The amendment is intended to relieve the administrative burden on small businesses.

The Red Flags Rule, part of the Fair and Accurate Credit Transaction Act of 2003, requires “creditors” and financial institutions to develop and implement written identity theft prevention programs. As described in the rule, creditors are organizations that maintain consumer accounts that receive multiple payments or payments made in installments.

In full, HR 3763 amends the Fair Credit Reporting Act to exclude “any health care practice, accounting practice, or legal practice with 20 or fewer employees.” It also excludes any other business that the Federal Trade Commission, which oversees the rule, determines:

• knows all its customers or clients individually;
• only performs services in or around the residences of its customers; or 
• has not experienced incidents of identity theft, and identity theft is rare for businesses of that type.

The proposed amendment moved easily through the House. It was introduced October 8 and was voted on without debate on October 20. There were 400 votes to approve and no votes in opposition.

The House bill was received and read in the Senate and referred to the Committee on Banking, Housing, and Urban Affairs.

The Red Flags Rule was first scheduled to take effect November 2008. The Federal Trade Commission offered several delays to provide more guidance and give businesses more time to prepare.

Provider Burden or Consumer Protection?

Rep. John Adler (D-NJ) sponsored the bill. “The Federal Trade Commission went too far and went beyond the intent of Congress by considering non-financial, service-related industries to be ‘creditors’…,” he said in a floor speech before the vote.

“Its ruling would force thousands of small businesses to comply with burdensome, expensive regulations by forcing them to develop and implement an identity theft program.”

The American Medical Association also is opposed to inclusion of medical practices and has lobbied against it.

However, in a letter to the Senate committee chair, AHIMA argues that medical practices are already a target of identity thieves and that exempting them from the rule would motivate thieves to focus on them more.

AHIMA also noted that the bill has a much farther reach than might appear. Nearly half of physicians work in practices of six physicians or fewer, according to a 2008 report from the Centers for Medicare and Medicaid Services. At a time when medical identity theft and healthcare fraud are on the rise, the bill would exempt a large share of providers from having identity theft prevention programs.

In addition, the exemption would undermine efforts to raise awareness of identity theft and subsequent fraud within the healthcare industry, AHIMA wrote.

The Senate Committee on Banking, Housing, and Urban Affairs has yet to schedule discussion of the bill. With a full plate and the winter recess approaching, it is unclear if the committee will consider the House bill this year.

Updated Oct. 28

AHIMA’s comments were in response to a draft description of the program published May 28 by the Office of the National Coordinator for Health IT. Specified under the American Recovery and Reinvestment Act, the program calls for a central Health IT Research Center with affiliated regional extension centers that provide direct assistance to providers. The centers will help providers meet requirements for receiving bonus Medicare and Medicaid payments under a separate ARRA provision.

AHIMA offered recommendations around four main comments:

Establish a clear and consistent set of goals:

• Define what constitutes a “region” for the regional centers
• Clarify the relationship among the regional centers and between the regional centers and the central Health IT Research Center
• Reconsider the proposed plan to issue multiple, closely spaced requests for proposals from organizations seeking to become regional centers 
• Consider mechanisms that ensure all providers are covered by qualified regional centers and that they are not penalized by any delay in accessing the services

Define a consistent set of core services delivered by an interdisciplinary team:

• Further define the minimum level of services the regional centers must supply
• Provide a consistent and uniform approach toward core services that addresses different functional components during each phase of an EHR implementation
• Consider critical areas of health IT implementation that are not just technical in nature and require specialized skills, such as workflow analysis, transition planning, data analysis, training, and customization (see related story for sample core services)

Clarify the governance and management structure:

• Define a clear and uniform structure for governance and management of the overall program, the regional centers, and the corresponding research center
• Discuss a coordinated, consistent, and standard approach toward program planning and service delivery of the regional centers and their relationship to the resource center
• Separate the research center’s research function from any management of the regional centers (the proposal seems to suggest that the research center will serve both roles)

Develop a sound program evaluation process that creates a learning community for sharing best practices with the resource center and among the regional centers:

• Create a uniform and consistent approach toward evaluating the program
• Develop a uniform measurement process that enables ONC to assess, evaluate, and make decision regarding future award programs, determining successful and unsuccessful regions, and defining areas that may need additional resources
• Provide detail on the evaluation process

In the draft program proposal, the Office of the National Coordinator indicated it could begin requesting applications from potential regional centers this summer, with grants awarded as early as the fall.

