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Vol. 77 Wednesday,No. 45 March 7, 2012

Part II

Department of Health and Human Services

Centers for Medicare & Medicaid Services

42 CFR Parts 412, 413, and 495Medicare and Medicaid Programs; Electronic Health Record IncentiveProgramStage 2; Proposed Rule

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13698 Federal Register / Vol. 77, No. 45/ Wednesday, March 7, 2012 / Proposed Rules

DEPARTMENT OF HEALTH ANDHUMAN SERVICES

Centers for Medicare & MedicaidServices

42 CFR Parts 412, 413, and 495

[CMS0044P]

RIN 0938AQ84

Medicare and Medicaid Programs;Electronic Health Record IncentiveProgramStage 2

AGENCY: Centers for Medicare &Medicaid Services (CMS), HHS.

ACTION: Proposed rule.

SUMMARY: This proposed rule wouldspecify the Stage 2 criteria that eligibleprofessionals (EPs), eligible hospitals,and critical access hospitals (CAHs)must meet in order to qualify for

Medicare and/or Medicaid electronichealth record (EHR) incentive payments.In addition, it would specify paymentadjustments under Medicare for coveredprofessional services and hospitalservices provided by EPs, eligiblehospitals, and CAHs failing todemonstrate meaningful use of certifiedEHR technology and other programparticipation requirements. Thisproposed rule would also revise certainStage 1 criteria, as well as criteria thatapply regardless of Stage, as finalized inthe final rule titled Medicare andMedicaid Programs; Electronic HealthRecord Incentive Program published on

July 28, 2010 in the Federal Register.The provisions included in theMedicaid section of this proposed rule(which relate to calculations of patientvolume and hospital eligibility) wouldtake effect shortly after finalization ofthis rule, not subject to the proposed 1year delay for Stage 2 of meaningful useof certified EHR technology. Changes toStage 1 of meaningful use would takeeffect for 2013, but most would beoptional until 2014.

DATES: To be assured consideration,comments must be received at one ofthe addresses provided below, no laterthan 5 p.m. on May 7, 2012.ADDRESSES: In commenting, please referto file code CMS0044P. Because ofstaff and resource limitations, we cannotaccept comments by facsimile (FAX)transmission.

You may submit comments in one offour ways (please choose only one of theways listed):

1. Electronically. You may submitelectronic comments on this regulationto http://www.regulations.gov. Followthe Submit a comment instructions.

2. By regular mail. You may mailwritten comments to the followingaddress ONLY: Centers for Medicare &Medicaid Services, Department ofHealth and Human Services, Attention:CMS0044P, P.O. Box 8013, Baltimore,MD 212448013.

Please allow sufficient time for mailedcomments to be received before the

close of the comment period.3. By express or overnight mail. You

may send written comments to thefollowing address ONLY: Centers forMedicare & Medicaid Services,Department of Health and HumanServices, Attention: CMS0044P, MailStop C42605, 7500 SecurityBoulevard, Baltimore, MD 212441850.

4. By hand or courier. Alternatively,you may deliver (by hand or courier)your written comments ONLY to thefollowing addresses prior to the close ofthe comment period:

a. For delivery in Washington, DC

Centers for Medicare & MedicaidServices, Department of Health andHuman Services, Room 445G, HubertH. Humphrey Building, 200Independence Avenue SW.,Washington, DC 20201.

(Because access to the interior of theHubert H. Humphrey Building is notreadily available to persons withoutFederal government identification,commenters are encouraged to leavetheir comments in the CMS drop slotslocated in the main lobby of the

building. A stamp-in clock is availablefor persons wishing to retain a proof of

filing by stamping in and retaining anextra copy of the comments being filed.)b. For delivery in Baltimore, MD

Centers for Medicare & MedicaidServices, Department of Health andHuman Services, 7500 SecurityBoulevard, Baltimore, MD 212441850.

If you intend to deliver yourcomments to the Baltimore address, calltelephone number (410) 7861066 inadvance to schedule your arrival withone of our staff members.

Comments erroneously mailed to theaddresses indicated as appropriate forhand or courier delivery may be delayedand received after the comment period.

For information on viewing publiccomments, see the beginning of theSUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT:Elizabeth Holland, (410) 7861309, orRobert Anthony, (410) 7866183, EHRIncentive Program issues. Jessica Kahn,(410) 7869361, for Medicaid IncentiveProgram issues. James Slade, (410) 7861073, or Matthew Guerand, (410) 7861450, for Medicare Advantage issues.Travis Broome, (214) 7674450,Medicare payment adjustment issues.

Douglas Brown, (410) 7860028, orMaria Durham, (410) 7866978, forClinical quality measures issues.Lawrence Clark, (410) 7865081, forAdministrative appeals process issues.SUPPLEMENTARY INFORMATION:

Inspection of Public Comments:Allcomments received before the close ofthe comment period are available for

viewing by the public, including anypersonally identifiable or confidential

business information that is included ina comment. We post all commentsreceived before the close of thecomment period on the following Website as soon as possible after they have

been received: http://www.regulations.gov. Follow the searchinstructions on that Web site to viewpublic comments.

Comments received timely will alsobe available for public inspection asthey are received, generally beginningapproximately 3 weeks after publication

of a document, at the headquarters ofthe Centers for Medicare & MedicaidServices, 7500 Security Boulevard,Baltimore, Maryland 21244, Mondaythrough Friday of each week from8:30 a.m. to 4 p.m. To schedule anappointment to view public comments,phone 18007433951.

Acronyms

ARRAAmerican Recovery andReinvestment Act of 2009

AACAverage Allowable Cost (of certifiedEHR technology)

AIUAdopt, Implement, Upgrade (certifiedEHR technology)

CAHCritical Access HospitalCAHPSConsumer Assessment of

Healthcare Providers and SystemsCCNCMS Certification NumberCFRCode of Federal RegulationsCHIPChildrens Health Insurance ProgramCHIPRAChildrens Health Insurance

Program Reauthorization Act of 2009CMSCenters for Medicare & Medicaid

ServicesCPOEComputerized Physician Order EntryCYCalendar YearEHRElectronic Health RecordEPEligible ProfessionalEPOExclusive Provider OrganizationFACAFederal Advisory Committee ActFFPFederal Financial Participation

FFYFederal Fiscal YearFFSFee-For-ServiceFQHCFederally Qualified Health CenterFTEFull-Time EquivalentFYFiscal YearHEDISHealthcare Effectiveness Data and

Information SetHHSDepartment of Health and Human

ServicesHIEHealth Information ExchangeHITHealth Information TechnologyHITPCHealth Information Technology

Policy CommitteeHIPAAHealth Insurance Portability and

Accountability Act of 1996

http://www.regulations.gov./http://www.regulations.gov./http://www.regulations.gov/http://www.regulations.gov/http://www.regulations.gov/http://www.regulations.gov/http://www.regulations.gov/http://www.regulations.gov./


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13699Federal Register / Vol. 77, No. 45/ Wednesday, March 7, 2012 / Proposed Rules

HITECHHealth Information Technology forEconomic and Clinical Health Act

HMOHealth Maintenance OrganizationHOSHealth Outcomes SurveyHPSAHealth Professional Shortage AreaHRSAHealth Resource and Services

AdministrationIAPDImplementation Advance Planning

DocumentICRInformation Collection Requirement

IHSIndian Health ServiceIPAIndependent Practice AssociationITInformation TechnologyMAMedicare AdvantageMACMedicare Administrative ContractorMAOMedicare Advantage OrganizationMCOManaged Care OrganizationMITAMedicaid Information Technology

ArchitectureMMISMedicaid Management Information

SystemsMSAMedical Savings AccountNAACNet Average Allowable Cost (of

certified EHR technology)NCQANational Committee for Quality

AssuranceNCVHSNational Committee on Vital and

Health StatisticsNPINational Provider IdentifierNPRMNotice of Proposed RulemakingONCOffice of the National Coordinator for

Health Information TechnologyPAHPPrepaid Ambulatory Health PlanPAPDPlanning Advance Planning

DocumentPFFSPrivate Fee-For-ServicePHOPhysician Hospital OrganizationPHSPublic Health ServicePHSAPublic Health Service ActPIHPPrepaid Inpatient Health PlanPOSPlace of ServicePPOPreferred Provider OrganizationPQRIPhysician Quality Reporting InitiativePSOProvider Sponsored OrganizationRHCRural Health Clinic

RPPORegional Preferred ProviderOrganization

SAMHSASubstance Abuse and MentalHealth Services Administration

SMHPState Medicaid Health InformationTechnology Plan

TINTax Identification Number

Table of Contents

I. Executive Summary and OverviewA. Executive Summary1. Purpose of Regulatory Actiona. Need for the Regulatory Action

b. Legal Authority for the RegulatoryAction

2. Summary of Major Provisionsa. Stage 2 Meaningful Use Objectives and

Measuresb. Reporting on Clinical Quality Measures

(CQMs)c. Payment Adjustments and Exceptionsd. Modifications to Medicaid EHR

Incentive Programe. Stage 2 Timeline Delay3. Costs and BenefitsB. Overview of the HITECH Programs

