)(i) Objective. Use certified EHR
technology to identify patient-specific
education resources and provide those
resources to the patient if appropriate.
(ii) Measure. More than 10 percent of
all unique patients seen by the EP are
provided patient-specific education
resources.
(7)(i) Objective. The EP who receives
a patient from another setting of care or
provider of care or believes an
encounter is relevant should perform
medication reconciliation.
(ii) Measure. Subject to paragraph (c)
of this section, the EP performs
medication reconciliation for more than
50 percent of transitions of care in
which the patient is transitioned into
the care of the EP.
(iii) Exclusion in accordance with
paragraph (a)(2) of this section. An EP
who was not the recipient of any
transitions of care during the EHR
reporting period.
(8)(i) Objective. The EP who
transitions their patient to another
setting of care or provider of care or
refers their patient to another provider
of care should provide summary care
record for each transition of care or
referral.
(ii) Measure. Subject to paragraph (c)
of this section, the EP who transitions
or refers their patient to another setting
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of care or provider of care provides a
summary of care record for more than
50 percent of transitions of care and
referrals.
(iii) Exclusion in accordance with
paragraph (a)(2) of this section. An EP
who neither transfers a patient to
another setting nor refers a patient to
another provider during the EHR
reporting period.
(9)(i) Objective. Capability to submit
electronic data to immunization
registries or immunization information
systems and actual submission
according to applicable law and
practice.
(ii) Measure. Performed at least one
test of certified EHR technology’s
capacity to submit electronic data to
immunization registries and follow up
submission if the test is successful
(unless none of the immunization
registries to which the EP submits such
information has the capacity to receive
the information electronically).
(iii) Exclusion in accordance with
paragraph (a)(2) of this section. An EP
who administers no immunizations
during the EHR reporting period or
where no immunization registry has the
capacity to receive the information
electronically.
(10)(i) Objective. Capability to submit
electronic syndromic surveillance data
to public health agencies and actual
submission according to applicable law
and practice.
(ii) Measure. Performed at least one
test of certified EHR technology’s
capacity to provide electronic
syndromic surveillance data to public
health agencies and follow-up
submission if the test is successful
(unless none of the public health
agencies to which an EP submits such
information has the capacity to receive
the information electronically).
(iii) Exclusion in accordance with
paragraph (a)(2) of this section. An EP
who does not collect any reportable
syndromic information on their patients
during the EHR reporting period or does
not submit such information to any
public health agency that has the
capacity to receive the information
electronically.
(f) Stage 1 core criteria for eligible
hospitals or CAHs. An eligible hospital
or CAH must meet the following
objectives and associated measures
except those objectives and associated
measures for which an eligible hospital
or CAH qualifies for a paragraph (b)(2)
of this section exclusion specified in
this paragraph:
(1)(i) Objective. Use CPOE for
medication orders directly entered by
any licensed healthcare professional
who can enter orders into the medical
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record per State, local, and professional
guidelines.
(ii) Measure. Subject to paragraph (c)
of this section, more than 30 percent of
all unique patients with at least one
medication in their medication list
admitted to the eligible hospital’s or
CAH’s inpatient or emergency
department (POS 21 or 23) have at least
one medication order entered using
CPOE.
(2)(i) Objective. Implement drug-drug
and drug-allergy interaction checks.
(ii) Measure. The eligible hospital or
CAH has enabled this functionality for
the entire EHR reporting period.
(3)(i) Objective. Maintain an up-todate problem list of current and active
diagnoses.
(ii) Measure. More than 80 percent of
all unique patients admitted to the
eligible hospital’s or CAH’s inpatient or
emergency department (POS 21 or 23)
have at least one entry or an indication
that no problems are known for the
patient recorded as structured data.
(4)(i) Objective. Maintain active
medication list.
(ii) Measure. More than 80 percent of
all unique patients admitted to the
eligible hospital’s or CAH’s inpatient or
emergency department (POS 21 or 23)
have at least one entry (or an indication
that the patient is not currently
prescribed any medication) recorded as
structured data.
(5)(i) Objective. Maintain active
medication allergy list.
(ii) Measure. More than 80 percent of
all unique patients admitted to the
eligible hospital’s or CAH’s inpatient or
emergency department (POS 21 or 23)
have at least one entry (or an indication
that the patient has no known
medication allergies) recorded as
structured data.
(6)(i) Objective. Record all of the
following demographics;
(A) Preferred language.
(B) Gender.
(C) Race.
(D) Ethnicity.
(E) Date of birth.
(F) Date and preliminary cause of
death in the event of mortality in the
eligible hospital or CAH.
(ii) Measure. More than 50 percent of
all unique patients admitted to the
eligible hospital’s or CAH’s inpatient or
emergency department (POS 21 or 23)
have demographics recorded as
structured data.
(7)(i) Objective. Record and chart
changes in the following vital signs:
(A) Height.
(B) Weight.
(C) Blood pressure.
(D) Calculate and display body mass
index (BMI).
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(E) Plot and display growth charts for
children 2–20 years, including BMI.
(ii) Measure. Subject to paragraph (c)
of this section, for more than 50 percent
of all unique patients age 2 and over
admitted to the eligible hospital’s or
CAH’s inpatient or emergency
department (POS 21 or 23), height,
weight, and blood pressure are recorded
as structured data.
(8)(i) Objective. Record smoking for
patients 13 years old or older.
(ii) Measure. Subject to paragraph (c)
of this section, more than 50 percent of
all unique patients 13 years old or older
or admitted to the eligible hospital’s
inpatient or emergency department
(POS 21 or 23) have smoking status
recorded as structured data.
(iii) Exclusion in accordance with
paragraph (b)(2) of this section. Any
eligible hospital or CAH that admits no
patients 13 years or older to their
inpatient or emergency department
(POS 21 or 23).
(9)(i) Objective. Report hospital
clinical quality measures to CMS or, in
the case of Medicaid eligible hospitals,
the States.
(ii) Measure. Subject to paragraph (c)
of this section, successfully report to
CMS (or, in the case of Medicaid eligible
hospitals or CAHs, the States) hospital
clinical quality measures selected by
CMS in the manner specified by CMS
(or, in the case of Medicaid eligible
hospitals or CAHs, the States).
(10)(i) Objective. Implement one
clinical decision support rule related to
a high priority hospital condition along
with the ability to track compliance
with that rule.
(ii) Measure. Implement one clinical
decision support rule.
(11)(i) Objective. Provide patients
with an electronic copy of their health
information (including diagnostic test
results, problem list, medication lists,
medication allergies, discharge
summary, procedures), upon request.
(ii) Measure. Subject to paragraph (c)
of this section, more than 50 percent of
all patients of the inpatient or
emergency departments of the eligible
hospital or CAH (POS 21 or 23) who
request an electronic copy of their
health information are provided it
within 3 business days.
(iii) Exclusion in accordance with
paragraph (b)(2) of this section. Any
eligible hospital or CAH that has no
requests from patients or their agents for
an electronic copy of patient health
information during the EHR reporting
period.
(12)(i) Objective. Provide patients
with an electronic copy of their
discharge instructions at time of
discharge, upon request.
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(ii) Measure. Subject to paragraph (c)
of this section, more than 50 percent of
all patients who are discharged from an
eligible hospital or CAH’s inpatient or
emergency department (POS 21 or 23)
and who request an electronic copy of
their discharge instructions are
provided it.
(iii) Exclusion in accordance with
paragraph (b)(2) of this section. Any
eligible hospital or CAH that has no
requests from patients or their agents for
an electronic copy of the discharge
instructions during the EHR reporting
period.
(13)(i) Objective. Capability to
exchange key clinical information (for
example, problem list, medication list,
medication allergies, and diagnostic test
results), among providers of care and
patient authorized entities
electronically.
(ii) Measure. Performed at least one
test of certified EHR technology’s
capacity to electronically exchange key
clinical information.
(14)(i) Objective. Protect electronic
health information created or
maintained by the certified EHR
technology through the implementation
of appropriate technical capabilities.
(ii) Measure. Conduct or review a
security risk analysis in accordance
with the requirements under 45 CFR
164.308(a)(1) and implement security
updates as necessary and correct
identified security deficiencies as part
of its risk management process.
(g) Stage 1 menu set criteria for
eligible hospitals or CAHs. Eligible
hospitals or CAHs must meet five of the
following objectives and associated
measures, one which must be specified
in paragraph (g)(8), (g)(9), or (g)(10) of
this section, except that the required
number of objectives and associated
measures is reduced by a hospital’s
paragraph (b)(2) of this section
exclusions specified in this paragraph:
(1)(i) Objective. Implement drugformulary checks.
(ii) Measure. The eligible hospital or
CAH has enabled this functionality and
has access to at least one internal or
external formulary for the entire EHR
reporting period.
(2)(i) Objective. Record advance
directives for patient 65 years old or
older.
(ii) Measure. Subject to paragraph (c)
of this section, more than 50 percent of
all unique patients 65 years old or older
admitted to the eligible hospital’s or
CAH’s inpatient (POS 21) have an
indication of an advance directive status
recorded as structured data.
(iii) Exclusion in accordance with
paragraph (b)(2) of this section. An
eligible hospital or CAH that admits no
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patients age 65 years old or older during
the EHR reporting period.
(3)(i) Objective. Incorporate clinical
lab-test results into EHR as structured
data.
(ii) Measure. Subject to paragraph (c)
of this section, more than 40 percent of
all clinical lab test results ordered by an
authorized provider of the eligible
hospital or CAH for patients admitted to
its inpatient or emergency department
(POS 21 and 23) during the EHR
reporting period whose results are either
in a positive/negative or numerical
format are incorporated in certified EHR
technology as structured data.
(4)(i) Objective. Generate lists of
patients by specific conditions to use for
quality improvement, reduction of
disparities, research, or outreach.
(ii) Measure. Subject to paragraph (c)
of this section, generate at least one
report listing patients of the eligible
hospital or CAH with a specific
condition.
(5)(i) Objective. Use certified EHR
technology to identify patient-specific
education resources and provide those
resources to the patient if appropriate.
(ii) Measure. More than 10 percent of
all unique patients admitted to the
eligible hospital’s or CAH’s inpatient or
emergency department (POS 21 or 23)
are provided patient-specific education
resources.
(6)(i) Objective. The eligible hospital
or CAH who receives a patient from
another setting of care or provider of
care or believes an encounter is relevant
should perform medication
reconciliation.
(ii) Measure. Subject to paragraph (c)
of this section, the eligible hospital or
CAH performs medication
reconciliation for more than 50 percent
of transitions of care in which the
patient is admitted to the eligible
hospital’s or CAH’s inpatient or
emergency department (POS 21 or 23).
(7)(i) Objective. The eligible hospital
or CAH that transitions their patient to
another setting of care or provider of
care or refers their patient to another
provider of care should provide
summary care record for each transition
of care or referral.
(ii) Measure. Subject to paragraph (c)
of this section, the eligible hospital or
CAH that transitions or refers their
patient to another setting of care or
provider of care provides a summary of
care record for more than 50 percent of
transitions of care and referrals.
(8)(i) Objective. Capability to submit
electronic data to immunization
registries or immunization information
systems and actual submission
according to applicable law and
practice.
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(ii) Measure. Performed at least one
test of certified EHR technology’s
capacity to submit electronic data to
immunization registries and follow up
submission if the test is successful
(unless none of the immunization
registries to which the eligible hospital
or CAH submits such information has
the capacity to receive the information
electronically).
(iii) Exclusion in accordance with
paragraph (b)(2) of this section. An
eligible hospital or CAH that
administers no immunizations during
the EHR reporting period or where no
immunization registry has the capacity
to receive the information
electronically.
(9)(i) Objective. Capability to submit
electronic data on reportable (as
required by State or local law) lab
results to public health agencies and
actual submission according to
applicable law and practice.
(ii) Measure. Performed at least one
test of certified EHR technology’s
capacity to provide electronic
submission of reportable lab results to
public health agencies and follow-up
submission if the test is successful
(unless none of the public health
agencies to which an eligible hospital or
CAH submits such information has the
capacity to receive the information
electronically).
(iii) Exclusion in accordance with
paragraph (b)(2) of this section. No
public health agency to which the
eligible hospital or CAH submits such
information has the capacity to receive
the information electronically.
(10)(i) Objective. Capability to submit
electronic syndromic surveillance data
to public health agencies and actual
submission according to applicable law
and practice.
(ii) Measure. Performed at least one
test of certified EHR technology’s
capacity to provide electronic
syndromic surveillance data to public
health agencies and follow-up
submission if the test is successful
(unless none of the public health
agencies to which an eligible hospital or
CAH submits information has the
capacity to receive the information
electronically).
(iii) Exclusion in accordance with
paragraph (a)(2) of this section. No
public health agency to which the
eligible hospital or CAH submits
information has the capacity to receive
the information electronically.
(h) Stage 2 criteria for EPs. Beginning
when final regulations for Stage 2 are
effective, an EP must satisfy the
following objectives and associated
measures:
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(1)(i) Objective. Use computerized
provider order entry (CPOE) for
medication orders directly entered by
any licensed healthcare professional
who can enter orders into the medical
record per state, local and professional
guidelines.
(ii) Measure. More than 60 percent of
all unique patients with at least one
medication in their medication list seen
by the EP have at least one medication
order entered using CPOE.
(iii) Exclusion. Any EP who writes
fewer than 100 prescriptions during the
EHR reporting period.
(2) [Reserved].
(i) Stage 2 criteria for eligible
hospitals or CAHs. Beginning when
final regulations for Stage 2 are
effective, an eligible hospital or CAH
must satisfy the following objectives
and associated measures:
(1)(i) Objective. Use computerized
provider order entry (CPOE) for
medication orders directly entered by
any licensed healthcare professional
who can enter orders into the medical
record per state, local and professional
guidelines.
(ii) Measure. More than 60 percent of
all unique patients with at least one
medication in their medication list
admitted to the eligible hospital’s or
CAH’s inpatient or emergency
department (POS 21 or 23) have at least
one medication order entered using
CPOE.
(2) [Reserved].
§ 495.8 Demonstration of meaningful use
criteria.
(a) Demonstration by EPs. An EP must
demonstrate that he or she satisfies each
of the applicable objectives and
associated measures under § 495.6 of
this subpart as follows:
(1) For CY 2011—(i) Attestation.
Attest, through a secure mechanism, in
a manner specified by CMS (or for a
Medicaid EP, in a manner specified by
the State), that during the EHR reporting
period, the EP—
(A) Used certified EHR technology,
and specify the technology used;
(B) Satisfied the required objectives
and associated measures under
§ 495.6(d) and § 495.6(e) of this subpart;
(C) Must specify the EHR reporting
period and provide the result of each
applicable measure for all patients seen
during the EHR reporting period for
which a selected measure is applicable;
(ii) Additional requirements for
Medicaid EPs. For Medicaid EPs, if, in
accordance with § 495.316 and
§ 495.332, CMS has approved a State’s
revised definition for meaningful use, in
addition to meeting paragraphs (a)(1)(i)
through (ii) of this section, the EP must
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also demonstrate meeting the State
revised definition using the method
approved by CMS; and
(iii) Exception for Medicaid EPs. If a
Medicaid EP has adopted, implemented
or upgraded certified EHR technology in
the first payment year, the EP need not
demonstrate meaningful use until the
second payment year, as described in
§ 495.6 and § 495.8 of this subpart.
(2) For CY 2012 and subsequent
years—
(i) Attestation. Attest, through a
secure mechanism, in a manner
specified by CMS (or for a Medicaid EP,
in a manner specified by the State) that
during the EHR reporting period, the
EP—
(A) Used certified EHR technology
and specify the technology used.
(B) Satisfied the required objectives
and associated measures under
§ 495.6(d) and § 495.6(e), except
§ 495.6(d)(10) ‘‘Report ambulatory
clinical quality measures to CMS or, in
the case of Medicaid EPs, the States.’’
(C) Must specify the EHR reporting
period and provide the result of each
applicable measure for all patients seen
during the EHR reporting period for
which a selected measure is applicable.
(ii) Reporting of clinical quality
information. For § 495.6(d)(10), ‘‘Report
ambulatory clinical quality measures to
CMS or, in the case of Medicaid EPs, the
States,’’ report the ambulatory clinical
quality measures selected by CMS
electronically to CMS (or in the case of
Medicaid EPs, the States) in the manner
specified by CMS (or in the case of
Medicaid EPs, the States).
(iii) Additional requirements for
Medicaid EPs. For Medicaid EPs, if, in
accordance with § 495.316 and
§ 495.332, CMS has approved a State’s
additional criteria for meaningful use, in
addition to meeting paragraphs (a)(2)(i)
through (iii), the EP must also
demonstrate meeting such additional
criteria using the method approved by
CMS.
(iv) Exception for Medicaid EPs. If a
Medicaid EP has adopted, implemented,
or upgrade certified EHR technology in
the first payment year, the EP need not
demonstrate that it is a meaningful EHR
user until the second payment year, as
described in § 495.6 and § 495.8 of this
subpart.
(3) For all CYs, an EP who practices
in multiple physical locations, not all of
which have certified EHR technology
available, will demonstrate meaningful
use using only the locations where the
EP has certified EHR technology
available. (See also § 495.4 regarding the
definition of meaningful EHR user).
(b) Demonstration by eligible
hospitals and CAHs. To successfully
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demonstrate that it is a meaningful EHR
user, an eligible hospital or CAH must
the following requirements:
(1) For FY 2011—
(i) Attestation. Attest, through a
secure mechanism, in a manner
specified by CMS (or for a Medicaid
eligible hospital, in a manner specified
by the State), that during the EHR
reporting period, the eligible hospital or
CAH—
(A) Used certified EHR and specify
the technology used.
(B) Satisfied the required objectives
and associated measures under
§ 495.6(f) and § 495.6(g).
(C) Must specify the EHR reporting
period and provide the result of each
applicable measure for all patients
admitted to the inpatient or emergency
department (POS 21 or 23) of the
hospital during the EHR reporting
period for which a selected measure is
applicable.
(ii) Additional requirements for
Medicaid eligible hospitals. For
Medicaid eligible hospitals, if, in
accordance with § 495.316 and
§ 495.332, CMS has approved a State’s
revised definition for meaningful use, in
addition to meeting paragraphs (b)(1)(i)
through (ii) of this section, the eligible
hospital must also demonstrate meeting
the State’s revised definition using the
method approved by CMS.
(iv) Exception for Medicaid eligible
hospitals. If a Medicaid eligible hospital
has adopted, implemented or upgraded
certified EHR technology in the first
payment year, the eligible hospital need
not demonstrate meaningful use until
the second payment year, as described
in § 495.6 and § 495.8 of this subpart.
(2) For FY 2012 and subsequent
years—
(i) Attestation. Attest, through a
secure mechanism, in a manner
specified by CMS (or for a Medicaid
eligible hospital, in a manner specified
by the State), that during the EHR
reporting period, the eligible hospital or
CAH—
(A) Used certified EHR and specify
the technology used;
(B) Satisfied the required objectives
and associated measures under
§ 495.6(f) and § 495.6(g), except
§ 495.6(f)(9) ‘‘Report hospital clinical
quality measures to CMS or, in the case
of Medicaid eligible hospitals, the
States;’’
(C) Must specify the EHR reporting
period and provide the result of each
applicable measure for all patients
admitted to the inpatient or emergency
department (POS 21 or 23) of the
hospital during the EHR reporting
period for which a selected measure is
applicable.
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(ii) Reporting clinical quality
information. For § 495.6(f)(9) ‘‘Report
hospital clinical quality measures to
CMS or, in the case of Medicaid eligible
hospitals, the States,’’ report the hospital
quality measures selected by CMS
electronically to CMS (or in the case of
Medicaid eligible hospitals, the States),
in the manner specified by CMS (or in
the case of Medicaid eligible hospitals,
the States).
(iv) Additional requirements for
Medicaid eligible hospitals. For
Medicaid eligible hospitals if, in
accordance with § 495.316 and
§ 495.332, CMS has approved a State’s
revised definition for meaningful use, in
addition to meeting paragraphs (b)(2)(i)
through (iii) of this section, the eligible
hospital must also demonstrate meeting
the State’s revised definition using the
method approved by CMS.
(v) Exception for Medicaid eligible
hospitals. If a Medicaid eligible hospital
has adopted, implemented, or upgraded
certified EHR technology in the first
payment year, the eligible hospital need
not demonstrate that it is a meaningful
EHR user until the second payment
year, as described in § 495.6 and § 495.8
of this subpart.
(c) Review of meaningful use. (1) CMS
(and in the case of Medicaid EPs and
eligible hospitals, States) may review an
EP, eligible hospital or CAH’s
demonstration of meaningful use.
(2) All EPs, eligible hospitals, and
CAHs must keep documentation
supporting their demonstration of
meaningful use for 6 years.
§ 495.10 Participation requirements for
EPs, eligible hospitals, and CAHs.
(a) An eligible hospital, CAH or EP
must submit in a manner specified by
CMS the following information in the
first payment year:
(1) Name of the EP, eligible hospital
or CAH.
(2) National Provider Identifier (NPI).
(3) Business address and phone
number.
(4) Such other information as
specified by CMS.
(b) In addition to the information
submitted under paragraph (a) of this
section, an eligible hospital or CAH,
must, in the first payment year, submit
in a manner specified by CMS its CMS
Certification Number (CCN) and its
Taxpayer Identification Number (TIN).
(c) Subject to paragraph (f) of this
section, in addition to the information
submitted under paragraph (a) of this
section, an EP must submit in a manner
specified by CMS, the Taxpayer
Identification Number (TIN) which may
be the EP’s Social Security Number
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(SSN) to which the EP’s incentive
payment should be made.