HHS will also use this year to plan necessary support for the program, including a national outreach program.

In 2010 HHS plans to conduct outreach to eligible professionals, develop the final program rules, and create systems to monitor and evaluate the payments.

Medicare incentive payments to hospitals will begin no sooner than October 2010; payments to eligible professionals will begin no sooner than January 2011. Medicaid incentives to professionals and hospitals both will also begin no sooner than January 2011.

The American Recovery and Reinvestment Act provides $17 billion in Medicare bonus payments for eligible individuals and hospitals that adopt certified electronic health record systems. The Medicare payments run until 2016. The Medicaid payments extend until 2021.

In 2015 a series of Medicare payment reductions will begin for eligible professionals and hospitals that are not meaningful EHR users.

The Times piece nicely highlights the challenge of implementing health IT in small physician practices, a primary healthcare target in the recently passed American Recovery and Reinvestment Act, or ARRA.

“There’s no way small practices can effectively implement electronic health records on their own,” says Dr. Farzad Mostashari in the article. “This is not the iPhone.”

Mostashari heads New York City’s Primary Care Information Project, which helps small practices implement health IT. Their technical support and educational services are similar to those that ARRA seems to envision for regional health IT “extension agencies.”

HIM professionals aren’t well known to many small physician practices, in part because the information management needs—and budgets—of small practices haven’t been great enough. But EHRs and ARRA may change that, since HIM professionals offer the kind of skills that can help small practices plan, implement, and manage their health IT systems.

In particular, HIM professionals can help on the front end, assessing needs and practices and redesigning workflows. They bring compliance backgrounds to IT systems, especially related to maintaining legally sound electronic records, and a focus on designing for, and managing, data integrity.

For more on these and other emerging issues that may introduce more HIM professionals and physician practices, see “Physician Practices and Information Management” in the August 2008 Journal.

In December consulting company TransforMED began offering products and services publicly for the first time, following a two-year national demonstration project aimed at showing the healthcare model’s efficiency and benefits to both patients and physicians.

TransforMED, a wholly owned subsidiary of the American Academy of Family Physicians, offers services ranging from practice assessments and consultations on partial implementation to assistance with full medical-home operations. The company’s services are offered in tiers, allowing a practice to transition in incremental steps.

“It became clear as we completed our national demonstration project that it was important to position TransforMED to support primary-care practices across the country in transforming to medical homes,” said Terry McGeeney, MD, president and CEO of TransforMED. “We discovered a lot of practices need quite a bit of help in becoming patient-centered medical homes, not only around working through all the technology issues but just the operational issues.”

The Medical Home Practice

The medical-home model positions primary-care physicians as coordinators of a patient’s healthcare. The model focuses on maximizing patient-physician interaction and group healthcare, usually through the use of team medicine, patient registries, electronic health records, and increased patient access such as e-scheduling and e-mail.

The Centers for Medicare and Medicaid Services has begun a large-scale medical home pilot that will offer tailored payments to qualifying medical home practices. CMS will solicit practices to participate in the demonstration this winter. Payment of the monthly medical home fee to qualified practices will begin January 2010 and continue through December 2012.

Healthcare payers are recognizing the medical-home model and offering test pilots on restructured payment systems, which usually pay medical homes more for certain services. TransforMED has partnered with some payers in medical-home pilots, helping primary-care practices transition to the model.