Created by the American Recovery andReinvestment Act of 2009

II. Provisions of the Proposed RegulationsA. Definitions Across the Medicare FFS,

Medicare Advantage, and MedicaidPrograms

1. Uniform Definitions2. Meaningful EHR User3. Definition of Meaningful Usea. Considerations in Defining Meaningful

Useb. Changes to Stage 1 Criteria for

Meaningful Usec. State Flexibility for Stage 2 of

Meaningful Used. Stage 2 Criteria for Meaningful Use (Core

Set and Menu Set)B. Reporting on Clinical Quality MeasuresUsing Certified EHRs Technology byEligible Professionals, Eligible Hospitals,and Critical Access Hospitals

1. Time Periods for Reporting ClinicalQuality Measures

2. Certification Requirements for ClinicalQuality Measures

3. Criteria for Selecting Clinical QualityMeasures

4. Proposed Clinical Quality Measures forEligible Professionals

a. Statutory and Other Considerationsb. Clinical Quality Measures Proposed for

Eligible Professionals for CY 2013c. Clinical Quality Measures Proposed for

Eligible Professionals Beginning With CY2014

5. Proposed Reporting Methods for ClinicalQuality Measures for EligibleProfessionals

a. Reporting Methods for Medicaid EPsb. Reporting Methods for Medicare EPs in

CY 2013c. Reporting Methods for Medicare EPs

Beginning With CY 2014d. Group Reporting Option for Medicare

and Medicaid Eligible ProfessionalsBeginning With CY 2014

6. Proposed Clinical Quality Measures forEligible Hospitals and Critical AccessHospitals

a. Statutory and Other Considerationsb. Clinical Quality Measures Proposed for

Eligible Hospitals and CAHs for FY 20137. Proposed Reporting Methods for Eligible

Hospitals and Critical Access Hospitalsa. Reporting Methods in FY 2013

b. Reporting Methods Beginning With FY2014

c. Electronic Reporting of Clinical QualityMeasures for Medicaid Eligible Hospitals

C. Demonstration of Meaningful Use andOther Issues

1. Demonstration of Meaningful Usea. Common Methods of Demonstration in

Medicare and Medicaidb. Methods for Demonstration of the Stage

2 Criteria of Meaningful Usec. Group Reporting Option of Meaningful

Use Core and Menu Objectives and

Associated Measures for Medicare andMedicaid EPs Beginning With CY 2014

2. Data Collection for Online Posting,Program Coordination, and AccuratePayments

3. Hospital-Based Eligible Professionals4. Interaction With Other ProgramsD. Medicare Fee-for-Service1. General Background and Statutory Basis2. Payment Adjustment Effective in CY

2015 and Subsequent Years for EPs WhoAre Not Meaningful Users of CertifiedEHR Technology

a. Applicable Payment Adjustments for EPsWho Are Not Meaningful Users of

Certified EHR Technology in CY 2015and Subsequent Calendar Years

b. EHR Reporting Period for DeterminingWhether an EP Is Subject to the PaymentAdjustment for CY 2015 and SubsequentCalendar Years

c. Exception to the Application of thePayment Adjustment to EPs in CY 2015and Subsequent Calendar Years

d. Payment Adjustment Not Applicable to

Hospital-Based EPs3. Incentive Market Basket Adjustment

Effective In FY 2015 and SubsequentYears for Eligible Hospitals Who Are NotMeaningful EHR Users

a. Applicable Market Basket Adjustmentfor Eligible Hospitals Who Are NotMeaningful EHR Users for FY 2015 andSubsequent FYs

b. EHR Reporting Period for DeterminingWhether a Hospital Is Subject to theMarket Basket Adjustment for FY 2015and Subsequent FYs

c. Exception to the Application of theMarket Adjustment to Hospitals in FY2015 and Subsequent FYs

d. Application of Market Basket

Adjustment in FY 2015 and SubsequentFYs to a State Operating Under aPayment Waiver Provided by Section1814(B)(3) of the Act

4. Reduction of Reasonable CostReimbursement in FY 2015 andSubsequent Years for CAHs That Are NotMeaningful EHR Users

a. Applicable Reduction of Reasonable CostPayment Reduction in FY 2015 andSubsequent Years for CAHs That Are NotMeaningful EHR Users

b. EHR Reporting Period for DeterminingWhether a CAH Is Subject to theApplicable Reduction of Reasonable CostPayment in FY 2015 and SubsequentYears

c. Exception to the Application ofReasonable Cost Payment to CAHs in FY2015 and Subsequent FYs

5. Proposed Administrative Review Processof Certain Electronic Health RecordsIncentive Program Determinations

a. Permissible Appealsb. Filing Requirementsc. Preclusion of Administrative and

Judicial Reviewd. Inchoate Reviewe. Informal Review Process Standards(1) Request for Supporting Documentation

b. Informal Review Decision3. Final Reconsideration4. Exhaustion of Administrative ReviewE. Medicare Advantage Organization

Incentive Payments1. Definition ( 495.200)2. Identification of Qualifying MA

Organizations, MAEPs and MA-Affiliated Eligible Hospitals ( 495.202)

3. Incentive Payments to Qualifying MAOrganizations for Qualifying MA EPsand Qualifying MA-Affiliated EligibleHospitals ( 495.204)

a. Amount Payable to a Qualifying MAOrganization for Its Qualifying MA EPs

b. Increase in Incentive Payment for MAEPs Who Predominantly FurnishServices in a Geographic HealthProfessional Shortage Area (HPSA)



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4. Avoiding Duplicate Payments5. Payment Adjustments Effective in 2015

and Subsequent MA PaymentAdjustment Years for PotentiallyQualifying MA EPs and PotentiallyQualifying MA-Affiliated EligibleHospitals ( 495.211)

6. Appeals Process for MA OrganizationsF. Proposed Revisions and Clarifications to

the Medicaid EHR Incentive Program

1. Net Average Allowable Costs2. Eligibility Requirements for ChildrensHospitals

3. Medicaid Professionals ProgramEligibility

a. Calculating Patient VolumeRequirements

b. Practices Predominately4. Medicaid Hospital Incentive Payment

Calculationa. Discharge Related Amount

b. Acute Care Inpatient Bed Days andDischarges for the Medicaid Share andDischarge-Related Amount

c. Hospitals Switching States5. Hospital Demonstrations of Meaningful

UseAuditing and Appeals

6. State Medicaid Health InformationTechnology Plan (SMHP) andImplementation Advance PlanningDocument (IAPD)

a. Frequency of Health InformationTechnology (HIT) ImplementationAdvanced Planning Document (IAPD)Updates

b. Requirements of States TransitioningFrom HIT Planning Advanced PlanningDocuments (PAPDs) to HIT IAPDs

III. Collection of Information RequirementsA. ICR Regarding Demonstration of

Meaningful Use Criteria ( 495.8)B. ICRs Regarding Qualifying MA

Organizations (495.210)C. ICRs Regarding State Medicaid Agency

and Medicaid EP and Hospital Activities( 495.332 Through 495.344)

IV. Response to CommentsV. Regulatory Impact Analysis

A. Statement of NeedB. Overall ImpactC. Anticipated EffectsD. Accounting Statement

I. Executive Summary and Overview

A. Executive Summary

1. Purpose of Regulatory Action

a. Need for the Regulatory Action

In this proposed rule the Secretary ofthe Department of Health and Human

Services (the Secretary) would specifyStage 2 criteria EPs, eligible hospitals,and CAHs must meet in order to qualifyfor an incentive payment, as well asintroduce changes to the programtimeline and detail paymentadjustments. These proposed criteriawere substantially adopted from therecommendations of the Health ITPolicy Committee (HITPC), a FederalAdvisory Committee that coordinatesindustry and provider input regardingthe Medicare and Medicaid EHRIncentive Programs, as well as in

consideration of current program datafor the Medicare and Medicaid EHRIncentive Programs.

b. Legal Authority for the RegulatoryAction

The American Recovery andReinvestment Act of 2009 (ARRA) (Pub.L. 1115) amended Titles XVIII and XIX

of the Social Security Act (the Act) toauthorize incentive payments to eligibleprofessionals (EPs), eligible hospitals,and critical access hospitals (CAHs),and Medicare Advantage (MA)organizations to promote the adoptionand meaningful use of certifiedelectronic health record (EHR)technology.

Sections 1848(o), 1853(l) and (m),1886(n), and 1814(l) of the Act providethe statutory basis for the Medicareincentive payments made to meaningfulEHR users. These statutory provisionsgovern EPs, Medicare Advantage (MA)

organizations (for certain qualifying EPsand hospitals that meaningfully usecertified EHR technology), subsection(d) hospitals and critical accesshospitals (CAHs) respectively. Sections1848(a)(7), 1853(l) and (m),1886(b)(3)(B), and 1814(l) of the Act alsoestablish downward paymentadjustments, beginning with calendar orfiscal year 2015, for EPs, MAorganizations, subsection (d) hospitalsand CAHs that are not meaningful usersof certified EHR technology for certainassociated reporting periods.

Sections 1903(a)(3)(F) and 1903(t) ofthe Act provide the statutory basis forMedicaid incentive payments. (Thereare no payment adjustments underMedicaid). For a more detailedexplanation of statutory basis, see theStage 1 final rule (75 FR 44316 through44317).

