Final Rule on ACOs encourages EHR adoption but eliminates “meaningful use” requirement

The Centers for Medicare and Medicaid Services (CMS) announced today, October 20, 2011, that the use of certified electronic health records (EHRs) will be the highest-weighted quality measure for an Accountable Care Organization (ACO) under the new Medicare Shared Savings Program.

ACOs are designed to encourage primary care doctors, specialists, hospitals, and other health care providers to coordinate their care. The CMS Final Rule on ACOs bases the amount of shared savings that an ACO may receive for its performance on four domains of quality: 1) quality standards on patient experience; 2) care coordination and patient safety; 3) preventive health; and 4) at-risk populations.  To earn shared savings the first performance year, providers must report across all four domains of quality, which include a total of 33 quality measures.  Providers will begin to share in savings based on how well they perform on 23 of the 33 quality measures in the second performance year and on 32 of the 33 measures in the third performance year. 

Measure 20 of the 33 quality measures requires ACOs to report the percentage of primary care providers (PCPs) who successfully qualify for an EHR Incentive Program payment.  CMS expanded the scope of PCPs who can be counted in this measure by eliminating the requirement that the PCP be a “meaningful EHR user” as defined in 42 C.F.R. § 495.4 of the Health Information Technology for Economic and Clinical Health (HITECH) Act of 2009.  CMS stated that it “decided to . . . expand [measure 20] to include any PCP who successfully qualifies for an EHR Incentive Program incentive rather than only including those deemed meaningful users.”

In the proposed ACO regulation, released April 7, 2011, CMS had proposed five EHR related quality measures–measures 19 to 23. In the Final Rule, CMS decided to retain and expand only one EHR measure, measure 20, citing three reasons for its decision:

One reason . . . is that we believe it is important to encourage EHR adoption as a means for ACOs to better achieve the goals of the three-part aim[1][of ACOs], recognizing that some organizations may currently be achieving better quality outcomes using EHRs, even if they are not yet considered “meaningful users,” than organizations that have not yet adopted such technology. To this end, we recognize that first-year Medicaid EHR Incentive Program participants can earn an EHR incentive for adopting, implementing, or upgrading an EHR, and do not need to be “meaningful users” in order to earn an incentive, and would like to include such EHR participants in this measure. A second reason for retaining this measure but not proposed measure 19, percent of all physicians meeting Stage 1 HITECH Meaningful Use Requirements, is that we recognize some ACOs may be comprised of PCPs only. An ACO’s score on proposed measures 19 and 20 would be the same if the ACO is only comprised of PCPs. As a result, the use of both measures could be considered redundant. The third reason for finalizing proposed measure 20 with modification is that it is a structural measure of EHR program participation that is not measured in any other program, and therefore is not duplicative of any existing measures. In addition, CMS can calculate the measure based on data already reported to the EHR Incentive Program, such that no additional reporting would be required by ACOs other than what EPs have already reported. (Emphasis added.)

CMS stated that, overall, relaxing measure 20 is more inclusive and promotes participation, while still signaling the importance of healthcare information technology (HIT) for ACOs.
The proposed ACO regulation also would have required that at least 50 percent of an ACO’s PCPs be “meaningful EHR users” by the start of the second performance year or CMS could terminate the ACO agreement.  This 50 percent threshold met criticism from the American Medical Association (AMA) and other groups, who cited a lack of correlation between the meaningful use of EHRs and improved coordination of care.  Many criticized this high threshold as premature, given that PCPs have not yet overwhelmingly adopted EHRs in a meaningful manner.  Some commenters believed the “meaningful EHR user” requirement to redundant because there are other governmental incentives for providers to adopt EHRs.
In response to these comments, CMS modified this participation requirement in the Final Rule.  EHR participation is no longer a condition of ACO participation, however, it remains one of the highest-weighted quality measures under the Final Rule.  CMS decided to use a carrot rather than a stick to encourage providers to adopt a “robust EHR.”  CMS stated in the preamble to the Final Rule that “this change is consistent with industry comments, recognizes ACOs providers’ current levels of EHR Incentive Program participation, rewards higher adoption with higher sharing rates, and signals the importance of EHR adoption to ACOs.”  To further highlight the importance of EHRs, CMS will score the EHR quality measure with double the weight of any other quality measure.  This requirement will be incorporated in 42 C.F.R. § 425.506.
Pay for performance on measure 20 (i.e., the percent of PCPs qualifying for an EHR Incentive Program payment) will not occur until performance year 3, which will begin on January 1, 2015 and end on December 31, 2015.
The Final Rule will be in effect in 60 days.
Click here to read the CMS press release announcing new incentives for providers to work together through ACOs.

[1] The “three-part aim” is defined in the Final Rule as: (1) better care for individuals; (2) better health for populations; and (3) lower growth in Medicare Parts A and B expenditures.  (See Final Rule at page 8.)

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