Blue Cross Blue Shield of Michigan has a medical home payment structure in place. And the development of the Medicare medical home demonstration project, which will test medical home payments to a yet-undetermined number practices, could eventually be developed into a permanent medical home payment structure for healthcare’s biggest payer. That would be a significant development for the movement, McGeeney said.

The Right Tools

McGeeney says that practices can successfully implement the medical home model now, but only with the right tools. EHRs are essential to take full advantage of the model, because a major component of the medical home is chronic disease management through population-based registries.

“I think to truly [implement medical home] in a fairly effective manner you have to leverage technology,” he said. “The things we focus on quite a bit are, number one, the electronic health record. It is not impossible to be a patient-centered medical home without it, but it certainly is much easier.”

“Where the technology now exists, you can search the EMR databases, the disease management system, lab interfaces, hospital data, to create a registry that is searchable, so you can identify all your diabetics that are out of control,” McGeeney said. A practice may then reach out to them proactively rather than waiting until they schedule an appointment on their own.

Changing payment structures to support preventive and wellness services is central to the model’s eventual success. But McGeeney says that running a successful medical home doesn’t depend entirely on new payment structures. Another part of the model is restructuring the practice so it operates more efficiently.

He describes this as “getting the right people doing the right job, approaching things from a team concept, and freeing up time for the physician to really do the stuff they went to medical school for.”

“It really is around managing your time and space efficiently,” McGeeney says. “What we have found is that practices, even without external sources of new revenue, did better financially when they started paying attention to these things.”

The Journal wrote about medical homes in an August 2008 article.

Organizations offering incentives necessarily put eligibility requirements around EHR systems to ensure that participating systems can deliver baseline benefits in quality measurement and improvement. Certification from a recognized body offers them a “solid qualifying mechanism” to do that, Leavitt says.

Leavitt is chair of the Certification Commission for Healthcare Information Technology, an independent, private-sector organizations that certifies EHR products and their networks. Facilitating incentive programs fits with CCHIT’s overall goal of accelerating health IT adoption in both ambulatory and inpatient settings.

Financial incentives are an important accelerator because the economics of EHR systems don’t favor physician practices, Leavitt says. The systems are expensive to purchase, expensive to implement, and the return on investment is challenging. Much of the savings that systems create are in efficiencies of the healthcare system, not efficiencies of the office.

“If your system warns of a drug interaction and you avoid it,” Leavitt says, “you didn’t actually make any extra money for your office—you saved an expensive hospitalization for the system and the patient. And yet you bought the system.”

Incentives can help address this issue of reimbursement. “We need those who are going to benefit—and in most case that is the people who are buying the healthcare and paying for the healthcare—to share some of those savings, if they do materialize, to help pay for the EHRs,” Leavitt says.

Initiatives Taking Shape

Today’s incentive programs are initial attempts—facing challenges of their own and likely to change over time. However, physicians currently may be eligible to participate in pilot and established programs in both the public and private sector.

This year the Centers for Medicare and Medicaid Services launched a nationwide demonstration project that will offer bonus payments to physician practices that adopt a certified EHR and use it measure and improve quality. At the state level, some states offer health IT grants or loans, often targeted to specific care populations or areas.

On private side, payers may offer adoption incentives. Physicians may also be eligible for discounts on liability insurance. Certified products are likely to meet program requirements in both cases, and they may carry the greatest assurance that an EHR system will qualify for the program.

The Stark Law exception and anti-kickback safe harbor allow hospitals and payers to donate IT software and services to physician practices. Here, too, the simplest and lowest-risk method to meet program qualifications is to look for a certified product, according to Leavitt. CCHIT offers a list of products that specifically meet the Stark and anti-kickback exceptions.

Certification Moving in Tandem

Product certification can only move as quickly as the industry when it comes to pay-for-performance initiatives. As programs take shape and begin to align, product certification will move in tandem, Leavitt says.

When certification began, products were required only to collect structured data. At the time, no one knew exactly what data incentive programs would require, Leavitt explains. Certification sought to ensure that systems began collecting data in structured form so that once the initiatives materialized, practices would already have the data they needed.

