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CMS Offers Financial Incentives for EHR Use

Butcher, Lola

doi: 10.1097/01.COT.0000390559.09254.95
EHR table computer

EHR table computer

Now that the rules for earning a $44,000 reward for using electronic health record technology are final, oncologists at the forefront of EHR use say they believe the technology will soon be used by a majority of practices.

Peter Yu, MD, Chair of the American Society of Clinical Oncology's EHR Workgroup, says he thinks it is “very realistic” that more than 50% of oncologists will be using EHR technology in five years.

He and other EHR experts say they think the financial incentives offered by the federal government will be less motivating to oncologists and other specialists than the incentives are to primary care physicians. But the final rule for so-called “meaningful use” of EHRs, issued by the Centers for Medicare & Medicaid Services in late July includes another provision that should get every physician's attention.

JOHN COX, DO, MBA, cautions oncologists not to oversimplify the government's offer: “I worry that people think ‘if I purchase it, then they're going to send me a check

JOHN COX, DO, MBA, cautions oncologists not to oversimplify the government's offer: “I worry that people think ‘if I purchase it, then they're going to send me a check

“The carrot goes away and a stick comes out in 2015 when you lose some percent of your Medicare revenues if you are not using an electronic system in a meaningful way by then,” said Dr. Yu, an oncologist at Palo Alto Medical Foundation.

Additionally, the government's full-throttle push to encourage EHR adoption is likely to prompt vendors to come up with the systems that oncologists have long been waiting for.

“The EHR products are serviceable now, but they are far from fully and robustly supporting oncology needs,” he said. “I think that will get better over the next few years, and that will help drive adoption and acceptance more quickly.”

John Cox, DO, MBA, who practices at Texas Oncology, cites a third factor that will spur more oncologists to use technology: The financial pressures on small practices are forcing them to consolidate into larger practices and affiliate with hospitals, both of which are more likely to use EHR systems.

“As they come into larger groups or centers, a large number of oncologists are running into an electronic health record that way,” said Dr. Cox, another member of ASCO's Workgroup.

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The Government's Role

US physicians have been slow to embrace EHR systems, and two barriers are most frequently cited: the expense and the fear that any given system might be rendered obsolete by standards set in the future.

To help overcome those objections, the government has established a certification system so that physicians can determine whether they are buying technology that meets government standards—and it is offering financial incentives.

Dr. Cox cautions oncologists not to oversimplify the government's offer (see box.) CMS's “meaningful use” rule got that nickname because it requires physicians to use technology in rather sophisticated ways that are expected to improve the quality and efficiency of the care they deliver.

PETER YU, MD, Chair of ASCO's EHR Workgroup: “The carrot goes away and a stick comes out in 2015 when you lose some percent of your Medicare revenues if you are not using an electronic system in a meaningful way by then

PETER YU, MD, Chair of ASCO's EHR Workgroup: “The carrot goes away and a stick comes out in 2015 when you lose some percent of your Medicare revenues if you are not using an electronic system in a meaningful way by then

“I worry that people think ‘if I purchase it, then they're going to send me a check,’” he said. “Some people don't understand that there is also an obligation to perform the activities of meaningful use and that they will have to show CMS that they meet the criteria.”

Beginning next year, physicians who participate in the Medicare program can earn up to $44,000 in incentive payments that will be paid out incrementally over five years. The first step to that payday is complying with 20 objectives, including 15 core requirements and five measures chosen from a menu of options that make up the Stage 1 criteria of the CMS program.

Robert S

Robert S

By design, the Stage 1 criteria are more relevant to primary care physicians than to specialists. Dr. Yu said CMS has sought input from specialists, including oncologists, about the Stage 2 criteria that will be in effect in 2013.

“They made it clear that they were not going to attempt to address specialty care until the second phase,” he said. “Knowing that, we were less disappointed with the criteria that came out this year. That's not to say we are thrilled about it but we knew the criteria were not going to meet oncology's needs. Stage 2 is where we will have the opportunity to make ‘meaningful use’ more applicable to oncologists.”