(d) In the event the information
specified in paragraphs (a) through (c) of
this section as previously submitted to
CMS is no longer accurate, the EP,
eligible hospital or CAH must provide
updated information to CMS or the State
on a timely basis in the manner
specified by CMS or the State.
(e) An EP that qualifies as both a
Medicaid EP and Medicare EP—
(1) Must notify CMS in the manner
specified by CMS as to whether he or
she elects to participate in the Medicare
or the Medicaid EHR incentive program;
(2) After receiving at least one EHR
incentive payment, may switch between
the two EHR incentive programs only
one time, and only for a payment year
before 2015;
(3) Must, for each payment year, meet
all of the applicable requirements,
including applicable patient volume
requirements, for the program in which
he or she chooses to participate
(Medicare or Medicaid);
(4) Is limited to receiving, in total, the
maximum payments the EP would
receive under the Medicaid EHR
program, as described in subpart D of
this part; and
(5) Is placed in the payment year the
EP would have been in had the EP
begun in and remained in the program
to which he or she has switched. For
example, an EP that begins receiving
Medicaid incentive payments in 2011,
and then switches to the Medicare
program for 2012, is in his or her second
payment year in 2012.
(f) Limitations on incentive payment
reassignments. (1) EPs are permitted to
reassign their incentive payments to
their employer or to an entity with
which they have a contractual
arrangement allowing the employer or
entity to bill and receive payment for
the EP’s covered professional services.
(2)(i) Assignments in Medicare must
be consistent with Section 1842(b)(6)(A)
of the Act and 42 CFR part 424 subpart
F.
(ii) Medicaid EPs may also assign
their incentive payments to a TIN for an
entity promoting the adoption of EHR
technology, consistent with subpart D of
this part.
(3) Each EP may reassign the entire
amount of the incentive payment to
only one employer or entity.
Subpart B—Requirements Specific to
the Medicare Program
§ 495.100
Definitions.
In this subpart unless otherwise
indicated—
Covered professional services means
(as specified in section 1848(k)(3) of the
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Act) services furnished by an EP for
which payment is made under, or is
based on, the Medicare physician fee
schedule.
Eligible hospital means a hospital
subject to the prospective payment
system specified in § 412.1(a)(1) of this
chapter, excluding those hospitals
specified in § 412.23 of this chapter, and
excluding those hospital units specified
in § 412.25 of this chapter.
Eligible professional (EP) means a
physician as defined in section 1861(r)
of the Act, which includes, with certain
limitations, all of the following types of
professionals:
(1) A doctor of medicine or
osteopathy.
(2) A doctor of dental surgery or
medicine.
(3) A doctor of podiatric medicine.
(4) A doctor of optometry.
(5) A chiropractor.
Geographic health professional
shortage area (HPSA) means a
geographic area that is designated by the
Secretary under section 332(a)(1)(A) of
the PHS Act as of December 31 of the
year prior to the payment year as having
a shortage of health professionals.
Qualifying CAH means a CAH that is
a meaningful EHR user for the EHR
reporting period for a cost reporting
period beginning during a payment
year.
Qualifying eligible professional
(qualifying EP) means an EP who is a
meaningful EHR user for the EHR
reporting period for a payment year and
who is not a hospital-based EP, as
determined for that payment year.
Qualifying hospital means an eligible
hospital that is a meaningful EHR user
for the EHR reporting period for a
payment year.
§ 495.102
Incentive payments to EPs.
(a) General rules. (1) Subject to
paragraph (b) of this section, in addition
to the amount otherwise paid under
section 1848 of the Act, there must be
paid to a qualifying EP (or to an
employer or entity in the cases
described in section 1842(b)(6)(A) of the
Act) for a payment year an amount
equal to 75 percent of the estimated
allowed charges for covered
professional services furnished by the
EP during the payment year.
(2) For purposes of this paragraph (a)
of this section, the estimated allowed
charges for the qualifying EP’s covered
professional services during the
payment year are determined based on
claims submitted no later than 2 months
after the end of the payment year, and,
in the case of a qualifying EP who
furnishes covered professional services
in more than one practice, are
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determined based on claims submitted
for the EP’s covered professional
services across all such practices.
(b) Limitations on amounts of
incentive payments.
(1) Except as otherwise provided in
paragraphs (b)(2) and (c) of this section,
the amount of the incentive payment
under paragraph (a) of this section for
each payment year is limited to the
following amounts:
(i) For the first payment year, $15,000
(or, if the first payment year for such
qualifying EP is 2011 or 2012, $18,000).
(ii) For the second payment year,
$12,000.
(iii) For the third payment year,
$8,000.
(iv) For the fourth payment year,
$4,000.
(v) For the fifth payment year, $2,000.
(vi) For any succeeding payment year
for such professional, $0.
(2)(i) If the first payment year for a
qualifying EP is 2014, then the payment
limit for a payment year for the
qualifying EP is the same as the amount
specified in paragraph (b)(1) of this
section for such payment year for a
qualifying EP whose first payment year
is 2013.
(ii) If the first payment year for a
qualifying EP is after 2014, then the
payment limit specified in this
paragraph for such EP for such year and
any subsequent year is $0.
(c) Increase in incentive payment
limit for EPs who predominantly furnish
services in a geographic HPSA. In the
case of a qualifying EP who in the year
prior to the payment year furnishes
more than 50 percent of his or her
covered professional services in a
geographic HPSA that is designated as
of December 31 of such year, the
incentive payment limit determined
under paragraph (b) of this section is to
be increased by 10 percent.
(d) Payment adjustment effective in
CY 2015 and subsequent years for
nonqualifying EPs.
(1) Subject to paragraph (d)(3) of this
section, beginning in 2015, for covered
professional services furnished by an EP
who is not a qualifying EP or a hospitalbased EP for the year, the payment
amount for such services is equal the
product of the applicable percent
specified in paragraph (d)(2) of this
section and the Medicare physician fee
schedule amount for such services.
(2) Applicable percent. Applicable
percent is as follows:
(i) For 2015, 99 percent if the EP is
not subject to the payment adjustment
for an EP who is not a successful
electronic prescriber under section
1848(a)(5) of the Act, or 98 percent if the
EP is subject to the payment adjustment
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for an EP who is not a successful
electronic prescriber under section
1848(a)(5) of the Act).
(ii) For 2016, 98 percent.
(iii) For 2017 and each subsequent
year, 97 percent.
(3) Significant hardship exception. (i)
The Secretary may, on a case-by-case
basis, exempt an EP who is not a
qualifying EP from the application of
the payment adjustment under
paragraph (d)(1) of this section if the
Secretary determines that compliance
with the requirement for being a
meaningful EHR user would result in a
significant hardship for the EP.
(ii) The Secretary’s determination to
grant an EP an exemption under
paragraph (d)(3)(i) of this section may be
renewed on an annual basis, provided
that in no case may an EP be granted an
exemption under paragraph (d)(3)(i) of
this section for more than 5 years.
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§ 495.104 Incentive payments to eligible
hospitals.
(a) General rule. A qualifying hospital
(as defined in this subpart) must receive
the special incentive payment as
determined under the formulas
described in paragraph (c) of this
section for the period specified in
paragraph (b) of this section.
(b) Transition periods. Subject to
paragraph (d) of this section and the
payment formula specified in paragraph
(c) of this section, qualifying hospitals
may receive incentive payments during
transition periods which comprise the
following fiscal years:
(1) Hospitals whose first payment year
is FY 2011 may receive such payments
for FYs 2011 through 2014.
(2) Hospitals whose first payment year
is FY 2012 may receive such payments
for FYs 2012 through 2015.
(3) Hospitals whose first payment year
is FY 2013 may receive such payments
for FYs 2013 through 2016.
(4) Hospitals whose first payment year
is FY 2014 may receive such payments
for FY 2014 through 2016.
(5) Hospitals whose first payment year
is FY 2015 may receive such payments
for FY 2015 through 2016.
(c) Payment methodology. (1) The
incentive payment for each payment
year is calculated as the product of the
following:
(i) The initial amount determined
under paragraph (c)(3) of this section.
(ii) The Medicare share fraction
determined under paragraph (c)(4) of
this section.
(iii) The transition factor determined
under paragraph (c)(5) of this section.
(2) Interim and final payments. CMS
uses data on hospital acute care
inpatient discharges, Medicare Part A
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acute care inpatient-bed-days, Medicare
Part C acute care inpatient-bed-days,
and total acute care inpatient-bed-days,
from the latest submitted 12-month
hospital cost report as the basis for
making preliminary incentive payments.
Final payments are determined at the
time of settling the first 12-month
hospital cost report for the hospital
fiscal year that begins on or after the
first day of the payment year, and
settled on the basis of data from that
cost reporting period.
(3) Initial amount. The initial amount
is equal to one of the following:
(i) For each hospital with 1,149 acute
care inpatient discharges or fewer,
$2,000,000.
(ii) For each hospital with at least
1,150 but no more than 23,000 acute
care inpatient discharges, $2,000,000 +
[$200 × (n ¥ 1,149)], where n is the
number of discharges for the hospital.
(iii) For each hospital with more than
23,000 acute care inpatient discharges,
$6,370,200.
(4) Medicare share fraction—(i)
General. (A) CMS determines the
Medicare share fraction for an eligible
hospital by using the number of
Medicare Part A, Medicare Part C, and
total acute care inpatient-bed-days using
data from the Medicare cost report as
specified by CMS.
(B) CMS computes the denominator of
the Medicare share fraction using the
charity care charges reported on the
hospital’s Medicare cost report.
(ii) The Medicare share fraction is the
ratio of—
(A) A numerator which is the sum
of—
(1) The number of inpatient-bed-days
which are attributable to individuals
with respect to whom payment may be
made under Part A, including
individuals enrolled in section 1876
Medicare cost plans; and
(2) The number of inpatient-bed-days
which are attributable to individuals
who are enrolled with a Medicare
Advantage organization (as defined in
§ 422.2 of this chapter).
(B) A denominator which is the
product of—
(1) The total number of acute care
inpatient-bed-days; and
(2) The total amount of the eligible
hospital’s charges, not including any
charges that are attributable to charity
care, divided by the estimated total
amount of the hospitals charges.
(5) Transition factor. For purposes of
the payment formula, the transition
factor is as follows:
(i) For hospitals whose first payment
year is FY 2011—
(A) 1 for FY 2011;
(B) 3⁄4 for FY 2012;
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44573
(C) 1⁄2 for FY 2013; and
(D) 1⁄4 for FY 2014.
(ii) For hospitals whose first payment
year is FY 2012—
(A) 1 for FY 2012;
(B) 3⁄4 for FY 2013;
(C) 1⁄2 for FY 2014; and
(D) 1⁄4 for FY 2015;
(iii) For hospitals whose first payment
year is FY 2013—
(A) 1 for FY 2013;
(B) 3⁄4 for FY 2014;
(C) 1⁄2 for FY 2015; and
(D) 1⁄4 for FY 2016.
(iv) For hospitals whose first payment
year is FY 2014—
(A) 3⁄4 for FY 2014;
(B) 1⁄2 for FY 2015; and
(C) 1⁄4 for FY 2016.
(v) For hospitals whose first payment
year is FY 2015—
(A) 1⁄2 for FY 2015; and
(B) 1⁄4 for FY 2016.
(d) No incentive payment for
nonqualifying hospitals. After the first
payment year, an eligible hospital will
not receive an incentive payment for
any payment year during which it is not
a qualifying hospital.
§ 495.106
Incentive payments to CAHs.
(a) Definitions. In this section, unless
otherwise indicated—
Payment year means a Federal fiscal
year beginning after FY 2010 but before
FY 2016.
Qualifying CAH means a CAH that
would meet the definition of a
meaningful EHR user at § 495.4, if it
were an eligible hospital.
Reasonable costs incurred for the
purchase of certified EHR technology for
a qualifying CAH means the reasonable
acquisition costs incurred for the
purchase of depreciable assets as
described in part 413 subpart G of this
chapter, such as computers and
associated hardware and software,
necessary to administer certified EHR
technology as defined in § 495.4,
excluding any depreciation and interest
expenses associated with the
acquisition.
(b) General rule. A qualifying CAH
receives an incentive payment for its
reasonable costs incurred for the
purchase of certified EHR technology, as
defined in paragraph (a) of this section,
in the manner described in paragraph
(c) of this section for a cost reporting
period beginning during a payment year
as defined in paragraph (a) of this
section.
(c) Payment methodology. (1)
Payment amount. A qualifying CAH
receives an incentive payment amount
equal to the product of its reasonable
costs incurred for the purchase of
certified EHR technology and the
Medicare share percentage.
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(2) Calculation of reasonable costs.
CMS or its Medicare contractor
computes a qualifying CAH’s reasonable
costs incurred for the purchase of
certified EHR technology, as defined in
paragraph (a) of this section, as the sum
of—
(i) The reasonable costs incurred for
the purchase of certified EHR
technology during the cost reporting
period that begins in a payment year;
and
(ii) Any reasonable costs incurred for
the purchase of certified EHR
technology in cost reporting periods
beginning in years prior to the payment
year which have not been fully
depreciated as of the cost reporting
period beginning in the payment year.
(3) Medicare share percentage.
Notwithstanding the percentage
applicable under § 413.70(a)(1) of this
chapter, the Medicare share percentage
equals the lesser of—
(i) 100 percent; or
(ii) The sum of the Medicare share
fraction for the CAH as calculated under
§ 495.104(c)(4) of this subpart and 20
percentage points.
(d) Incentive payments made to
CAHs. (1) The amount of the incentive
payment made to a qualifying CAH
under this section represents the
expensing and payment of the
reasonable costs computed in paragraph
(c) of this section in a single payment
year and, as specified in § 413.70(a)(5)
of this chapter, such payment is made
in lieu of payment that would have been
made under § 413.70(a)(1) of this
chapter for the reasonable costs of the
purchase of certified EHR technology
including depreciation and interest
expenses associated with the
acquisition.
(2) The amount of the incentive
payment made to a qualifying CAH
under this section is paid through a
prompt interim payment for the
applicable payment year after—
(i) The CAH submits the necessary
documentation, as specified by CMS or
its Medicare contractors, to support the
computation of the incentive payment
amount under this section; and
(ii) CMS or its Medicare contractor
reviews such documentation and
determines the interim amount of the
incentive payment.
(3) The interim incentive payment
made under this paragraph is subject to
a reconciliation process as specified by
CMS and the final incentive payment as
determined by CMS or its Medicare
contractor is considered payment in full
for the reasonable costs incurred for the
purchase of certified EHR technology in
a single payment year.
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(4) In no case may an incentive
payment be made with respect to a cost
reporting period beginning during a
payment year before FY 2011 or after FY
2015 and in no case may a CAH receive
an incentive payment under this section
with respect to more than 4 consecutive
payment years.
(e) Reductions in payment to CAHs.
For cost reporting periods beginning in
FY 2015, if a CAH is not a qualifying
CAH for a payment year, then the
payment for inpatient services furnished
by a CAH under § 413.70(a) of this
chapter is adjusted by the applicable
percentage described in § 413.70(a)(6) of
this chapter unless otherwise exempt
from such adjustment.
(f) Administrative or judicial review.
There is no administrative or judicial
review under sections 1869 or 1878 of
the Act, or otherwise, of the—
(1) Methodology and standards for
determining the amount of payment, the
reasonable cost, and adjustments
described in this section including
selection of periods for determining,
and making estimates or using proxies
of, inpatient-bed-days, hospital charges,
charity charges, and the Medicare share
percentage as described in this section;
(2) Methodology and standards for
determining if a CAH is a qualifying
CAH under this section;
(3) Specification of EHR reporting
periods, cost reporting periods, payment
years, and fiscal years used to compute
the CAH incentive payment as specified
in this section; and
(4) Identification of the reasonable
costs used to compute the CAH
incentive payment under paragraph (c)
of this section including any
reconciliation of the CAH incentive
payment amount made under paragraph
(d) of this section.
§ 495.108
Posting of required information.
(a) CMS posts, on its Internet Web
site, the following information regarding
EPs, eligible hospitals, and CAHs
receiving an incentive payment under
subparts B and C of this part:
(1) Name.
(2) Business addressee.
(3) Business phone number.
(4) Such other information as
specified by CMS.
(b) CMS posts, on its Internet Web
site, the following information for
qualifying MA organizations that
receive an incentive payment under
subpart C of this part—
(1) The information specified in
paragraph (a) of this section for each of
the qualifying MA organization’s MA
plan information; and
(2) The information specified in
paragraph (a) of this section for each of
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the qualifying MA organization’s MA
EPs and MA-affiliated eligible hospitals.
§ 495.110 Preclusion on administrative
and judicial review.
There is no administrative or judicial
review under sections 1869 or 1878 of
the Act, or otherwise, of the following:
(a) For EPs—
(1) The methodology and standards
for determining EP incentive payment
amounts;
(2) The methodology and standards
for determining the payment
adjustments that apply to EPs beginning
with 2015;
(3) The methodology and standards
for determining whether an EP is a
meaningful EHR user, including—
(i) The selection of clinical quality
measures; and
(ii) The means of demonstrating
meaningful EHR use.
(4) The methodology and standards
for determining the hardship exception
to the payment adjustments;
(5) The methodology and standards
for determining whether an EP is
hospital-based; and
(6) The specification of the EHR
reporting period, as well as whether
payment will be made only once, in a
single consolidated payment, or in
periodic installments.
(b) For eligible hospitals—
(1) The methodology and standards
for determining the incentive payment
amounts made to eligible hospitals,
including—
(i) The estimates or proxies for
determining discharges, inpatient-beddays, hospital charges, charity charges,
and Medicare share; and
(ii) The period used to determine such
estimate or proxy;
(2) The methodology and standards
for determining the payment
adjustments that apply to eligible
hospitals beginning with FY 2015;
(3) The methodology and standards
for determining whether an eligible
hospital is a meaningful EHR user,
including—
(i) The selection of clinical quality
measures; and
(ii) The means of demonstrating
meaningful EHR use.
(4) The methodology and standards
for determining the hardship exception
to the payment adjustments; and
(5) The specification of the EHR
reporting period, as well as whether
payment will be made only once, in a
single consolidated payment, or in
periodic installments.
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Subpart C—Requirements Specific to
Medicare Advantage (MA)
Organizations
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§ 495.200
Definitions.
As used in this subpart:
First payment year means with
respect to—
(1) Covered professional services
furnished by a qualifying MA EP, the
first calendar year for which an
incentive payment is made for such
services under this subsection to a
qualifying MA organization.
(2) Qualifying MA-affiliated eligible
hospitals, the first fiscal year for which
an incentive payment is made for
qualifying MA-affiliated eligible
hospitals under this section to a
qualifying MA organization.
Inpatient-bed-days is defined in the
same manner and is used in the same
manner as that term is defined and used
for purposes of implementing section
4201(a) of the American Recovery and
Reinvestment Act of 2009 with respect
to the Medicare FFS hospital EHR
incentive program in § 495.104 of this
part.
Patient care services means health
care services for which payment would
be made under, or for which payment
would be based on, the fee schedule
established under Medicare Part B if
they were furnished by an EP to a
Medicare beneficiary.
Payment year means—
(1) For a qualifying MA EP, a calendar
year (CY) beginning with CY 2011 and
ending with CY 2016; and
(2) For an eligible hospital, a Federal
fiscal year (FY) beginning with FY 2011
and ending with FY 2016.
Qualifying MA-affiliated eligible
hospital means an eligible hospital
under section 1886(n)(6) of the Act that
is under common corporate governance
with a qualifying MA organization, for
which at least two thirds of the
Medicare hospital discharges (or beddays) are of (or for) Medicare
individuals enrolled under MA plans,
and that is a meaningful user of certified
EHR technology as defined by § 495.4 of
this part. In the case of a hospital for
which at least one-third of whose
Medicare bed-days for the year are
covered under Part A rather than Part C,
payment for that payment year must
only be made under section 1886(n) of
the Act and not under this section.
Qualifying MA EP means all of the
following:
(1) A physician (as described in
section 1861(r) of the Act), including a
doctor of medicine or osteopathy who is
either of the following:
(i) Employed by a qualifying MA
organization.
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(ii) Employed by, or is a partner of, an
entity that through a contract with a
qualifying MA organization furnishes at
least 80 percent of the entity’s Medicare
patient care services to enrollees of such
organization.
(2) Furnishes at least 80 percent of his
or her professional services covered
under Title XVIII to enrollees of the
qualifying MA organization.
(3) Furnishes, on average, at least 20
hours per week of patient care services
to enrollees of the qualifying MA
organization during the EHR reporting
period.
(4) Is a meaningful user of certified
EHR technology in accordance with
§ 495.4 of this part.
(5) Is not a ‘‘hospital-based EP’’ as that
term is defined in § 495.4 of this Part.
Qualifying MA organization means a
MA organization that is organized as a
health maintenance organization (HMO)
as defined in section 2791(b)(3) of the
Public Health Service (PHS) Act which
includes a Federally qualified HMO, an
organization recognized as an HMO
under State law, or a similar
organization regulated for solvency
under State law in the same manner and
to the same extent as an HMO.
Second, third, fourth, and fifth
payment year means with respect to
incentive payments for qualifying—
(1) MA EPs to a qualifying MA
organization, each successive calendar
year immediately following the first
payment year for the qualifying MA
organization. The first payment year and
each successive year immediately
following the first payment year, for the
qualifying MA organizations, through
2016, is the same for all qualifying MA
EPs with respect to any specific
qualifying MA organization.
(2) MA-affiliated eligible hospitals to
a qualifying MA organization, each
successive fiscal year immediately
following the first payment year for the
qualifying MA organization.
Under common corporate governance
means that a qualifying MA
organization and a qualifying MAaffiliated eligible hospital have a
common parent corporation, that one is
a subsidiary of the other, or that the
organization and the hospital have a
common board of directors.
