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    CMS offers a carrot to physicians implementing EHRs

    Can EHRs and eased kickback regulations cool P4P's sting?

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    Bob Gatty
    Washington—Physicians who embrace a new federal initiative to establish a uniform system of interoperable electronic health records will be eligible for increased payments under the pay for performance policies being established at the Centers for Medicare and Medicaid Services.

    The Bush administration, which has included the use of information technology in its health care priorities, has taken several major steps to link physician computer systems with hospitals and other key providers, including electronic prescriptions. Top administration officials are now equating participation by physicians with financial rewards in no uncertain terms.

    Speaking to a group of food industry executives at a White House briefing in May, Lance Leggitt, special assistant to the president for domestic policy, said the administration hopes to implement a technology-based interoperable health care records system so patients' records can be easily and efficiently—but securely—shared by physicians and hospitals.

    To achieve that, he explained, systems must be harmonized to communicate with each other. Once in place, Leggitt added, "CMS will be looking at this as a performance factor—in outcomes."

    CMS administrator Mark B. McClellan, MD, speaking at the 2006 National Health Policy Conference in February, said flatly, "When providers use electronic records to avoid duplicative tests or head off an office visit or a complication, resulting in higher quality and lower costs, we will start paying more, not less."

    Dr. McClellan pointed out that CMS is supporting widespread adoption of health information technology to help improve care, and has proposed regulatory reforms to create new opportunities for health care providers to work together to adopt interoperable electronic health care systems.

    Last October, Health and Human Services Secretary Mike Leavitt announced proposed regulations that would create exceptions to the "physician self-referral" law. The purpose is to allow hospitals and certain health care organizations to furnish hardware, software, and related training services to physicians for e-prescribing and electronic health records, particularly when the support involves systems that are "interoperable," and thus can exchange information effectively and securely among health care providers (also see, "Would 'free' EHR systems really help physicians?" Urology Times, May 15, 2006, page 1).

    Currently, physicians in Medicare are prohibited from referring Medicare pa-tients for certain health services to health care entities with which the physician has a financial relationship unless an exception applies. Health care entities are also not allowed to bill Medicare for services furnished as a result of a prohibited referral.

    As part of that effort, the HHS Office of Inspector General has announced proposed safe harbors for arrangements involving the donation of technology for e-prescribing and electronic health records. Arrangements that meet the safe harbor requirements would be exempt from enforcement action under the federal anti-kickback statute.

    CMS said it is considering a cap on the value of technology that can be donated by a single donor to reduce the potential of arrangements designed to pay physicians for referrals.

    Guidance sought

    Last October, a new federal task force of health-related agency representatives, known as the American Health Information Community, was launched to make recommendations on health information technology standards, deployment of technology, and protection of privacy.

    In mid-May 2006, the task force delivered to Leavitt its first set of 28 recommendations on making health records digital and interoperable while protecting patient privacy and the security of those records.

    In addition, HHS has awarded contracts to four groups of health care and health information technology organizations to develop prototypes for a Nationwide Health Information Network architecture and, in January, Leavitt announced a pilot project to test initial standards for electronic prescribing.

    In that project, four teams will measure the impact of e-prescribing data transmission systems on patient safety and quality of care, such as whether and how they reduce adverse drug events and improve the appropriate use of medications.

    "We expect that electronic prescribing will help improve quality, prevent medication errors, and reduce costs," Dr. McClellan said.

    The pilot project also will assess changes in workflow in pharmacies and physician offices that use e-prescribing to demonstrate a return on investment for use of the technology.

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    Bob Gatty
    Bob Gatty, a former congressional aide, covers news from Washington for Urology Times.

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