Hospitals to receive payments from Medicare and Medicaid for effective use of EHRs

According to a survey released today by CSC (NYSE:CSC) titled “Are Hospitals Ready for Meaningful Use of EHRs?” U.S. hospitals are only halfway to qualifying for government incentive payments aimed at controlling healthcare costs while improving the quality and effective delivery of patient care. Under the American Recovery and Reinvestment Act of 2009 (ARRA), hospitals will receive payments from Medicare and Medicaid starting in October 2010 for the successful implementation and effective use of electronic health records (EHRs). The goal is for hospitals to increase use of comprehensive EHR systems from 10 percent in 2009 to 55 percent by 2014, and the incentive payments are substantial: a typical 275 bed hospital would be eligible for approximately $6 million. Hospitals that do not meet federal guidelines by 2015 face reductions in Medicare reimbursement.

“In addition to getting substantial monetary rewards, meaningful use criteria will enable our nation’s hospitals to reap the full benefit of EHRs and provide the safest level of care while reducing costs of delivering, reporting and paying for care.”

The United States Department of Health and Human Services (HHS) released draft rules on the EHR incentive plan today that revealed broad gaps between government expectations and the healthcare industry’s ability to meet those expectations. The CSC report shows only two-thirds of hospitals have even taken the first step: Identifying gaps in their current systems to meet the requirements for meaningful use. One quarter of hospitals meet at least 70 percent of the readiness criteria from the survey. Hospitals have the highest readiness scores for privacy and security protection, while the use of required EHR capabilities is furthest behind.

“The definition of ‘meaningful use’ is a very important step in the process of transforming healthcare with better information for better decisions,” said Deward Watts, president of CSC’s Healthcare Group. “In addition to getting substantial monetary rewards, meaningful use criteria will enable our nation’s hospitals to reap the full benefit of EHRs and provide the safest level of care while reducing costs of delivering, reporting and paying for care.”

Hospitals do not necessarily need to purchase additional hardware or software to move forward. For instance, CSC’s survey shows 70 percent of hospitals have systems capable of supporting Computerized Physician Order Entry (CPOE), but only eight percent have CPOE throughout the hospital with at least 75 percent of orders being entered by physicians. No hospital under 100 beds had CPOE up and running in even two units, and none of the midsized hospitals (100 - 300 beds) had the system up and running throughout the hospital.

Additional findings include:

• Smaller hospitals have lower readiness scores especially for use of required applications and quality reporting;
• 54 percent are using the latest software version of their EHR product, which indicates upgrading might be required to meet the criteria for meaningful use;
• Although 89 percent report on core quality measures, only half capture the majority of the required data from their EHR system;
• The majority (98 percent) have a policy in place to limit the disclosure of protected health information, but only 52 percent employ encryption technologies to render data unreadable or unusable in the case of unauthorized access;
• Only 40 percent report that there is clear and broad awareness of the new civil and criminal penalties under the ARRA.

These findings came from a survey of executives from 58 hospitals and integrated health delivery networks of all sizes across the U.S. conducted by CSC. The respondents reported their readiness for HITECH incentives based on 50 indicators grouped into five general categories: Use of a certified product, current use of capabilities required for meaningful use, standards adoption, quality management and reporting, and privacy and security protection. To get a representative sample of hospitals, CSC collaborated with two state hospital associations and one hospital alliance to distribute the survey to their members. Additional surveys were obtained from CSC clients. All questions generated a “Yes” or “No” response and results were self-reported using a paper form or an online survey instrument.