§ 495.202 Identification of qualifying MA
organizations, MA–EPs and MA-affiliated
eligible hospitals.
(a) Identification of qualifying MA
organizations. (1) Beginning with bids
due in June 2011 (for plan year 2012),
MA organizations seeking
reimbursement for qualifying MA EPs
and qualifying MA-affiliated eligible
hospitals under the MA EHR incentive
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program are required to identify
themselves to CMS in a form and
manner specified by CMS, as part of
submissions of initial bids under section
1854(a)(1)(A) of the Act.
(2) Qualifying MA organizations
offering MA HMO plans, absent
evidence to the contrary, are deemed to
meet the definition of HMO in 42 U.S.C.
300gg–91(b)(3)—section 2791(b)(3) of
the PHS Act.
(3) Qualifying MA organizations
offering MA plan types other than
HMOs, must attest to the fact that they
meet the definition of HMO in 42 U.S.C.
300gg–91(b)(3)—section 2791(b)(3) of
the PHS Act.
(4) Beginning with bids due in June
2014 (for plan year 2015), all MA
organizations with potentially
qualifying MA EPs or potentially
qualifying MA-affiliated eligible
hospitals under the MA EHR incentive
program must identify themselves to
CMS in a form and manner specified by
CMS, as part of submissions of initial
bids under section 1854(a)(1)(A) of the
Act. ‘‘Potentially qualifying MA EPs’’
and ‘‘potentially qualifying MAaffiliated eligible hospitals’’ are those
EPs and hospitals that meet the
respective definitions of ‘‘qualifying MA
EP’’ and ‘‘qualifying MA-affiliated
eligible hospital’’ in § 495.200 but who
(or which) are not meaningful users of
certified EHR technology.
(b) Identification of qualifying MA EPs
and qualifying MA-affiliated eligible
hospitals.
(1) A qualifying MA organization, as
part of its initial bid starting with plan
year 2012, must make a preliminary
identification of potentially qualifying
MA EPs and potentially qualifying MAaffiliated eligible hospitals for which the
organization is seeking incentive
payments for the current plan year.
(2) A qualifying MA organization
must provide CMS with the following
for each MA EP or eligible hospital
when reporting under either paragraph
(b)(1) or (b)(3) of this section:
(i) The MA EP’s or MA-affiliated
eligible hospital’s name.
(ii) The address of the MA EP’s
practice or MA-affiliated eligible
hospital’s location.
(iii) NPI.
(iv) An attestation by MA organization
specifying that the MA EP or MAaffiliated eligible hospital meets the
eligibility criteria.
(3) Final identification of potentially
qualifying MA EP or MA-affiliated
eligible hospital must be made within
60 days of the close of the payment year
as defined in § 495.200 for which MA
EHR incentive payments are being
sought.
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(4) Beginning plan year 2015 and for
subsequent plan years, all qualifying
MA organizations, as part of their initial
bids in June for the following plan year
must—
(i) Identify potentially qualifying MA
EPs and potentially qualifying MAaffiliated eligible hospitals;
(ii) Include information specified in
paragraph (b)(2)(i)(A) through (C) of this
section for each professional and
hospital.
(iii) Include an attestation that each
professional and hospital either meets
or does not meet the EHR incentive
payment eligibility criteria.
srobinson on DSKHWCL6B1PROD with RULES2
§ 495.204 Incentive payments to qualifying
MA organizations for MA–EPs and MAaffiliated eligible hospitals.
(a) General rule. A qualifying MA
organization receives an incentive
payment for its qualifying MA–EPs and
its qualifying MA-eligible hospitals. The
incentive payment amount paid to a
qualifying MA organization for a—
(1) Qualifying MA–EP is the amount
determined under paragraph (b) of this
section; and
(2) Qualifying MA-eligible hospital is
the amount determined under paragraph
(c) of this section.
(b) Amount payable to qualifying MA
organization for qualifying MA EPs.
(1) CMS substitutes an amount
determined to be equivalent to the
amount computed under § 495.102 of
this part.
(2) The qualifying MA organization
must report to CMS within 60 days of
the close of the calendar year, the
aggregate annual amount of revenue
attributable to providing services that
would otherwise be covered as
professional services under Part B
received by each qualifying MA EP for
enrollees in MA plans of the MA
organization in the payment year.
(3) CMS calculates the incentive
amount for the MA organization for
each qualifying MA EP as an amount
equal to 75 percent of the reported
annual revenue specified in paragraph
(b)(2) of this section, up to the
maximum amounts specified under
section 1848(o)(1)(B) of the Act.
(4) For qualifying MA EPs who are
compensated on a salaried basis, CMS
requires the qualifying MA organization
to develop a methodology for estimating
the portion of each qualifying MA EP’s
salary attributable to providing services
that would otherwise be covered as
professional services under Part B to
MA plan enrollees of the MA
organization in the payment year. The
methodology—
(i) Must be approved by CMS; and
(ii) May include an additional amount
related to overhead, where appropriate,
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estimated to account for the MAenrollee related Part B practice costs of
the salaried qualifying MA EP.
(iii) Methodological proposals must
be submitted to CMS by June of the
payment year and must be auditable by
an independent third-party. CMS will
review and approve or disapprove such
proposals in a timely manner.
(5) For qualifying MA EPs who are not
salaried, qualifying MA organizations
may obtain attestations from such
qualifying MA EPs (or from entities that
the MA EPs are employed by or with
which they have a partnership interest)
as to the amount of compensation
received by such EPs for MA plan
enrollees of the MA organization. The
organizations may submit to CMS
compensation information for each such
MA EP based on such attestations.
(6) For qualifying MA EPs who are not
salaried, qualified MA organizations
may have qualifying MA EPs (or from
entities that the MA EPs are employed
by or with which they have a
partnership interest) send MA
organization compensation information
directly to CMS. CMS will use the
information provided in this
subparagraph or paragraph (b)(5) of this
section for no other purpose than to
compute the amount of EHR incentive
payment due the MA organization.
(c) Amount payable to qualifying MA
organization for qualifying MAaffiliated eligible hospitals. (1)(i) CMS
substitutes an amount determined to be
equivalent to the amount computed
under § 495.104, to the extent data are
not available to compute payments for
qualifying MA-affiliated eligible
hospitals under the Medicare FFS EHR
hospital incentive program.
(ii) CMS uses the same methodology
and defines ‘‘inpatient-bed-days’’and
other terms as used under the Medicare
FFS EHR hospital incentive program in
§ 495.104 of this part in computing
amounts due qualifying MA
organizations for MA-affiliated eligible
hospitals.
(2) To the extent data are available,
qualifying MA organizations must
receive hospital incentive payments
through their affiliated hospitals under
the Medicare FFS EHR hospital
incentive program, rather than through
the MA EHR hospital incentive
program.
(d) Payment to qualifying MA
organizations. CMS makes payment to
qualifying MA organizations for
qualifying MA EPs only under the MA
EHR incentive program and not under
the Medicare FFS EHR incentive
program to the extent an EP has earned
less than the maximum incentive
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payment for the same period under the
Medicare FFS EHR incentive program.
(e) Payment review under MA. To
ensure the accuracy of the incentive
payments, CMS conducts selected
compliance reviews of qualifying MA
organizations to ensure that EPs and
eligible hospitals for which such
qualifying organizations received
incentive payments were meaningful
EHR users in accordance with § 422.504
of this chapter.
(1) The reviews include validation of
the status of the organization as a
qualifying MA organization, verification
of meaningful use and review of data
used to calculate incentive payments.
(2) MA organizations are required to
maintain evidence of their qualification
to receive incentive payments and the
data necessary to accurately calculate
incentive payments.
(3) Documents and records must be
maintained for 6 years from the date
such payments are made with respect to
a given payment year.
(4) Payments that result from
incorrect or fraudulent attestations, cost
data, or any other submission required
to establish eligibility or to qualify for
such payment, will be recouped by CMS
from the MA organization.
§ 495.206 Timeframe for payment to
qualifying MA organizations.
(a) CMS makes payment to qualifying
MA organizations for qualifying MA EPs
under the MA EHR incentive program
after computing incentive payments due
under the Medicare FFS EHR incentive
program according to § 495.102.
(b) Payments to qualifying MA
organizations for qualifying MAaffiliated eligible hospitals under
common corporate governance are made
under the Medicare FFS EHR incentive
program, following the timeline in
specified in § 495.104 of this part. To
the extent sufficient data do not exist to
pay qualifying MA-affiliated eligible
hospitals under common corporate
governance under the Medicare FFS
EHR incentive program, payment is
made under the MA EHR incentive
program, following the same timeline in
§ 495.104 of this part.
§ 495.208
Avoiding duplicate payment.
(a) Unless a qualifying MA EP is
entitled to a maximum payment for a
year under the Medicare FFS EHR
incentive program, payment for such an
individual is only made under the MA
EHR incentive program to a qualifying
MA organization.
(b) Payment to qualifying MA
organizations for a qualifying MAaffiliated eligible hospital under
common governance only occurs under
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the MA EHR incentive program to the
extent that sufficient data does not exist
to pay such hospital under the Medicare
FFS hospital incentive program under
§ 495.104 of this part. In no event are
EHR incentive payments made for a
hospital for a payment year under this
section to the extent they have been
made for the same hospital for the same
payment year under § 495.104 of this
part.
(c) Each qualifying MA organization
must ensure that all potentially
qualifying MA EPs are enumerated
through the NPI system and that other
identifying information required under
§ 495.202(b) is provided to CMS.
§ 495.210
Meaningful EHR user attestation.
(a) Qualifying MA organizations are
required to attest, in a form and manner
specified by CMS, that each qualifying
MA EP and qualifying MA-affiliated
eligible hospitals is a meaningful EHR
user.
(b) Qualifying MA organizations are
required to attest within 60 days after
the close of a calendar year whether
each qualifying MA EP is a meaningful
EHR user.
(c) Qualifying MA organizations are
required to attest within 60 days after
close of the FY whether each qualifying
MA-affiliated eligible hospital is a
meaningful EHR user.
srobinson on DSKHWCL6B1PROD with RULES2
§ 495.212
Limitation on review.
(a) There is no administrative or
judicial review under section 1869 or
1878 of the Act, or otherwise of the
methodology and standards for
determining payment amounts and
payment adjustments under the MA
EHR EP incentive program. This
includes provisions related to
duplication of payment avoidance and
rules developed related to the fixed
schedule for application of limitation on
incentive payments for all qualifying
MA EPs related to a specific qualifying
MA organization. It also includes the
methodology and standards developed
for determining qualifying MA EPs and
the methodology and standards for
determining a meaningful EHR user,
including the means of demonstrating
meaningful use and the selection of
measures.
(b) There is no administrative or
judicial review under sections 1869 or
1878 of the Act, or otherwise, of the
methodology and standards for
determining payment amounts and
payment adjustments under the MA
EHR hospital incentive program. This
includes provisions related to
duplication of payment avoidance. It
also includes the methodology and
standards developed for determining
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qualifying MA-affiliated eligible
hospitals and the methodology and
standards for determining a meaningful
EHR user, including the means of
demonstrating meaningful use and the
selection of measures.
Subpart D—Requirements Specific to
the Medicaid Program
§ 495.300
Basis and purpose.
This subpart implements section 4201
of the American Reinvestment and
Recovery Act of 2009 and sections
1903(a)(3)(F) and 1903(t) of the Act,
which authorize States, at their option,
to provide for incentive payments to
Medicaid providers for adopting,
implementing, or upgrading certified
EHR technology or for meaningful use of
such technology. This subpart also
provides enhanced Federal financial
participation (FFP) to States to
administer these incentive payments.
§ 495.302
Definitions.
As used in this subpart—
Acceptance documents mean written
evidence of satisfactory completion of
an approved phase of work or contract
and acceptance thereof by the State
agency.
Acquisition means to acquire health
information technology (HIT)
equipment or services for the purpose of
implementation and administration
under this part from commercial sources
or from State or local government
resources.
Acute care hospital means a health
care facility—
(1) Where the average length of
patient stay is 25 days or fewer; and
(2) With a CMS certification number
(previously known as the Medicare
provider number) that has the last four
digits in the series 0001–0879 or 1300–
1399
Adopt, implement or upgrade
means—
(1) Acquire, purchase, or secure
access to certified EHR technology;
(2) Install or commence utilization of
certified EHR technology capable of
meeting meaningful use requirements;
or
(3) Expand the available functionality
of certified EHR technology capable of
meeting meaningful use requirements at
the practice site, including staffing,
maintenance, and training, or upgrade
from existing EHR technology to
certified EHR technology per the ONC
EHR certification criteria.
Children’s hospital means a
separately certified children’s hospital,
either freestanding or hospital-withinhospital that—
(1) Has a CMS certification number,
(previously known as the Medicare
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provider number), that has the last 4
digits in the series 3300–3399; and
(2) Predominantly treats individuals
under 21 years of age.
Entities promoting the adoption of
certified electronic health record
technology means the State-designated
entities that are promoting the adoption
of certified EHR technology by enabling
oversight of the business, operational
and legal issues involved in the
adoption and implementation of
certified EHR technology or by enabling
the exchange and use of electronic
clinical and administrative data
between participating providers, in a
secure manner, including maintaining
the physical and organizational
relationship integral to the adoption of
certified EHR technology by eligible
providers.
Health information technology
planning advance planning document
(HIT PAPD) means a plan of action that
requests FFP and approval to
accomplish the planning necessary for a
State agency to determine the need for
and plan the acquisition of HIT
equipment or services or both and to
acquire information necessary to
prepare a HIT implementation advanced
planning document or request for
proposal to implement the State
Medicaid HIT plan.
HIT implementation advance
planning document (HIT IAPD) means a
plan of action that requests FFP and
approval to acquire and implement the
proposed State Medicaid HIT plan
services or equipment or both.
Medicaid information technology
architecture (MITA) is both an initiative
and a framework. It is a national
framework to support improved systems
development and health care
management for the Medicaid
enterprise. It is an initiative to establish
national guidelines for technologies and
processes that enable improved program
administration for the Medicaid
enterprise. The MITA initiative includes
an architecture framework, models,
processes, and planning guidelines for
enabling State Medicaid enterprises to
meet common objectives with the
framework while supporting unique
local needs.
Medicaid management information
system (MMIS) means a mechanized
claims processing and information
retrieval system—referred to as
Medicaid Management Information
Systems (MMIS)—that meets specified
requirements and that the Department
has found (among other things) is
compatible with the claims processing
and information retrieval systems used
in the administration of the Medicare
program. The objectives of the MMIS are
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to include claims processing and
retrieval of utilization and management
information necessary for program
administration and audit and must
coordinate with other mechanized
systems and subsystems that perform
other functions, such as eligibility
determination.
Needy individuals mean individuals
that meet one of following:
(1) Received medical assistance from
Medicaid or the Children’s Health
Insurance Program. (or a Medicaid or
CHIP demonstration project approved
under section 1115 of the Act).
(2) Were furnished uncompensated
care by the provider.
(3) Were furnished services at either
no cost or reduced cost based on a
sliding scale determined by the
individuals’ ability to pay.
Patient volume means the minimum
participation threshold (as described at
§ 495.304(c) through (e)) that is
estimated through a numerator and
denominator, consistent with the
SMHP, and that meets the requirements
of § 495.306.
Practices predominantly means an EP
for whom the clinical location for over
50 percent of his or her total patient
encounters over a period of 6 months in
the most recent calendar year occurs at
a federally qualified health center or
rural health clinic.
Service oriented architecture or
service component based architecture
means organizing and developing
information technology capabilities as
collaborating services that interact with
each other based on open standards.
State Medicaid health information
technology plan (SMHP) means a
document that describes the State’s
current and future HIT activities.
State self-assessment means a process
that a State uses to review its strategic
goals and objectives, measure its current
business processes and capabilities
against the (MITA) business capabilities
and ultimately develops target
capabilities to transform its Medicaid
enterprise to be consistent with the
MITA principles.
srobinson on DSKHWCL6B1PROD with RULES2
§ 495.304 Medicaid provider scope and
eligibility.
(a) General rule. The following
Medicaid providers are eligible to
participate in the HIT incentives
program:
(1) Medicaid EPs.
(2) Acute care hospitals.
(3) Children’s hospitals.
(b) Medicaid EP. The Medicaid
professional eligible for an EHR
incentive payment is limited to the
following when consistent with the
scope of practice regulations, as
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applicable for each professional
(§ 440.50, § 440.60, § 440.100; § 440.165,
and § 440.166):
(1) A physician.
(2) A dentist.
(3) A certified nurse-midwife.
(4) A nurse practitioner.
(5) A physician assistant practicing in
a Federally qualified health center
(FQHC) led by a physician assistant or
a rural health clinic (RHC), that is so led
by a physician assistant.
(c) Additional requirements for the
Medicaid EP. To qualify for an EHR
incentive payment, a Medicaid EP must,
for each year for which the EP seeks an
EHR incentive payment, not be hospitalbased as defined at § 495.4 of this
subpart, and meet one of the following
criteria:
(1) Have a minimum 30 percent
patient volume attributable to
individuals receiving Medicaid.
(2) Have a minimum 20 percent
patient volume attributable to
individuals receiving Medicaid, and be
a pediatrician.
(3) Practice predominantly in a FQHC
or RHC and have a minimum 30 percent
patient volume attributable to needy
individuals, as defined at § 495.302.
(d) Exception. The hospital-based
exclusion in paragraph (c) of this
section does not apply to the MedicaidEP qualifying based on practicing
predominantly at a FQHC or RHC.
(e) Additional requirement for the
eligible hospital. To be eligible for an
EHR incentive payment for each year for
which the eligible hospital seeks an
EHR incentive payment, the eligible
hospital must meet the following
criteria:
(1) An acute care hospital must have
at least a 10 percent Medicaid patient
volume for each year for which the
hospital seeks an EHR incentive
payment.
(2) A children’s hospital is exempt
from meeting a patient volume
threshold.
§ 495.306
Establishing patient volume.
(a) General rule. A Medicaid provider
must annually meet patient volume
requirements of § 495.304, as these
requirements are established through
the State’s SMHP in accordance with
the remainder of this section.
(b) State option(s) through SMHP. A
State must submit through the SMHP
the option or options it has selected for
measuring patient volume. A State must
select the methodology described in
either paragraph (c) or paragraph (d) of
section (or both methodologies). In
addition, or as an alternative, a State
may select the methodology described
in paragraph (g) of this section.
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(c) Methodology, patient encounter.
(1) EPs. To calculate Medicaid patient
volume, an EP must divide:
(i) The total Medicaid patient
encounters in any representative,
continuous 90-day period in the
preceding calendar year; by
(ii) The total patient encounters in the
same 90-day period.
(2) Eligible hospitals. To calculate
Medicaid patient volume, an eligible
hospital must divide—
(i) The total Medicaid encounters in
any representative, continuous 90-day
period in the preceding fiscal year; by
(ii) The total encounters in the same
90-day period.
(3) Needy individual patient volume.
To calculate needy individual patient
volume, an EP must divide—
(i) The total needy individual patient
encounters in any representative,
continuous 90-day period in the
preceding calendar year; by
(ii) The total patient encounters in the
same 90-day period.
(d) Methodology, patient panel.
(1) EPs. To calculate Medicaid patient
volume, an EP must divide:
(i) (A) The total Medicaid patients
assigned to the EP’s panel in any
representative, continuous 90-day
period in the preceding calendar year
when at least one Medicaid encounter
took place with the Medicaid patient in
the year prior to the 90-day period; plus
(B) Unduplicated Medicaid
encounters in the same 90-day period;
by
(ii)(A) The total patients assigned to
the provider in that same 90-day period
with at least one encounter taking place
with the patient during the year prior to
the 90-day period; plus
(B) All unduplicated patient
encounters in the same 90-day period.
(2) Needy individual patient volume.
To calculate needy individual patient
volume an EP must divide—
(i)(A) The total Needy Individual
patients assigned to the EP’s panel in
any representative, continuous 90-day
period in the preceding calendar year
when at least one Needy Individual
encounter took place with the Medicaid
patient in the year prior to the 90-day
period; plus
(B) Unduplicated Needy Individual
encounters in the same 90-day period,
by
(ii)(A) The total patients assigned to
the provider in that same 90-day period
with at least one encounter taking place
with the patient during the year prior to
the 90-day period, plus
(B) All unduplicated patient
encounters in the same 90-day period.
(e) For purposes of this section, the
following rules apply:
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(1) For purposes of calculating EP
patient volume, a Medicaid encounter
means services rendered to an
individual on any one day where—
(i) Medicaid (or a Medicaid
demonstration project approved under
section 1115 of the Act) paid for part or
all of the service; or
(ii) Medicaid (or a Medicaid
demonstration project approved under
section 1115 of the Act) paid all or part
of the individual’s premiums, copayments, and cost-sharing.
(2) For purposes of calculating
hospital patient volume, both of the
following definitions in paragraphs
(e)(2)(i) and (e)(2)(ii) of this section may
apply:
(i) A Medicaid encounter means
services rendered to an individual per
inpatient discharge where—
(A) Medicaid (or a Medicaid
demonstration project approved under
section 1115 of the Act) paid for part or
all of the service; or
(B) Medicaid (or a Medicaid
demonstration project approved under
section 1115 of the Act) paid all or part
of the individual’s premiums, copayments, and/or cost-sharing.
(ii) A Medicaid encounter means
services rendered in an emergency
department on any one day where—
(A) Medicaid (or a Medicaid
demonstration project approved under
section 1115 of the Act) paid for part or
all of the service; or
(B) Medicaid (or a Medicaid
demonstration project approved under
section 1115 of the Act) paid all or part
of the individual’s premiums, copayments, and cost-sharing.
