2010 Testimony

2009 Testimony

I am Ken Braithwaite, regional executive for Delaware Valley Healthcare Council and senior vice president for The Hospital & Healthsystem Association of Pennsylvania. DVHC represents and advocates for more than 100 acute care, pediatric, rehabilitation, behavioral health, and specialty care health systems, hospitals, and facilities and the patients they serve in Bucks, Chester, Delaware, Montgomery, and Philadelphia counties. DVHC is part of The Hospital & Healthsystem Association of Pennsylvania, which represents and advocates for more than 250 acute and specialty care hospitals and health systems across the state. We appreciate the opportunity to present the views of hospitals and health systems across the state regarding the Department of Public Welfare’s Medical Assistance Health Information Technology Vision Document, Transforming Health Care Delivery Through The Use of Information Technology: The Role of the Department of Public Welfare, Office of Medical Assistance Programs.

Hospitals and health systems in the region and across the state support the vision that health information technology (health IT) is an important component of advancing quality and coordination of care by connecting providers to patient information at the point of care through the meaningful use of electronic health records (EHR). This is a vision that hospitals and health systems share with the Department of Public Welfare (DPW).

To achieve this vision, we believe DPW must maximize the use of available American Recovery and Reinvestment Act (ARRA) of 2009 Medicaid health IT incentive payments available to the commonwealth and its health care providers. We believe that DPW’s Health IT Vision Document and the engagement of stakeholders in a collaborative approach to strategic planning for the federal investment in health IT is to be commended. Working together, with the commitment of federal financial support, Pennsylvania hospitals, health systems, and health care providers are committed to improving the quality and coordination of care through the effective use of health IT.

EHR adoption and local health information exchange (HIE) by hospitals and health care providers presents both opportunities and challenges, including:

• The importance of maximizing early health IT incentive payments to high Medical Assistance providers.
• Setting Medical Assistance meaningful use requirements appropriately to achieve the objectives envisioned.
• Ensuring collaboration of the Medical Assistance health IT program with other ARRA-funded health IT programs.
• Engaging stakeholders throughout the process.
• Ensuring that Pennsylvania’s Medical Assistance managed care organizations (HMOs, behavioral health managed care organizations, and the primary care case management program) remain accountable for care coordination.

I will briefly speak to each of these issues.

Medical Assistance Health IT Incentive Payments

HAP understands that ARRA provides states with discretion in regards to Medicaid health IT incentive payments, including when and how payments are made to eligible providers. Since the cost of purchasing and implementing EHR systems is the greatest challenge to EHR adoption, particularly for high Medicaid providers, DPW should maximize the use of early Medicaid health IT incentive payments to eligible health care providers that demonstrate a commitment to becoming meaningful EHR users.

ARRA recognized that high Medicaid providers need capital to invest in health IT. That is why Medicaid health IT incentive payments can be made to high Medicaid providers in the first year, provided they are working toward becoming meaningful users. Over the coming months, DPW needs to effectively identify eligible Medical Assistance providers who are meaningful users or who are working on becoming meaningful users, so that first-year payments can be made to them in January 2011. Further, DPW should exercise its discretion to pay high Medical Assistance hospitals half of their full multi-year payments in the first year. This approach will help reduce the financial barriers to EHR adoption.

In southeastern Pennsylvania, early payments would provide crucial support for many hospitals as they endeavor to make the significant investments needed to become meaningful users of EHR technology. Of the nearly 2 million Pennsylvanians eligible to receive Medical Assistance, more than one third reside in Bucks, Chester, Delaware, Montgomery, and Philadelphia Counties. Because Medical Assistance reimburses hospitals at below-cost rates, caring for patients with Medical Assistance insurance places considerable financial burdens on providers. As a result, these providers face additional challenges in marshalling the resources needed to implement EHR systems.

Within the region’s provider community, hospitals serving higher percentages of Medical Assistance patients often struggle more financially. In fiscal year 2008, Medical Assistance accounted for more than 15 percent of net patient revenue at 10 of the region’s acute care hospitals. Seven, or 70 percent, of these hospitals had total margins of less than 2 percent, considered the bare minimum needed to maintain operations. Overall, only about 40 percent of the region’s hospitals had total margins of less than 2 percent. Due to the protracted recession and slow recovery, hospitals’ financial performance has deteriorated since then.

Because of these financial realities, high Medical Assistance providers able to demonstrate that they are working toward becoming meaningful EHR users should receive half their total multi-year incentive in January 2011.

Medical Assistance Meaningful Use

ARRA allows states to adopt meaningful use definitions that vary from the CMS Medicare meaningful use definition. As we understand DPW’s vision, Pennsylvania intends to adopt the federal meaningful use definition and establish additional electronic reporting requirements, Electronic Quality Improvement Projects (EQUIP). Pennsylvania hospitals and health systems are concerned that, without knowing the final CMS meaningful use requirements for 2011, requiring additional MA electronic reporting for 2011 could make it very difficult for providers to qualify for Medicaid health IT incentive payments or commit to meaningful use.

These concerns were heightened on January 13, when Department of Health and Human Services (HHS) released its proposed rule for meaningful use of electronic health records. The HHS rule as currently defined could undermine the success of the incentive programs to promote and expand the use of health IT. As a result of the unclear certification process, the scope of meaningful use objectives and reporting requirements, and an inevitable implementation backlog, the national hospital community has three main concerns.

First, hospitals cannot implement EHR without their supplier partners. But these partners may simply not have the capacity to assist hospitals in meeting the rule’s ambitious goals and timelines.

Second, the rule uses Medicare provider numbers to identify hospitals for EHR incentive payments. Due to lack of standardization, provider numbers may represent individual facilities or multiple sites of a large hospital system. Multi-campus providers could be seriously disadvanged by this payment methodology.

