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April 2010

ARRA Clarification Opens Door of "Meaningful Use" Incentive Payments for Physicians in Hospital-Based Outpatient Clinics

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:




(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:



‘‘(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.



Under these changes hospital-based physicians remain excluded from ARRA incentives, but the definition of “hospital-based” physicians 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 is really good news for many physicians who work in hospital-based outpatient clinics whether they are in academia or private practice.

What Physicians Need to Know about Work Flow Analysis Before Selecting and Implementing an Ambulatory EMR

Work flow analysis is valuable when selecting and implementing an ambulatory electronic medical record (EMR).   The results of this analysis will help the physician identify which EMR products are best suited to meet their expectations.   Physicians should have an understanding of the effort involved and prepare their practice for this important assessment.

Work flow analysis is hard work and takes a lot of time.  With time pressures on physicians to see patients and a payment system that rewards them more for higher numbers of patient visits than for higher quality of care, many physicians find it difficult to carve out enough time in their day for efforts like this.    As a result, work flow analysis is often not performed or is less than comprehensive during an ambulatory EMR selection and implementation.

Physicians essentially have two options to obtain a work flow analysis:

  1. Hire a consultant
  2. Perform the work flow analysis themselves

Hiring an IT consultant who is experienced with work flow analysis at the beginning of the EMR selection process is a more expensive option but will likely result in a more comprehensive analysis.  The consultant will interview key physicians and staff, create work flow descriptions and maps, analyze the results, review them with the practice and develop recommendations.  The physicians and staff will spend time with the consultant during this process, but most of the time and effort necessary for the documentation and assessment will be done by the consultant.

Alternatively, physicians may decide to perform work flow analysis on their own.  If so, there are a variety of methods and tools available to assist the effort.  These include:

  1. AHRQ’s Health IT Tool Box website
  2. DOQ-IT Operational Redesign Workbook
  3. PITO Physician Information Technology Office Needs Assessment

These tools will guide the physician through the documentation of current work flows, an analysis of them and then considerations of redesigned future work flows.  The initial tedious steps to document current work flows are to:

  1. Collect all paper forms used in practice
  2. Select a workflow guide to facilitate analysis (i.e. one of the three listed above)
  3. Identify major processes to map out (key processes vs. all processes)
  4. Gather information on each process by interviewing people involved in each process
  5. Write detailed descriptions of each process
  6. Create detailed work flow maps (at least for the major processes)

Collecting paper forms will help identify specific paper-based processes that are unique to the practice.  The purposes of paper-based processes are important to understand and account for when future work flows are redesigned.  If the new technology tools and work flows do not account for the purpose of a paper-based work flow, and that purpose remains pertinent, then a work-around will need to be discussed and designed.  The goal should be to convert all paper processes to electronic ones, but the limits of technology or the costs involved will limit the ability to fully achieve this.

A work flow analysis guide will help the practice identify other key work flow processes that are generally known to be important for physician practices to assess when selecting and implementing an EMR.  As shown in the snapshot below of part of the DOQ-IT Workbook, these guides will lead the practice through questions to ask about each process:

DOQ IT Guide

After interviews with people involved in the process are completed, a description for each process is documented and then used to synthesize current work flow maps. A work flow map serves as a visual representation of the described workflow.  As described in a previous blog, these maps are useful when analyzing current work flow and redesigning them into future work flows.  My next blog will describe how the results of work flow analysis will facilitate the selection of an EMR that meets the needs of the physician office.