2. Summary of Major Provisions

a. Stage 2 Meaningful Use Objectivesand Measures

In the Stage 1 final rule we outlinedStage 1 criteria, we finalized a separateset of core objectives and menuobjectives for both EPs and eligible

hospitals and CAHs. EPs and hospitalsmust meet or qualify for an exclusion toall of the core objectives and 5 out of the10 menu measures in order to qualifyfor an EHR incentive payment. In thisproposed rule, we propose to maintainthe same core-menu structure for theprogram for Stage 2. We propose thatEPs must meet or qualify for anexclusion to 17 core objectives and 3 of5 menu objectives. We propose thateligible hospitals and CAHs must meetor qualify for an exclusion to 16 coreobjectives and 2 of 4 menu objectives.

Nearly all of the Stage 1 core and menuobjectives would be retained for Stage 2.The exchange of key clinicalinformation core objective from Stage 1would be re-evaluated in favor of a morerobust transitions of care coreobjective in Stage 2, and the Providepatients with an electronic copy of theirhealth information objective would be

removed because it would be replacedby an electronic/online access coreobjective. There are also multiple Stage1 objectives that would be combinedinto more unified Stage 2 objectives,with a subsequent rise in the measurethreshold that providers must achievefor each objective that has been retainedfrom Stage 1.

b. Reporting on Clinical QualityMeasures (CQMs)

EPs, eligible hospitals, and CAHs arerequired to report on specified clinicalquality measures in order to qualify forincentive payments under the Medicareand Medicaid EHR Incentive Programs.For EPs, we propose a set of clinicalquality measures beginning in 2014 thatalign with existing quality programssuch as measures used for the PhysicianQuality Reporting System (PQRS), CMSShared Savings Program, and NationalCouncil for Quality Assurance (NCQA)for medical home accreditation, as wellas those proposed under ChildrensHealth Insurance ProgramReauthorization Act (CHIPRA) andunder ACA Section 2701. For eligiblehospitals and CAHs, the set of CQMs wepropose beginning in 2014 would align

with the Hospital Inpatient QualityReporting (HIQR) and the JointCommissions hospital qualitymeasures.

This proposed rule also outlines aprocess by which EPs, eligible hospitals,and CAHs would submit CQM dataelectronically, reducing the associated

burden of reporting on quality measuresfor providers. We are soliciting publicfeedback on several mechanisms forelectronic CQM reporting, includingaggregate-level electronic reportinggroup reporting options; and throughexisting quality reporting systems.

Within these mechanisms of reporting,we outline different approaches to CQMreporting that would require EPs toreport 12 CQMs and eligible hospitalsand CAHs to report 24 CQMs in total.

c. Payment Adjustments and Exceptions

Medicare payment adjustments arerequired by statute to take effect in2015. We propose a process by whichpayment adjustment would bedetermined by a prior reporting period.Therefore, we propose that anysuccessful meaningful user in 2013



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would avoid payment adjustment in2015. Also, any Medicare provider thatfirst meets meaningful use in 2014would avoid the penalty if they are ableto demonstrate meaningful use at least3 months prior to the end of thecalendar or fiscal year (respectively) andmeet the registration and attestationrequirement by July 1, 2014 (eligible

hospitals) or October 1, 2014 (EPs).We also propose exceptions to these

payment adjustments. This proposedrule outlines three categories ofexceptions based on the lack ofavailability of Internet access or barriersto obtaining IT infrastructure, a time-limited exception for newly practicingEPs or new hospitals who would nototherwise be able to avoid paymentadjustments, and unforeseencircumstances such as natural disastersthat would be handled on a case-by-case

basis. We also solicit comment on afourth category of exception due to a

combination of clinical features limitinga providers interaction with patientsand lack of control over the availabilityof Certified EHR technology at theirpractice locations.

d. Modifications to Medicaid EHRIncentive Program

We propose to expand the definitionof what constitutes a Medicaid patientencounter, which is a required

eligibility threshold for the MedicaidEHR Incentive Programs. We propose toinclude encounters for individualsenrolled in a Medicaid program,including Title XXI-funded Medicaidexpansion encounters (but not separateCHIP programs. We also proposeflexibility in the look-back period forpatient volume to be over the 12 months

preceding attestation, not tied to theprior calendar year.

We also propose to make eligibleapproximately 12 additional childrenshospitals that have not been able toparticipate to date, despite meeting allother eligibility criteria, because they donot have a CMS Certification Numbersince they do not bill Medicare.

e. Stage 2 Timeline Delay

Finally, we propose a minor delay ofthe implementation of the onset of Stage2 criteria. In the Stage 1 final rule, weestablished that any provider who first

attested to Stage 1 criteria for Medicarein 2011 would begin using Stage 2criteria in 2013. This proposed ruledelays the onset of those Stage 2 criteriauntil 2014, which we believe providesthe needed time for vendors to developCertified EHR Technology.

3. Summary of Costs and Benefits

This proposed rule is anticipated tohave an annual effect on the economy

of $100 million or more, making it aneconomically significant rule under theExecutive Order and a major rule underthe Congressional Review Act.Accordingly, we have prepared aRegulatory Impact Analysis that to the

best of our ability presents the costs andbenefits of the proposed rule. The totalFederal cost of the Medicare andMedicaid EHR Incentive Programs isestimated to be $14.6 billion in transfers

between 2014 and 2019. In thisproposed rule we have not quantifiedthe overall benefits to the industry, norto eligible hospitals, or EPs in theMedicare and Medicaid EHR IncentivePrograms. Information on the costs and

benefits of adopting systems specificallymeeting the requirements for the EHRIncentive Programs has not yet beencollected and information on costs and

benefits overall is limited. Nonetheless,we believe there are substantial benefits

that can be obtained by eligiblehospitals and EPs, including reductionsin medical recordkeeping costs,reductions in repeat tests, decreases inlength of stay, increased patient safety,and reduced medical errors. There isevidence to support the cost-saving

benefits anticipated from wideradoption of EHRs.

Fiscal yearMedicare eligible Medicaid eligible

TotalHospitals Professionals Hospitals Professionals

2014 ..................................................................................... $1.3 $1.2 $0.4 $0.8 $3.7

2015 ..................................................................................... 1.2 1.1 0.5 0.9 3.72016 ..................................................................................... 0.6 0.8 0.9 1.0 3.32017 ..................................................................................... 0.0 0.2 1.0 1.0 2.22018 ..................................................................................... 0.2 0.2 0.6 0.9 1.12019 ..................................................................................... 0.0 0.2 0.1 0.7 0.6

Amounts are in 2012 billions.

B. Overview of the HITECH ProgramsCreated by the American Recovery andReinvestment Act of 2009

The American Recovery andReinvestment Act of 2009 (ARRA) (Pub.L. 1115) amended Titles XVIII and XIXof the Social Security Act (the Act) toauthorize incentive payments to eligibleprofessionals (EPs), eligible hospitals,and critical access hospitals (CAHs),and Medicare Advantage (MA)Organizations to promote the adoptionand meaningful use of certifiedelectronic health record (EHR)technology. On July 28, 2010 wepublished in the Federal Register (75FR 44313 through 44588) a final ruletitled Medicare and MedicaidPrograms; Electronic Health RecordIncentive Program, that specified the

Stage 1 criteria EPs, eligible hospitals,and CAHs must meet in order to qualifyfor an incentive payment, calculation ofthe incentive payment amounts, andother program participationrequirements (hereinafter referred to asthe Stage 1 final rule). (For a full

explanation of the amendments made byARRA, see the final rule (75 FR 44316).)In that final rule, we also detailed thatthe Medicare and Medicaid EHRIncentive Programs would consist of 3different stages of meaningful userequirements.

For Stage 1, CMS and the Office of theNational Coordinator for HealthInformation Technology (ONC) workedclosely to ensure that the definition ofmeaningful use of Certified EHRTechnology and the standards andcertification criteria for Certified EHR

Technology were coordinated. CurrentONC regulations may be found at 45CFR part 170. For Stage 2, CMS andONC will again work together to alignour regulations.

We urge those interested in thisproposed rule to also review the ONC

proposed rule on standards andimplementation specifications forCertified EHR Technology. Readers mayalso visit http://healthit.hhs.govandhttp://www.cms.hhs.gov/EHRincentiveprograms for moreinformation on the efforts at theDepartment of Health and HumanServices (HHS) to advance HITinitiatives.

http://healthit.hhs.gov/http://www.cms.hhs.gov/EHRincentiveprogramshttp://www.cms.hhs.gov/EHRincentiveprogramshttp://www.cms.hhs.gov/EHRincentiveprogramshttp://www.cms.hhs.gov/EHRincentiveprogramshttp://healthit.hhs.gov/


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II. Provisions of the ProposedRegulations

A. Definitions Across the Medicare FFS,Medicare Advantage, and MedicaidPrograms

1. Uniform Definitions

In the Stage 1 final rule, we finalized

many uniform definitions for theMedicare FFS, MA, and Medicaid EHRincentive programs. These definitionsare set forth in part 495 subpart A of theregulations, and we are proposing tomaintain most of these definitions,including, for example, Certified EHRTechnology, Qualified EHR,Payment Year, and First, Second,Third, Fourth, Fifth, and Sixth PaymentYear. We note that our definitions ofCertified EHR Technology andQualified EHR incorporate thedefinitions adopted by ONC, and to theextent that ONCs definitions arerevised, our definitions would also

incorporate those changes. For thesedefinitions, we refer readers to ONCsstandards and certification criteriaproposed rule that is publishedelsewhere in this issue of the FederalRegister. We are revising thedescriptions of the EHR reporting periodto clarify that for providers who aredemonstrating meaningful for the firsttime their EHR reporting period is 90days regardless of payment year. Wepropose to add definitions for theapplicable EHR reporting period thatwould be used in determining thepayment adjustments, as well as a

definition of a payment adjustment year,as discussed in section II.D. of thisproposed rule.

