Focus on the Final Rule
Focus on the Final Rule
EHR Certification & Meaningful Use
Please submit all questions via the WebEx
Q&A function.
Additional questions may be submitted
to: meaningfuluse@healthland.com
Final Rule
Legal Restrictions & Guidance
Daniel Gottlieb
Partner, McDermott Will
& Emery LLP
Agenda
• Who is an eligible hospital (EHs)?
– Medicare Incentives
– Medicaid Incentives
• Who is an eligible professional (EP)?
– Medicare Incentives
– Medicaid Incentives
• Exclusion of inapplicable meaningful
use (MU) objectives
Agenda (cont’d)
• Changes to Medicare and Medicaid
incentive calculations
• Registration and attestation process
and timelines
• Certification of EHR Technology
• Stark Law EHR Donation Exception
– Independent physicians on Medical Staff
– Hospital-Owned Clinics
Medicare Eligible Hospitals
• Medicare EHs: a hospital located in
one of the 50 states or D.C. that
participates in the Medicare Inpatient
Prospective Payment System (IPPS)
and Maryland acute care hospitals
• CAHs are also eligible for incentives
• Multi-campus hospital with a single
provider number is a single hospital
Medicare Eligible Hospitals
• Excludes IPPS-excluded hospitals
and hospital units such as:
– Psych hospital
– Children's hospital
- Rehab hospital
- LTCHs
• Surgical and other specialty hospitals
participating in IPPS are eligible for
Medicare incentives
Medicare Eligible Professionals
• Medicare EPs include doctors of:
medicine or osteopathy; dental
surgery or dental medicine; podiatric
medicine; optometry or chiropractry
• Hospital-based physicians who
provide 90% or more of their
covered services in a hospital
inpatient or ER setting are ineligible
Medicaid Eligible Hospitals
• EHs include “acute care hospitals”
and children’s hospitals
• An “acute care hospital” is a hospital
where the ALOS is 25 days or fewer
and a CCN that has the last four
digits in the series 0001-0879 (shortterm general hospitals and 11 U.S.
cancer hospitals) and now under the
final rule also 1300-1399 (CAHs)
Medicaid Eligible Hospitals
• Acute care hospital must have at
least 10 percent Medicaid Patient
Volume based on patient encounters
• Like other Medicaid EHs, CAHs may
receive both Medicare and Medicaid
EHR incentive payments
• If an EH meets Medicare MU
requirements, it will be deemed to
meet Medicaid MU requirements
Medicaid Eligible Professionals
• Medicaid EPs are the following
professionals (other than hospitalbased professionals):
– Physicians and dentists
– nurse practitioners
– certified nurse-midwives
– physician assistants practicing in FQHCs
or RHCs that are led by a physician
assistant
Medicaid Eligible Professionals
• A PA leads an FQHC or RHC under
any of the following circumstances:
– when a PA is the primary provider in a
clinic (for example, when there is a
part-time physician and full-time PA
– when a PA is a clinical or medical
director at a clinical site of practice
– PA is an owner of the RHC
Medicaid Eligible Professionals
• Medicaid EP must satisfy one of three
Patient Volume thresholds:
– Have ≥ 30% Patient Volume attributable
to Medicaid recipients
– Have ≥ 20% Patient Volume attributable
to Medicaid recipients and be a
pediatrician
– practice predominantly in a FQHC or
RHC and have ≥ 30% Patient Volume
attributable to Needy Individuals
Medicaid Eligible Professionals
• Needy Individuals are persons who:
– received medical assistance from
Medicaid or the Children’s Health
Insurance Program
– were furnished uncompensated care or
– were furnished services either at no cost
or reduced cost based on a sliding scale
determined by individuals’ ability to pay
Inapplicable MU Objectives
• Some MU objectives do not apply to
every provider so provider would not
have any eligible patients or actions
for the measure denominator
• In these cases, provider may exclude
(i.e., not meet) the measure
• Exclusions do not count against the
deferred measures in the menu set
Inapplicable MU Measures
• For example, an EH or CAH that did