(3) For purposes of calculating needy
individual patient volume, a needy
patient encounter means services
rendered to an individual on any one
day where—
(i) Medicaid or CHIP (or a Medicaid
or CHIP demonstration project approved
under section 1115 of the Act) paid for
part or all of the service;
(ii) Medicaid or CHIP (or a Medicaid
or CHIP demonstration project approved
under section 1115 of the Act) paid all
or part of the individual’s premiums, copayments, or cost-sharing;
(iii) The services were furnished at no
cost; and calculated consistent with
§ 495.310(h); or
(iv) The services were paid for at a
reduced cost based on a sliding scale
determined by the individual’s ability to
pay.
(f) Exception. A children’s hospital is
not required to meet Medicaid patient
volume requirements.
(g) Establishing an alternative
methodology. A State may submit to
CMS for review and approval through
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the SMHP an alternative from the
options included in paragraphs (c) and
(d) of this section, so long as it meets the
following requirements:
(1) It is submitted consistent with all
rules governing the SMHP at § 495.332.
(2) Has an auditable data source.
(3) Has received input from the
relevant stakeholder group.
(4) It does not result, in the aggregate,
in fewer providers becoming eligible
than the methodologies in either
paragraphs (c) and (d) of this section.
(h) Group practices. Clinics or group
practices will be permitted to calculate
patient volume at the group practice/
clinic level, but only in accordance with
all of the following limitations:
(1) The clinic or group practice’s
patient volume is appropriate as a
patient volume methodology calculation
for the EP.
(2) There is an auditable data source
to support the clinic’s or group
practice’s patient volume determination.
(3) All EPs in the group practice or
clinic must use the same methodology
for the payment year.
(4) The clinic or group practice uses
the entire practice or clinic’s patient
volume and does not limit patient
volume in any way.
(5) If an EP works inside and outside
of the clinic or practice, then the patient
volume calculation includes only those
encounters associated with the clinic or
group practice, and not the EP’s outside
encounters.
§ 495.308 Net average allowable costs as
the basis for determining the incentive
payment.
(a) The first year of payment. (1) The
incentive is intended to offset the costs
associated with the initial adoption,
implementation or upgrade of certified
electronic health records technology.
(2) The maximum net average
allowable costs for the first year are
$25,000.
(b) Subsequent payment years. (1) The
incentive is intended to offset
maintenance and operation of certified
EHR technology.
(2) The maximum net average
allowable costs for each subsequent year
are $10,000.
§ 495.310 Medicaid provider incentive
payments.
(a) Rules for Medicaid EPs. The
Medicaid EP’s incentive payments are
subject to all of the following
limitations:
(1) First payment year. (i) For the first
payment year, payment under this
subpart may not exceed 85 percent of
the maximum threshold of $25,000,
which equals $21,250.
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(ii) Medicaid EPs are responsible for
payment for the remaining 15 percent of
the net average allowable cost of
certified EHR technology, or $3,750 for
the first payment year.
(iii) An EP may not begin receiving
payments any later than CY 2016.
(2) Subsequent annual payment years.
(i) For subsequent payment years,
payment may not exceed 85 percent of
the maximum threshold of $10,000,
which equals $8,500.
(ii) Medicaid EPs are responsible for
payment for the remaining 15 percent of
the net average allowable cost of
certified EHR technology, or $1,500 per
payment year.
(iii) Payments after the first payment
year may continue for a maximum of 5
years.
(iv) Medicaid EPs may receive
payments on a non-consecutive, annual
basis.
(v) No payments may be made after
CY 2021.
(3) Maximum incentives. In no case
may a Medicaid EP participate for more
than a total of 6 years, and in no case
will the maximum incentive over a 6year period exceed $63,750.
(4) Limitation. For a Medicaid EP who
is a pediatrician described in paragraph
(b) of this section payment is limited as
follows:
(i) The maximum payment in the first
payment year is further reduced by twothirds, which equals $14,167.
(ii) The maximum payment in
subsequent payment years is further
reduced by two-thirds, which equals
$5,667.
(iii) In no case will the maximum
incentive payment to a pediatrician
under this limitation exceed $42,500
over a 6-year period.
(b) Optional exception for
pediatricians. A pediatrician described
in this paragraph is a Medicaid EP who
does not meet the 30 percent patient
volume requirements described in
§ 495.304 and § 495.306, but who meets
the 20 percent patient volume
requirements described in such
sections.
(c) Limitation to only one EHR
incentive program. An EP may only
receive an incentive payment from
either Medicare or Medicaid in a
payment year, but not both.
(d) Exception for EPs to switch
programs. An EP may change his or her
EHR incentive payment program
election once, consistent with § 495.10
of this part.
(e) Limitation to one State only. A
Medicaid EP or eligible hospital may
receive an incentive payment from only
one State in a payment year.
(f) Incentive payments to hospitals.
Incentive payments to an eligible
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hospital under this subpart are subject
to all of the following conditions:
(1) The payment is provided over a
minimum of a 3-year period and
maximum of a 6-year period.
(2) The total incentive payment
received over all payment years of the
program is not greater than the aggregate
EHR incentive amount, as calculated
under paragraph (g) of this section.
(3) No single incentive payment for a
payment year may exceed 50 percent of
the aggregate EHR hospital incentive
amount calculated under paragraph (g)
of this section for an individual
hospital.
(4) No incentive payments over a 2year period may exceed 90 percent of
the aggregate EHR hospital incentive
amount calculated under paragraph (g)
of this section for an individual
hospital.
(5) No hospital may begin receiving
incentive payments for any year after FY
2016, and after FY 2016, a hospital may
not receive an incentive payment unless
it received an incentive payment in the
prior fiscal year.
(6) Prior to FY 2016, payments can be
made to an eligible hospital on a nonconsecutive, annual basis for the fiscal
year.
(7) A multi-site hospital with one
CMS Certification Number is considered
one hospital for purposes of calculating
payment.
(g) Calculation of the aggregate EHR
hospital incentive amount. The
aggregate EHR hospital incentive
amount is calculated as the product of
the (overall EHR amount) times (the
Medicaid Share).
(1) Overall EHR amount. The overall
EHR amount for an eligible hospital is
based upon a theoretical 4 years of
payment the hospital would receive
based, for each of such 4 years, upon the
product of the following:
(i) Initial amount. The initial amount
is equal to the sum of—
(A) The base amount which is set at
$2,000,000 for each of the theoretical 4
years; plus
(B) The discharge-related amount for
a 12-month period selected by the State,
but ending in the Federal fiscal year
before the hospital’s fiscal year that
serves as the first payment year. The
discharge-related amount is the sum of
the following, with discharges over the
12-month period and based upon the
total discharges for the eligible hospital
(regardless of any source of payment):
(1) For the first through 1,149th
discharge, $0.
(2) For the 1,150th through the
23,000th discharge, $200.
(3) For any discharge greater than the
23,000th, $0.
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(C) For purposes of calculating the
discharge-related amount under
paragraph (g)(1)(i)(B) of this section, for
the last 3 of the theoretical 4 years of
payment, discharges are assumed to
increase by the provider’s average
annual rate of growth for the most
recent 3 years for which data are
available per year. Negative rates of
growth must be applied as such.
(ii) Medicare share. The Medicare
share, which equals 1.
(iii) Transition factor. The transition
factor which equals as follows:
(A) For the first of the theoretical 4
years, 1.
(B) For the second of the theoretical
4 years, 3⁄4.
(C) For the third of the theoretical 4
years, 1⁄2.
(D) For the fourth of the theoretical 4
years, 1⁄4.
(2) Medicaid share. The Medicaid
share specified under this paragraph for
an eligible hospital is equal to a
fraction—
(i) The numerator of which is the sum
(for the 12-month period selected by the
State and with respect to the eligible
hospital) of—
(A) The estimated number of
inpatient-bed-days which are
attributable to Medicaid individuals;
and
(B) The estimated number of
inpatient-bed-days which are
attributable to individuals who are
enrolled in a managed care organization,
a pre-paid inpatient health plan, or a
pre-paid ambulatory health plan under
part 438 of this chapter; and
(ii) The denominator of which is the
product of—
(A) The estimated total number of
inpatient-bed-days with respect to the
eligible hospital during such period;
and
(B) The estimated total amount of the
eligible hospital’s charges during such
period, not including any charges that
are attributable to charity care, divided
by the estimated total amount of the
hospital’s charges during such period.
(iii) In computing inpatient-bed-days
under paragraph (g)(2)(i) of this section,
a State may not include estimated
inpatient-bed-days attributable to
individuals with respect to whom
payment may be made under Medicare
Part A, or inpatient-bed-days
attributable to individuals who are
enrolled with a Medicare Advantage
organization under Medicare Part C.
(h) Approximate proxy for charity
care. If the State determines that an
eligible provider’s data are not available
on charity care necessary to calculate
the portion of the formula specified in
paragraph (g)(2)(ii)(B) of this section, the
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State may use that provider’s data on
uncompensated care to determine an
appropriate proxy for charity care, but
must include a downward adjustment to
eliminate bad debt from uncompensated
care data. The State must use auditable
data sources.
(i) Deeming. In the absence of the data
necessary, with respect to an eligible
hospital the amount described in
paragraph (g)(2)(ii)(B) of this section
must be deemed to be 1. In the absence
of data, with respect to an eligible
hospital, necessary to compute the
amount described in paragraph
(g)(2)(i)(B) of this section, the amount
under such clause must be deemed to be
0.
(j) Dual eligibility for incentives
payments. A hospital may receive
incentive payments from both Medicare
and Medicaid if it meets all eligibility
criteria in the payment year.
(k) Payments to State-designated
entities. Payments to entities promoting
the adoption of certified EHR
technology as designated by the State
must meet the following requirements:
(1) A Medicaid EP may reassign his or
her incentive payment to an entity
promoting the adoption of certified EHR
technology, as defined in § 495.302, and
as designated by the State, only under
the following conditions:
(i) The State has established a method
to designate entities promoting the
adoption of EHR technology that
comports with the Federal definition in
§ 495.302.
(ii) The State publishes and makes
available to all EPs a voluntary
mechanism for reassigning annual
payments and includes information
about the verification mechanism the
State will use to ensure that the
reassignment is voluntary and that no
more than 5 percent of the annual
payment is retained by the entity for
costs not related to certified EHR
technology.
(2) [Reserved].
§ 495.312
Process for payments.
(a) General rule. States must have a
process for making payments consistent
with the requirements in subparts A and
D of this part.
(b) Reporting data consistent with this
subpart. In order to receive a payment
under this part, a provider must report
the required data under subpart A and
this subpart within the EHR reporting
period described in § 495.4.
(c) State role. The State determines
the provider’s eligibility for the EHR
incentive payment under subpart A and
this subpart and approves, processes,
and makes timely payments using a
process approved by CMS.
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(d) State disbursement. The State
disburses an incentive payment to the
provider based on the criteria described
in subpart A and this subpart.
(e) Timeframes. Payments are
disbursed consistent with the following
timeframes for each type of Medicaid
eligible provider:
(1) Medicaid EPs. States disburse
payments consistent with the calendar
year on a rolling basis following
verification of eligibility for the
payment year.
(2) Medicaid eligible hospitals. States
disburse payments consistent with the
Federal fiscal year on a rolling basis
following verification of eligibility for
the payment year.
§ 495.314 Activities required to receive an
incentive payment.
(a) First payment year. (1) In the first
payment year, to receive an incentive
payment, the Medicaid EP or eligible
hospital must meet one of the following:
(i) Demonstrate that during the
payment year, it has adopted,
implemented, or upgraded certified EHR
technology, as defined in § 495.302.
(ii) Demonstrate that during the EHR
reporting period for a payment year, it
is a meaningful EHR user as defined in
§ 495.4.
(2) A provider may notify the State of
its non-binding intention to participate
in the incentives program prior to
having fulfilled all of the eligibility
criteria.
(b) Subsequent payment years. (1) In
the second, third, fourth, fifth, and sixth
payment years, to receive an incentive
payment, the Medicaid EP or eligible
hospital must demonstrate that during
the EHR reporting period for the
applicable payment year, it is a
meaningful EHR user, as defined in
§ 495.4.
(2) The automated reporting of the
clinical quality measures will be
accomplished using certified EHR
technology interoperable with the
system designated by the State to
receive the data.
srobinson on DSKHWCL6B1PROD with RULES2
§ 495.316 State monitoring and reporting
regarding activities required to receive an
incentive payment.
(a) Subject to § 495.332 the State is
responsible for tracking and verifying
the activities necessary for a Medicaid
EP or eligible hospital to receive an
incentive payment for each payment
year, as described in § 495.314.
(b) Subject to § 495.332, the State
must submit a State Medicaid HIT Plan
to CMS that includes—
(1) A detailed plan for monitoring,
verifying and periodic auditing of the
requirements for receiving incentive
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payments, as described in § 495.314;
and
(2) A description of the how the State
will collect and report on provider
meaningful use of certified EHR
technology.
(c) Subject to § 495.332 and § 495.352
the State is required to submit to CMS
annual reports on the following:
(1) Provider adoption,
implementation, or upgrade of certified
EHR technology activities and
payments; and
(2) Aggregated, de-identified
meaningful use data.
(d)(1) The annual report described in
paragraph (c) of this section must
include, but is not limited to the
following:
(i) The number, type, and practice
location(s) of providers who qualified
for an incentive payment on the basis of
having adopted, implemented, or
upgraded certified EHR technology.
(ii) Aggregated data tables
representing the provider adoption,
implementation, or upgrade of certified
EHR technology.
(iii) The number, type, and practice
location(s) of providers who qualified
for an incentive payment on the basis of
demonstrating that they are meaningful
users of certified EHR technology;
(iv) Aggregated data tables
representing the provider’s clinical
quality measures data; and
(v) A description and quantitative
data on how its incentive payment
program addressed individuals with
unique needs such as children.
(2) Subject to § 495.332, the State may
propose a revised definition of
meaningful use of certified EHR
technology, subject to CMS prior
approval, but only with respect to the
following objectives:
(i) Generate lists of patients by
specific conditions to use for quality
improvement, reduction of disparities,
research or outreach.
(ii) Capability to submit electronic
data to immunization registries or
immunization information systems and
actual submission in accordance with
applicable law and practice.
(iii) Capability to provide electronic
submission of reportable (as required by
State or local law) lab results to public
health agencies and actual submission
in accordance with applicable law and
practice; and
(iv) Capability to provide electronic
syndromic surveillance data to public
health agencies and actual transmission
in accordance with applicable law and
practice.
(e) State failure to submit the required
reports to CMS may result in
discontinued or disallowed funding.
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§ 495.318 State responsibilities for
receiving FFP.
In order to be provided FFP under
section 1903(a)(3)(F) of the Act, a State
must demonstrate to the satisfaction of
HHS, that the State is—
(a) Using the funds provided for the
purposes of administering incentive
payments to providers under this
program, including tracking of
meaningful use by Medicaid providers
of EHR technology;
(b) Conducting adequate oversight of
the program, including routine tracking
of meaningful use attestations and
reporting mechanisms; and
(c) Is pursuing initiatives to encourage
the adoption of certified EHR
technology to promote health care
quality and the exchange of health care
information, subject to applicable laws
and regulations governing such
exchange.
§ 495.320 FFP for payments to Medicaid
providers.
Subject to the requirements outlined
in this subpart, FFP is available at 100
percent of State expenditures for
payments to Medicaid eligible providers
to encourage the adoption and
meaningful use of certified EHR
technology.
§ 495.322 FFP for reasonable
administrative expenses.
Subject to prior approval conditions
at § 495.324 of this subpart, FFP is
available at 90 percent in State
expenditures for administrative
activities in support of implementing
incentive payments to Medicaid eligible
providers.
§ 495.324
Prior approval conditions.
(a) A State must obtain prior written
approval as specified in paragraph (b) of
this section, when the State plans to
initiate planning and implementation
activities in support of Medicaid
provider incentive payments
encouraging the adoption and
meaningful use of certified EHR
technology with proposed Federal
financial participation.
(b) To receive 90 percent match, each
State must receive prior approval for all
of the following:
(1) The HIT advance planning
document and the implementation
advance planning document.
(2) A request for proposal and any
contract that a State may utilize to
complete activities under this subpart,
unless specifically exempted by the
Department of Health and Human
Services, prior to release of the request
for proposal or prior to execution of a
contract.
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(3) For contract amendments, unless
specifically exempted by HHS, before
execution of the contract amendment,
involving contract cost increases
exceeding $100,000 or contract time
extensions of more than 60 days.
(4) The State Medicaid HIT plan.
(c) Failure to submit any of the
information specified in paragraph (b) of
this section to the satisfaction of HHS
may result in disapproval or suspension
of project funding.
(d) A State must obtain prior written
approval from HHS of its justification
for a sole source acquisition, when it
plans to acquire non-competitively from
a nongovernmental source HIT
equipment or services, with proposed
FFP under this subpart if the total State
and Federal acquisition cost is more
than $100,000.
§ 495.326
Disallowance of FFP.
If the HHS finds that any acquisition
approved or modified under the
provisions of this subpart fails to
comply with the criteria, requirements,
and other undertakings described in the
approved HIT planning advance
planning document and HIT
implementation advance planning
document to the detriment of the proper
and efficient operation of the Medicaid
program, payment of FFP may be
disallowed. In the case of a suspension
of approval of a HIT planning advance
planning document and HIT
implementation advance planning
document, suspension would occur in
the same manner as 45 CFR 205.37(c)
and 307.40(a).
§ 495.328 Request for reconsideration of
adverse determination.
If CMS disapproves a State request for
any elements of a State’s advance
planning document or State Medicaid
HIT Plan under this subpart, or
determines that requirements are met
for approval on a date later than the date
requested, the decision notice includes
the following:
(a) The finding of fact upon which the
determination was made.
(b) The procedures for appeal of the
determination in the form of a request
for reconsideration.
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§ 495.330 Termination of FFP for failure to
provide access to information.
(a) HHS terminates FFP at any time if
the Medicaid agency fails to provide
State and Federal representatives with
full access to records relating to HIT
planning and implementation efforts,
and the systems used to interoperate
with electronic HIT, including on-site
inspection.
(b) The Department may request such
access at any time to determine whether
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the conditions in this subpart are being
met.
§ 495.332 State Medicaid health
information technology (HIT) plan
requirements.
Each State Medicaid HIT plan must
include all of the following elements:
(a) State systems. For State systems,
interoperability, and the current and
future visions:
(1) A baseline assessment of the
current HIT landscape environment in
the State including the inventory of
existing HIT in the State. The
assessment must include a
comprehensive—
(i) Description of the HIT ‘‘as-is’’
landscape;
(ii) Description of the HIT ‘‘to-be’’
landscape; and
(iii) HIT roadmap and strategic plan
for the next 5 years.
(2) A description of how the State
Medicaid HIT plan will be planned,
designed, developed and implemented,
including how it will be implemented
in accordance with the Medicaid
Information Technology Architecture
(MITA) principles as described in the
Medicaid Information Technology
Framework 2.0. The MITA initiative—
(i) Establishes national guidelines for
technologies and processes that enable
improved program administration for
the Medicaid enterprise;
(ii) Includes business, information
and technology architectures that
provide an overall framework for
interoperability, as well as processes
and planning guidelines for enabling
State Medicaid enterprises to meet
common objectives within the
framework while supporting unique
local needs; and
(iii) Is important to the design and
development of State EHR incentive
payment systems.
(3) A description of how intrastate
systems, including the Medicaid
Management Information System
(MMIS) and other automated
mechanized claims processing and
information retrieval systems—
(i) Have been considered in
developing a HIT solution; and
(ii) A plan that incorporates the
design, development, and
implementation phases for
interoperability of such State systems
with a description of how any planned
systems enhancements support overall
State and Medicaid goals.
(4) A description of data-sharing
components of HIT solutions.
(5) A description of how each State
will promote secure data exchange,
where permissible under the Health
Insurance Portability and
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Accountability Act (HIPAA) and other
requirements included in ARRA.
(6) A description of how each State
will promote the use of data and
technical standards to enhance data
consistency and data sharing through
common data-access mechanisms.
(7) A description of how each State
will support integration of clinical and
administrative data.
(8) A description of the process in
place for ensuring improvements in
health outcomes, clinical quality, or
efficiency resulting from the adoption of
certified EHR technology by recipients
of Medicaid incentive payments and a
methodology for verifying such
information.
(9) A description of the process in
place for ensuring that any certified
EHR technology used as the basis for a
payment incentive to Medicaid
providers is compatible with State or
Federal administrative management
systems, including the MMIS or other
automated claims processing system or
information retrieval system and a
methodology for verifying such
information.
(10) A description of how each State
will adopt national data standards for
health and data exchange and open
standards for technical solutions as they
become available.
(11) A description of how the State
intends to address the needs of
underserved and vulnerable populations
such as children, individuals with
chronic conditions, Title IV–E foster
care children, individuals in long-term
care settings and the aged, blind, and
disabled. This description must address
the following:
(i) Person centered goals and
objectives and shared decision-making;
(ii) Coordination of care across
multiple service providers, funding
sources, settings, and patient
conditions—
(iii) Universal design to ensure access
by people with disabilities and older
Americans; and
(iv) Institutional discharge planning
and diversion activities that are tied to
community based service availability.
(b) Eligibility. For eligibility, a
description of the process in place for
all of the following:
(1) For ensuring that each EP and
eligible hospital meets all provider
enrollment eligibility criteria upon
enrollment and re-enrollment to the
Medicaid EHR payment incentive
program.
(2) For ensuring patient volume
consistent with the criteria in § 495.304
and § 495.306 for each EP who practices
predominantly in a FQHC or RHC and
for each Medicaid EP who is a
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physician, pediatrician, nurse
practitioner, certified nurse midwife or
dentist and a methodology in place used
to verify such information.