2. Meaningful EHR User

We propose to include clinical qualitymeasure reporting as part of thedefinition of meaningful EHR userinstead of as a separate meaningful useobjective under 42 CFR 495.6. Thischange is explained in section II.A.3.d.in the context of the proposed Stage 2criteria for meaningful use.

The third paragraph of the definitionof meaningful EHR user at 42 CFR 495.4

currently read as follows: (3) To beconsidered a meaningful EHR user, atleast 50 percent of an EPs patientencounters during the EHR reportingperiod during the payment year mustoccur at a practice/location or practices/locations equipped with certified EHRtechnology. We propose to revise thethird paragraph of the definition ofmeaningful EHR user at 42 CFR 495.4 toread as follows: (3) To be considereda meaningful EHR user, at least 50percent of an EPs patient encountersduring an EHR reporting period for a

payment year (or during an applicableEHR reporting period for a paymentadjustment year) must occur at apractice/location or practices/locationsequipped with Certified EHRTechnology. This change is to includethe payment adjustment in thisdefinition. Currently, it only refers tothe incentives.

3. Definition of Meaningful Use

a. Considerations in DefiningMeaningful Use

In sections 1848(o)(2)(A) and1886(n)(3)(A) of the Act, Congressidentified the broad goal of expandingthe use of EHRs through the concept ofmeaningful use. Section 1903(t)(6)(C) ofthe Act also requires that Medicaidproviders adopt, implement, upgrade ormeaningfully use Certified EHRTechnology if they are to receiveincentives under Title XIX. CertifiedEHR Technology used in a meaningful

way is one piece of the broader HITinfrastructure needed to reform thehealth care system and improve healthcare quality, efficiency, and patientsafety. This vision of reforming thehealth care system and improvinghealth care quality, efficiency, andpatient safety should inform thedefinition of meaningful use.

As we explained in our Stage 1meaningful use rule, we seek to balancethe sometimes competingconsiderations of health systemadvancement (for example, improvinghealth care quality, encouraging

widespread EHR adoption, promotinginnovation) and minimizing burdens onhealth care providers given the shorttimeframe available under the HITECHAct.

Based on public and stakeholderinput received during our Stage 1rulemaking, we laid out a phasedapproach to meaningful use. Such aphased approach encompassesreasonable criteria for meaningful use

based on currently available technologycapabilities and provider practiceexperience, and builds up to a morerobust definition of meaningful use as

technology and capabilities evolve. TheHITECH Act acknowledges the need forthis balance by granting the Secretarythe discretion to require more stringentmeasures of meaningful use over time.Ultimately, consistent with otherprovisions of law, meaningful use ofCertified EHR Technology should resultin health care that is patient-centered,evidence-based, prevention-oriented,efficient, and equitable.

Under this phased approach tomeaningful use, we update the criteriaof meaningful use through staggered

rulemaking. We published the Stage 1final rule July 28, 2010, and this ruleoutlines our proposed Stage 2 approach.We currently anticipate at least oneadditional update, and anticipateupdating the Stage 3 criteria withanother proposed rule by early 2014.The stages represent an initial graduatedapproach to arriving at the ultimate

goal. Stage 1: The Stage 1 meaningful use

criteria, consistent with other provisionsof Medicare and Medicaid law, focusedon electronically capturing healthinformation in a structured format;using that information to track keyclinical conditions and communicatingthat information for care coordinationpurposes (whether that information isstructured or unstructured, but instructured format whenever feasible);implementing clinical decision supporttools to facilitate disease andmedication management; using EHRs to

engage patients and families andreporting clinical quality measures andpublic health information. Stage 1focused heavily on establishing thefunctionalities in Certified EHRTechnology that will allow forcontinuous quality improvement andease of information exchange. By havingthese functionalities in certified EHRtechnology at the onset of the programand requiring that the EP, eligiblehospital or CAH become familiar withthem through the varying levels ofengagement required by Stage 1, we

believe we created a strong foundationto build on in later years. Though some

functionalities were optional in Stage 1,all of the functionalities are consideredcrucial to maximize the value to thehealth care system provided by CertifiedEHR Technology. We encouraged allEPs, eligible hospitals and CAHs to beproactive in implementing all of thefunctionalities of Stage 1 in order toprepare for later stages of meaningfuluse, particularly functionalities thatimprove patient care, the efficiency ofthe health care system and public andpopulation health. The specific criteriafor Stage 1 of meaningful use arediscussed in the Stage 1 final rule,

(published on July 28, 2010 (75 FR44314 through 44588). We are proposingcertain changes to the Stage 1 criteria insection II.B.3.b. of this proposed rule.

Stage 2: Our Stage 2 goals,consistent with other provisions ofMedicare and Medicaid law, expandupon the Stage 1 criteria with a focus onensuring that the meaningful use ofEHRs supports the aims and priorities ofthe National Quality Strategy.Specifically, Stage 2 meaningful usecriteria encourage the use of health ITfor continuous quality improvement at



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the point of care and the exchange ofinformation in the most structuredformat possible. Stage 2 meaningful userequirements include rigorousexpectations for health informationexchange including: more demandingrequirements for e-prescribing;incorporating structured laboratoryresults; and the expectation that

providers will electronically transmitpatient care summaries to supporttransitions in care across unaffiliatedproviders, settings and EHR systems.Increasingly robust expectations forhealth information exchange in Stage 2and Stage 3 will support the goal thatinformation follows the patient. Inaddition, as we forecasted in the Stage1 final rule, we now consider nearly

every objective that was optional forStage 1 to be required in Stage 2, andwe reevaluated the thresholds andexclusions of all the measures.

Stage 3: We anticipate that Stage 3meaningful use criteria will focus on:promoting improvements in quality,safety and efficiency leading toimproved health outcomes; focusing on

decision support for national highpriority conditions; patient access toself-management tools; access tocomprehensive patient data throughrobust, patient-centered healthinformation exchange; and improvingpopulation health. For Stage 3, wecurrently intend to propose higherstandards for meeting meaningful use.For example, we intend to propose that

every objective in the menu set for Stage2 (as described later in this section) beincluded in Stage 3 as part of the coreset. While the use of a menu set allowsproviders flexibility in setting prioritiesfor EHR implementation and takes intoaccount their unique circumstances, wemaintain that all of the objectives arecrucial to building a strong foundation

for health IT and to meeting theobjectives of the Act. In addition, as thecapabilities of HIT infrastructureincrease, we may raise the thresholdsfor these objectives in both Stage 2 andStage 3.

In the Stage 1 final rule (75 FR 44323),we published the following table withour expected timeline for the stages ofmeaningful use.

TABLE 1STAGE OF MEANINGFUL USE CRITERIA BY PAYMENT YEAR AS FINALIZED IN 2010

First payment yearPayment year

2011 2012 2013 2014 2015

2011 .................................. Stage 1 .................... Stage 1 .................... Stage 2 .................... Stage 2 .................... TBD.2012 .................................. .................................. Stage 1 .................... Stage 1 .................... Stage 2 .................... TBD.2013 .................................. .................................. .................................. Stage 1 .................... Stage 1 .................... TBD.2014 .................................. .................................. .................................. .................................. Stage 1 .................... TBD.

We are proposing changes to thistimeline as well as its extension beyond2014. Under the timeline used in theStage 1 final rule (75 FR 44323), an EP,eligible hospital, or CAH that became ameaningful EHR user for the first timein 2011 would need to begin their EHRreporting period for Stage 2 on January

1, 2013 or October 1, 2012, respectively.We anticipate publishing a final rule bysummer 2012. The HIT PolicyCommittee recommended we delay by 1year the start of Stage 2 for providers

who became meaningful EHR users in2011. Stage 2 of meaningful use requireschanges to both technology andworkflow that cannot reasonably beexpected to be completed in the time

between the publication of the final ruleand the start of the EHR reportingperiods. We have heard similar

concerns from other stakeholders andagree that, based on our proposeddefinition of meaningful use for Stage 2,providers could have difficultyimplementing these changes in time.

Therefore, we are proposing a 1-yearextension of Stage 1 of meaningful usefor providers who successfullydemonstrated meaningful use for 2011.Our proposed timeline through 2021 isdisplayed in Table 2. We refer readersto II.D.2 of this proposed rule for adiscussion of the applicable EHR

reporting period that would be used todetermine whether providers are subjectto payment adjustments.

