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January 2010

Academic Physician Incentives Needed to Catalyze “White Coat-Driven Transformation” of Medical Practice Using Health IT

On April 15th President Obama signed into law legislation that allows the Department of Health and Human Services (HHS) to include physicians who treat patients in hospital-based outpatient clinics among the physicians eligible for “Meaningful Use” incentive payments. These incentives are authorized by the HITECH Act portion of the 2009 American Recovery and Reinvestment Act (ARRA). Under ARRA, “hospital-based physicians” are not eligible for health IT incentive payments because they depend “substantially” on a hospital’s “facilities and equipment, including qualified electronic health records”. The new legislation clarifies the definition of “hospital-based” so that it may include physicians working in hospital outpatient clinics as opposed to the inpatient units, surgery suites or emergency departments.

As I wrote in “Academic Physician Incentives Needed to Catalyze White Coat-Driven Transformation of Medical Practice Using Health IT”, it appeared that the original intent of ARRA eligibility was misinterpreted by HHS. The new clarifying language resolves this issue.

The new bill’s clarifying language:

"SEC. 6. EHR CLARIFICATION. (a) QUALIFICATION FOR CLINIC-BASED PHYSICIANS.— (1) MEDICARE.—Section 1848(o)(1)(C)(ii) of the Social Security Act (42 U.S.C. 1395w– 4(o)(1)(C)(ii)) is amended by striking ‘‘setting (whether inpatient or outpatient)’’ and inserting ‘‘in- patient or emergency room setting’’. (2) MEDICAID.—Section 1903(t)(3)(D) of the Social Security Act (42 U.S.C. 1396b(t)(3)(D)) is amended by striking ‘‘setting (whether inpatient or outpatient)’’ and inserting ‘‘inpatient or emergency room setting’’. (b) EFFECTIVE DATE.—The amendments made by 15 subsection (a) shall be effective as if included in the enact- 16 ment of the HITECH Act (included in the American Re- 17 covery and Reinvestment Act of 2009 (Public Law 111– 18 5)). (c) IMPLEMENTATION.—Notwithstanding any other 20 provision of law, the Secretary of Health and Human 21 Services may implement the amendments made by this 22 section by program instruction or otherwise."

So, the change in section 1848 looks like this:

‘‘ (C) NON-APPLICATION TO HOSPITAL-BASED ELIGIBLE PROFESSIONALS.— ‘‘(i) IN GENERAL.—No incentive payment may be made under this paragraph in the case of a hospital-based eligible professional. H. R. 1—355 ‘‘(ii) HOSPITAL-BASED ELIGIBLE PROFESSIONAL.—For purposes of clause (i), the term ‘hospital-based eligible professional’ means, with respect to covered professional services furnished by an eligible professional during the EHR reporting period for a payment year, an eligible professional, such as a pathologist, anesthesiologist, or emergency physician, who furnishes substantially all of such services in a hospital setting (whether inpatient or outpatient) inpatient or emergency room setting and through the use of the facilities and equipment, including qualified electronic health records, of the hospital. The determination of whether an eligible professional is a hospital-based eligible professional shall be made on the basis of the site of service (as defined by the Secretary) and without regard to any employment or billing arrangement between the eligible professional and any other provider. ‘‘(D) PAYMENT.—

So hospital-based physicians remain excluded from ARRA incentives, but the definition of “hospital-based” changes from those who practice in inpatient or outpatient settings to those who practice in inpatient or ER settings. This still excludes pathologists, anesthesiologists, ER physicians, hospitalists and others who see most of their patients in the ER as outpatients or as hospital inpatients.  But this opens the door for HHS to interpret ARRA to mean that those who practice in hospital-based clinics using ambulatory EMRs are eligible…a setting common for many academic physicians and others who are closely associated with the ambulatory side of hospitals.  This type of government response to sensible feedback brought forward by physicians and others is reassuring to see.