(3) For ensuring that the EP or eligible
hospital is a provider who meets patient
volume consistent with the criteria in
§ 495.304 and § 495.306 and a
methodology in place used to verify
such information.
(4) For ensuring that each Medicaid
EP is not hospital-based and a
methodology in place used to verify
such information.
(5) To ensure that a hospital eligible
for incentive payments has
demonstrated an average length of stay
of 25 days or less and a methodology for
verifying such information.
(c) Monitoring and validation. For
monitoring and validation of
information, States must include the
following:
(1) A description of the process in
place for ensuring that, because of CMS’
and the States’ oversight
responsibilities, all provider
information for attestations including
meaningful use, efforts to adopt,
implement, or upgrade and any
information added to the CMS Single
Provider Repository including all
information related to patient volume,
NPI, Tax identification number (TIN),
are all true and accurate and that any
concealment or falsification of a
material fact related to the attestation
may result in prosecution under Federal
and State laws and a methodology in
place used to verify such information.
(2) A description of the process in
place for ensuring that the EP or eligible
hospital is eligible to receive an
incentive payment consistent with the
criteria outlined in § 495.314 and a
methodology in place used to verify
such information.
(3) A description of the process in
place for capturing attestations from
each EP or eligible hospital that they
have meaningfully used certified EHR
technology during the EHR reporting
period, and that they have adopted,
implemented, or upgraded certified EHR
technology and a description of the
methodology in place used to verify
such information.
(4) A description of the process in
place for capturing clinical quality data
from each EP or eligible hospital and a
description of the methodology in place
used to verify such information.
(5) A description of the process in
place for monitoring the compliance of
providers coming onto the program with
different requirements depending upon
their participation year and a
methodology for verifying such
information.
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(6) A list of the specific actions
planned to implement the EHR
incentive program, including a
description and organizational charts for
workgroups within State government
including external partners.
(7) A description of the process in
place to ensure that no amounts higher
than 100 percent of FFP will be claimed
by the State for reimbursement of
expenditures for State payments to
Medicaid eligible providers for the
certified EHR technology incentive
payment program and a methodology
for verifying such information.
(8) A description of the process in
place to ensure that no amounts higher
than 90 percent of FFP will be claimed
by the State for administrative expenses
in administering the certified EHR
technology incentive payment program
and a methodology for verifying such
information.
(9) A description of the process and
methodology for ensuring and verifying
the following:
(i) Amounts received under section
1903(a)(3)(F) of the Act with respect to
payments to a Medicaid EP or eligible
hospital are paid directly to such
provider (or to an employer or facility
to which such provider has assigned
payments) without any deduction or
rebate.
(ii) All incentive payment
reassignments to an entity promoting
the adoption of certified EHR
technology, as designated by the State,
are voluntary for the Medicaid EP
involved.
(iii) Entities promoting the adoption
of certified EHR technology do not
retain more than 5 percent of such
payments for costs not related to
certified EHR technology (and support
services including maintenance and
training) that is for, or is necessary for
the operation of, such technology.
(10) A description of the process in
place for ensuring that each Medicaid
EP or eligible hospital that collects an
EHR payment incentive has collected a
payment incentive from only one State
even if the provider is licensed to
practice in multiple States and a
methodology for verifying such
information.
(11)(i) A description of the process in
place for ensuring that each EP or
eligible hospital that wishes to
participate in the EHR incentive
payment program will receive a NPI;
and
(ii) A description of how the NPI will
be used to coordinate with the CMS so
that the EP will choose only one
program from which to receive the
incentive payment and the hospital
payments are tracked accordingly.
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(12) A description of the process in
place for ensuring that each EP or
eligible hospital who wishes to
participate in the EHR incentive
payment program will provide a TIN to
the State for purposes of the incentive
payment.
(d) Payments. For payments, States
must provide descriptions of the
following processes that are in place:
(1) The process in place for ensuring
that there is no duplication of Medicare
and Medicaid incentive payments to
EPs and a methodology for verifying
such information.
(2) The process in place to ensure that
any existing fiscal relationships with
providers to disburse the incentive
payments through Medicaid managed
care plans does not result in payments
that exceed 105 percent of the capitation
rate, in order to comply with the
Medicaid managed care incentive
payment rules at § 438.6(v)(5)(iii) of this
chapter and a methodology for verifying
such information.
(3) The process in place to ensure that
only appropriate funding sources are
used to make Medicaid EHR incentive
payments and the methodology for
verifying such information.
(4) The process in place and the
methodology for verifying that
information is available in order to
ensure that Medicaid EHR incentive
payments are made for no more than a
total of 6 years; that no EP or eligible
hospital begins receiving payments after
2016; that incentive payments cease
after 2021; and that an eligible hospital
does not receive incentive payments
after FY 2016 unless the hospital
received an incentive payment in the
prior fiscal year.
(5) The process in place to ensure that
Medicaid EHR incentive payments are
not paid at amounts higher than 85
percent of the net average allowable cost
of certified EHR technology and the
yearly maximum allowable payment
thresholds and a methodology for
verifying such information.
(6) The process in place to ensure that
all hospital calculations and hospital
payment incentives are made consistent
with the requirements of this part and
a methodology for verifying such
information.
(7) The process in place to provide for
the timely and accurate payment of
incentive payments to EPs and eligible
hospitals, including the timeframe
specified by the State to meet the timely
payment requirement.
(8) The process in place and a
methodology for verifying such
information to provide that any monies
that have been paid inappropriately as
an improper payment or otherwise not
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in compliance with this subpart will be
recouped and FFP will be repaid.
(9) The process in place and the
methodology for verifying that EPs meet
their responsibility for 15 percent of the
net average allowable cost for certified
EHR technology.
(e) For combating fraud and abuse
and for provider appeals. (1) A
description of the process in place for a
provider to appeal consistent with the
criteria described in § 495.370 and a
methodology for verifying the following
related to the EHR incentives payment
program:
(i) Incentive payments.
(ii) Provider eligibility
determinations.
(iii) Demonstration of efforts to adopt,
implement or upgrade and meaningful
use eligibility for incentive payments
under this part.
(2) A description of the process in
place, and a methodology for verifying
such information, to address Federal
laws and regulations designed to
prevent fraud, waste, and abuse,
including, but not limited to applicable
provisions of Federal criminal law, the
False Claims Act (32 U.S.C. 3729 et
seq.), and the anti-kickback statute
(section 1128B(b) of the Act).
(f) Optional—proposed alternatives. A
State may choose to propose any of the
following, but they must be included as
an element in the State Medicaid HIT
Plan for review and approval:
(1) An alternative methodology for
measuring patient volume, consistent
with § 495.306(g).
(2)(i) A revised definition of
meaningful use of certified EHR
technology consistent with § 495.4 and
§ 495.316(d)(2) of this part.
(ii) Any revised definition of
meaningful use may not require
additional functionality beyond that of
certified EHR technology and conform
with CMS guidance on Stage 1. See also
§ 495.316(d)(2).
§ 495.334
[Reserved]
srobinson on DSKHWCL6B1PROD with RULES2
§ 495.336 Health information technology
planning advance planning document
requirements (HIT PAPD).
Each State’s HIT PAPD must contain
the following:
(a) A statement of need and objective
which clearly state the purpose and
objectives of the project to be
accomplished and the necessity for the
project.
(b) A project management plan which
addresses the following:
(1) The planning project organization.
(2) Planning activities and
deliverables.
(3) State and contractor resource
needs.
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(4) Planning project procurement
activities and schedule.
(c) A specific budget for the planning
of the project.
(d) An estimated total project cost and
a prospective State and Federal cost
distribution, including planning and
implementation.
(e) A commitment to submit a HIT
implementation advance planning
document.
(f) A commitment to conduct and
complete activities which will result in
the production of the State Medicaid
HIT plan that includes conduct of the
following activities:
(1) A statewide HIT environmental
baseline self-assessment.
(2) An assessment of desired HIT
future environment.
(3) Development of benchmarks and
transition strategies to move from the
current environment to the desired
future environment.
(g) A commitment to submit the plan
to CMS for approval.
§ 495.338 Health information technology
implementation advance planning
document requirements (HIT IAPD).
Each State’s HIT IAPD must contain
the following:
(a) The results of the activities
conducted as a result of the HIT
planning advance planning document,
including the approved state Medicaid
HIT plan.
(b) A statement of needs and
objectives.
(c) A statement of alternative
considerations.
(d) A personnel resource statement
indicating availability of qualified and
adequate staff, including a project
director to accomplish the project
objectives.
(e) A detailed description of the
nature and scope of the activities to be
undertaken and the methods to be used
to accomplish the project.
(f) The proposed activity schedule for
the project.
(g) A proposed budget including a
consideration of all HIT implementation
advance planning document activity
costs, including but not limited to the
following:
(1) The cost to implement and
administer incentive payments.
(2) Procurement or acquisition.
(3) State personnel.
(4) Contractor services.
(5) Hardware, software, and licensing.
(6) Equipment and supplies.
(7) Training and outreach.
(8) Travel.
(9) Administrative operations.
(10) Miscellaneous expenses for the
project.
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(h) An estimate of prospective cost
distribution to the various State and
Federal funding sources and the
proposed procedures for distributing
costs including:
(1) Planned annual payment amounts;
(2) Total of planned payment
amounts; and
(3) Calendar year of each planned
annual payment amount.
(4) A statement setting forth the
security and interface requirements to
be employed for all State HIT systems,
and related systems, and the system
failure and disaster recovery procedures
available.
§ 495.340 As-needed HIT PAPD update and
as-needed HIT IAPD update requirements.
Each State must submit a HIT PAPD
update or a HIT IAPD no later than 60
days after the occurrence of project
changes including but not limited to any
of the following:
(a) A projected cost increase of
$100,000 or more.
(b) A schedule extension of more than
60 days for major milestones.
(c) A significant change in planning
approach or implementation approach,
or scope of activities beyond that
approved in the HIT planning advance
planning document or the HIT
implementation advance planning
document.
(d) A change in implementation
concept or a change to the scope of the
project.
(e) A change to the approved cost
allocation methodology.
§ 495.342
Annual HIT IAPD requirements.
Each State’s annual HIT IAPD is due
60 days from the HIT IAPD approved
anniversary date and must contain the
following:
(a) A reference to the approved HIT
PAPD/IAPD and all approved changes.
(b) A project activity status which
reports the status of the past year’s
major project tasks and milestones,
addressing the degree of completion and
tasks/milestones remaining to be
completed and discusses past and
anticipated problems or delays in
meeting target dates in the approved
HIT technology PAPD/IAPD and
approved changes to it.
(c) A report of all project deliverables
completed in the past year and degree
of completion for unfinished products.
(d) A project activity schedule for the
remainder of the project.
(e) A project expenditure status which
consists of a detailed accounting of all
expenditures for project development
over the past year and an explanation of
the differences between projected
expenses in the approved HIT PAPD/
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IAPD and actual expenditures for the
past year.
(f) A report of any approved or
anticipated changes to the allocation
basis in the advance planning
document’s approved cost methodology.
§ 495.344 Approval of the State Medicaid
HIT plan, the HIT PAPD and update, the HIT
IAPD and update, and the annual HIT IAPD.
HHS will not approve the State
Medicaid HIT plan, HIT PAPD and
update, HIT–IAPD and update, or
annual IAPD if any of these documents
do not include all of the information
required under this subpart.
§ 495.346
Access to systems and records.
The State agency must allow HHS
access to all records and systems
operated by the State in support of this
program, including cost records
associated with approved administrative
funding and incentive payments to
Medicaid providers. State records
related to contractors employed for the
purpose of assisting with
implementation or oversight activities
or providing assistance, at such
intervals as are deemed necessary by the
Department to determine whether the
conditions for approval are being met
and to determine the efficiency,
economy, and effectiveness of the
program.
srobinson on DSKHWCL6B1PROD with RULES2
§ 495.348
Procurement standards.
(a) General rule. Procurements of HIT
equipment and services are subject to
the following procurement standards in
paragraphs (b) through (f) of this section
regardless of any conditions for prior
approval. These standards—
(1) Include a requirement for
maximum practical open and free
competition regardless of whether the
procurement is formally advertised or
negotiated.
(2) Are established to ensure that such
materials and services are obtained in a
cost effective manner and in compliance
with the provisions of applicable
Federal statutes and executive orders.
(3) Apply when the cost of the
procurement is treated as a direct cost
of an award.
(b) Grantee responsibilities. The
standards contained in this section do
not relieve the Grantee of the
contractual responsibilities arising
under its contract(s).
(1) The grantee is the responsible
authority, without recourse to the
Departmental awarding agency,
regarding the settlement and satisfaction
of all contractual and administrative
issues arising out of procurements
entered into in support of an award or
other agreement. This includes disputes,
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claims, and protests of award, source
evaluation or other matters of a
contractual nature.
(2) Matters concerning violation of
statute are to be referred to such
Federal, State or local authority as may
have proper jurisdiction.
(c) Codes of conduct. The grantee
must maintain written standards of
conduct governing the performance of
its employees engaged in the award and
administration of contracts.
(1) No employee, officer, or agent
must participate in the selection, award,
or administration of a contract
supported by Federal funds if a real or
apparent conflict of interest would be
involved.
(2) Such a conflict would arise when
the employee, officer, or agent, or any
member of his or her immediate family,
his or her partner, or an organization
which employs or is about to employ
any of the parties indicated herein, has
a financial or other interest in the firm
selected for an award.
(3) The officers, employees, and
agents of the grantee must neither solicit
nor accept gratuities, favors, or anything
of monetary value from contractors, or
parties to sub agreements.
(4) Grantees may set standards for
situations in which the financial interest
is not substantial or the gift is an
unsolicited item of nominal value.
(5) The standards of conduct provide
for disciplinary actions to be applied for
violations of such standards by officers,
employers, or agents of the grantees.
(d) Competition. All procurement
transactions must be conducted in a
manner to provide, to the maximum
extent practical, open and free
competition.
(1) The grantee must be alert to
organizational conflicts of interest as
well as noncompetitive practices among
contractors that may restrict or
eliminate competition or otherwise
restrain trade.
(2) In order to ensure objective
contractor performance and eliminate
unfair competitive advantage,
contractors that develop or draft grant
applications, or contract specifications,
requirements, statements of work,
invitations for bids and requests for
proposals must be excluded from
competing for such procurements.
(3) Awards must be made to the
bidder or offer or whose bid or offer is
responsive to the solicitation and is
most advantageous to the grantee, price,
quality, and other factors considered.
(4) Solicitations must clearly set forth
all requirements that the bidder or offer
or must fulfill in order for the bid or
offer to be evaluated by the grantee.
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(5) Any and all bids or offers may be
rejected when it is in the grantee’s
interest to do so.
(e) Procurement procedures. All
grantees must establish written
procurement procedures. These
procedures must provide, at a
minimum, the following:
(1) Grantees avoid purchasing
unnecessary items.
(2) When appropriate, an analysis is
made of lease and purchase alternatives
to determine which would be the most
economical and practical procurement
for the grantee and the Federal
government.
(3) Solicitations for goods and
services provide for all of the following:
(i) A clear and accurate description of
the technical requirements for the
material, product or service to be
procured. In competitive procurements,
such a description must not contain
features which unduly restrict
competition.
(ii) Requirements which the bidder or
offer must fulfill and all other factors to
be used in evaluating bids or proposals.
(iii) A description, whenever
practicable, of technical requirements in
terms of functions to be performed or
performance required, including the
range of acceptable characteristics or
minimum acceptable standards.
(iv) The specific features of brand
name or equal descriptions that bidders
are required to meet when such items
are included in the solicitation.
(v) The acceptance, to the extent
practicable and economically feasible,
of products and services dimensioned in
the metric system of measurement.
(vi) Preference, to the extent
practicable and economically feasible,
for products and services that conserve
natural resources and protect the
environment and are energy efficient.
(4) Positive efforts must be made by
grantees to utilize small businesses,
minority-owned firms, and women’s
business enterprises, whenever possible.
Grantees of Departmental awards must
take all of the following steps to further
this goal:
(i) Ensure that small businesses,
minority-owned firms, and women’s
business enterprises are used to the
fullest extent practicable.
(ii) Make information on forthcoming
opportunities available and arrange time
frames for purchases and contracts to
encourage and facilitate participation by
small businesses, minority-owned firms,
and women’s business enterprises.
(iii) Consider in the contract process
whether firms competing for larger
contracts intend to subcontract with
small businesses, minority-owned firms,
and women’s business enterprises.
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(iv) Encourage contracting with
consortia of small businesses, minorityowned firms and women’s business
enterprises when a contract is too large
for one of these firms to handle
individually.
(v) Use the services and assistance, as
appropriate, of such organizations as the
Small Business Administration and the
Department of Commerce’s Minority
Business Development Agency in the
solicitation and utilization of small
businesses, minority-owned firms and
women’s business enterprises.
(5) The type of procuring instruments
used (for example, fixed price contracts,
cost reimbursable contracts, purchase
orders, and incentive contracts) must be
determined by the grantee but must be
appropriate for the particular
procurement and for promoting the best
interest of the program or project
involved.
(6) The ‘‘cost-plus-a-percentage-ofcost’’ or ‘‘percentage of construction
cost’’ methods of contracting must not
be used.
(7) Contracts must be made only with
responsible contractors who possess the
potential ability to perform successfully
under the terms and conditions of the
proposed procurement.
(8) Consideration must be given to
such matters as contractor integrity,
record of past performance, financial
and technical resources or accessibility
to other necessary resources.
(9) In certain circumstances, contracts
with certain parties are restricted by
agencies’ implementation of Executive
Orders 12549 and 12689, ‘‘Debarment
and Suspension’’ as described in 2 CFR
part 376.
(10) Some form of cost or price
analysis must be made and documented
in the procurement files in connection
with every procurement action.
(11) Price analysis may be
accomplished in various ways,
including the comparison of price
quotations submitted, market prices,
and similar indicia, together with
discounts.
(12) Cost analysis is the review and
evaluation of each element of cost to
determine reasonableness, allocability,
and allowability.
(13) Procurement records and files for
purchases in excess of the simplified
acquisition threshold must include the
following at a minimum:
(i) Basis for contractor selection.
(ii) Justification for lack of
competition when competitive bids or
offers are not obtained.
(iii) Basis for award cost or price.
(f) Contract administration. A system
for contract administration must be
maintained to ensure contractor
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conformance with the terms, conditions
and specifications of the contract and to
ensure adequate and timely follow up of
all purchases. Grantees must evaluate
contractor performance and document,
as appropriate, whether contractors
have met the terms, conditions, and
specifications of the contract.
(g) Additional contract requirements.
The grantee must include, in addition to
provisions to define a sound and
complete agreement, the following
provisions in all contracts, which must
also be applied to subcontracts:
(1) Contracts in excess of the
simplified acquisition threshold must
contain contractual provisions or
conditions that allow for administrative,
contractual, or legal remedies in
instances in which a contractor violates
or breaches the contract terms, and
provide for such remedial actions as
may be appropriate.
(2) All contracts in excess of the
simplified acquisition threshold
(currently $100,000) must contain
suitable provisions for termination by
the grantee, including the manner by
which termination must be effected and
the basis for settlement.
(h) Conditions for default or
termination. Such contracts must
describe conditions under which the
contract may be terminated for default
as well as conditions where the contract
may be terminated because of
circumstances beyond the control of the
contractor.
(i) Access to contract materials and
staff. All negotiated contracts (except
those for less than the simplified
acquisition threshold) awarded by
grantees must include a provision to the
effect that the grantee, the Departmental
awarding agency, the U.S. Comptroller
General, or any of their duly authorized
representatives, must have access to any
books, documents, papers and records
and staff of the contractor which are
directly pertinent to a specific program
for the purpose of making audits,
examinations, excerpts and
transcriptions.
§ 495.350 State Medicaid agency
attestations.
(a) The State must provide assurances
to HHS that amounts received with
respect to sums expended that are
attributable to payments to a Medicaid
provider for the adoption of EHR are
paid directly to such provider, or to an
employer or facility to which such
provider has assigned payments,
without any deduction or rebate.
§ 495.352
Reporting requirements.
Each State must submit to HHS on a
quarterly basis a progress report
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documenting specific implementation
and oversight activities performed
during the quarter, including progress in
implementing the State’s approved
Medicaid HIT plan.
§ 495.354
Rules for charging equipment.
Equipment acquired under this
subpart is subject to the public
assistance program requirements
concerning the computation of claims
for Federal financial participation in
accordance with the provisions of 45
CFR part 95, subpart G.
§ 495.356 Nondiscrimination
requirements.
State agencies and any other
recipients or subrecipients of Federal
financial assistance provided under this
subpart are subject to the
nondiscrimination requirements in 45
CFR parts 80, 84, and 91.
(a) These regulations in 45 CFR parts
80, 84, and 91 prohibit individuals from
being excluded from participation in,
being denied the benefits of, or being
otherwise subjected to discrimination
under any program or activity which
received Federal financial assistance.
(b) Specifically, 45 CFR part 80
prohibits discrimination on the basis of
race, color, or national origin; 45 CFR
part 84 prohibits discrimination on the
basis of disability; and 45 CFR part 91
prohibits discrimination on the basis of
age.
§ 495.358
Cost allocation plans.
State agencies that acquire HIT
equipment and services under this
subpart are subject to cost allocation
plan requirements in 45 CFR part 95.
§ 495.360
Software and ownership rights.
(a) General rule. The State or local
government must include a clause in all
procurement instruments that provides
that the State or local government will
have all ownership rights in software or
modifications thereof and associated
documentation designed, developed or
installed with FFP under this Subpart.