TABLE 2STAGE OF MEANINGFUL USE CRITERIA BY FIRST PAYMENT YEAR

First payment yearStage of meaningful use

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

2011 .................................. 1 1 1 2 2 3 3 TBD ....... TBD ....... TBD ....... TBD.2012 .................................. ............ 1 1 2 2 3 3 TBD ....... TBD ....... TBD ....... TBD.2013 .................................. ............ ............ 1 1 2 2 3 3 ............ TBD ....... TBD ....... TBD.2014 .................................. ............ ............ ............ 1 1 2 2 3 ............ 3 ............ TBD ....... TBD.2015 ... .. ... ... .. ... .. ... .. ... ... .. ... . .. ... .. ... . .. .. ... ... .. . .. ... .. ... . .. ... .. ... .. 1 1 2 2 ... ... ... .. . 3 .. ... ... .. .. 3 .. ... .. ... .. TBD.

2016 .................................. ............ ............ ............ ............ ............ 1 1 2 ............ 2 ............ 3 ............ 3.2017 .................................. ............ ............ ............ ............ ............ ............ 1 1 ............ 2 ............ 2 ............ 3.

Please note that the Medicare EHRincentive program and the MedicaidEHR incentive program have differentrules regarding the number of paymentyears available, the last year for whichincentives may be received, and the lastpayment year for initiating the program.Medicaid EPs and eligible hospitals canreceive a Medicaid EHR incentive

payment for adopting, implementing,and upgrading (AIU) to Certified EHRTechnology for their first payment year,which is not reflected in Table 2. Forexample, a Medicaid EP who earns anincentive payment for AIU in 2013would have to meet Stage 1 ofmeaningful use in his or her next 2payment years (2014 and 2015). The

applicable payment years and theincentive payments available for eachprogram are discussed in the Stage 1final rule.

If there will be a Stage 4 ofmeaningful use, we expect to updatethis table in the rulemaking for Stage 3.



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b. Changes to Stage 1 Criteria forMeaningful Use

We propose the following changes tothe objectives and associated measuresfor Stage 1. As explained later in thisproposed rule, most of these changeswould be optional for Stage 1 in 2013and would be required for Stage 1

beginning in 2014 (CY for EPs, FY foreligible hospitals/CAHs). We do not

believe that this creates an additionalhardship as providers would have theoption of completing Stage 1 in thesame manner in 2013 as in 2011 and2012, and in fact, the changes wepropose create flexibility for EPs,eligible hospitals, and CAHs seeking toachieve Stage 1 meaningful useobjectives.

The current denominator for theCPOE objective measure for Stage 1 isthe number of unique patients with atleast one medication in their medicationlist seen by an EP or admitted to an

eligible hospitals or CAHs inpatient oremergency department (POS 21 or 23)during the EHR reporting period. Wecreated this denominator in response tocomments that our original Stage 1proposed denominator for this measure,the number of orders for medications, isdifficult to measure. Followingpublication of the final rule, we havereceived nearly unanimous feedbackfrom providers that the logicaldenominator for this measure is thenumber of orders for medications andthat it is measurable. For more detailsplease reference the discussion of the

Stage 2 CPOE objective. Beginning in2013 (CY for EPs, FY for eligiblehospitals/CAHs), we propose to allowproviders in Stage 1 to use thealternative denominator of the numberof medication orders created by the EPor in the eligible hospitals or CAHsinpatient or emergency department(POS 21 or 23) during the EHR reportingperiod (for further explanation of thisalternative denominator, see thediscussion of the proposed CPOEobjective in the Stage 2 criteria section).A provider seeking to meet Stage 1 in2013 could use either the current or the

proposed alternative denominator tocalculate the percentage for the CPOEmeasure.

Starting with the EHR reportingperiods in FY/CY 2014, the proposedalternative denominator would berequired for all providers in Stage 1 andStage 2.

For the objective of record and chartchanges in vital signs, our Stage 2proposal would allow an EP to split theexclusion and exclude blood pressureonly or height/weight only (for moredetail, see the discussion of this

objective in the Stage 2 criteria section).We propose an identical change to theStage 1 exclusion as well, starting in CY2013. We also propose changing the agelimitations on vital signs for Stage 2 (formore detail, see the discussion of thisobjective in the Stage 2 criteria section).We propose identical changes to the agelimitations on vital signs for Stage 1,

starting in 2013 (CY for EPs, FY foreligible hospitals/CAHs). These changesto the exclusion and age limitationswould be an alternative in 2013 to thecurrent Stage 1 requirements and would

be required for Stage 1 beginning in2014. We have found the objective ofcapability to exchange key clinicalinformation to be surprisingly difficultfor providers to understand, which hasmade the objective considerably moredifficult to achieve than we envisionedin the Stage 1 final rule. As the measurefor this objective is simply a test withno associated requirement for follow-up

submission, we are concerned the valueof this objective is not sufficient tojustify the burden of compliance.However, we also strongly believe thatmeaningful use of EHRs must ultimatelyinvolve real and ongoing electronichealth information exchange to supportcare coordination, as the Stage 2objectives on this subject (described

below) make clear. We considered fouroptions for this objective, and welcomecomment on all four, that variouslyreduce or eliminate the burden of theobjective or increase the value of theobjective. The first option we

considered is removal of this objective.This acknowledges our experience withStage 1 and the limited benefit of just atest. The second option is to require thatthe test be successful. This wouldincrease the value of the objective andeliminate a common question wereceive on what happens if the test isunsuccessful. The third option is toeliminate the objective, but require thatproviders select either the Stage 1medication reconciliation objective orthe Stage 1 summary of care attransitions of care and referrals from themenu set. This would eliminate the

burden and complexity of the test, butpreserve the domain of carecoordination for Stage 1. The fourthoption is to move from a test to one caseof actual electronic transmission of asummary of care document for a realpatient either to another provider of careat a transition or referral or to a patientauthorized entity. This would increasethe benefit of the objective and reducethe complexity of the defining theparameters of the test, but potentiallyincreases the real burden of compliancesignificantly beyond what is currently

included in Stage 1. We are proposingthe first option to remove this objectiveand measure from the Stage 1 core set

beginning in 2013 (CY for EPs, FY foreligible hospitals/CAHs). In Stage 2, wepropose to move to actual use cases ofelectronic exchange of healthinformation as discussed later in thisproposed rule, which would require

significant testing in the years of Stage1. We encourage comments on all fouroptions and will evaluate them again inlight of the public comment received.

We propose for Stage 2 a new methodfor making patient information availableelectronically, which would enablepatients to view online and downloadtheir health information and hospitaladmission information. We discuss inthe Stage 2 criteria section the proposedview, download, and transmitobjectives for EPs and hospitals. Startingin 2014, Certified EHR Technology willno longer be certified to the Stage 1 EP

and hospital core objectives ofproviding patients with electroniccopies of their health information anddischarge instructions upon request, norwill it support the Stage 1 EP menuobjective of providing patients withtimely electronic access to their healthinformation. Therefore starting in 2014,for Stage 1, we propose to replace theseobjectives with the new view online,download and transmit objectives. Wediscuss these objectives further in ourproposed Stage 2 criteria.

We are proposing a revised definitionof a meaningful EHR user which wouldincorporate the requirement to submit

clinical quality measures, as discussedin section II.A.2. of this proposed rule,and as such are removing the objectiveto submit clinical quality measures

beginning in 2013 and the associatedregulation text under 45 CFR 495.6 forStage 1 to conform with this change inthe definition of a meaningful EHR user.

For the Stage 1 public healthobjectives, beginning in 2013, we alsopropose to add except whereprohibited to the regulation text,

because we want to encourage all EPs,eligible hospitals, and CAHs to submitelectronic immunization data, even

when not required by State/local law.Therefore, if they are authorized tosubmit the data, they should do so evenif it is not required by either law orpractice. There are a few instanceswhere some EPs, eligible hospitals, andCAHs are prohibited from submitting toa State/local immunization registry. Forexample, in sovereign tribal areas thatdo not permit transmission to animmunization registry or when theimmunization registry only accepts datafrom certain age groups (for example,adults).



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TABLE 3CHANGES TO STAGE 1

Stage 1 objective Proposed changes Effective year(CY/FY)

Use CPOE for medication orders directlyentered by any licensed healthcareprofessional who can enter orders intothe medical record per State, localand professional guidelines.

Change: Addition of an alternative measure ............... ................ ............... ...........More than 30 percent of medication orders created by the EP or authorized

providers of the eligible hospitals or CAHs inpatient or emergency depart-ment (POS 21 or 23) during the EHR reporting period are recorded usingCPOE.

2013Only (Op-tional).

Use CPOE for medication orders directlyentered by any licensed healthcareprofessional who can enter orders intothe medical record per State, localand professional guidelines.

Change: Replacing the measure ...........................................................................More than 30 percent of medication orders created by the EP or authorized

providers of the eligible hospitals or CAHs inpatient or emergency depart-ment (POS 21 or 23) during the EHR reporting period are recorded usingCPOE.

2014Onward (Re-quired).

Record and chart changes in vital signs Change: Addition of alternative age limitations .............. ............... ................ ........More than 50 percent of all unique patients seen by the EP or admitted to the

eligible hospitals or CAHs inpatient or emergency department (POS 21 or23) during the EHR reporting period have blood pressure (for patients age 3and over only) and height and weight (for all ages) recorded as structureddata.


