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Was Machiavelli Wrong?

December 1, 2007
by Anthony Guerra, Editor-in-Chief
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CMS's latest program will only reward better outcomes that are achieved while using electronic medical records

At the recently held Medical Group Management Association (MGMA) conference in Philadelphia, I sat down with more than 15 providers, analysts and vendors to learn the latest trends affecting the ambulatory portion of the healthcare continuum. One word seemed to be on everyone's lips — Stark.

Apparently, the changes to that regulation (and the federal anti-kickback statue) to allow for more hospital donation of IT to physicians are starting to have an effect. The “relaxation” of the rules was announced in August 2006, but the initial notification left people at not-for-profits unsure of maintaining their tax-exempt status if they began to donate. The lack of clarity meant not much happened until May, when the IRS ruled the hospitals had nothing to worry about. But the final rules did not come out until September, revealing that the anticipated relaxations were still in place — no surprises. The MGMA show took place just a month and a half later.

Some practices got the jump on the final rules, preferring to venture into murky territory, rather than take the wait-and-see approach. We wrote about a few of them in our July cover story ( However I suspect many more took the cautious approach, using uncertainty as a reason to hold back from doing something they find intimidating — transforming their practices from paper-based environments to electronic ones.

But that fear is going to become very expensive very soon. While I was at the MGMA conference, CMS announced its latest attempt to move practices off paper. The five-year demonstration project starting this spring will provide “financial incentives” and “a bonus” for participating practices (CMS is looking for 1,200) that use certified EMRs to meet certain clinical quality measures. (As of today, the Certification Commission for Healthcare Information Technology — CCHIT — is the only CMS-recognized certification body.) For the first time, getting paid more is directly tied to using IT.

Sure, other indirect attempts have been made, such as the large-practice-focused Medical Physician Group Practice Demonstration, announced in January 2005, and the small/medium-practice-focused Medicare Care Management Performance Demonstration, announced in October 2006, but neither tied higher payments directly to the use of IT, just outcomes.

Other programs have been put in place to help physicians actually implement IT (but not pay for it), such as the Doctor's Office Quality-Information Technology (DOQ-IT) initiative, which set up Quality Improvement Organizations in each state to act as consultants in the selection and implementation of EMRs, but again, with no direct payment for using them.

So even before the most recent CMS initiative was announced, physicians could get EMRs almost completely paid for (hospitals could pick up as much as 85 percent of the tab), they could get help in selecting and implementing them (through DOQ-IT's QIOs), and they could use the research and vetting of a certification body to narrow down their choices (CCHIT). Now, they will also be financially rewarded for using the IT solutions to meet certain clinical guidelines. In this newest program, there is no other way to make extra money — adopting the technology is stakes to play.

If all those factors combined could be considered the soft sell to encouraging adoption, Partners HealthCare System in Boston is doling out some tough love. The organization let it be known in October that it was requiring all physicians in its network to agree to adopt an EMR by January 2008, furthering the impact of its message by noting that those not on an EMR — either Partners homegrown Longitudinal Medical Record or GE Healthcare's Centricity — by January 2009 would be removed from its network. But despite the Stark situation, Partners is not picking up the EMR tab for its network docs, though it has arranged P4P managed care contracts that include financial incentives for EMR adoption.

I suspect that other health systems will keep a close eye on the Partners situation, eschewing that path if they notice an exodus of practices from the network, embracing it if they don't. Discussing this issue with a source at MGMA, the individual noted that Partners has the clout in Boston to pull this off, other health systems with more competition for the local docs may not.

No matter what happens in Boston, the latest CMS program is one more indication that healthcare IT and P4P will likely be linked in future payer reimbursement models. For the first time, it's not only about the end, but the means taken to get there.

Anthony Guerra, Editor-in-Chief