(b) Federal license. HHS reserves a
royalty-free, non-exclusive, and
irrevocable license to reproduce,
publish or otherwise use and to
authorize others to use for Federal
government purposes, the software,
modifications, and documentation
designed, developed or installed with
FFP under this Subpart.
(c) Proprietary software. Proprietary
operating/vendor software packages
such as software that is owned and
licensed for use by third parties, which
are provided at established catalog or
market prices and sold or leased to the
general public must not be subject to the
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ownership provisions in paragraphs (a)
and (b) of this section.
(d) Limitation. Federal financial
participation is not available for
proprietary applications software
developed specifically for the public
assistance programs covered under this
subpart.
§ 495.362 Retroactive approval of FFP with
an effective date of February 18, 2009.
For administrative activities
performed by a State, without obtaining
prior approval, which are in support of
planning for incentive payments to
providers, a State may request
consideration of FFP by recorded
request in a HIT advance planning
document or implementation advance
planning document update. In such a
consideration, the agency takes into
consideration overall Federal interests
which may include any of the following:
(a) The acquisition must not be before
February 18, 2009.
(b) The acquisition must be
reasonable, useful, and necessary.
(c) The acquisition must be
attributable to payments for reasonable
administrative expenses under section
1903(a)(3)(F)(ii) of the Act.
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§ 495.364 Review and assessment of
administrative activities and expenses of
Medicaid provider health information
technology adoption and operation.
(a) CMS conducts periodic reviews on
an as needed basis to assess the State’s
progress described in its approved HIT
planning advance planning document
and health information technology
implementation advance planning
document.
(b) During planning, development,
and implementation, these reviews will
generally be limited to the overall
progress, work performance,
expenditure reports, project
deliverables, and supporting
documentation.
(c) CMS assesses the State’s overall
compliance with the approved advance
planning document and provide
technical assistance and information
sharing from other State projects.
(d) CMS will, on a continuing basis,
review, assess and inspect the planning,
design, development, implementation,
and operation of activities and
payments for reasonable administrative
expenses related to the administration
of payment for Medicaid provider HIT
adoption and operation payments to
determine the extent to which such
activities meet the following:
(1) All requirements of this subpart.
(2) The goals and objectives stated in
the approved HIT implementation
advance planning document and State
Medicaid HIT plan.
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(3) The schedule, budget, and other
conditions of the approved HIT
implementation advance planning
document and State Medicaid HIT plan.
§ 495.366 Financial oversight and
monitoring of expenditures.
(a) General rule. (1) The State must
have a process in place to estimate
expenditures for the Medicaid EHR
payment incentive program using the
Medicaid Budget Expenditure System.
(2) The State must have a process in
place to report actual expenditures for
the Medicaid EHR payment incentive
program using the Medicaid Budget
Expenditure System.
(3) The State must have an automated
payment and information retrieval
mechanized system, (Medicaid
Management Information System) to
make EHR payment incentives, to
ensure Medicaid provider eligibility, to
ensure the accuracy of payment
incentives, and to identify potential
improper payments.
(b) Provider eligibility as basis for
making payment. Subject to § 495.332,
the State must do all of the following:
(1) Collect and verify basic
information on Medicaid providers to
assure provider enrollment eligibility
upon enrollment or re-enrollment to the
Medicaid EHR payment incentive
program.
(2) Collect and verify basic
information on Medicaid providers to
assure patient volume.
(3) Collect and verify basic
information on Medicaid providers to
assure that EPs are not hospital-based
including the determination that
substantially all health care services are
not furnished in a hospital setting,
either inpatient or outpatient.
(4) Collect and verify basic
information on Medicaid providers to
assure that EPs are practicing
predominantly in a Federally-qualified
health center or rural health clinic.
(5) Have a process in place to assure
that Medicaid providers who wish to
participate in the EHR incentive
payment program has or will have a NPI
and will choose only one program from
which to receive the incentive payment
using the NPI, a TIN, and CMS’ national
provider election database.
(c) Meaningful use and efforts to
adopt, implement, or upgrade to
certified electronic health record
technology to make payment. Subject to
§ 495.312, 495.314, and § 495.332, the
State must annually collect and verify
information regarding the efforts to
adopt, implement, or upgrade certified
EHR technology and the meaningful use
of said technology before making any
payments to providers.
PO 00000
Frm 00275
Fmt 4701
Sfmt 4700
44587
(d) Claiming Federal reimbursement
for State expenditures. Subject to
§ 495.332, the State must do the
following:
(1) Assure that State expenditures are
claimed in accordance with, including
but not limited to, applicable Federal
laws, regulations, and policy guidance.
(2) Have a process in place to assure
that expenditures for administering the
Medicaid EHR incentive payment
program will not be claimed at amounts
higher than 90 percent of the cost of
such administration.
(3) Have a process in place to assure
that expenditures for payment of
Medicaid EHR incentive payments will
not be claimed at amounts higher than
100 percent of the cost of such
payments to Medicaid providers.
(e) Improper Medicaid electronic
health record payment incentives.
(1) Subject to § 495.332, the State
must have a process in place to assure
that no duplicate Medicaid EHR
payment incentives are paid between
the Medicare and Medicaid programs, or
paid by more than one State even if the
provider is licensed to practice in
multiple States, or paid within more
than one area of a State.
(2) Subject to § 495.332, the State
must have a process in place to assure
that Medicaid EHR incentive payments
are made without reduction or rebate,
have been paid directly to an eligible
provider or to an employer, a facility, or
an eligible third-party entity to which
the Medicaid eligible provider has
assigned payments.
(3) Subject to § 495.332, the State
must have a process in place to assure
that that Medicaid EHR incentive
payments are made for no more than 6
years; that no EP or eligible hospital
begins receiving payments after 2016;
that incentive payments cease after
2021; and that an eligible hospital does
not receive incentive payments after FY
2016 unless the hospital received an
incentive payment in the prior fiscal
year.
(4) Subject to § 495.332, the State
must have a process in place to assure
that only appropriate funding sources
are used to make Medicaid EHR
incentive payments.
(5) Subject to § 495.332, the State
must have a process in place to assure
that Medicaid EHR incentive payments
are not paid at amounts higher than 85
percent of the net average allowable cost
of certified EHR technology and the
yearly maximum allowable payment
thresholds.
(6) Subject to § 495.332, the State
must have a process in place to assure
that for those entities promoting the
adoption of EHR technology, the
E:\FR\FM\28JYR2.SGM
28JYR2
44588
Federal Register / Vol. 75, No. 144 / Wednesday, July 28, 2010 / Rules and Regulations
Medicaid EHR incentive payments are
paid on a voluntary basis and that these
entities do not retain more than 5
percent of such payments for costs not
related to certified EHR technology.
(7) Subject to § 495.332, the State
must have a process in place to assure
that any existing fiscal relationships
with providers to disburse the incentive
through Medicaid managed care plans
does not exceed 105 percent of the
capitation rate, in order to comply with
the Medicaid managed care incentive
payment rules at § 438.6(c)(5)(iii) of this
chapter and a methodology for verifying
such information.
(8) The State must not request
reimbursement for Federal financial
participation unless all requirements of
this subpart have been satisfied.
§ 495.368
Combating fraud and abuse.
srobinson on DSKHWCL6B1PROD with RULES2
(a) General rule. (1) The State must
comply with Federal requirements to—
(i) Ensure the qualifications of the
providers who request Medicaid EHR
incentive payments;
(ii) Detect improper payments; and
(iii) In accordance with § 455.15 and
§ 455.21 of this chapter, refer suspected
cases of fraud and abuse to the Medicaid
Fraud Control Unit.
(2) The State must take corrective
action in the case of improper EHR
payment incentives to Medicaid
providers.
(b) Providers’ statements regarding
submission of documentation
containing falsification or concealment
of a material fact on EHR incentive
payment documentation. For any forms
on which a provider submits
information necessary to the
determination of eligibility to receive
EHR payments, the State must obtain a
VerDate Mar<15>2010
18:10 Jul 27, 2010
Jkt 220001
statement that meets the following
requirements:
(1) Is signed by the provider and
contains the following statement: ‘‘This
is to certify that the foregoing
information is true, accurate, and
complete. I understand that Medicaid
EHR incentive payments submitted
under this provider number will be from
Federal funds, and that any falsification,
or concealment of a material fact may be
prosecuted under Federal and State
laws.’’
(2) Appears directly above the
claimant’s signature, or if it is printed
on the reverse of the form, a reference
to the statements must appear
immediately preceding the provider’s
signature.
(3) Is resubmitted upon a change in
provider representative.
(4) Is updated as needed.
(c) Overpayments. States must repay
to CMS all Federal financial
participation received by providers
identified as an overpayment regardless
of recoupment from such providers,
within 60 days of discovery of the
overpayment, in accordance with
sections 1903(a)(1), (d)(2), and (d)(3) of
the Act and part 433 subpart F of the
regulations.
(d) Complying with Federal laws and
regulations. States must comply with all
Federal laws and regulations designed
to prevent fraud, waste, and abuse,
including, but not limited to applicable
provisions of Federal criminal law, the
False Claims Act (32 U.S.C. 3729 et
seq.), and the anti-kickback statute
(section 1128B(b) of the Act).
§ 495.370 Appeals process for a Medicaid
provider receiving electronic health record
incentive payments.
(a) The State must have a process in
place consistent with the requirements
PO 00000
Frm 00276
Fmt 4701
Sfmt 9990
established in § 447.253(e) of this
chapter for a provider or entity to appeal
the following issues related to the HIT
incentives payment program:
(1) Incentive payments.
(2) Incentive payment amounts.
(3) Provider eligibility determinations.
(4) Demonstration of adopting,
implementing, and upgrading, and
meaningful use eligibility for incentives
under this subpart.
(b) Subject to paragraph (a) of this
section, the State’s process must ensure
the following:
(1) That the provider (whether an
individual or an entity) has an
opportunity to challenge the State’s
determination under this Part by
submitting documents or data or both to
support the provider’s claim.
(2) That such process employs
methods for conducting an appeal that
are consistent with the State’s
Administrative Procedure law(s).
(c) The State must provide that the
provider (whether individual or entity)
is also given any additional appeals
rights that would otherwise be available
under procedures established by the
State.
Authority: Catalog of Federal Domestic
Assistance Program No. 93.773, Medicare—
Hospital Insurance; and Program No. 93.774,
Medicare—Supplementary Medical
Insurance Program, Program No. 93.778,
Medical Assistance Program.
Dated: June 16, 2010.
Marilyn Tavenner,
Acting Administrator, Centers for Medicare
& Medicaid Services.
Approved: July 9, 2010.
Kathleen Sebelius,
Secretary.
[FR Doc. 2010–17207 Filed 7–13–10; 8:45 am]
BILLING CODE 4120–01–P
E:\FR\FM\28JYR2.SGM
28JYR2
Agencies
[Federal Register Volume 75, Number 144 (Wednesday, July 28, 2010)]
[Rules and Regulations]
[Pages 44314-44588]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-17207]
[[Page 44313]]
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Part II
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Parts 412, 413, 422 et al.
Medicare and Medicaid Programs; Electronic Health Record Incentive
Program; Final Rule
Federal Register / Vol. 75 , No. 144 / Wednesday, July 28, 2010 /
Rules and Regulations
[[Page 44314]]
-----------------------------------------------------------------------
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 412, 413, 422, and 495
[CMS-0033-F]
RIN 0938-AP78
Medicare and Medicaid Programs; Electronic Health Record
Incentive Program
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This final rule implements the provisions of the American
Recovery and Reinvestment Act of 2009 (ARRA) (Pub. L. 111-5) that
provide incentive payments to eligible professionals (EPs), eligible
hospitals and critical access hospitals (CAHs) participating in
Medicare and Medicaid programs that adopt and successfully demonstrate
meaningful use of certified electronic health record (EHR) technology.
This final rule specifies--the initial criteria EPs, eligible
hospitals, and CAHs must meet in order to qualify for an incentive
payment; calculation of the incentive payment amounts; payment
adjustments under Medicare for covered professional services and
inpatient hospital services provided by EPs, eligible hospitals and
CAHs failing to demonstrate meaningful use of certified EHR technology;
and other program participation requirements. Also, the Office of the
National Coordinator for Health Information Technology (ONC) will be
issuing a closely related final rule that specifies the Secretary's
adoption of an initial set of standards, implementation,
specifications, and certification criteria for electronic health
records. ONC has also issued a separate final rule on the establishment
of certification programs for health information technology.
DATES: Effective Date: These regulations are effective on September 27,
2010.
FOR FURTHER INFORMATION CONTACT:
Elizabeth Holland, (410) 786-1309, EHR incentive program issues.
Edward Gendron, (410) 786-1064, Medicaid incentive payment issues.
Jim Hart, (410) 786-9520, Medicare fee for service payment issues.
Bob Kuhl or Susan Burris, (410) 786-5594, Medicare CAH payment and
charity care issues.
Frank Szeflinski, (303) 844-7119, Medicare Advantage issues.
SUPPLEMENTARY INFORMATION:
Acronyms
ARRA American Recovery and Reinvestment Act of 2009
AAC Average Allowable Cost (of certified EHR technology)
AIU Adopt, Implement, Upgrade (certified EHR technology)
CAH Critical Access Hospital
CAHPS Consumer Assessment of Healthcare Providers and Systems
CCN CMS Certification Number
CFR Code of Federal Regulations
CHIP Children's Health Insurance Program
CHIPRA Children's Health Insurance Program Reauthorization Act of
2009
CMS Centers for Medicare & Medicaid Services
CPOE Computerized Physician Order Entry
CY Calendar Year
EHR Electronic Health Record
EP Eligible Professional
EPO Exclusive Provider Organization
FACA Federal Advisory Committee Act
FFP Federal Financial Participation
FFY Federal Fiscal Year
FFS Fee-For-Service
FQHC Federally Qualified Health Center
FTE Full-Time Equivalent
FY Fiscal Year
HEDIS Healthcare Effectiveness Data and Information Set
HHS Department of Health and Human Services
HIE Health Information Exchange
HIT Health Information Technology
HIPAA Health Insurance Portability and Accountability Act of 1996
HITECH Health Information Technology for Economic and Clinical
Health Act
HMO Health Maintenance Organization
HOS Health Outcomes Survey
HPSA Health Professional Shortage Area
HRSA Health Resource and Services Administration
IAPD Implementation Advance Planning Document
ICR Information Collection Requirement
IHS Indian Health Service
IPA Independent Practice Association
IT Information Technology
MA Medicare Advantage
MAC Medicare Administrative Contractor
MAO Medicare Advantage Organization
MCO Managed Care Organization
MITA Medicaid Information Technology Architecture
MMIS Medicaid Management Information Systems
MSA Medical Savings Account
NAAC Net Average Allowable Cost (of certified EHR technology)
NCQA National Committee for Quality Assurance
NCVHS National Committee on Vital and Health Statistics
NPI National Provider Identifier
NPRM Notice of Proposed Rulemaking
ONC Office of the National Coordinator for Health Information
Technology
PAHP Prepaid Ambulatory Health Plan
PAPD Planning Advance Planning Document
PFFS Private Fee-For-Service
PHO Physician Hospital Organization
PHS Public Health Service
PHSA Public Health Service Act
PIHP Prepaid Inpatient Health Plan
POS Place of Service
PPO Preferred Provider Organization
PQRI Physician Quality Reporting Initiative
PSO Provider Sponsored Organization
RHC Rural Health Clinic
RHQDAPU Reporting Hospital Quality Data for Annual Payment Update
RPPO Regional Preferred Provider Organization
SMHP State Medicaid Health Information Technology Plan
TIN Tax Identification Number
Table of Contents
I. Background
A. Overview of the HITECH Programs Created by the American
Recovery and Reinvestment Act of 2009
B. Statutory Basis for the Medicare & Medicaid EHR Incentive
Programs
II. Provisions of the Proposed Regulations and Response and Analysis
of Comments
A. Definitions Across the Medicare FFS, Medicare Advantage, and
Medicaid Programs
1. Definitions
a. Certified Electronic Health Record (EHR) Technology
b. Qualified Electronic Health Record
c. Payment Year
d. First, Second, Third, Fourth, Fifth and Sixth Payment Year
e. EHR Reporting Period
f. Meaningful EHR User
2. Definition of Meaningful Use
a. Considerations in Defining Meaningful Use
b. Common Definition of Meaningful Use Under Medicare and
Medicaid
c. Stage 1 Criteria for Meaningful Use
3. Sections 4101(a) and 4102(a)(1) of HITECH Act: Reporting on
Clinical Quality Measures Using EHR by EPs, Eligible Hospitals and
CAHs
a. General
b. Requirements for the Submission of Clinical Quality Measures
by EPs, Eligible Hospitals and CAHs
c. Statutory Requirements and Other Considerations for the
Selection of Clinical Quality Measures for Electronic Submission by
EPs, Eligible Hospitals and CAHs
(1) Statutory Requirements for the Selection of Clinical Quality
Measures for Electronic Submission by EPs, Eligible Hospitals and
CAHs
(2) Other Considerations for the Selection of Clinical Quality
Measures for Electronic Submission by EPs, Eligible Hospitals and
CAHs
d. Clinical Quality Measures for EPs
e. Clinical Quality Measures Reporting Criteria for EPs
f. Clinical Quality Measures for Electronic Submission by
Eligible Hospitals
g. Potential Measures for EPs, Eligible Hospitals and CAHs in
Stage 2 and Subsequent Years
h. Reporting Method for Clinical Quality Measures for 2011 and
Beginning With the 2012 Payment Years
(1) Reporting Method for 2011 Payment Year
(2) Reporting Method Beginning in 2012
[[Page 44315]]
i. Alternative Reporting Methods for Clinical Quality Measures
j. Reporting Period for Reporting Clinical Quality Measures
4. Demonstration of Meaningful Use
a. Common Methods of Demonstration in Medicare and Medicaid
b. Methods for Demonstration of the Stage 1 Criteria of
Meaningful Use
5. Data Collection for Online Posting, Program Coordination, and
Accurate Payments
a. Online Posting
b. Program Election Between Medicare FFS/MA and Medicaid for EPs
c. Data To Be Collected
6. Hospital-Based Eligible Professionals
7. Interaction With Other Programs
B. Medicare Fee-for-Service Incentives
1. Incentive Payments for Eligible Professionals
a. Definitions
b. Incentive Payment Limits
c. Increase in Incentive Payment for EPs Who Predominantly
Furnish Services in a Geographic Health Professional Shortage Area
d. Form and Timing of Payment
e. Payment Adjustment Effective in CY 2015 and Subsequent Years
for EPs Who Are Not Meaningful Users of Certified EHR Technology
2. Incentive Payments for Hospitals
a. Definition of Eligible Hospital for Medicare
b. Incentive Payment Calculation for Eligible Hospitals
c. Medicare Share
d. Charity Care
e. Transition Factor
f. Duration and Timing of Incentive Payments
g. Incentive Payment Adjustment Effective in Federal FY 2015 and
Subsequent Years for Eligible Hospitals Who Are Not Meaningful EHR
Users
3. Incentive Payments for Critical Access Hospitals
a. Definition of CAHs for Medicare
b. Current Medicare Payment of Reasonable Cost for CAHs
c. Changes Made by the HITECH Act
d. Incentive Payment Calculation for CAHs
e. Reduction of Reasonable Cost Payment in FY 2015 and
Subsequent Years for CAHs That Are Not Meaningful EHR Users
4. Process for Making Incentive Payments Under the Medicare FFS
Program
a. Incentive Payments to EPs
b. Incentive Payments to Eligible Hospitals
c. Incentive Payments to CAHs
d. Payment Accounting Under Medicare
C. Medicare Advantage Organization Incentive Payments
1. Definitions
a. Qualifying MA Organization
b. Qualifying MA Eligible Professional
c. Qualifying MA-Affiliated Eligible Hospital
2. Identification of Qualifying MA Organizations, MA EPs, and
MA-Affiliated Eligible Hospitals
3. Computation of Incentives to Qualifying MA Organizations for
MA EPs and Hospitals
4. Timeframe for Payment
5. Avoiding Duplicate Payment
6. Meaningful User Attestation
7. Posting Information on the CMS Web site
8. Limitation on Review
9. Conforming Changes
10. Payment Adjustment and Future Rulemaking
D. Medicaid Incentives
1. Overview of Health Information Technology in Medicaid
2. General Medicaid Provisions
3. Identification of Qualifying Medicaid EPs and Eligible
Hospitals
a. Overview
b. Program Participation
1. Acute Care Hospitals
2. Children's Hospitals
c. Medicaid Professionals Program Eligibility
d. Calculating Patient Volume Requirements
e. Entities Promoting the Adoption of Certified EHR Technology
4. Computation of Amount Payable to Qualifying Medicaid EPs and
Eligible Hospitals
a. Payment Methodology for EPs
(1) General Overview
(2) Average Allowable Costs
(3) Net Average Allowable Costs
(4) Payments for Medicaid Eligible Professionals
(5) Basis for Medicaid EHR Incentive Program First Payment Year
and Subsequent Payment Years
(i) Medicaid EP Who Begins Adopting, Implementing or Upgrading
Certified EHR Technology in the First Year
(ii) Medicaid EP Who Has Already Adopted, Implemented or
Upgraded Certified EHR Technology and Meaningfully Uses EHR
Technology
b. Payment Methodology for Eligible Hospitals
c. Alternative and Optional Early State Implementation To Make
Incentive Payments for Adopting, Implementing or Upgrading Certified
EHR Technology
d. Process for Making and Receiving Medicaid Incentive Payments
e. Avoiding Duplicate Payment
f. Flexibility To Alternate Between Medicare and Medicaid EHR
Incentive Programs One Time
g. One State Selection
5. Single Provider Election Repository and State Data Collection
6. Collection of Information Related to the Eligible
Professional's National Provider Identifier (NPI) and the Tax
Identification Number (TIN)
7. Activities Required To Receive Incentive Payments
a. General Overview
b. Definitions Related to Certified EHR Technology and Adopting,
Implementing or Upgrading Such Technology
(1) Certified EHR Technology
(2) Adopting, Implementing or Upgrading
c. Other General Terminology
d. Quality Measures
8. Overview of Conditions for States To Receive Federal
Financial Participation (FFP) for Incentive Payments and
Implementation Funding
9. Financial Oversight, Program Integrity and Provider Appeals
III. Collection of Information Requirements
A. ICRs Regarding Demonstration of Meaningful Use Criteria
(Sec. 495.8)
B. ICRs Regarding Participation Requirements for EPs, Eligible
Hospitals, and Qualifying CAHs (Sec. 495.10)
C. ICRs Regarding Identification of Qualifying MA Organizations,
MA-EPs and MA-Affiliated Eligible Hospitals (Sec. 495.202)
D. ICRs Regarding Incentive Payments to Qualifying MA
Organizations for MA-EPs and Hospitals (Sec. 495.204)
E. ICRs Regarding Meaningful User Attestation (Sec. 495.210)
F. ICRs Regarding Incentive Payments to Qualifying MA
Organizations for MA-Eligible Professionals and Hospitals (Sec.