Record and chart changes in vital signs Change: Addition of alternative exclusions .............. ................ ............... ..............Any EP who(1) Sees no patients 3 years or older is excluded from recording blood pres-

sure;(2) Believes that all three vital signs of height, weight, and blood pressure have

no relevance to their scope of practice is excluded from recording them;(3) Believes that height and weight are relevant to their scope of practice, butblood pressure is not, is excluded from recording blood pressure; or

(4) Believes that blood pressure is relevant to their scope of practice, but heightand weight are not, is excluded from recording height and weight.


Record and chart changes in vital signs Change: Age Limitations on Growth Charts and Blood Pressure .............. ...........More than 50 percent of all unique patients seen by the EP or admitted to the

eligible hospitals or CAHs inpatient or emergency department (POS 21 or23) during the EHR reporting period have blood pressure (for patients age 3and over only) and height and weight (for all ages) recorded as structureddata.

2014Onward(Required)

Record and chart changes in vital signs Change: Changing the age and splitting the EP exclusion .............. ............... ......Any EP who(1) Sees no patients 3 years or older is excluded from recording blood pres-

sure;(2) Believes that all three vital signs of height, weight, and blood pressure have

no relevance to their scope of practice is excluded from recording them;

(3) Believes that height and weight are relevant to their scope of practice, butblood pressure is not, is excluded from recording blood pressure; or(4) Believes that blood pressure is relevant to their scope of practice, but height

and weight are not, is excluded from recording height and weight.

2014Onward(Required).

Capability to exchange key clinical infor-mation (for example, problem list,medication list, medication allergies,and diagnostic test results), amongproviders of care and patient author-ized entities electronically.

Change: Objective is no longer required ............................................................... 2013Onward(Required).

Report ambulatory (hospital) clinicalquality measures to CMS or theStates.

Change: Objective is incorporated directly into the definition of a meaningfulEHR user and eliminated as an objective under 42 CFR 495.6.

2013Onward(Required)

EP Objective: Provide patients with anelectronic copy of their health informa-tion (including diagnostics test results,problem list, medication lists, medica-

tion allergies) upon request.

Change: Replace these three objectives with the Stage 2 objective and one ofthe two Stage 2 measures.

EP Objective: Provide patients the ability to view online, download and transmittheir health information within 4 business days of the information being avail-

able to the EP.


Hospital Objective: Provide patients withan electronic copy of their dischargeinstructions and procedures at time ofdischarge, upon request.

EP Measure: More than 50 percent of all unique patients seen by the EP dur-ing the EHR reporting period are provided timely (within 4 business daysafter the information is available to the EP) online access to their health infor-mation subject to the EPs discretion to withhold certain information.

EP Objective: Provide patients withtimely electronic access to their healthinformation (including lab results,problem list, medication lists, medica-tion allergies) within 4 business daysof the information being available tothe EP.

Hospital Objective: Provide patients the ability to view online, download andtransmit information about a hospital admission.

Hospital Measure: More than 50 percent of all patients who are dischargedfrom the inpatient or emergency department (POS 21 or 23) of an eligiblehospital or CAH have their information available online within 36 hours of dis-charge.

Public Health Objectives: ........................ Change: Addition of except where prohibited to the objective regulation textfor the public health objectives under 42 CFR 495.6.




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c. State Flexibility for Stage 2 ofMeaningful Use

We propose to offer States flexibilitywith the public health measures inStage 2, similar to that of Stage 1,subject to the same conditions andstandards as the Stage 1 flexibilitypolicy. This applies to the public health

measures as well as the measure togenerate lists of specific conditions touse for quality improvement, reductionof disparities, research or outreach.

In addition, whether moved to thecore or left in the menu, States may alsospecify the means of transmission of thedata or otherwise change the publichealth measure, as long as it does notrequire EHR functionality above and

beyond that which is included in theONC EHR certification criteria asfinalized for Stage 2 of meaningful use.

We solicit comment on extendingState flexibility as described for Stage 2of meaningful use and whether this

remains a useful tool for State Medicaidagencies.

d. Stage 2 Criteria for Meaningful Use(Core Set and Menu Set)

We are proposing to continue theStage 1 concept of a core set ofobjectives and a menu set of objectivesfor Stage 2. In the Stage 1 final rule (75FR 44322), we indicated that for Stage2, we expected to include the Stage 1menu set objectives in the core set. Wepropose to follow that approach for ourStage 2 core set with two exceptions.We are proposing to keep the objective

of capability to submit electronicsyndromic surveillance data to publichealth agencies in the menu set forEPs. Our experience with Stage 1 is thatvery few public health agencies have theability to accept ambulatory syndromicsurveillance data electronically andthose that do are less likely to supportEPs than hospitals; therefore we do not

believe that current infrastructuresupports moving this objective to thecore set for EPs. We are also proposingto keep the objective of record advancedirectives in the menu set for eligiblehospitals and CAHs. As we stated in our

Stage 1 final rule (75 FR 44345), wehave continuing concerns that there arepotential conflicts between storingadvance directives and existing Statelaws.

We are proposing new objectives forStage 2, some of which would be partof the Stage 2 core set and others wouldmake up the Stage 2 menu set, asdiscussed below with each objective.We are proposing to eliminate certainStage 1 objectives for Stage 2, such asthe objective for testing the capability toexchange key clinical information. We

are also proposing to combine some ofthe Stage 1 objectives for Stage 2. Forexample, the objectives of maintainingan up-to-date problem list, activemedication list, and active medicationallergy list would not be separateobjectives for Stage 2. Instead, we wouldcombine these objectives with theobjective of providing a summary of

care record for each transition of care orreferral by including them as requiredfields in the summary of care.

We are proposing a total of 17 coreobjectives and 5 menu objectives forEPs. We propose that an EP must meetthe criteria or an exclusion for all of thecore objectives and the criteria for 3 ofthe 5 menu objectives. This is a changefrom our current Stage 1 policy wherean EP could reduce by the number ofexclusions applicable to the EP thenumber of menu set objectives that theEP would otherwise need to meet. Wereceived feedback on Stage 1 that we

have received from providers and healthcare associations leads us to believe thatmost EPs had difficulty understandingthe concept of deferral of a menuobjective in Stage 1, so we are proposingthis change for Stage 2, as well as forStage 1 beginning in 2014, to make theselection of menu objectives easier forEPs. We are proposing this change

because we are concerned that underthe current Stage 1 requirements EPscould select and exclude menuobjectives when there are other menuobjectives they can legitimately meet,thereby making it easier for them todemonstrate meaningful use than EPs

who attempt to legitimately meet thefull complement of menu objectives.Although we provided greater flexibilityto do this in the selection of Stage 1menu objectives through 2013, we

believe that EPs participating in Stage 1and Stage 2 starting in 2014 shouldfocus solely on those objectives they canmeet rather than those for which theyhave an exclusion. In addition, we haveprovided exclusions for the Stage 2menu objectives that we believe willaccommodate EPs who are unable tomeet certain objectives because of scopeof practice.

However, just as we signaled in ourStage 1 regulation, we currently intendto propose in our next rulemaking thatevery objective in the menu set for Stage2 (as described later in this section) beincluded in Stage 3 as part of the coreset. In the case where an EP meets thecriteria for the exclusions for 3 or moreof the Stage 2 menu objectives, the EPwould have more exclusions than theallowed deferrals. EPs in this situationwould attest to an exclusion for 1 ormore menu objectives in his or herattestation to meaningful use. In doing

so, the EP would be attesting that he orshe also meets the exclusion criteria forall of the menu objectives that he or shedid not choose. The same policy wouldalso apply for the Stage 1 menuobjectives for EPs beginning in 2014.

We propose a total of 16 coreobjectives and 4 menu objectives foreligible hospitals and CAHs for Stage 2.

We propose that an eligible hospital orCAH must meet the criteria or anexclusion for all of the core objectivesand the criteria for 2 of the 4 menuobjectives. The policy for exclusions forEPs discussed in the precedingparagraph would also apply to eligiblehospitals and CAHs for Stage 1

beginning in 2014 and for Stage 2.

(1) Discussion of Whether Certain EPs,Eligible Hospitals or CAHs Can Meet AllStage 2 Meaningful Use ObjectivesGiven Established Scopes of Practice

We do not believe that any of theproposed new objectives for Stage 2make it impossible for any EP, eligiblehospital or CAH to meet meaningfuluse. Where scope of practice mayprevent an EP, eligible hospital or CAHfrom meeting the measure associatedwith an objective we discuss the barriersand include exclusions in ourdescriptions of the individual objectiveslater. We are proposing to include newexclusion criteria when necessary fornew objectives, continue the Stage 1exclusions for Stage 2, and continue theoption for EPs and hospitals to defersome of the objectives in the menu setunless they meet the exclusion criteria

for more objectives than they can deferas explained previously.

We recognize that at the time ofpublication, our data (derived internallyfrom attestations) only reflects themeaningful use attestation fromMedicare providers. Before thepublication of the final rule, we plan onadjusting the data on the successfulattestations to date to reflect theexperience of successful Medicaidmeaningful EHR users. This may resultin changes to our current assumptions

based upon the data available at thetime of the proposed rule, especially

given the different eligible professionaltypes in the Medicaid EHR IncentiveProgram. It may be that different eligibleprofessional types may have differentlevels of success in meeting themeaningful use measure thresholds,given their scope of practice.