Third, physicians who care for patients in certain hospital settings would be denied incentive payments because of their hospital affiliation, even though these physicians provide a substantial portion of their practice outside the inpatient hospital setting. This payment methodology penalizes providers for developing strong physician/hospital alignment and disadvantages them in accessing incentive payments to develop outpatient EHRs and facilitate coordination of care.

To address these issues, the national hospital community recommends a more flexible approach to achieving EHR functionally and reporting requirements for meaningful use. We are also putting forth remedies for inequities in provider payment methodologies.

With the final definition of meaningful use not yet established, it is difficult for hospitals to commit, plan, or deploy the resources necessary to begin work on certified EHR systems. These same uncertainties may also hinder DPW’s intention to build additional EQUIP reporting requirements on the foundation of the CMS Medicare meaningful use definition.

DPW also must carefully examine the standards for certified EHRs to ensure that all of EQUIP’s data elements envisioned and reporting logic can be supported by a meaningful use-certified EHR. DPW must allow time for EHR vendors to incorporate the new meaningful use EHR standards into their products, undergo certification, and install their new or upgraded products at provider sites. Unfortunately, this development, certification, and deployment cycle can take from one to two years for hospital EHR systems. Once a new product is installed, the internal adoption process could add additional time to the implementation process.

Even after a certified EHR product is fully implemented, not all historical data is fully populated, and some new data elements may not have been collected or recorded in the past. DPW will need to allow time for data to be captured on a prospective basis before new required electronic reporting requirements can be enforced.

This also raises questions regarding the mode of reporting. DPW’s vision document ultimately expects this electronic reporting to be accomplished through local health information exchanges and the Pennsylvania Health Information Exchange (PHIX); however, robust HIEs are not currently available throughout the state. To date, none have been developed here in southeastern Pennsylvania. At this time, it is difficult to determine when the PHIX or other robust HIEs will be in place and capable of facilitating automated EQUIP’s reporting.

ARRA Partners

ARRA includes funding and support for HIE development in the state, regional extension centers, broadband deployment, health IT workforce training, as well as Medicaid health IT use. As noted in DPW’s vision document, the department needs to work collaboratively with the organizations that are seeking funding for these various initiatives in Pennsylvania in order to assure success in moving the adoption of health IT forward in Pennsylvania, and to minimize duplication of effort and costs, including those to health care providers.

Stakeholder Engagement

We appreciate DPW’s efforts to engage affected stakeholders early through the creation of a Medical Assistance Advisory Committee HIT Workgroup, stakeholder outreach activities, the development of the vision document, and in holding these listening sessions. DVHC and its member hospitals and health systems appreciate the opportunity to participate in these efforts. We look forward to continuing that participation, along with other stakeholders, to assist DPW in the creation of an effective Medical Assistance health IT strategic plan and operating plan. This monumental task can only be accomplished through a collaborative and transparent multi-stakeholder approach.

Hospitals and health systems in southeastern Pennsylvania have been advancing use of health IT for a number of years and have learned that broad engagement is essential for effective use of health IT. Within hospitals, this includes clinical, financial, and operational leaders, as well as IT professionals. It is important that DPW’s stakeholder process includes the breadth of stakeholders that are essential to make the most effective use of health IT in improving quality and care coordination.

Managed Care Organizations

DPW’s vision document outlines leveraging provider relationships with Medical Assistance managed care organizations to facilitate initial EQUIP reporting. Pennsylvania hospitals and health systems already have to comply with substantial reporting requirements, including those established by various federal and state agencies, as well as those established by individual managed care organizations.

Reporting requirements envisioned by DPW must be more thoroughly discussed with clinical and operational leaders to make sure that these are appropriate to improving quality and care coordination. Any new electronic reporting requirements should be evaluated against existing requirements to determine which should be additive or which can replace a less effective or useful current reporting requirement. It also is important to consider the process by which providers and EHR vendors will have to advance to comply with any transitional electronic reporting requirements.

The vision document also raises questions regarding whether DPW intends to increasingly hold individual health care providers accountable for care coordination for Medical Assistance patients, including those that receive their care through an HMO, behavioral health managed care organizations, and the state’s primary care case management program. This raises a concern that the accountability for care coordination could shift from managed care organizations to individual health care providers. This shift could create conflicting incentives regarding care coordination for Medical Assistance patients receiving care under the state’s managed care programs. These concerns are especially relevant to southeastern Pennsylvania, where Health Choices managed care organizations serve 77 percent of those eligible for Medical Assistance.

Summary

HAP and DVHC believe that the health IT vision document provides a framework for strategic planning discussions to support the state’s Medicaid health IT incentive program. Pennsylvania hospitals and health systems appreciate the state’s efforts to engage stakeholders and its willingness to partner with other ARRA-funded health IT initiatives in Pennsylvania. These efforts and partnerships are essential to advancing the use of health IT in improving quality and care coordination for all Pennsylvanians.

HAP and DVHC believe that additional discussion is needed, including clinical and operational input, regarding DPW’s proposed expansion of the meaningful use definition. The definition must be structured to assist in achieving the objectives of DPW’s strategic plan without creating even further or unintended challenges for health care providers, particularly high Medical Assistance providers, to qualify for health IT incentive payments. In addition, the proposed measures and schedule for EQUIP reporting must be appropriately developed to engender improved care to Medical Assistance patients. Finally, any health IT reporting requirements for health care providers must be appropriately structured to minimize duplicative reporting and to engender appropriate accountability for care coordination by Pennsylvania’s Medical Assistance managed care programs.

Thank you for this opportunity to testify and to provide the hospital community’s perspective on the DPW health IT vision document. We welcome the opportunity to work with you on this important initiative, and I will be happy to answer your questions.

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