Oversight Excludes Rural Health Clinics From Medicare EHR Bonus Program

Congressional Action Needed to Correct Wording in Law

July 27, 2011 06:05 pm Sheri Porter

It's an "oversight," a "technical glitch," an "unintentional error," or perhaps just a "misunderstanding" about how rural health clinics bill the government for health care services provided to Medicare beneficiaries. That's how some rural family physicians describe the fact that most of America's nearly 3,800 rural health clinics likely will miss out when physicians receive their checks for meeting all of the requirements of Medicare's electronic health record, or EHR, incentive program(www.cms.gov).

According to AAFP Director Robert Wergin, M.D., of Milford, Neb., his rural family medicine practice possibly will miss out on collecting $440,000 -- the amount available if each of the clinic's 10 physicians earned the maximum Medicare EHR incentive of $44,000.

The problem practices such as Wergin's are encountering is that rural health clinics bill for Medicare services as part of Medicare Part A. Therefore, they use an UB-04 form, not the HCFA 1500 Medicare Part B form. Unfortunately, the Part B form is the form required by the regulations governing Medicare's EHR incentive program.

"Rural health clinics bill differently through Medicare, and I believe the people who set up the rules and regulations and policy didn't understand that," says Wergin.

Duane Koons, M.D., of Viroqua, Wis., says his provider-based rural health clinic was gearing up to meet meaningful use criteria last year. "Part of our strategy was to go for the meaningful use funding, not just for the money, but because it's good use of the technology," says Koons, adding that an updated version of software was recently installed to allow physicians to measure their adherence to Medicare's meaningful use criteria.

Story highlights

  • A congressional oversight excludes rural health clinics from participating in Medicare's electronic health record, or EHR, incentive program.
  • Because the error is legislative, it can only be corrected by Congress.
  • Rural health clinics could earn more than $63,000 in a similar Medicaid EHR incentive bonus program, but state programs vary, and few rural health clinics see enough Medicaid patients to meet the patient threshold.

"We turned around to apply for the funding and found that our clinic category (rural health clinic) does not qualify," says Koons. "It's quite frustrating -- as a strong advocate of health care reform, including electronic health records -- to encounter this type of oversight that will harm our practice's ability to modernize."

Robert McKeeman, M.D., of Friend, Neb., describes the land surrounding his rural health clinic as "an old farming community." About 60 percent of McKeeman's patients are covered by Medicare.

"We were under the initial impression that we would be covered in the (Medicare) incentive program if we went ahead and got EHRs," says McKeeman. So he signed a contract with an EHR vendor. "We spent $30,000 getting the technology," says McKeeman, and then spent another $10,000 to $15,000 on additional hardware.

"Come to find out that rural health clinics are not really under the auspices of (Medicare's) meaningful use (program); we don't fall under those criteria," says McKeeman, adding that he would not have invested tens of thousands of dollars in technology if he'd known he couldn't qualify for the bonus.

Medicaid's EHR Bonus Program Also Problematical

Steven Waldren, M.D., director of the AAFP's Center for Health IT, says when he reviewed the Medicare EHR incentive program, he actually expected that rural health clinics would qualify for an even bigger bonus -- up to $63,750 per physician -- via an incentive program for physicians who serve Medicaid patients. That program requires participants to meet a threshold in the number of Medicaid patients they treat.

Although Section 1903 of the EHR incentive program(edocket.access.gpo.gov) sets a patient volume requirement for family physicians of 30 percent, it also includes a "needy individuals" clause that allows physicians to count patients enrolled in the Children's Health Insurance Program, those who are furnished uncompensated care and those billed on a sliding scale toward meeting the threshold.

Waldren says he anticipated that these extra neediness categories would apply to enough additional patients to bump rural FPs beyond the required threshold of patients served, but that has not proved to be the situation. In fact, Wergin, Koons and McKeeman say that their Medicaid populations are much smaller than the number of Medicare patients they serve, and they will not be able to meet that threshold.

Other issues also complicate the situation. For example, each state sets its own Medicaid qualification guidelines, and some states, such as Nebraska, have tougher qualification rules than others.

In addition, state participation in the incentive program is voluntary, and according to the most recent information(www.cms.gov) provided by CMS, only 21 states had launched a Medicaid EHR incentive program at the time of publication.

Koons is still waiting for a chance to review the "nuts and bolts" of Wisconsin's proposed program, which has to be approved by CMS, but he's not optimistic. "We're going to fall through the cracks most likely, even though we're in the second-poorest county in the state," he says.

Fixing the Problem

Dan Boston, EVP of Health Policy Source Inc., a Washington-based consulting and advocacy group, is exploring the issue at the behest of the American Medical Group Association, the National Rural Health Association, Quincy Medical Group and others.

Based on his 20-year background working in D.C. and his experience in the technicalities of federal health policy, Boston is certain that Congress didn't intend to carve rural health clinics out of the EHR incentive payment program.

He has explored the legislative and bill mark-up history and examined the Congressional Budget Office score sheets during his investigation of both the Medicare and Medicaid EHR incentive programs. Boston says he found nothing that would indicate any desire on the part of Congress to exempt rural health clinics from EHR bonus programs.

What Boston did find is what he calls "cookie cutter" language that applies to other federal quality incentive programs, including the Physician Quality Reporting System and the electronic-prescribing bonus program.

"When we looked across the board at other quality incentive programs, we kept finding the same problem as we went backward," says Boston. "Given the way the billing arrangements are set up (on the UB-04 form), there is no way for physicians in rural health centers to participate in any of these programs. It just seems like a technical correction, and we have a broad coalition of folks that seem to have recognized that … hopefully, we can get Congress to address this."

Robert Rauner, M.D., past president of the Nebraska AFP, agrees that the specific Medicare billing language is negatively affecting rural health clinics in more than one federal program. "A couple of lines in the law need to be changed; everything else is OK," he says.

Rauner, who is clinical coordinator of the Wide River Technology Extension Center -- Nebraska's EHR regional extension center -- has been in the thick of the incentive program controversy. Centers, such as his, have been tasked with helping physicians achieve meaningful use of their EHRs so they can earn the bonus money. But, he notes, very few of Nebraska's 134 rural health clinics will be able to qualify for EHR incentive payments through Medicaid. And the language in the Medicare program just adds to the frustration because it excludes these clinics. "Not getting the $44,000 (from Medicare) to pay for an EHR is a big deal," says Rauner.

Because the language is included in the legislation that established the Medicare EHR incentive program, it will take an act of Congress to amend it. However, the issue appears to be gaining traction with some lawmakers.

A Dec. 17, 2010, letter provided by Rauner and addressed to Sen. Max Baucus, D-Mont., chair of the Senate Finance Committee and Sen. Charles Grassley, R-Iowa, (then) ranking member of the finance committee, asks them to "consider a technical change to federal law" to ensure that physicians serving at rural health clinics are fully eligible for the Medicare health IT incentive payments "as Congress intended."

The letter, which was signed by Sen. Benjamin Nelson, D-Neb., and Sen. Claire McCaskill, D-Mo., points out that America's rural health clinics provide care for more than 7 million people, and the current "health IT incentive payment structure will hamper adoption of electronic health records in rural and underserved areas." The result could be that the savings Congress was expecting from the adoption of health IT "may not be fully realized."

In the meantime, says Waldren, CMS is due to release the proposed rule on "stage two" of the meaningful use regulations later this summer. That will give the Academy another opportunity to address the problem and advocate for rural practices.

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