495.220)
G. ICRs Regarding Process for Payments (Sec. 495.312)
H. ICRs Regarding Activities Required To Receive an Incentive
Payment (Sec. 495.314)
I. ICRs Regarding State Monitoring and Reporting Regarding
Activities Required To Receive an Incentive Payment (Sec. 495.316)
J. ICRs Regarding State Responsibilities for Receiving FFP
(Sec. 495.318)
K. ICRs Regarding Prior Approval Conditions (Sec. 495.324)
L. ICRs Regarding Termination of Federal Financial Participation
(FFP) for Failure To Provide Access to Information (Sec. 495.330)
M. ICRs Regarding State Medicaid Agency and Medicaid EP and
Hospital Activities (Sec. 495.332 Through Sec. 495.338)
N. ICRs Regarding Access to Systems and Records (Sec. 495.342)
O. ICRs Regarding Procurement Standards (Sec. 495.344)
P. ICRs Regarding State Medicaid Agency Attestations (Sec.
495.346)
Q. ICRs Regarding Reporting Requirements (Sec. 495.348)
R. ICRs Regarding Retroactive Approval of FFP With an Effective
Date of February 18, 2009 (Sec. 495.358)
S. ICRs Regarding Financial Oversight and Monitoring
Expenditures (Sec. 495.362)
T. ICRs Regarding Appeals Process for a Medicaid Provider
Receiving Electronic Health Record Incentive Payments (Sec.
495.366)
IV. Regulatory Impact Analysis
A. Overall Impact
B. Regulatory Flexibility Analysis
C. Small Rural Hospitals
D. Unfunded Mandates Reform Act
E. Federalism
F. Anticipated Effects
G. HITECH Impact Analysis
H. Accounting Statement
I. Background
A. Overview of the HITECH Programs Created by the American Recovery and
Reinvestment Act of 2009
The American Recovery and Reinvestment Act of 2009 (ARRA) (Pub. L.
111-5) was enacted on February 17,
[[Page 44316]]
2009. Title IV of Division B of ARRA amends Titles XVIII and XIX of the
Social Security Act (the Act) by establishing incentive payments to
eligible professionals (EPs), eligible hospitals, and critical access
hospitals (CAHs), and Medicare Advantage Organizations to promote the
adoption and meaningful use of interoperable health information
technology (HIT) and qualified electronic health records (EHRs). These
provisions, together with Title XIII of Division A of ARRA, may be
cited as the ``Health Information Technology for Economic and Clinical
Health Act'' or the ``HITECH Act.'' These incentive payments are part
of a broader effort under the HITECH Act to accelerate the adoption of
HIT and utilization of qualified EHRs.
On January 13, 2010 we published a proposed rule (75 FR 1844),
entitled ``Medicare and Medicaid Programs; Electronic Health Record
Incentive Program'' to implement the provisions of ARRA that provide
incentive payments to EPs, eligible hospitals, and CAHs participating
in Medicare and Medicaid programs that adopt and successfully
demonstrate meaningful use of ``certified EHR technology,'' and
incentive payments to certain Medicare Advantage Organizations for
their affiliated EPs and eligible hospitals that meaningfully use
certified EHR technology. Through this final rule, we are developing
the incentive programs which are outlined in Division B, Title IV of
the HITECH Act. This final rule sets forth the definition of
``meaningful use of certified EHR technology.''
Section 13101 of the HITECH Act adds a new section 3000 to the
Public Health Service Act (PHSA), which defines ``certified EHR
technology'' as a qualified EHR that has been properly certified as
meeting standards adopted under section 3004 of the PHSA. CMS and ONC
have been working closely to ensure that the definition of meaningful
use of certified EHR technology and the standards for certified EHR
technology are coordinated. In the interim final rule published on
January 13, 2010 (75 FR 2014) entitled ``Health Information Technology:
Initial Set of Standards, Implementation Specifications, and
Certification Criteria for Electronic Health Record Technology,'' ONC
defined the term ``certified EHR technology,'' identified the initial
set of standards and implementation specifications that such EHR
technology would need to support the achievement of the proposed
meaningful use Stage 1, as well as the certification criteria that will
be used to certify EHR technology. ONC is also issuing a final rule on
the standards, implementation specifications, and certification
criteria elsewhere in this issue of the Federal Register.
In a related proposed rule published on March 10, 2010, (75 FR
11328) entitled ``Proposed Establishment of Certification Programs for
Health Information Technology'' ONC proposed the establishment of two
certification programs for purpose of testing and certifying health
information technology. In the June 24, 2010 Federal Register (75 FR
36157), ONC published a final rule to establish a temporary
certification program whereby the National Coordinator would authorize
organizations to test and certify complete EHRs and EHR Modules, and
plans to issue a separate final rule to establish a permanent
certification program to replace the temporary certification program.
Specifically, this final rule will ensure that the definition of
meaningful use of certified EHR technology does not require EPs,
eligible hospitals, and CAHs to perform functions for which standards
have not been recognized or established. Similarly, the functionality
of certified EHR technology should enable and advance the definition of
meaningful use.
We urge those interested in this final rule to also review the ONC
interim final rule on standards and implementation specifications for
certified EHR technology and the related final rule as well as the
final rule on the establishment of a temporary certification program.
Readers may also visit https://healthit.hhs.gov and https://www.cms.hhs.gov/Recovery/11_HealthIT.asp#TopOfPage for more
information on the efforts at the Department of Health and Human
Services (HHS) to advance HIT initiatives.
B. Statutory Basis for the Medicare & Medicaid EHR Incentive Programs
Section 4101(a) of the HITECH Act adds a new subsection (o) to
section 1848 of the Act. Section 1848(o) of the Act establishes
incentive payments for demonstration of meaningful use of certified EHR
technology by EPs participating in the original Medicare program
(hereinafter referred to as the Medicare Fee-for-Service (FFS) program)
beginning in calendar year (CY) 2011. Section 4101(b) of the HITECH Act
also adds a new paragraph (7) to section 1848(a) of the Act. Section
1848(a)(7) of the Act provides that beginning in CY 2015, EPs who do
not demonstrate that they are meaningful users of certified EHR
technology will receive an adjustment to their fee schedule for their
professional services of 99 percent for 2015 (or, in the case of an
eligible professional who was subject to the application of the payment
adjustment under section 1848(a)(5) of the Act, 98 percent for 2014),
98 percent for 2016, and 97 percent for 2017 and each subsequent year.
Section 4101(c) of the HITECH Act adds a new subsection (l) to section
1853 of the Act to provide incentive payments to certain Medicare
Advantage (MA) organizations for their affiliated EPs who meaningfully
use certified EHR technology and meet certain other requirements, and
requires a downward adjustment to Medicare payments to certain MA
organizations for professional services provided by any of their
affiliated EPs who are not meaningful users of certified EHR
technology, beginning in 2015. Section 1853(l) of the Act also requires
us to establish a process that ensures that there are no duplicate
payments made to MA organizations under section 1853(l) of the Act and
to their affiliated EPs under the FFS EHR incentive program established
under section 1848(o)(1)(A) of the Act.
Section 4102(a) of the HITECH Act adds a new subsection (n) to
section 1886 of the Act. Section 1886(n) of the Act establishes
incentives payments for demonstration of meaningful use of certified
EHR technology by subsection (d) hospitals, as defined under section
1886(d)(1)(B) of the Act, participating in the Medicare FFS program
beginning in Federal fiscal year (FFY) 2011. Section 4102(b)(1) of the
HITECH Act amends section 1886(b)(3)(B) of the Act to provide that,
beginning in FY 2015, subsection (d) hospitals that are not meaningful
users of certified EHR technology will receive a reduced annual payment
update for their inpatient hospital services. Section 4102(a)(2) of the
HITECH Act amends section 1814(l) of the Act to provide an incentive
payment to critical access hospitals (CAHs) who meaningfully use
certified EHR technology based on the hospitals' reasonable costs for
the purchase of certified EHR technology beginning in FY 2011. In
addition, section 4102(b)(2) of the HITECH Act amends section 1814(l)
of the Act to provide for a downward payment adjustment for hospital
services provided by CAHs that are not meaningful users of certified
EHR technology for cost reporting periods beginning in FY 2015. Section
4102(c) of the HITECH Act adds a new subsection (m) to section 1853 of
the Act to provide incentive payments to qualifying MA organizations
for certain affiliated hospitals that meaningfully
[[Page 44317]]
use certified EHR technology to make a downward adjustment to payments
to certain MA organizations for inpatient hospital services provided by
its affiliated hospitals that are not meaningful users of certified EHR
technology beginning in FY 2015. Section 1853(m) of the Act also
requires us to establish a process that ensures that there are no
duplicate payments made to MA organizations under section 1853(m) of
the Act and to their affiliated hospitals under the FFS EHR incentive
program established under section 1886(n) of the Act.
Section 4103 of the HITECH Act provides for implementation funding
for the EHR incentives program under Medicare.
Section 4201 of the HITECH Act amends section 1903 of the Act to
provide 100 percent Federal financial participation (FFP) to States for
incentive payments to certain eligible providers participating in the
Medicaid program to purchase, implement, operate (including support
services and training for staff) and meaningfully use certified EHR
technology and 90 percent FFP for State administrative expenses related
to the program outlined in 1903(t) of the Act. Section 4201(a)(2) of
the HITECH Act adds a new subsection (t) to section 1903 of the Act to
establish a program with input from the States to provide incentives
for the adoption and subsequent meaningful use of certified EHR
technology for providers participating in the Medicaid program.
II. Provisions of the Proposed Rule and Analysis of and Responses to
Public Comments
We proposed to add a new part 495 to title 42 of the Code of
Federal Regulations to implement the provisions of Title IV of Division
B of ARRA providing for incentive payments to EPs, eligible hospitals,
CAHs and certain Medicare Advantage organizations for the adoption and
demonstration of meaningful use of certified EHR technology under the
Medicare program or the Medicaid program.
The HITECH Act creates incentives under the Medicare Fee-for-
Service (FFS), Medicare Advantage (MA), and Medicaid programs for EPs,
eligible hospitals and CAHs to adopt and demonstrate meaningful use of
certified EHR technology, and payment adjustments under the Medicare
FFS and MA programs for EPs, eligible hospitals, and CAHs who fail to
adopt and demonstrate meaningful use of certified EHR technology. The
three incentive programs contain many common elements and certain
provisions of the HITECH Act encourage avoiding duplication of
payments, reporting, and other requirements, particularly in the area
of demonstration of meaningful use of certified EHR technology.
Eligible hospitals and CAHs may participate in both the Medicare
program and the Medicaid program, assuming they meet each program's
eligibility requirements, which vary across the two programs. In
certain cases, the HITECH Act has used nearly identical or identical
language in defining terms that are used in the Medicare FFS, MA, and
Medicaid programs, including such terms as ``hospital-based EPs'' and
``certified EHR technology.'' For these reasons, we seek to create as
much commonality between the three programs as possible and have
structured this final rule, as we did the proposed rule, based on the
premise by beginning with those provisions that cut across the three
programs before moving on to discuss the provisions specific to
Medicare FFS, MA and Medicaid.
A. Definitions Across the Medicare FFS, MA, and Medicaid Programs
Title IV, Division B of ARRA establishes incentive payments under
the Medicare and Medicaid programs for certain professionals and
hospitals that meaningfully use certified EHR technology, and for
certain MA organizations whose affiliated EPs and hospitals
meaningfully use certified EHR technology. We refer to the incentive
payments made under the original Medicare program to EPs, eligible
hospitals, and CAHs as the Medicare FFS EHR incentive program, the
incentive payments made to qualifying MA organizations as the MA EHR
incentive program, and the incentive payments made under Medicaid to
eligible professionals and eligible hospitals as the Medicaid EHR
incentive program. When referring to the Medicare EHR incentive
program, we are generally referring to both the Medicare FFS EHR and
the MA EHR incentive programs.
1. Definitions
Sections 4101, 4102, and 4201 of the HITECH Act use many identical
or similar terms. In this section of the preamble, we discuss terms for
which we are finalizing uniform definitions for the Medicare FFS, MA,
and Medicaid EHR incentive programs. These definitions are set forth in
part 495 subpart A of the regulations. For definitions specific to an
individual program, the definition is set forth and discussed in the
applicable EHR incentive program section.
The incentive payments are available to EPs which are non-hospital-
based physicians, as defined in section 1861(r) of the Act, who either
receive reimbursement for services under the Medicare FFS program or
have an employment or contractual relationship with a qualifying MA
organization meeting the criteria under section 1853(l)(2) of the Act;
or healthcare professionals meeting the definition of ``eligible
professional'' under section 1903(t)(3)(B) of the Act as well as the
patient-volume and non-hospital-based criteria of section 1903(t)(2)(A)
of the Act and eligible hospitals which are subsection (d) hospitals as
defined under subsection 1886(d)(1)(B) of the Act that either receive
reimbursement for services under the Medicare FFS program or are
affiliated with a qualifying MA organization as described in section
1853(m)(2) of the Act; critical access hospitals (CAHs); or acute care
or children's hospitals described under section 1903(t)(2)(B) of the
Act.
a. Certified Electronic Health Record (EHR) Technology
Under all three EHR incentive programs, EPs, eligible hospitals,
and CAHs must utilize ``certified EHR technology'' if they are to be
considered eligible for the incentive payments. In the Medicare FFS EHR
incentive program this requirement for EPs is found in section
1848(o)(2)(A)(i) of the Act, and for eligible hospitals and CAHs in
section 1886(n)(3)(A)(i) of the Act. In the MA EHR incentive program
this requirement for EPs is found in section 1853(l)(1) of the Act, and
for eligible hospitals and CAHs, in section 1853(m)(1) of the Act. In
the Medicaid EHR incentive program this requirement for EPs and
Medicaid eligible hospitals is found throughout section 1903(t) of the
Act, including in section 1903(t)(6)(C) of the Act. Certified EHR
technology is a critical component of the EHR incentive programs, and
the Secretary has charged ONC, under the authority given to her in the
HITECH Act, with developing the criteria and mechanisms for
certification of EHR technology. Therefore, we finalize our proposal to
use the definition of certified EHR technology adopted by ONC. ONC
issued an interim final rule with comment for the standards and
certification criteria for certified EHR technology at the same time
our proposed rule was issued. After reviewing the comments they
received and to address changes made in this final rule, ONC will be
issuing a final rule in conjunction with this final rule. When we refer
to the ONC final rule, we are referring to this final rule titled
[[Page 44318]]
``Health Information Technology: Initial Set of Standards,
Implementation Specifications, and Certification Criteria for
Electronic Health Record Technology. When we refer to the ONC IFR, we
are referring to the interim final rule with comment period published
in the Federal Register on January 13, 2010.
Comment: Several commenters asked for clarification on the
definition of certified EHR technology. Currently, hospitals utilize
multiple systems to operate electronically. For example, some
electronic operating systems feed EHR data and some systems pull EHR
data. Data from the two systems are then extracted and manipulated to
create a quality measure calculation. The commenters' inquired as to
how these systems can continue to be utilized even though,
independently, these systems will not meet all certification standards.
Some commenters expressed concern the ONC IFR did not include
generation of the data needed to demonstrate meaningful use as a
certification requirement and that certified EHR technology
requirements should also include compliance with HIPAA standards as
well as all relevant state statutes for the state or states where it is
installed. Commenters recommended various approaches to defining
certified technology especially in the early stages of the program.
Some suggestions included, grandfathering existing systems for a period
of three years as long as the provider could meet specific meaningful
use objectives while requiring all upgrades to existing systems to be
certified, allowing all EHR products certified by the Certification
Commission for Health Information Technology (CCHIT) at the criteria
established for 2008 or later be deemed as meeting Stage 1
certification requirements or alternatively CMS provide a process that
can verify compliance of required features at no cost to providers or
vendors as is done now with Enterprise Data Interchange (EDI) claims
processing. Some commenters also offered other thoughts on potential
unintended consequences of defining the EHR certification software
process to include certifying agencies that charge for the process. The
commenters believed this could result in continued new and revised
requirements to justify the certifying entities' existence and increase
its revenue.
Response: We have referred those comments to ONC who addresses them
in their final rule.
We are adopting the ONC definition of certified EHR technology at
45 CFR 170.102 in this final rule.
b. Qualified Electronic Health Record
In order for an EHR technology to be eligible for certification, it
must first meet the definition of a Qualified Electronic Health Record.
This term was defined by ONC in its in its IFR and finalized by ONC in
their final rule, and we are finalizing our proposal to use the
definition of qualified electronic health record adopted by ONC in
their final rule to be published concurrently with this rule.
Comment: We received a few comments on the definition of qualified
EHR technology. Commenters expressed concerns regarding perceived gaps
in defining an EHR as qualified such as a lack of the requirement for a
narrative text for physicians (also known as progress note). Another
comment requested further clarification regarding the requirement for a
qualified EHR to ``capture and query information relevant to health
care quality'' and ``exchange electronic health information with and
integrate such information from other sources.'' For example, some
might believe that these requirements apply strictly to information
contained within the EHR or closed proprietary hospital systems and not
to information that would have to be obtained from outside the four
walls of the practice or the extended (but closed) system.
Response: We have referred those comments to ONC who addresses them
in their final rule.
We are adopting the ONC definition of Qualified Electronic Health
Record at 45 CFR 170.102.
c. Payment Year
As discussed in the proposed rule, under section 1848(o)(1)(A)(i)
of the Act the Medicare FFS EHR incentive payment is available to EPs
for a ``payment year.'' Section 1848(o)(1)(E) of the Act defines the
term ``payment year'' as a year beginning with 2011. While the Act does
not use the term, ``payment year,'' for the Medicaid EHR incentive
program, it does use the term ``year of payment'' throughout section
1903(t) of the Act, for example, at sections 1903(t)(3)(C),
1903(t)(4)(A), and 1903(t)(6)(C) of the Act. For all EPs in the
Medicare and Medicaid EHR incentive programs, we are proposing a common
definition for both ``payment year'' and ``year of payment,'' as ``any
calendar year beginning with 2011'' at Sec. 495.4. In the proposed
rule, we explained that this definition, which is consistent with the
statutory definition of ``payment year'' under Medicare FFS, would
simplify the EHR incentive programs for EPs. As discussed later in this
preamble, EPs will have the opportunity to participate in either the
Medicare or Medicaid incentive programs, and once an EP has selected a
program, they are permitted to make a one-time switch from one program
to the other. A common definition will allow EPs to more easily
understand both incentive programs, and inform their decisions
regarding participation in either program.
Under section 1886(n)(1) of the Act, the Medicare FFS EHR incentive
payment is available to eligible hospitals and CAHs for a ``payment
year.'' Section 1886(n)(2)(G) of the Act defines the term ``payment
year'' as a fiscal year beginning in 2011. As hospitals are paid based
on the 12-month Federal fiscal year, we interpret the reference to a
``fiscal year'' means the fiscal year beginning on October 1 of the
prior calendar year and extending to September 30 of the relevant year.
Again, for the Medicaid EHR incentive program, the HITECH Act uses the
term, ``year of payment'' (see section 1903(t)(5)(D)(ii) of the Act),
rather than ``payment year.'' For the same reasons expressed in the
proposed rule and summarized above for proposing a common definition of
``payment year'' for EPs, and because hospitals will have the
opportunity to simultaneously participate in both the Medicare and
Medicaid EHR incentive programs, we propose a common definition of
``payment year'' and ``year of payment'' for both programs.
For purposes of the incentive payments made to eligible hospitals
and CAHs under the Medicare FFS, MA and Medicaid EHR incentive
programs, we proposed to define payment year and year of payment at
Sec. 495.4, consistent with the statutory definition, as ``any fiscal
year beginning with 2011.''
Comment: A commenter asked CMS to identify the first possible
payment year for EPs, and hospitals and CAHs.
Response: The first payment year for EPs is any calendar year (CY)
beginning with CY 2011 and for eligible hospitals and CAHs is any
fiscal year (FY) beginning with 2011.
Comment: The majority of commenters favored our definition of
``payment year'' based on the different existing fiscal periods for
eligible professionals and hospitals. Additional support was received
from some commenters whom explained that they participated in
performance-based initiatives, which define a payment year the same as
the proposed rule.
Response: After consideration of the public comments received, we
are adopting our proposed definition of ``payment year'' in the
Medicare and
[[Page 44319]]
Medicaid EHR incentive programs as described above.
Comment: The majority of comments received regarding the definition
of a payment year asked whether payment years must be consecutive for
an EP or eligible hospital to receive all years of incentive payments.
