State EHR Mandates

If you don’t acquire an electronic health record system before 2015, you’re going to lose a small portion of your Medicare reimbursement. But if you live in Massachusetts, the penalty could be much greater: A state EHR mandate requires physicians to show they know how to use an EHR by 2015 or face the loss of their license to practice in Massachusetts. Hospitals, similarly, could lose their state operating certificates. Meanwhile, Minnesota requires all providers, including physicians, hospitals, and post-acute facilities, to have EHRs by 2015, but there are no specific penalties in the law for noncompliance.

As the federal government is encouraging EHR adoption through incentives (and later penalties), a few states are developing their own programs to apply extra pressure on physicians.

In Maryland, there isn’t an EHR mandate, but the state is turning the screws on doctors who don’t have clinical information systems. Under legislation that was signed May 19, Maryland requires all private health insurers to build EHR incentives and penalties into their payment structures. Both Maryland and Massachusetts are also in the process of aligning their state requirements with the federal “meaningful use” criteria for receiving government EHR incentives. Minnesota offers another twist: it requires all physicians to prescribe electronically by 2011.

The two direct EHR mandates, which along with Maryland’s initiative are the only state programs passed at this time, were approved in states that are already way ahead of the national curve in health IT adoption. More than 40 percent of Massachusetts doctors already use EHRs in their offices, and 68 percent of primary-care physicians in Minnesota have electronic records. The evolution of health care organizations in both states has had a major impact on their EHR penetration rates.

Integrated systems dominate Minnesota

In Minnesota, large, integrated delivery systems dominate the healthcare market, says Becky Schierman, manager of quality improvement for the Minnesota Medical Association (MMA). A large percentage of Minnesota physicians work for or are affiliated with one of these healthcare systems, which have the resources and the technical know-how to help practices implement EHRs.

In addition, the longtime emphasis on quality improvement in Minnesota has helped persuade many physician groups to move to EHRs. “We have a culture for high quality performance, and we have public reporting on quality measures,” says Susan Severson, director of health IT for Stratis Health, a Minneapolis research and consulting organization. “The physician groups recognize that to perform well on quality measures, they need more data than they can abstract out of medical records manually. The [EHR] is a tool for improving quality of patient care and safety if it’s orchestrated correctly.”

This was also the view of the Minnesota and Massachusetts lawmakers when they adopted EHR mandates in 2008. But the Massachusetts market is a bit different than that of Minnesota.

In the Bay State, about 60 percent of physicians practice in solo or two-doctor practices. While large healthcare organizations prevail in the Boston metropolitan area, small, independent practices unaffiliated with hospitals are common in the rest of the state. In eastern Massachusetts, many small and medium-sized practices are bound together in contracting networks that center around hospital systems. Some of these systems are actively promoting EHRs. Partners Healthcare in Boston, for example, required all of its network physicians to get EHRs by 2008 as a condition of participating in Partners’ insurance contracts.

EHR funding is still a challenge

Neither the Massachusetts statute nor the Minnesota law provides any funds to help physicians pay for EHR systems. “Obviously, we’re very concerned about the state mandate,” says anesthesiologist and critical care specialist Alice A. Tolbert Coombs, president of the Massachusetts Medical Society. “The [EHR] is very costly, and physicians are stressed economically. It’s going to be a major undertaking for them to get [EHRs]. So the transition from a paper record to an [EHR] will take a while for some physician groups - especially solo practitioners.”

Many Massachusetts doctors, notes Coombs, are “encouraged” by the federal government’s health IT incentives. But even if they can meet the meaningful use criteria, she says, the subsidies won’t be enough to cover their ongoing costs. And with other financial burdens weighing them down, including reimbursement cuts by Medicare and private payers, many doctors wonder how they can afford an EHR.

Faced with the possibility of losing their licenses, Coombs adds, some physicians may decide to give up private practice and go to work for hospitals or large groups that have EHRs. “If it’s a mandate, physicians will make decisions based on the mandate,” she says. “But some of the decisions that are made may be career-changing decisions.”

Healthcare South, a 41-physician practice in Pembroke, Mass., just acquired an EHR with financial aid from a physician-hospital organization. Pediatrician Francis Kilduff, president of the group, is enthusiastic about the EHR’s potential to improve patient care and make his life easier. But with the state mandate, he doesn’t feel that Healthcare South had any choice but to get an EHR. And he wonders how doctors who don’t belong to a large organization can afford the technology. Some older physicians will just “say the hell with it” and retire, he predicts.

Nevertheless, Kilduff, like many other physicians, believes that most physicians and hospitals in his state will get aboard the EHR train by 2015.

Minnesota providers move together

In Minnesota, says Severson, a consensus is forming that everyone will soon have EHRs. “That, plus the incentives from Medicare and Medicaid, will continue to propel us forward,” she says. Severson also heads a federally funded health IT regional extension center that will help primary-care practices choose and implement EHRs. This assistance will be especially important in rural areas of the state, she notes.

Schierman of the state medical association is less optimistic than Severson that rural practices not affiliated with hospitals will be able to meet the EHR deadline. Citing quality reporting requirements and the shift to the ICD-10 coding system, she says, “There’s a lot of stuff falling on practices’ plates right now, and they’re feeling overwhelmed by the potential impact. Also, reimbursement rates are being cut.”

The Raiter Clinic in Cloquet, a small town in northern Minnesota, is stepping up to the plate, nevertheless. The independent practice, which includes 12 family physicians as well as three surgeons who share space at Raiter’s offices but work for the local hospital, is in the process of implementing an EHR. Family physician David Luehr, a former president of the MMA, says the EHR is going to help improve care, especially after it’s hooked up with an electronic disease registry.

While quality has been the main motivator for getting an EHR, Luehr notes that the group is concerned about the state mandate. The doctors have figured out how to finance the EHR even if they don’t get federal subsidies, but they’re afraid of what will happen if their productivity decreases during the implementation phase.

Luehr predicts that practices of his group’s size and very small practices will get computerized by 2015, but that medium-sized groups of five or six doctors may have more difficulty. That’s because those practices need a more sophisticated EHR than a one or two-doctor practice does, but they can’t afford a technical support person. Even the Raiter Clinic is seeking technical aid from the hospital.

But in the long run, Luehr states, “I think [universal EHR adoption] will happen. There’s a lot of support in the state to get it done.”

Ken Terry is a New Jersey-based freelance writer and the author of the book “Rx for Health Care Reform.” He can be reached at physicianspractice@ubm.com.

This article originally appeared in the September 2010 issue of Physicians Practice.