Medicare pilot project to pay more to doctors who use EMRs

The physician community is waiting for important program details before it can embrace the initiative.

By Dave Hansen — Posted Nov. 26, 2007

Print  |   Email  |   Respond  |   Reprints  |   Like Facebook  |   Share Twitter  |   Tweet Linkedin

Physician groups reacted with cautious optimism to a new government pilot project that will give higher Medicare payments to doctors who adopt electronic medical records.

The Centers for Medicare & Medicaid Services said it wants 1,200 physician practices to participate. It will begin recruitment next summer, giving priority to small- and medium-sized practices. The agency has not determined how it will choose the practices. It also has not calculated how large the incentive payments will be. CMS will determine how much savings the program will generate and then calibrate payouts so the project ends up budget-neutral.

The American Academy of Family Physicians supports any activities to make it easier for physicians to adopt EMRs, said Jason Mitchell, MD, assistant director of the organization's Center for Health Information Technology. But the program's details must be worked out before the academy can get excited about it, he said. Dr. Mitchell estimated that 20,000 to 25,000 AAFP members use EMRs.

The American Medical Association declined to comment on the program but emphasized the financial challenges health information technology poses for physician practices. While HIT will save money for the health care system, only 11% of the return on investment will go to physicians, who are expected to pay for it, according to the AMA.

The AMA strongly urges Congress to consider financial help, such as grants, loans, increased reimbursement for HIT use and tax credits for doctors purchasing the technology.

The startup cost of an EMR system ranges from $16,000 to $36,000, found a 2005 study by the Congressional Research Service.

The Dept. of Health and Human Services acknowledges that market forces alone will not be enough for physicians to adopt EMRs, said American College of Physicians President David Dale, MD.

The project is an "encouraging step in the right direction," he stated. "For physicians in small- and medium-size practices, the cost of an EHR system -- not just the dollars spent on the hardware and software, but the time lost on training and conversion to a new system -- makes implementing these systems a financial impossibility for their offices."

Minimal effect predicted

But the program will have little impact because it involves too few physicians, some health care IT experts said.

"The project to give bonuses to 1,200 practices is welcomed. However, when put in perspective, it is a tiny step in the process," said C. Peter Waegemann, CEO and executive director of the Medical Records Institute, created to promote EMR adoption. Medical groups already have achieved substantial levels of electronic medical record use, he said.

"Compared to these and other efforts, the move to motivate 1,200 is not a big deal," he said. "CMS and HHS should be able to do better." At this rate, President Bush will not meet his goal of most patients having EMRs by 2014, Waegemann predicted.

The program will involve a minimal number of practices, agreed Dan Rode, vice president for government and policy relations at the American Health Information Management Assn., which represents health information management professionals. But physicians have argued for years that the federal government should offset the cost of EMRs because the benefits extend beyond the practice level, and this demonstration project will be valuable if it shows this, he said.

A CMS official speaking on background conceded that the project is small. But the agency hopes it will complement efforts by private insurers to encourage EMR use and will persuade insurers to offer similar incentives. The official emphasized that this is a demonstration project, not a full-fledged program. The agency limited its size to make the project more manageable and practicable.

How it will work

What physicians must do to get bonuses will vary throughout the five-year program, CMS explained. In the first year, physician practices will receive extra payment for using an approved EMR to manage patient care. In the last phase, the agency will base bonuses on practices' performance on designated clinical quality measures. At every stage of the project, practices that perform better than others will receive larger bonuses.

CMS said it would determine whether savings for physicians would cover their administrative costs for participating and make that information available to doctors when recruiting begins. The agency pointed out that many physicians already are moving toward using EMRs and that most doctors would improve the quality of care and save substantial money by using such technology. For example, practices participating in a different program, the Medicare Care Management Performance Demonstration Project, saved $38,000 per physician over its three-year span by using EMRs, CMS noted.

In the new project, the agency will not subsidize physicians' training costs for using EMRs, CMS said. But it will help train staff to use the program's clinical quality measures.

To qualify, a practice must use an EMR system approved by the Certification Commission for Healthcare Information Technology. The system must perform a basic set of functions that can "positively impact patient care processes," such as handling clinical documentation, ordering lab tests, recording lab tests and ordering prescriptions.

"We want to revolutionize the way vital health data are managed and maintained, so we are taking steps to change from a paper-based medical record to an electronic health record," stated CMS Acting Administrator Kerry Weems in an Oct. 30 news release announcing the initiative. "This project will appropriately align incentives to reward doctors in small physician practices who use certified EHRs as tools to deliver higher quality care."

Back to top


Pilot payment rules

What physician practices must do to get extra Medicare payment varies during the three stages of the five-year EMR demonstration project.

First year: Payments will go to practices that use EMRs approved by the Certification Commission for Healthcare Information Technology. Extra bonuses will go to offices that have more sophisticated health information technology.

Second year: Payments will go to practices that use CCHIT-certified EMRs and report on clinical quality measures.

Third to fifth years: Payments will go to practices based on performance on clinical quality measures, with an added bonus depending on the degree to which offices use the EMR to improve the ways they operate.

Source: Centers for Medicare & Medicaid Services

Back to top



Read story

Confronting bias against obese patients

Medical educators are starting to raise awareness about how weight-related stigma can impair patient-physician communication and the treatment of obesity. Read story

Read story


American Medical News is ceasing publication after 55 years of serving physicians by keeping them informed of their rapidly changing profession. Read story

Read story

Policing medical practice employees after work

Doctors can try to regulate staff actions outside the office, but they must watch what they try to stamp out and how they do it. Read story

Read story

Diabetes prevention: Set on a course for lifestyle change

The YMCA's evidence-based program is helping prediabetic patients eat right, get active and lose weight. Read story

Read story

Medicaid's muddled preventive care picture

The health system reform law promises no-cost coverage of a lengthy list of screenings and other prevention services, but some beneficiaries still might miss out. Read story

Read story

How to get tax breaks for your medical practice

Federal, state and local governments offer doctors incentives because practices are recognized as economic engines. But physicians must know how and where to find them. Read story

Read story

Advance pay ACOs: A down payment on Medicare's future

Accountable care organizations that pay doctors up-front bring practice improvements, but it's unclear yet if program actuaries will see a return on investment. Read story

Read story

Physician liability: Your team, your legal risk

When health care team members drop the ball, it's often doctors who end up in court. How can physicians improve such care and avoid risks? Read story

  • Stay informed
  • Twitter
  • Facebook
  • RSS
  • LinkedIn