not have request for electronic copy
of discharge instructions may
exclude core MU Objective #12 and
only comply with 13 of 14 objectives
• An EH or CAH that is excluded from a
menu set objective must only meet 4
rather than 5 of 10 objectives
Medicaid Incentive Calculation
• CMS clarified that employer’s or
FQHC’s purchase of EHR for use by
employed EPs is not a payment
• CMS did not address whether
payments from other sources could
include EHR donation to independent
physician practice under Stark EHR
donation exception
Registration
• To participate in incentive programs,
eligible provider must register on
incentive program website at
http://www.cms.gov/EHrIncentivePrograms/
• Medicaid programs will interface with
program registration website
• Registration begins in January 2011
Registration
• Registration requirements include:
– Name, National Provider Identifier,
business address and phone number
– Taxpayer identification number
– Hospital’s CCN
– EPs must select Medicare or Medicaid
– Medicaid providers must select one
state
Attestation for Medicare FFS
• Eligible providers demonstrate MU to
CMS through attestation in 2011 and
attestation and electronic reporting
of clinical quality information in 2012
• Providers may submit attestations as
early as April 2011 to CMS
• Payment begins as early as May
2011 following attestation
Attestation for Medicare FFS
• CMS will provide a web-based tool
for attestation
• CMS has not released attestation tool
• CMS is developing an audit strategy
to verify attestations and prevent
fraud and abuse
• Providers should develop compliance
and document retention procedures
Attestation to States
• States must identify attestation
and/or electronic reporting
mechanism in their State Medicaid
HIT Plans, subject to CMS approval
• States must develop audit and
verification procedures
Attestation and Reporting
• FY 2011: EH or CAH must attest that
during the EHR reporting period, it:
– Used certified EHR technology and
specify technology
– Satisfied required MU objectives and
measures
– Must specify the EHR reporting period
and provide the result of each applicable
measure for inpatients and ER patients
during the reporting period
Attestation and Reporting
• FY 2012 and after: EH or CAH must attest
that during the EHR reporting period, it:
– Used certified EHR technology and specify EHR
– Satisfied required MU objectives and measures
except clinical quality reporting
– Must specify the EHR reporting period and
provide the result of each applicable measure
• EH or CAH must electronically report
clinical quality measures through a portal
(or, if feasible HIE or registry)
EP’s Attestation and Reporting
• For CY 2011: EP must attest that
during the EHR reporting period, EP:
– Used certified EHR technology and
specify technology
– Satisfied required MU objectives and
measures
– Must specify the EHR reporting period
and provide the result of each applicable
measure
EP’s Attestation and Reporting
• For CY 2012 and after: EP must attest that
during the EHR reporting period, EP:
– Used certified EHR technology and specify EHR
– Satisfied required MU objectives and measures
except clinical quality reporting
– Must specify the EHR reporting period and
provide the result of each applicable measure
• EP must electronically report clinical
quality measures through a portal (or, if
feasible HIE or registry)
Medicare EH Payment Process
• Single payment contractor pays an
EH or CAH a preliminary, estimated
EHR incentive payment based on
most recently filed 12-month cost
report as early as May 2011
following successful MU attestation
• Final payment determined at time of
settling cost report that begins on or
after start of payment year
Medicare EP Payment Process
• Single payment contractor makes
annual incentive payment to an EP
when EP demonstrates MU and earns
the maximum annual incentive
payment
• Payments begin as early as May
2011 following successful