Collecting the data is the bigger challenge, Leavitt notes, more so than creating the eventual output. Once the reporting requirements are standardized, certification will then specify that systems be capable of generating the required reports.

There is a virtuous cycle in quality measurement and EHRs. Traditionally quality measures have been drawn from claims data and are thus designed within the limits of claims data, Leavitt notes. EHRs offer a much richer source of clinical data. Once quality measures and EHR systems meet in the middle, he says, the entire industry will benefit from better quality measurement and less work in collecting and reporting data.

Certification criteria for ambulatory products is available in detail online. The CCHIT site also offers lists of certified products and educational material on certification.

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The Institute for Health Policy (IHP) wanted a definitive answer on how many physicians were using EHRs. They got their chance with a grant from the Office of the National Coordinator for Health Information Technology (ONC), which they used to produce the study “Electronic Health Records in Ambulatory Care—A National Survey of Physicians.” The survey, which appeared in the July 3, 2008, issue of the New England Journal of Medicine, aims to provide a scientific, accurate look at physician EHR use.

In late 2007 and early 2008, IHP used the ONC grant to survey 2,758 physicians about their degree of EHR implementation, their satisfaction with their system, perceived effect the EHR has on quality of care, and perceived barriers to EHR adoption. ONC, the federal office tasked with measuring the nation’s progress toward universal EHR implementation, called on IHP to first study EHR surveys from the past 10 years and determine if enough data already existed to establish the EHR implementation rate in physician offices. The past surveys were deemed insufficient, and IHP was commissioned to create their own definitive survey.

Before the first physician was contacted, the organizers of the IHP survey gathered several major healthcare stakeholders and spent months drawing up a specific definition of a fully functional EHR. This definition laid out the functionalities that determined whether a respondent had a full or basic EHR for purposes of the study.

This difference gave the IHP survey a much needed measuring stick that could be used to say how many US physicians are using an EHR, according to Catherine DesRoches, DrPH., an instructor in the Department of Medicine at Massachusetts General Hospital and Harvard Medical School and co-author of the survey. IHP is part of Massachusetts General Hospital.

“We were trying to move the literature beyond the surveys that relied on questions like, ‘Do you have an electronic health record system or not?’” DesRoches says.

With the strong definition of a functional EHR and a statistically valid sample of physicians, DesRoches and her team started asking questions.

Low Numbers, but Signs of Encouragement

What they found is sobering for EHR supporters. Only 4 percent of physicians have implemented a fully functional EHR; 13 percent use a basic EHR. This leaves 83 percent of US physicians who use a paper record.

“When you really look at a system that we think will have significant benefits for patient care, the number is quite low,” DesRoches says.

The survey showed that EHR use is most common in large physician groups. But even among larger groups of 50 or more doctors, half of those groups still have no EHR. In those practices with one to three physicians, only 9 percent use EHRs.

That is not good news for ONC, but the survey did uncover some encouraging findings, according to DesRoches. Sixteen percent of those with no EHR responded that their practice had purchased an EHR at the time of the survey but had not yet implemented it. Another 26 percent said their practice was planning on implementing a system in the next two years.

“We don’t want to over-interpret, particularly the 26 percent who said they intend to purchase, because these things might not come to pass,” DesRoches says. “But if they do, we are more likely to see a substantial increase in the number of physicians with electronic medical records in the next three to five years.”

Other findings included that two-thirds of surveyed physicians without EHRs said affordability is the main reason they don’t implement. Other reasons included the burden of finding the right EHR and legal liability fears. The more functional a physicians EHR, the more they felt it positively affected quality of care.

However, no survey is perfect. Those interested or supporting EHRs could have been the only ones to respond to the survey, the authors note in the published study.

Though the initial numbers are low, DesRoches says the survey is encouraging. She hopes people will look at the adoption barriers physicians explained and find incentives to encourage more widespread use, such as increasing payments to physicians who use EHRs. “I think that we have some good data that could be used to make some policy changes,” she says.