Response: In the proposed rule, we defined the second, third,
fourth, fifth, and sixth payment year, respectively, to mean ``the
second, third, fourth, fifth, and sixth calendar or Federal fiscal
year, respectively, for which an EP or eligible hospital receives an
incentive payment.'' However, section 1848(o)(1)(E) of Act defines the
second through fifth payment years for an EP as each successive year
immediately following the first payment year for such professional for
the Medicare FFS and MA EHR incentive programs. Similarly, section
1886(n)(2)(G)(ii) of the Act defines the second through fourth payment
years for an eligible hospital or CAH as requiring the years to be
``successive'' and ``immediately following'' the prior year. This
requirement, that each payment year ``immediately follow'' the prior
year, means that every year subsequent to the first payment year is a
payment year regardless of whether an incentive payment is received by
the EP, eligible hospital or CAH. For example, if a Medicare EP
receives an incentive in CY 2011, but does not successfully demonstrate
meaningful use or otherwise fails to qualify for the incentive in CY
2012, CY 2012 still counts as one of the EP's five payment years and
they would only be able to receive an incentive under the Medicare EHR
incentive program for three more years as CY 2013 would be there third
payment year. In this example, the maximum incentive payment that would
apply for this Medicare EP not practicing predominately in a health
professional shortage area (HPSA) would be $18,000 in 2011, and $8,000
in 2013 as outlined in section 1848(o)(1)(B) of the Act. The EP would
have qualified for a maximum incentive payment of $12,000 in 2012, but
did not qualify as a meaningful user for this year. No incentives may
be made under the Medicare EHR incentive program after 2016.
The same rule, however, does not apply to the Medicaid EHR
incentive program. For that program, payments may generally be non-
consecutive. If an EP or eligible hospital does not receive an
incentive payment for a given CY or FY then that year would not
constitute a payment year. For example, if a Medicaid EP receives
incentives in CY 2011 and CY 2012, but fails to qualify for an
incentive in CY 2013, they would still be eligible to receive
incentives for an additional four payment years. For hospitals,
however, starting with FY 2017 payments must be consecutive. This rule
is required by section 1903(t)(5)(D) of the Act, which states that
after 2016, no Medicaid incentive payment may be made to an eligible
hospital unless ``the provider has been provided payment * * * for the
previous year.'' As a result, Medicaid eligible hospitals must receive
an incentive in FY 2016 to receive an incentive in FY 2017 and later
years. Starting in FY 2016, incentive payments must be made every year
in order to continue participation in the program. In no case may any
Medicaid EP or eligible hospital receive an incentive after 2021. We
have revised our regulations at Sec. 495.4 to incorporate these
statutory requirements.
Comment: Some commenters requested that CMS clarify the impact on
EPs when they change practices in the middle of the incentive payment
program; in other words, if an EP leaves a practice in year two of the
incentive payment program and goes to another practice, does that EP
forfeit the ability to continue collecting incentive payments for years
3 through 5?
Response: A qualifying EP that leaves one practice for another may
still be eligible to receive subsequent incentive payments if the EP is
a meaningful EHR user in the new practice. The incentive payment is
tied to the individual EP, and not to his or her place of practice.
d. First, Second, Third, Fourth, Fifth, and Sixth Payment Year
In accordance with sections 1848(o)(1)(A)(ii), 1886(n)(2)(E),
1814(l)(3)(A), 1903(t)(4)(B), and 1903(t)(5)(A) of the Act, for EPs,
eligible hospitals, and CAHs that qualify for EHR incentive payments in
a payment year, the amount of the payment will depend in part on
whether the EP or hospital previously received an incentive payment
and, if so (for the Medicare EHR incentive program) when the EP or
hospital received his or her first payment. We proposed to define the
first payment year to mean the first CY or Federal fiscal year (FY) for
which an EP, eligible hospital, or CAH receives an incentive payment.
Likewise, we proposed to define the second, third, fourth, fifth, and
sixth payment year, respectively, to mean the second, third, fourth,
fifth, and sixth CY or FY, respectively, for which an EP, eligible
hospital, or CAH receives an incentive payment.
Comment: As stated above, many commenters requested clarification
on non-consecutive payment.
Response: This comment is addressed above.
Comment: A commenter requested CMS to clarify the consequences for
a hospital that originally qualified and received incentive payments
the first year, but in a subsequent year failed to qualify as a
meaningful user of certified EHR technology.
Response: Meaningful use will be assessed on a year-by-year basis
as we establish different Stages of meaningful use criteria for
different years. If an EP or an eligible hospital including a CAH has
failed to demonstrate meaningful use of certified EHR technology for a
certain payment year, the EP, eligible hospital, or CAH will not be
qualified for incentive payments for that payment year. However, upon
successful demonstration as a meaningful EHR user in subsequent years,
an EP, eligible hospital or CAH may be eligible to receive an incentive
payment. As discussed above, however, for the Medicare program, the
failure of the eligible hospital or CAH to demonstrate meaningful use
in the subsequent year, will affect the total payments that hospital is
eligible to receive, as, pursuant to the statute, the hospital is
treated as skipping a payment year. Payment adjustments apply to
Medicare providers who are unable to demonstrate meaningful use
starting in 2015.
Comment: One commenter asked if CMS could apply the same Medicaid
EP's first year incentive eligibility requirements of adopting,
implementing or upgrading to certified EHR technology to Medicare
physicians instead of demonstration of meaningful use.
Response: The HITECH Act allows Medicaid EPs and eligible hospitals
to receive an incentive for the adoption, implementation, or upgrade of
certified EHR technology in their first participation year. In
subsequent years, these EPs and eligible hospitals must demonstrate
that they are meaningful users. There are no parallel provisions under
the Medicare EHR incentive program that would authorize us to make
payments to Medicare EPs, eligible hospitals, and CAHs for the
adoption, implementation or upgrade of certified EHR technology.
Rather, in accordance with sections 1848(o)(2), 1886(n)(3)(A), and
1814(l)(3)(A) of the Act, Medicare incentive payments are only made to
EPs, eligible hospitals, and CAHs for the demonstration of meaningful
use of certified EHR technology.
[[Page 44320]]
After consideration of the public comments received, we are
finalizing the definitions of First payment year as proposed. For the
Medicare EHR incentive programs, we are modifying the definitions of
second, third, fourth, fifth payment year to make clear that these
years are ``each successive year following the first payment year.''
For the Medicaid EHR incentive program, we included definitions of
first, second, third, fourth, fifth and sixth payment year that make
clear that these are the years for which payment is received. The
regulations can now be found at Sec. 495.4 of our regulations.
e. EHR Reporting Period
In the proposed rule, we proposed a definition of EHR Reporting
Period for purposes of the Medicare and Medicaid incentive payments
under sections 1848(o), 1853(l)(3), 1886(n), 1853(m)(3), 1814(l) and
1903(t) of the Act. For these sections, we proposed that the EHR
reporting period would be any continuous 90-day period within the first
payment year and the entire payment year for all subsequent payment
years. In our proposed rule, we did not make any proposals regarding
the reporting period that will be used for purposes of the payment
adjustments that begin in 2015. We intend to address this issue in
future rulemaking, for purposes of Medicare incentive payment
adjustments under sections 1848(a)(7), 1853(l)(4), 1886(b)(3)(B)(ix),
1853(m)(4), and 1814(l)(4) of the Act.
For the first payment year only, we proposed to define the term EHR
reporting period at Sec. 495.4 of our regulations to mean any
continuous 90-day period within a payment year in which an EP, eligible
hospital or CAH successfully demonstrates meaningful use of certified
EHR technology. The EHR reporting period therefore could be any
continuous period beginning and ending within the relevant payment
year. Starting with the second payment year and any subsequent payment
years for a given EP, eligible hospital or CAH, we proposed to define
the term EHR reporting period at Sec. 495.4 to mean the entire payment
year. In our discussion of considerations in defining meaningful use
later in this section we discuss how this policy may be affected by
subsequent revisions to the definition of meaningful use.
For the first payment year, we stated in the proposed rule our
belief that giving EPs, eligible hospitals and CAHs flexibility as to
the start date of the EHR reporting period is important, as unforeseen
circumstances, such as delays in implementation, higher than expected
training needs and other unexpected hindrances, may cause an EP,
eligible hospital, or CAH to potentially miss a target start date.
Comment: Some commenters supported the 90-day reporting period
proposed for the first payment year. One commenter requested that
exceptions, per the provider request, be considered individually in
cases of compliance for less than the 90 days (for example, 85 days).
Commenters preferred the 90-day reporting period overall and many
suggested it be used for subsequent years as well. We also received
comments questioning why Medicaid providers would need to conform to
the 90-day reporting period in order to adopt, implement or upgrade
certified EHR technology.
Response: We do believe that for program integrity it is crucial to
maintain a consistent reporting period. Basing the incentive payments
on meaningful use implies a minimum level of use in order to receive
the incentive payment. The timeframe is part of the determination of
whether use is meaningful and therefore requires a minimum as well.
Given the short time period as compared to the entire year, we do not
believe an exception process is needed. However, we agree with
commenters that an EHR reporting period for demonstrating adoption,
implementation or upgrading certified EHR technology by Medicaid EPs
and eligible hospitals is unnecessary and are removing it for the final
rule in this instance. Similarly, Medicaid EPs and eligible hospitals
who are demonstrating meaningful use for the first time in their second
payment year, will have a 90-day reporting period to maintain parity
with Medicare providers' first meaningful use payment year. We do not
believe that after successfully demonstrating meaningful use, a 90-day
period is appropriate for subsequent years. The reasons for using the
90-day period instead of the full year are based on potential delays in
implementing certifying EHR technology. Once certified EHR technology
is implemented these are no longer applicable.
After consideration of the public comments received and with the
clarification described above for adopting, implementing or upgrading,
we are finalizing the 90-day reporting period for the first payment
year based on meaningful use as proposed for Medicare EPs, eligible
hospitals and CAHs and full year EHR reporting periods for subsequent
payment years. For Medicaid EPs and eligible hospitals, the EHR
reporting period will be a 90-day period for the first year a Medicaid
EP or eligible hospital demonstrates meaningful use and full year EHR
reporting periods for subsequent payment years.
f. Meaningful EHR User
Section 1848(o)(1)(A)(i) of the Act, limits incentive payments
under the Medicare FFS EHR incentive program to an EP who is a
``meaningful EHR user.'' Similarly, section 1886(n)(1) and 1814(l) of
the Act, limits incentive payments under the Medicare FFS EHR incentive
program to an eligible hospital or CAH, respectively, who is a
``meaningful EHR user.'' Section 1903(t)(6)(C)(i)(II) of the Act limits
incentive payments for payment years other than the first payment year
to a Medicaid EP or eligible hospital who ``demonstrates meaningful use
of certified EHR technology.'' We proposed to define at Sec. 495.4 the
term ``meaningful EHR user'' as an EP, eligible hospital, or CAH who,
for an EHR reporting period for a payment year, demonstrates meaningful
use of certified EHR technology in the form and manner consistent with
our standards (discussed below).
Comment: Several commenters indicated there is a need to align
measures and programs, to avoid having to report similar measure
standards to different Federal, State and other entities.
Response: We concur with the goal of alignment to avoid redundant
and duplicative reporting and seek to accomplish this to the extent
possible now and in future rulemaking.
Comment: Several commenters suggested that CMS considers EPs,
eligible hospitals, and CAHs who are participating in certain existing
programs as meaningful EHR users. The commenters contended that the
standards followed by participants in these programs are equivalent to
those we proposed to adopt for purposes of demonstrating meaningful
use. The programs recommended by commenters are--
Qualified Health Information Exchange Networks; and
Medicare Electronic Health Record Demonstration Program.
Response: We do not agree that participation in these programs
would be the equivalent to demonstrating meaningful use in accordance
with the criteria under the EHR incentive programs. Most of these
programs place a heavy focus on one of the five priorities of
meaningful use discussed in the next section such as reporting clinical
quality measures or the exchange of health information, tailored to the
individual program's goals. For example, the goal of the Medicare
[[Page 44321]]
Electronic Health Record Demonstration Program, for example, which was
started in 2009 and pre-dates passage of the HITECH Act, is to reward
delivery of high-quality care supported by the adoption and use of
electronic health records in physician small to medium-size primary
care practices. The purpose of this program is to encourage adoption
and increasingly sophisticated use of EHRs by small to medium-sized
primary care practices. While this goal is similar to the overall
objective of the HITECH Act, the requirements for the demonstration are
not as broad-based as that of the HITECH Act, and payment incentives
are based on the level of use over the duration of the program, which
will vary by practice. Therefore, it is not appropriate to deem
practices participating in the EHR Demonstration as meaningful users
for purposes of the HITECH Act. The HITECH Act also requires use
certified EHR technology as defined by ONC to qualify for incentive
payments. While CCHIT has certified EHR technology in the past, the ONC
regulation ``Establishment of the Temporary Certification Program for
Health Information Technology; Final Rule'' (see 75 FR 36157) which
establishes a temporary certifying body has yet to be established.
Where possible, we have aligned the criteria required to demonstrate
meaningful use with existing programs like PQRI and RHQDAPU as
discussed in section II.A.3 of this final rule. After consideration of
the public comments received, we are finalizing our definition of a
meaningful EHR user as proposed.
2. Definition of Meaningful Use
a. Considerations in Defining Meaningful Use
In sections 1848(o)(2)(A) and 1886(n)(3)(A) of the Act, the
Congress identified the broad goal of expanding the use of EHRs through
the term meaningful use. In section 1903(t)(6)(C) of the Act, Congress
applies the definition of meaningful use to Medicaid eligible
professionals and eligible hospitals as well. Certified EHR technology
used in a meaningful way is one piece of a broader HIT infrastructure
needed to reform the health care system and improve health care
quality, efficiency, and patient safety. HHS believes this ultimate
vision of reforming the health care system and improving health care
quality, efficiency and patient safety should drive the definition of
meaningful use consistent with the applicable provisions of Medicare
and Medicaid law.
In the proposed rule we explained that in defining meaningful use
we sought to balance the sometimes competing considerations of
improving health care quality, encouraging widespread EHR adoption,
promoting innovation, and avoiding imposing excessive or unnecessary
burdens on health care providers, while at the same time recognizing
the short timeframe available under the HITECH Act for providers to
begin using certified EHR technology.
Based on public and stakeholder input received prior to publishing
the proposed rule, we consider a phased approach to be most
appropriate. Such a phased approach encompasses reasonable criteria for
meaningful use based on currently available technology capabilities and
provider practice experience, and builds up to a more robust definition
of meaningful use, based on anticipated technology and capabilities
development. The HITECH Act acknowledges the need for this balance by
granting the Secretary the discretion to require more stringent
measures of meaningful use over time. Ultimately, consistent with other
provisions of law, meaningful use of certified EHR technology should
result in health care that is patient centered, evidence-based,
prevention-oriented, efficient, and equitable.
Under this phased approach to meaningful use, we intend to update
the criteria of meaningful use through future rulemaking. We refer to
the initial meaningful use criteria as ``Stage 1.'' We currently
anticipate two additional updates, which we refer to as Stage 2 and
Stage 3, respectively. We expect to update the meaningful use criteria
on a biennial basis, with the Stage 2 criteria by the end of 2011 and
the Stage 3 criteria by the end of 2013. The stages represent an
initial graduated approach to arriving at the ultimate goal.
Stage 1: The Stage 1 meaningful use criteria, consistent
with other provisions of Medicare and Medicaid law, focuses on
electronically capturing health information in a structured format;
using that information to track key clinical conditions and
communicating that information for care coordination purposes (whether
that information is structured or unstructured, but in structured
format whenever feasible); implementing clinical decision support tools
to facilitate disease and medication management; using EHRs to engage
patients and families and reporting clinical quality measures and
public health information. Stage 1 focuses heavily on establishing the
functionalities in certified EHR technology that will allow for
continuous quality improvement and ease of information exchange. By
having these functionalities in certified EHR technology at the onset
of the program and requiring that the EP, eligible hospital or CAH
become familiar with them through the varying levels of engagement
required by Stage 1, we believe we will create a strong foundation to
build on in later years. Though some functionalities are optional in
Stage 1, as outlined in discussions later in this rule, all of the
functionalities are considered crucial to maximize the value to the
health care system provided by certified EHR technology. We encourage
all EPs, eligible hospitals and CAHs to be proactive in implementing
all of the functionalities of Stage 1 in order to prepare for later
stages of meaningful use, particularly functionalities that improve
patient care, the efficiency of the health care system and public and
population health. The specific criteria for Stage 1 of meaningful use
are discussed at section II.2.c of this final rule.
Stage 2: Our goals for the Stage 2 meaningful use
criteria, consistent with other provisions of Medicare and Medicaid
law, expand upon the Stage 1 criteria to encourage the use of health IT
for continuous quality improvement at the point of care and the
exchange of information in the most structured format possible, such as
the electronic transmission of orders entered using computerized
provider order entry (CPOE) and the electronic transmission of
diagnostic test results (such as blood tests, microbiology, urinalysis,
pathology tests, radiology, cardiac imaging, nuclear medicine tests,
pulmonary function tests, genetic tests, genomic tests and other such
data needed to diagnose and treat disease). For the final rule, we
elaborate on our plans for Stage 2. We expect that stage two meaningful
use requirements will include rigorous expectations for health
information exchange, including more demanding requirements for e-
prescribing and incorporating structured laboratory results and the
expectation that providers will electronically transmit patient care
summaries to support transitions in care across unaffiliated providers,
settings and EHR systems. Increasingly robust expectations for health
information exchange in stage two and stage three will support and make
real the goal that information follows the patient. We expect that
Stage 2 will build upon Stage 1 by both altering the expectations of
the functionalities in Stage 1 and likely adding new functionalities
which
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are not yet ready for inclusion in Stage 1, but whose provision is
necessary to maximize the potential of EHR technology. As discussed
later in this final rule, we are making some objectives of the Stage 1
of meaningful use optional and other required. We will consider every
objective that is optional for Stage 1 to be required in Stage 2 as
well as revaluate the thresholds and exclusions of all the measures
both percentage based and those currently a yes/no attestation.
Additionally, we may consider applying the criteria more broadly to all
outpatient hospital settings (not just the emergency department).
Stage 3: Our goals for the Stage 3 meaningful use criteria
are, consistent with other provisions of Medicare and Medicaid law, to
focus on promoting improvements in quality, safety and efficiency
leading to improved health outcomes, focusing on decision support for
national high priority conditions, patient access to self management
tools, access to comprehensive patient data through robust, patient-
centered health information exchange and improving population health.
We did not include regulatory provisions for Stage 2 or Stage 3 in
our proposal and with one exception discussed under the CPOE objective,
we are not finalizing Stage 2 or Stage 3 requirements at this time.
However, we plan to build upon Stage 1 by increasing the expectations
of the functionalities in Stage 1 and adding new objectives for Stage
2. In our next rulemaking, we currently intend to propose that every
objective in the menu set for Stage 1 (as described later in this
section) be included in Stage 2 as part of the core set. While allowing
providers flexibility in setting priorities for EHR implementation
takes into account their unique circumstances, we maintain that all the
objectives are crucial to building a strong foundation for health IT
and to meeting the statutory objectives of the Act. In addition, as
indicated in our proposed rule, we anticipate raising the threshold for
these objectives in both Stage 2 and 3 as the capabilities of HIT
infrastructure increases. For Stage 2, we intend to review the
thresholds and measures associated with all Stage 1 objectives
considering advances in technology, changes in standard practice, and
changes in the marketplace (for example, wider adoption of information
technology by pharmacies) and propose, as appropriate, increases in
these requirements.
We recognize that the thresholds included in the final regulation
are ambitious for the current state of technology and standards of
care. However, we expect the delivery of health care to evolve through
the inception of the HITECH incentive programs and implementation of
the Affordable Care Act prior to finalizing Stage 2. Furthermore, data
collected from the initial attestations of meaningful use will be used
to ensure that the thresholds of the measures that accompany the
objectives in Stage 2 are continue to aggressively advance the use of
certified EHR technology. Finally, we continue to anticipate redefining
our objectives to include not only the capturing of data in electronic
format but also the exchange (both transmission and receipt) of that
data in increasingly structured formats. As appropriate, we intend to
propose the addition of new objectives to capture new functions that
are necessary to maximize the potential of EHR technology, but were not
ready for Stage 1. For instance, we would consider adding measures
related to CPOE orders for services beyond medication orders. The
intent and policy goal for raising these thresholds and expectations is
to ensure that meaningful use encourages patient-centric, interoperable
health information exchange across provider organizations.
We will continue to evaluate the progression of the meaningful use
definition for consistency with the HITECH ACT and any future statutory
requirements relating to quality measurement and administrative
simplification. As the purpose of these incentives is to encourage the
adoption and meaningful use of certified EHR technology, we believe it
is desirable to account for whether an EP, eligible hospital or CAH is
in their first, second, third, fourth, fifth, or sixth payment year
when deciding which definition of meaningful use to apply in the
beginning years of the program. The HIT Policy Committee in its public
meeting on July 16, 2009 also voiced its approval of this approach.
However, such considerations are dependent on future rulemaking, so for
this final rule Stage 1 criteria for meaningful use are valid for all
payments years until updated by future rulemaking.
We proposed that Medicare EPs, eligible hospitals, and CAHs whose
first payment year is 2011 must satisfy the requirements of the Stage 1
criteria of meaningful use in their first and second payment years
(2011 and 2012) to receive the incentive payments. We anticipate
updating the criteria of meaningful use to Stage 2 in time for the 2013
payment year and therefore anticipate for their third and fourth
payment years (2013 and 2014), an EP, eligible hospital, or CAH whose
first payment year is 2011 would have to satisfy t