Reflections on the anniversary of ARRA

On the upcoming anniversary of the American Recovery and Reinvestment Act (ARRA), it is helpful to put the current healthcare reform debate into some perspective. ARRA included a section called HITECH, which earmarked $19 billion for health information technology. This has been law since 2009. HITECH creates incentives to promote the widespread use of Electronic Health Records (EHRs) – the “meaningful use of certified EHRs” – and the Office of the National Coordinator (ONC) for health IT has worked diligently in defining what that means. At the end of 2009, the ONC proposed to CMS its proposed definition of “meaningful use” and “certified EHR technology.”

The current healthcare reform debate focuses more on healthcare financing reform, and not so much on healthcare delivery-system reform. It concerns itself more with “how can we afford healthcare?” and less about “how can be make healthcare affordable?” The debate about how much healthcare delivery should be paid for by the private sector (healthcare payors – insurance companies) and how much by the public sector (Medicare and Medicaid), and how can we cover the 1/3 of Americans that don’t have health insurance, has been the focus of the current debate in Washington.

However, changes in the delivery of healthcare are underway anyway, and much of it flows from the law covered under ARRA. Some of the health-delivery changes currently in-play involve (1) increasing electronic connectivity between physicians, hospitals and payors, (2) promoting results-oriented payment (pay-for-performance), and (3) re-defining health delivery into Accountable Care Organization, including embracing the Patient Centered Medical Home model. Regardless of the outcome of the current healthcare reform machinations in Washington, these efforts are evolving anyway.

There are three performance bonuses currently in play, coming from CMS: (1) electronic prescribing incentives, (2) quality-metrics pay-for-performance incentives, and (3) meaningful use of certified EHR incentives.

Electronic prescribing incentives:
Prior to ARRA, Electronic Prescribing (eRx) has been a focus of federal initiatives since 2008, as part of the Medicare Improvements for Patients and Providers (MIPPA). Physicians do not need to enroll in this program, and can access stimulus moneys from CMS for use of a qualified eRx system (Practice Fusion’s eRx feature does this). Physicians submit the specific non-dollar billing code G8553 along with a claim for an office visit to denote that an eRx was sent. A bonus payment of up to 2% of the total CMS payments for office visits is available through this channel.

Pay for performance:
The principle behind pay for performance (P4P) is the creation of a business model for improved outcomes. Previously, fee-for-service payments paid for volume of service rendered, regardless of outcomes or adherence to data-driven clinically appropriate processes. In California, the Integrated Health Association has joined payors, hospitals and medical groups/risk-taking IPAs into a common system for HMO patients (private HMOs as well as Medicare Advantage HMO programs), where performance according to agreed-upon metrics would result in bonus payments (over-and-above baseline capitation payments). These clinical metrics were based on the HEDIS set of measures, published by the NCQA.

Similarly, for Medicare fee-for-service patients, CMS has established a quality-metric bonus program based on the PQRI measure set. Physicians can report their performance on these measures through a set of non-dollar billing codes (the CPT Category II reporting codes) along with their ordinary billings, and receive bonus payments if their performance meets thresholds. Physicians do not need to enroll in the PQRI reporting system in order to participate.

Meaningful Use:
In addition to the above incentive systems, which are already in place, the new Meaningful Use criteria are a product of ARRA. Incentive payments will begin in 2011, and the specific criteria for qualification have been published and are open for review. These incentives can be up to $44,000 per physician, paid out through Medicare; they can be substantially more for hospitals. Vendors, like Practice Fusion, are focused on the 25 criteria set for ambulatory EHR certification, and are building tools into their products that will help physicians demonstrate their Meaningful Use of their EHR products (in each of the 25 areas). CMS does not believe they will be ready to receive Meaningful Use reporting electronically in 2011 (they expect to be ready by 2012), so reporting of such activity will be done by attestation in 2011.

The point of all of this is to illustrate that numerous initiatives are already underway – are already law – and are intended to improve the healthcare delivery system. Though not as “in the headlines” as healthcare financing reform has been lately, these kinds of efforts are taking place anyway. The marketplace, perhaps more than federal policy, is creating efforts that challenge how healthcare has been deployed – organizations like Practice Fusion are moving EHR technology onto a web-based platform (for free) that build towards the free-flowing exchange of needed medical data between all elements in the healthcare ecosystem – doctors, hospitals and payors.


Robert Rowley, MD
Chief Medical Officer, Practice Fusion, Inc.