demonstration of MU on attestation
EHR Certification
• ONC published the temporary EHR
certification program final rule on
6/24/2010, which establishes :
– selection process for testing and
certification bodies (ONC-ATCBs)
– parameters under which the ONC-ATCBs
will test and certify that EHR meets the
EHR certification requirements
• ONC will make a Certified EHR list
available this Fall
Review of Medicare’s Timeline
• Fall 2011: Certified EHR technology
on EHR incentive program website
• January 2011: Registration begins on
incentive program website
• April 2011: Attestation of MU begins
through web tool
• May 2011: Medicare incentive
payments begin
Stark EHR Donation Exception
• Stark Law provides an exception for
subsidies for EHR items and services
• Exception applies to subsidies for
EHRs used in private physician
practice offices
• Hospital may purchase inpatient or
ambulatory EHR for use in hospital
facilities to serve hospital patients
without meeting exception
Other Resources
• Comprehensive McDermott White
Paper regarding final EHR
certification and meaningful use
regulations to be issued shortly
• Healthcare Informatics article
regarding Stark EHR donation
exception
Daniel F. Gottlieb
Partner, McDermott Will & Emery LLP
dgottlieb@mwe.com
312-984-6471
Final Rule
Accounting Requirements &
Incentive Guidelines
Ralph Llewellyn
Partner, Eide Bailly
Reimbursement Topics
• Medicare
– Medicare Share
– PPS Hospitals
– Critical Access Hospitals
– Eligible Professionals
• Medicaid
– Same
Medicare Share
• Based on inpatient volume
– Numerator
• Medicare days + Medicare Advantage
patient days
– IP, specialty care
» Psych and Rehab included in proposed
rule, but eliminated in final rule
– Excludes Swing Bed
Medicare Share
• Based on inpatient volume
– Denominator
• Total inpatient days TIMES
– Hospital charges less charity care
DIVIDED BY hospital charges
» Worksheet C Part I Line 200 Column 8
Medicare Share
• Based on inpatient volume
– Denominator
• Total inpatient days TIMES
– Hospital charges less charity care
DIVIDED BY hospital charges
» Worksheet C Part I Line 200 Column 8
• Charity Care
– As identified on Worksheet S-10 of the
Medicare cost report for PPS Hospitals
– Not reported on Medicare cost report for
CAH’s in the past
PPS Hospitals
• Initial Amount
– Base payment for each PPS hospital =
$2,000,000
• Adjusted for discharges 1,150 to 23,000
– $200 additional per discharge in this
range
– Times your Medicare Share
PPS Hospitals
• Payment Process
– Hospital data last filed 12 month cost
report
– Settled based on the first 12 month cost
reporting period that begins after the
start of the payment year
PPS Hospitals
• Transition Factor (FFY 2011 – 2013)
– Year 1 = 1
– Year 2 = ¾
– Year 3 = ½
– Year 4 = ¼
– Subsequent Years = 0
PPS Hospitals
• Transition Factor (FFY 2014 – 2015)
– If the facility’s first year of eligibility is
after FFY 2013, the transition factor is
the same as a facility with a first
payment in FFY 2013
– If the first payment year is after FFY
2015, the transition factor
PPS Hospitals
Fiscal
Year
Fiscal Year that Eligible Hospital First Receives the
Incentive Payment
2011
2012
2013
2014
2015
2011
1.00
---
---
---
---
2012
0.75
1.00
---
---
---
2013
0.50
0.75
1.00
---
---
2014
0.25
0.50
0.75
0.75
---
2015
---
0.25
0.50
0.50
0.50
2016
---
---
0.25
0.25
0.25
Critical Access Hospitals
• Allowed to expense their costs
associated with the purchase of
certified EHR technology in a single
year
– Versus depreciating these costs on the
cost report
– Current year and prior year purchases
(undepreciated value)
– Includes only purchases for hospital
specific EHR technology
Critical Access Hospitals
• Continued
– Reimbursement based on Medicare
Share + 20 percentage points (not to
exceed 100%)
– Lump sum prompt payment subject to
reconciliation
• Initial based on last filed 12 month cost
report
• Final based on final cost report
Critical Access Hospitals
• Continued
– Payments up to 4 consecutive years
• Stages
