Managing Your Practice

The Affordable Care Act and the drive for electronic health records: Are small practices being squeezed?

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“Big” practice. By comparison, in 2011, 99% of physicians in health maintenance organizations, or HMOs, and 73% in academic health centers and other hospitals used EHR systems.6 The number of physicians in these practice settings is small but growing.

In 2011, only 17% of physicians were in large practices of 10 or more physicians; 40% were in practices of one or two physicians.6

Primary care. These practices lead others in the adoption of EHRs, in part because of federal assistance, including a nationwide system of regional HIT assistance centers established by the Health Information Technology for Economic and Clinical Health (­HITECH) Act to help providers located in rural areas participate in the Centers for Medicare and Medicaid Services (CMS) programs in EHR. The goal of these programs is to provide HIT support to at least 100,000 primary care providers, including ObGyns, by 2014.

The numbers cited in the Health Affairs article largely mirror data developed by other research organizations, including the Deloitte Center for Health Solutions.6

The EHR incentive

The drive for EHRs started long before the Affordable Care Act (ACA) was passed in 2010. The US Congress took a first stab at encouraging the health-care community to embrace HIT in 1996, when it passed the Health Insurance Portability and Accountability Act (HIPAA). HIPAA created an electronic data interchange that health plans, health-care clearinghouses, and certain health-care providers, including pharmacists, are required to use for electronic transactions, including:

  • claims and encounter information
  • payment and remittance advice
  • claims status
  • eligibility
  • enrollment and disenrollment
  • referrals and authorizations
  • coordination of benefits
  • premium payment.

Congress stepped up its game in 2009, when it offered higher Medicare and Medicaid payments to physicians who adopt and “meaningfully use” EHRs. The HITECH Act included $30 billion in new Medicare and Medicaid incentive payments—as much as $44,000 under Medicare and $63,750 under Medicaid—as well as $500 million for states to develop health information exchanges.

The Act also established a government-led process for certification of electronic health records through a $35 billion appropriation for the Office of the National Coordinator for Health IT, housed in CMS.

Other programs designed to encourage use of EHRs
Other federal programs include the Physician Quality Reporting System (PQRS), which, when created in 2006, was a voluntary physician electronic reporting program. Under the ACA, however, it has become a mandate. Starting in 2015, Medicare payments will be reduced for nonparticipating physicians.

The Electronic Prescribing (eRx) Incentive Program, created in 2008 under the Medicare Improvements for Patients and Providers Act, provides incentives for eligible physicians who e-prescribe Medicare Part D medications through a qualified system. This program converted to a penalty program last year for physicians who don’t use eRx.

Grants were also provided under the HITECH Act to fund an HIT infrastructure and low-interest HIT loans. The AHRQ has awarded $300 million in federal grant money to more than 200 projects in 48 states to promote access to and encourage HIT adoption. Over $150 million in Medicaid transformation grants have been awarded to three states and territories for HIT in the Medicaid program under the 2005 Deficit Reduction Act.

The ACA carried these initiatives even further by establishing uniform standards that HIT systems must meet, including:

  • automatic reconciliation of electronic fund transfers and HIPAA payment and remittance
  • improved claims payment process
  • consistent methods of health plan enrollment and claim edits
  • simplified and improved routing of health-care transactions
  • electronic claims attachments.

Clearly, a lot of effort and taxpayer dollars have been dedicated to drive efficient use of HIT and EHRs in the hopes that they can:

  • help make sense of our increasingly fragmented health-care system
  • improve patient safety
  • increase efficiency
  • reduce paperwork
  • reduce unnecessary tests
  • better coordinate patient care.

To see which providers are cashing in on the government’s incentives for EHRs, see “Some physicians are more likely to seek incentives for meaningful use of EHRs” on page 37.

The long view

HIT and EHRs are here to stay. Products are maturing and improving. Acceptance by large and small practices has gained traction. Are small practices being squeezed? No doubt.

In 2011, I urged all ObGyns—especially those in private practice—to read an article written by President Barack Obama’s health-reform deputies on how physicians can be successful under the ACA.1 It reads, in part:

To realize the full benefits of the Affordable Care Act, physicians will need to embrace rather than resist change. The economic forces put in motion by the Act are likely to lead to vertical organization of providers and accelerate physician employment by hospitals and aggregation into larger physician groups. The most successful physicians will be those who most effectively collaborate with other providers to improve outcomes, care productivity, and patient experience.7

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