(2) EPs Practicing in Multiple Practices/Locations

We propose for Stage 2 to continueour policy that to be a meaningful EHRuser, an EP must have 50 percent ormore of his or her outpatient encounters



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during the EHR reporting period at apractice/location or practices/locationsequipped with Certified EHRTechnology. An EP who does notconduct at least 50 percent of theirpatient encounters in any one practice/location would have to meet the 50percent threshold through acombination of practices/locations

equipped with Certified EHRTechnology. For example, if the EPpractices at a federally qualified healthcenter (FQHC) and within his or herindividual practice at 2 differentlocations, we would include in ourreview all 3 of these locations, andCertified EHR Technology would haveto be available at one location or acombination of locations where the EPhas 50 percent or more of his or herpatient encounters. If Certified EHRTechnology is only available at onelocation, then only encounters at thislocation would be included in

meaningful use assuming this onelocation represents 50 percent or moreof the EPs patient encounters. IfCertified EHR Technology is available atmultiple locations that collectivelyrepresent 50 percent or more of the EPspatient encounters, then all encountersfrom those locations would be includedin meaningful use.

We have received many inquiries onthis requirement since the publicationof the Stage 1 final rule. We definepatient encounter as any encounterwhere a medical treatment is providedand/or evaluation and management

services are provided. This includesboth individually billed events andevents that are globally billed, but areseparate encounters under ourdefinition. We have also receivedrequests for clarification on what itmeans for a practice/location to beequipped with Certified EHRTechnology. We define a practice/location as equipped with Certified EHRTechnology if the record of the patientencounter that occurs at that practice/location is created and maintained inCertified EHR Technology. This can beaccomplished in three ways: Certified

EHR Technology could be permanentlyinstalled at the practice/location, the EPcould bring Certified EHR Technologyto the practice/location on a portablecomputing device, or the EP couldaccess Certified EHR Technologyremotely using computing devices at thepractice/location. Although it iscurrently allowed under Stage 1 for anEP to create a record of the encounterwithout using Certified EHR Technologyat the practice/location and then laterinput that information into CertifiedEHR Technology that exists at a

different practice/location, we do notbelieve this process takes advantage ofthe value Certified EHR Technologyoffers. We are proposing not to allowthis practice beginning in 2013. Wehave also received inquiries whether thepractice locations have to be in the sameState, to which we clarify that they donot. Finally, we received inquiries

regarding the interaction with hospital-based EP determination. There is nointeraction. The determination ofwhether an EP is hospital-based or notoccurs prior to the application of thispolicy, so only non-hospital basedeligible professionals are included.Furthermore, this policy, like allmeaningful use policies for EPs, onlyapplies to outpatient settings (allsettings except the inpatient andemergency department of a hospital).

(3) Discussion of the ReportingRequirements of the MeasuresAssociated With the Stage 2 Meaningful

Use ObjectivesIn our experience with Stage 1, we

found the distinction between limitingthe denominators of certain measures toonly those patients whose records aremaintained using Certified EHRTechnology, but including all patientsin the denominators of other measures,to be complicated for providers toimplement. We are proposing to removethis distinction for Stage 2 and insteadinclude all patients in the denominatorsof all of the measures associated withthe meaningful use objectives for Stage2. We believe that by the time an EP,

eligible hospital, or CAH has reachedStage 2 of meaningful use all or nearlyall of their patient population should beincluded in their Certified EHRTechnology, making this distinction nolonger relevant.

We also continue our policy that EPspracticing in multiple locations do nothave to include patients seen atpractices/locations that are notequipped with Certified EHRTechnology in the calculations of themeaningful use measures as long as theEP has 50 percent of their patientencounters during the EHR reporting

period at locations equipped withCertified EHR Technology.We are proposing new objectives that

could increase reporting burden. Tominimize the burden, we are proposingto create a uniform set of denominatorsthat would be used for all of the Stage2 meaningful use objectives, asdiscussed later.

Many of our meaningful useobjectives use percentage-basedmeasures wherever possible and ifappropriate. To provide a check on the

burden of reporting of meaningful use,

we propose for Stage 2 to use 1 of 4denominators for each of the measuresassociated with the meaningful useobjectives. We focus on denominators

because the action that movessomething from the denominator to thenumerator usually requires the use ofCertified EHR Technology by theprovider. These actions are easily

tracked by the technology.The four proposed denominators for

EPs: Unique patients seen by the EP

during the EHR reporting period(stratified by age or previous officevisit).

Number of orders (medication, labs,radiology).

Office visits, and Transitions of care/referrals.The term unique patient means that

if a patient is seen or admitted morethan once during the EHR reportingperiod, the patient only counts once inthe denominator. Patients seen or

admitted only once during the EHRreporting period would count once inthe denominator. A patient is seen bythe EP when the EP has an actualphysical encounter with the patient inwhich they render any service to thepatient. A patient seen throughtelemedicine would also still count as apatient seen by the EP. In cases wherethe EP and the patient do not have anactual physical or telemedicineencounter, but the EP renders a minimalconsultative service for the patient (likereading an EKG), the EP may choosewhether to include the patient in the

denominator as seen by the EPprovided the choice is consistent for theentire EHR reporting period and for allrelevant meaningful use measures. Forexample, a cardiologist may choose toexclude patients for whom they providea one-time reading of an EKG sent tothem from another provider, but includemore involved consultative services aslong as the policy is consistent for theentire EHR reporting period and for allmeaningful use measures that includepatients seen by the EP. EPs whonever have a physical or telemedicineinteraction with patients must adopt apolicy that classifies at least some of theservices they render for patients asseen by the EP, and this policy must

be consistent for the entire EHRreporting period and across meaningfuluse measures that involve patientsseen by the EPotherwise, these EPswould not be able to satisfy meaningfuluse, as they would have denominatorsof zero for some measures. In caseswhere the patient is seen by a memberof the EPs clinical staff the EP caninclude or not include those patients intheir denominator at their discretion as



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long as the decision applies universallyto all patients for the entire EHRreporting period and the EP isconsistent across meaningful usemeasures. In cases where a member ofthe EPs clinical staff is eligible for theMedicaid EHR incentive in their ownright (for example, nurse practitioners(NPs) and certain physician assistants

(PA)), patients seen by NPs or PAsunder the EPs supervision can becounted by both the NP or PA and thesupervising EP as long as the policy isconsistent for the entire EHR reportingperiod.

An office visit is defined as anybillable visit that includes: (1)Concurrent care or transfer of care visits;(2) consultant visits; or (3) prolongedphysician service without direct, face-to-face patient contact (for example,telehealth). A consultant visit occurswhen a provider is asked to render anexpert opinion/service for a specific

condition or problem by a referringprovider. The visit does not have to beindividually billable in instances wheremultiple visits occur under one globalfee. Transitions of care are themovement of a patient from one settingof care (hospital, ambulatory primarycare practice, ambulatory specialty carepractice, long-term care, home health,rehabilitation facility) to another.Currently, the meaningful use measuresthat use transitions of care require thereto be a receiving provider of care toaccept the information. Therefore, atransition home without anyexpectation of follow-up care related to

the care given in the prior setting byanother provider is not a transition ofcare for purpose of Stage 2 meaningfuluse measures as there is no providerrecipient. A transition within onesetting of care does not qualify as atransition of care. Referrals are caseswhere one provider refers a patient toanother, but the referring providermaintains their care of the patient aswell. (Please note that a referral asdefined here and elsewhere in thisproposed rule is only intended to applyto the EHR Incentive Programs and isnot applicable to other Federal

regulations.)The four proposed denominators for

eligible hospitals and CAHs: Unique patients admitted to the

eligible hospitals or CAHs inpatient oremergency department during the EHRreporting period (stratified by age).

Number of orders (medication, labs,radiology).

Inpatient bed days. Transitions of care.The explanation of unique patients

and transitions of care in thepreceding paragraph for EPs also applies

for eligible hospitals and CAHs.Admissions to the eligible hospital orCAH can be calculated using one of twomethods currently available under Stage1 of meaningful use. The observationservices method includes all patientsadmitted to the inpatient department(POS 21) either directly or through theemergency department and patients

who initially present to the emergencydepartment (POS 23) and receiveobservation services. Details onobservation services can be found in theMedicare Benefit Policy Manual,Chapter 6, Section 20.6. Patients whoreceive observation services under boththe outpatient department (POS 22) andemergency department (POS 23) should

be included in the denominator underthis method. The all emergencydepartment method includes all patientsadmitted to the inpatient department(POS 21) either directly or through theemergency department and all patients

receiving services in the emergencydepartment (POS 23).Inpatient bed days are the admission

day and each of the following full 24-hour periods during which the patientis in the inpatient department (POS 21)of the hospital. For example, a patientadmitted to the inpatient department atnoon on June 5th and discharged at 2p.m. on June 7th would be admitted for2-patient days: the admission day (June5th) and the 24 hour period from 12a.m. on June 6th to 11:59 p.m. on June6th.