• Replacement equipment
Critical Access Hospitals
• Allowable expense
– Reasonable cost – “computers and
associated hardware and software
necessary to administer EHR
technology”
• Vendor implementation costs not included in
this incentive calculation
• Communicate with MAC/FI
Critical Access Hospitals
• Allowable expense
– Incentive payment in lieu of
depreciation AND interest
• “Be smart about your interest”
– Cost not reportable on future cost
reports
– Subject to reconciliation
Eligible Providers
• Incentive
– 75% of secretary’s estimate of allowed
charges for covered services furnished
by eligible professional during relevant
payment year
• Paid claims no later than 2 months after
relevant year
– Up to 5 years
– No incentive after 2016
Eligible Providers
Calendar
Year
2011
2012
First CY in which EP Receives an Incentive
Payment
2011
2012
$18,000
--$12,000 $18,000
2013
-----
2014
2015 +
---------
2013
2014
2015
2016
$8,000 $12,000 $15,000
--$4,000 $8,000 $12,000 $12,000
$2,000 $4,000 $8,000 $8,000
--- $2,000 $4,000 $4,000
----$0
$0
Total
$44,000 $44,000 $39,000 $24,000
$0
Eligible Providers
• HPSA incentive
– 10% increase in incentive
•
•
•
•
Provides services predominately in HPSA
Defined as greater than 50%
January 1 – December 31 frequency
If HPSA by December 31 of prior year
– No impact if HPSA lost during current
year
– No impact if HPSA obtained during
current year
Eligible Providers
Calendar
Year
2011
2012
First CY in which EP Receives an Incentive
Payment
2011
2012
$19,800
--$13,200 $19,800
2013
-----
2014
2015+
---------
2013
2014
2015
2016
$8,800 $13,200 $16,500
--$4,400 $8,800 $13,200 $13,200
$2,200 $4,400 $8,800 $8,800
--- $2,200 $4,400 $4,400
----$0
$0
Total
$48,400 $48,400 $42,900 $26,400
$0
Eligible Providers
• Single consolidated payment
– Ascertain professional has demonstrated
meaningful use
– Reaches maximum payment limit
– If maximum payment limit is not
reached payment is processed 2 months
after relevant payment year
• Multiple employers/contractual
arrangements
– Assign incentive to 1 employer or entity
Medicaid
• PPS Hospitals and Critical Access
Hospitals can participate in Medicare
and Medicaid
• Eligible providers must elect, with
option for one change
Medicaid - Hospitals
• PPS and CAHs reimbursed under
same methodology as Medicare PPS
– Medicaid Share versus Medicare Share
– Payment made over 3 – 6 years
Medicaid – Eligible Providers
• Incentive payment to EP equals Net
Average Allowable Costs for EHR
• NAAC is Average Allowable Costs
(capped at $25K in yr 1 and $10K in
yrs 2-6) net of cash payments
attributable to EHR technology or
support services from sources other
than state and local governments,
subject to 15% EP responsibility
Medicaid – Eligible Providers
Medicaid – Eligible Providers
Calendar
Year
Maximum Incentive Payment for Medicaid EPs Who Are
Meaningful Users in the First Payment Year
2011
2012
2013
2014
2015
2016
2011
$21,250
---
---
---
---
---
2012
$8,500
$21,250
---
---
---
---
2013
$8,500
$8,500
$21,250
---
---
---
2014
$8,500
$8,500
$8,500
$21,250
---
---
2015
$8,500
$8,500
$8,500
$8,500
$21,250
---
2016
$8,500
$8,500
$8,500
$8,500
$8,500
$21,250
2017
---
$8,500
$8,500
$8,500
$8,500
$8,500
2018
---
---
$8,500
$8,500
$8,500
$8,500
2019
---
---
---
$8,500
$8,500
$8,500
2020
---
---
---
---
$8,500
$8,500
2021
---
---
---
---
---
$8,500
Total
$63,750
$63,750
$63,750
$63,750
$63,750
$63,750
Ralph Llewellyn
Partner, Eide Bailly LLP
RLlewellyn@eidebailly.com
701-239-8594
Healthland’s Role in
Getting you to MU
Robert Forrest
Healthland ARRA Task Force
Meeting Meaningful Use
Eligible hospitals must
1. Implement certified EHR technology
2. Use it in a “meaningful manner”
Healthland will
1. Develop EHR technology that meets
meaningful use requirements
2. Obtain Certification from an ONC-ATCB
For more information
Email: meaningfuluse@healthland.com
Phone: 800.323.6987 xt.3211
Web: www.healthland.com/stimulus
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