Even though the criteria are only minimally relevant for oncology, a physician who wishes to receive the government's maximum incentive must comply with the Stage 1 criteria for at least three consecutive months in 2012. He or she also must comply with still-to-be-announced Stage 2 and Stage 3 criteria within five years of meeting the Stage 1 threshold.

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Is the Incentive Worth It?

The oncologists interviewed for this article are enthusiastic supporters of EHR technology, but they do not think all oncologists should pursue the government's financial incentive for adopting it. For one thing, the $44,000 available over five years is not as much as it sounds when the full costs of EHR implementation are considered.

Dr. Yu, who has used an EHR system for several years, says practices should plan to spend between $25,000 and $50,000 per year per provider during the initial years of implementation. In addition to the licensing fee for “cloud-based” EHR systems or the purchase of an office server-based EHR product, other costs include the purchase of laptops, printers, servers, networking at the clinic and physicians' homes, and training and technical support.

In addition to those costs, the disruption to practice associated with EHR implementation will lower productivity for months, Dr. Cox said.

“When you add all that up, I don't think $44,000 makes or breaks the decision.”

Dr. Yu encourages oncologists to decide whether to pursue the incentives only after they have made other decisions about how and when their practices will be ready for EHR implementation.

“You should not view the incentives as a way to underwrite the process,” he said. “It's more a bonus for doing it.”

An oncologist who buys a system simply because it will support the Stage 1 criteria will be making a mistake, Dr. Yu said. “You could get a system that does qualify you for the incentives, but would function very poorly for supporting cancer care in the office.”

On the other hand, oncologists should not be looking for more reasons to procrastinate. If an oncologist intends to participate in the Medicare program after 2015, moving toward EHR use needs to start soon.

“I think it probably is time to take action now,” said Robert S. Miller, MD, Clinical Associate at the Sidney Kimmel Comprehensive Cancer Center at Johns Hopkins. “The core [Stage 1] criteria are certainly applicable to oncologists, so I am encouraging people, depending on their resources, to consider adopting this technology within the next calendar year.

What It Takes to Qualify for “Meaningful Use” Financial Incentives

What It Takes to Qualify for “Meaningful Use” Financial Incentives

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What to Do Now

  • Don't let EHR vendors educate you about the government's incentive program or EHR implementation. Robert S. Miller, MD, a physician advisor for medical informatics at Johns Hopkins, encourages oncologists to make use of the resources available through professional organizations, including ASCO (; the American Academy of Family Physicians, which sponsors the Center for Health IT (; and the American College of Physicians, which offers a web-based resource to help physicians compare systems to find the one that best suits their needs (
  • Find out if there are opportunities to partner with other organizations in your community. “One of the first questions to ask is whether you are affiliated with a hospital system that might enable you to get into the market at a lower cost,” Dr. Miller said.

In North Texas, for example, several hospitals are offering volume-discount prices to community physicians who choose an EHR system that is compatible with the hospital's technology, Dr. Cox said. Perhaps equally important, some hospitals are offering to provide IT support to the physician practices. Such partnerships may also position practices to participate in accountable care organizations, which require the ability to share patient data, he added.

  • Analyze the workflow of your clinic to identify the changes needed to accommodate EHR use, and start making changes, Dr. Miller said. “Preparing for implementation is critical, and that process itself takes 12 months, so practices need to start thinking about those things right now.”
  • Evaluate EHR systems to determine the best one for your practice. Unless a vendor will guarantee in writing that the system will receive and maintain government certification, do not waste time considering it. Even if you do not intend to pursue the financial incentives for EHR use, the use of certified technology will be essential to participate in the Medicare program eventually.

That said, some practices may choose to buy from a company that is currently developing a product that will not receive certification in the immediate future. “Maybe it's a smaller company that is really is going to fill your need but will not be ready for the certification process as quickly as a large company,” Dr. Cox said. “If it is the right fit, it may be that you sacrifice some of that government money to make sure you have the right product for your situation.”

© 2010 Lippincott Williams & Wilkins, Inc.
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