(4) Discussion of the Relationship of

Meaningful Use to Certified EHRTechnology

We propose to continue our policy oflinking each meaningful use objective tocertification criteria for Certified EHRTechnology. As with Stage 1, EPs,eligible hospitals, and CAHs must usethe capabilities and standards that arecertified to meet the objectives andassociated measures for Stage 2 ofmeaningful use. In meeting anyobjective of meaningful use, an EP,eligible hospital or CAH must use thecapabilities and standards that areincluded in certification. In some

instances, meaningful use objectivesand measures require use that is notdirectly enabled by certified capabilitiesand/or standards. In these cases, the EP,eligible hospital and CAH is responsiblefor meeting the objectives and measuresof meaningful use, but the way they doso is not constrained by the capabilitiesand standards of Certified EHRTechnology. For example, in e-Rx andpublic health reporting, Certified EHRTechnology applies standards to themessage being sent and enables certaincapabilities for transmission in 2014;

however, to actually engage in e-Rx orpublic health reporting many steps must

be taken despite these standards andcapabilities such as contacting bothparties and troubleshooting issues thatmay arise through the normal course of

business.

(5) Discussion of the Relationship

Between a Stage 2 Meaningful UseObjective and its Associated Measure

We propose to continue our Stage 1policy that regardless of any actual orperceived gaps between the measure ofan objective and full compliance withthe objective, meeting the criteria of themeasure means that the provider hasmet the objective for Stage 2.

(6) Objectives and Their AssociatedMeasures

(a) Objectives and Measures CarriedOver (Modified or Unmodified) FromStage 1 Core Set to Stage 2 Core Set

Proposed Objective:Usecomputerized provider order entry(CPOE) for medication, laboratory andradiology orders directly entered by anylicensed healthcare professional whocan enter orders into the medical recordper State, local and professionalguidelines to create the first record ofthe order.

We propose to continue to defineCPOE as entailing the providers use ofcomputer assistance to directly entermedical orders (for example,medications, consultations with otherproviders, laboratory services, imaging

studies, and other auxiliary services)from a computer or mobile device. Theorder is then documented or captured ina digital, structured, and computableformat for use in improving safety andefficiency of the ordering process.

CPOE improves quality and safety byallowing clinical decision support at thepoint of the order and thereforeinfluences the initial order decision.CPOE improves safety and efficiency byautomating aspects of the orderingprocess to reduce the possibility ofcommunication and other errors.Consistent with the recommendations ofthe HIT Policy Committee, we wouldexpand the orders included in theobjective to medication (which wasincluded in Stage 1), laboratory, andradiology. We believe that theexpansion to laboratory and radiologyfurthers the goals of the CPOE objective,that such orders are commonly includedin CPOE roll outs and that this is alogical step in the progression ofmeaningful use.

Our experience with Stage 1 ofmeaningful use demonstrated that ourdefinition of CPOE in the Stage 1 final



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rule does not indicate when in theordering process the CPOE functionmust be utilized. We provided guidanceat: https://questions.cms.hhs.gov/app/answers/detail/a_id/10134/on the Stage1 criteria to say that the CPOE functionshould be used the first time the order

becomes part of the patients medicalrecord and before any action can be

taken on the order. Our experienceshows that the limiting criterion is thefirst time the order becomes part of thepatients medical record rather than thelimitation to licensed healthcareprofessionals entering the order. Ourexperience has also demonstrated thateach provider must make the decision ofwhether the record of an order is part ofthe patients medical recordindependently as the possible variationsin process and record keeping are toonumerous for a universal statement onwhen in the process an order becomespart of the patients medical record. To

further CPOEs ability to improve safetyand efficiency and to provide greaterclarity for Stage 2 of meaningful use, weare proposing to redefine the point inthe ordering process when CPOE must

be utilized. We propose that to beconsidered CPOE, the CPOE functionmust be utilized to create the first recordof any type for the order. This removesthe possibility that a record of the ordercould be created prior to CPOE, but not

be part of the patients medical record.In a practice, this means the originatingprovider (the provider whose judgmentcreates the order) must personally usethe CPOE function, verbally

communicate the order to someone elsewho will use the CPOE function, or givean electronic or written order that mustnot be retained in any way once theCPOE function has been utilized. This isa meaningful use requirement and doesnot affect any other legal or regulatoryrequirements as to what constitutes apatients health record or order. Withthis new proposal, we invite publiccomment on whether the stipulationthat the CPOE function be used only bylicensed healthcare professionalsremains necessary or if CPOE can beexpanded to include nonlicensed

healthcare professionals such as scribes.Proposed Measure:More than 60percent of medication, laboratory, andradiology orders created by the EP orauthorized providers of the eligiblehospitals or CAHs inpatient oremergency department (POS 21 or 23)during the EHR reporting period arerecorded using CPOE.

In Stage 1 of meaningful use, weadopted a measure of more than 30percent of all unique patients with atleast one medication in their medicationlist seen by the EP or admitted to the

eligible hospitals or CAHs inpatient oremergency department (POS 21 or 23)during the EHR reporting period have atleast one medication order enteredusing CPOE. In the Stage 1 final rule, weadopted a threshold of 60 percent forthis measure for Stage 2.

Our experience with Stage 1 ofmeaningful use has shown that adenominator of all orders created by theEP or in the hospital would not beunduly burdensome for providers. Manyproviders have voluntarily providedinformation on the number ofmedication orders in their clinic orhospital. However, this does notguarantee such a denominator would befeasible for all providers. We believe theEHRs can calculate a denominator of allorders entered into the Certified EHRTechnology, with the numerator limitedto those entered into Certified EHRTechnology using CPOE. Potentially,this would exclude those orders that are

never entered into the Certified EHRTechnology in any manner. Theprovider would be responsible forincluding those orders in theirdenominator. However, we believe thatproviders using Certified EHRTechnology use it as the patientsmedical record; therefore, an order notentered into Certified EHR Technologywould be an order that is not enteredinto a patients medical record. For thisreason, we expect that orders given forpatients that are never entered into theCertified EHR Technology to be few innumber or non-existent. We encourage

comments on whether a denominatorother than number of medication,laboratory, and radiology orders created

by the EP or in the hospital would beneeded for EPs and/or hospitals. Forexample, the HIT Policy Committeerecommended a denominator ofpatients with at least one type oforder. We are proposing, however, adifferent denominator for this measure,which we believe would be possible tocollect given our experience in Stage 1of meaningful use and a much moreaccurate measure of actual CPOE usage.The denominator of patients with at

least one type of order is a proxymeasure for the number of orders issuedby the EP, eligible hospital or CAH. Theaccuracy of that proxy is dependent onthe frequency in which an encounterresults in an order. For example, an EPwhose scope of practice is such thatthey order a medication on nearly everyencounter would have every encounteras an opportunity to move the patientfrom the denominator to a numerator.The 2005 National Ambulatory MedicalCare Survey (referenced in the Stage 1final rule, 75 FR 44333) found that 66

percent of office-based visits had anytype of medication order. EPs whoseoffice visits are consistent with thesurvey findings would have a thirdfewer opportunities to move the patientfrom the denominator to the numerator.We believe a direct measure of thenumber of orders is feasible and moreaccurate as it is not dependent on the

frequency of orders. We encouragecomments on whether the barriers tocollecting information for our proposeddenominator would be greater in ahospital or ambulatory setting. As wenoted previously, the denominator usedin Stage 1 (as well as the denominatorrecommended by the HIT PolicyCommittee) is much more representativeof CPOE use in a hospital setting thanan ambulatory setting, so these settingscould require different denominators ormeasures. We request comment ondifferent denominators or measures andencourage any commenter proposing an

alternative denominator to discusswhether the proposed threshold or analternative threshold should be used forthis measure and to include anyexclusions they believe are necessary

based on their alternative denominator.Based on our experience with

attestation data from Stage 1, wecontinue to believe that the 60 percentthreshold that we finalized previouslyfor Stage 2 is appropriate. We also

believe that this threshold translates toour new measure. The HIT PolicyCommittee recommended includinglaboratory and radiology orders in themeasure, but as yes/no attestations of

one order being entered using CPOErather than at the 60 percent threshold.We believe this is unnecessary given theadvance of CPOE. In our discussionswith EPs, eligible hospitals and CAHswe find that they do not roll out CPOEwith only one order type, but ratherinclude medications, laboratory andradiology/imaging orders as a package.We are also concerned about thepossibility that an EP, eligible hospitalor CAH could create a test environmentto issue the one order and not roll outthe capability widely or at all. Wewelcome comment on whether

laboratory and radiology orders aresufficiently different in the use of CPOEthat they would require a differentthreshold and whether such a thresholdshould be a lower percentage or a yes/no attestation.

To calculate the percentage, CMS andONC have worked together to define thefollowing for this objective:

Denominator:Number ofmedication, radiology, and laboratoryorders created by the EP or authorizedproviders in the eligible hospitals orCAHs inpatient or emergency

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department (POS 21 or 23) during theEHR reporting period.

Numerator:The number of ordersin the denominator recorded usingCPOE.

Threshold:The resulting percentagemust be more than 60 percent in orderfor an EP, eligible hospital or CAH tomeet this measure.

Exclusion:Any EP who writes fewerthan 100 medication, laboratory andradiology orders durin