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EHR incentives are opportunities for ODs

June 1, 2012

By J.R. Armstrong, CPA, and Jodi Permenter, CPA

The increased use of electronic health records, or EHRs, is poised to dramatically change the health care industry in the United States. An EHR is a digital record that is stored in a standard format that allows records to be shared across care providers. The implementation of EHRs is thought to improve the quality of health care by reducing medical errors and providing physicians with decision support.

Given the emphasis now being increasingly placed on EHRs by public and private health care systems, an electronic health records system is a purchase just about any optometric practice should be considering as a part of its capital improvements program.

In addition to providing a higher standard of care to their patients, early adopters of EHR technology can benefit from an incentive plan put in place by the American Recovery and Reinvestment Act of 2009. And as noted elsewhere in AOA News, those incentives can be substantial.

Any optometrist, who has not already done so, should consider how these government incentive programs are providing a unique opportunity to make this capital improvement affordable.

The Medicare Incentive Plan provides up to $44,000 ($63,500 for Medicaid Incentive Plans) over five consecutive years to practitioners who put an EHR system into “meaningful use” by Jan. 1, 2012. Practitioners who are located in a Health Professional Shortage Area can qualify for a 10 percent increase in incentive benefits.

The first step in taking advantage of the Medicare EHR Incentive Program is to determine if you are eligible for the incentive program. Practitioners can qualify as an eligible professional (EP), eligible hospital, or critical access hospital.

Optometrists and ophthalmologists qualify as eligible professionals. Optometrists are eligible for the Medicare Incentive Plan in five states so far. However, ophthalmologists are eligible for either the Medicare or Medicaid Incentive Plans if 30 percent or more of their patient volume is Medicaid patients.

Practitioners who are eligible for both plans may choose which plan they would like to participate in when they register with the Centers for Medicare & Medicaid Services (CMS). Switching incentive plans is allowed only once after the first incentive payment is initiated.

For more information about choosing the incentive plan that is right for you, see the resources at www.cms.gov.

After you have determined your eligibility for the Medicare and Medicaid Incentive Plans, the next step is to register with the CMS. The date that registration is available can vary from state to state, but most states opened registration on Jan. 1, 2011.

You do not have to wait until an EHR system has been implemented in order to register. Eligible professionals will need their National Provider Identifier (NPI) and National Plan and Provider Enumeration System (NPPES) User ID and password (this is the same password used to access PECOS). If you do not have NPPES access information, you must request one from the CMS. To complete the request, you will need your NPI, Taxpayer Identification Number (TIN) and a copy of IRS Form CP-575.

The next step is to purchase and implement a certified EHR software system. A full list of certified EHR software providers can be found on the CMS website. If you already have an EHR system, be sure to confirm that your software provider has been certified by CMS. If your EHR system is not certified, it could be missing certain functionalities that are required to receive incentive payments.

As always, implementing a new software system will take time, and may reduce productivity in the first few months of the transition, so it is best to plan ahead. Your software provider will be able to offer you tips to smooth the transition.
The fourth and most difficult step is achieving “meaningful use” of the EHR system. The American Recovery and Reinvestment Act of 2009 gives three specific components to meaningful use: (1) the use of a certified EHR system in a meaningful manner, (2) the use of certified EHR technology for electronic exchange of health information to improve the quality of health care, and (3) the use of EHR technology to submit clinical quality measures.

The act gave the CMS the responsibility for developing specific measures of meaningful use. The CMS has created a three stage system for measuring meaningful use. Stage 1 applies to 2011 and 2012 adopters. Stages 2 and 3 will be implemented in 2013 and beyond, and will build upon the requirements set up in Stage 1.

Stage 1 includes 25 objectives, of which 20 must be met in order to qualify for the incentives. The 25 objectives are divided into a set of 15 required core objectives and 10 menu set objectives (of which five must be met). One of the 15 core objectives is meeting Clinical Quality Measures (CQM). A CQM is a mechanism used for assessing the degree to which a provider competently and safely delivers clinical services that are appropriate for the patient in an optimal timeframe. Eligible professionals must meet three required core CQM measures and three additional measures from a menu set of 38 CQM measures.

Complete lists of all meaningful use objectives and CQM measures are available on the CMS website.

In order to receive payment, you must meet all of the meaningful use requirements for the reporting period. For the first year of participation in the incentive program, the reporting period is 90 consecutive days. This means that those initiating their meaningful use effort in 2012 must have implemented an EHR system well before Oct. 1, 2012, so as to be able to find a 90-consecutive-day period of meaningful use (called a reporting period) by Dec. 31, 2012.

For practitioners in any year after their first year, the reporting period is a full calendar year. Those who earned incentive payments for meaningful use in 2011 must demonstrate meaningful use for the entire year of 2012 and every year thereafter.

Entering the EHR incentive program and achieving meaningful use during the first two years (2011, 2012) of the program is critical. The maximum incentives available through the program will be reduced each year thereafter.

For practitioners who implement EHR systems by 2013, the maximum incentive payment drops to $39,000 (over four consecutive years). By 2014, the total available incentive is $24,000 (over three consecutive years).

Practitioners who do not meet the meaningful use requirements until 2015 do not qualify for any incentive payments through the Medicare EHR Incentive Plan (practitioners participating in the Medicaid EHR Incentive Plan can initiate participation through 2016 to receive benefits), and Medicare payment adjustment penalties will be assessed on practitioners who have not established an EHR system by 2015.

The final step to qualify for your incentive payments is to attest that you meet the meaningful use requirements for the reporting period through the CMS Registration and Attestation System.

In 2011, the attestation process will be relatively simple. However, in 2012 the attestation process is expected to require additional documentation and support.

In order to complete the attestation process for 2011, providers will fill in numerators and denominators or exclusions for each of the meaningful use objectives and Clinical Quality Measures. For example, one of the core objectives is that an active medication allergy list is kept for 80 percent of patients. In this case, the denominator would be the number of patients seen by the EP during the reporting period, and the numerator would be the number of patients who have at least one entry in their medication allergy list (or an indication that the patient does not have any known medication allergies). The fraction that results must be 80 percent in order to meet the objective.

Some of the objectives require a yes or no answer rather than a numerator and denominator. These objectives generally require that the practitioner perform a test of the EHR system. For example, the EHR system must be capable of electronically exchanging key clinical information among providers of care.

The practitioner must perform at least one successful test of this function during the reporting period in order to answer “yes” and meet the objective. Eligible professionals must have completed their 2011 attestation by Feb. 29, 2012, in order to receive their incentive payment.

After successfully completing your attestation, you will receive your incentive payment in eight to 10 weeks in the same way you receive your payments for Medicare services.

One thing you need to keep in mind is that any money you receive for implementing your EHR will be taxable income to you.

For instance, an OD who is in the 25 percent federal bracket and 5 percent state bracket can expect his or her $44,000 incentive to net $30,800 after taxes.

If you are a health care provider, now is the time to implement your EHR system, so do not wait!

The implementation process can be time-consuming, so starting the process early is critically important. Do not procrastinate! Get the most out of your new EHR system by claiming the early adopter incentives in 2011 or 2012.

Armstrong is a partner in the firm of May & Company, LLP. Permenter is a member of the professional staff. The firm consults with ODs in 30 states, assisting with their tax planning and preparation, QuickBooks support, and business planning. May & Company has offices in Louisiana, Mississippi, and Alabama. Armstrong can be reached at 601-636-4762 or by email at jarmstrong@maycpa.com.

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