Health Care IT Initiatives Remain on Front Burner, especially for Nashville companies (North Highland)

While many aspects of health care reform have been put on hold while we wait for the U.S. Supreme Court to decide the fate of the Patient Protection and Affordable Care Act – a decision expected in June – some elements are moving forward and, in fact, accelerating in anticipation of the high court’s ruling.

Specifically, I’m referring to two different initiatives that involve the adoption of information technology by health care providers – known to those in the industry by their shorthand labels as “Meaningful Use” and “ICD-10.”

Meaningful Use

Briefly, Meaningful Use is a term introduced in the HITECH Act, which is part of the Patient Protection and Affordable Care Act, passed in 2009. The HITECH Act established a goal of having all health care providers – i.e., doctors, hospitals, clinics, etc. – convert their patient information to electronic health records (EHRs). Realizing that this is a costly conversion, the HITECH Act established a $21 billion incentive pool to be distributed to providers who can demonstrate that they are making the transition and putting technology to meaningful use.

Several stages of Meaningful Use were established to allow providers to prove they are meeting the benchmarks of EHR adoption. With each stage reached, an incentive payment is made to the provider.

For providers still working to achieve Stage One compliance, the June Supreme Court ruling has become a deadline of sorts, because if the high court decides to scuttle “Obamacare,” as some are suggesting, that could scuttle the HITECH Act in the process, which could make the incentive money disappear. No one knows for certain; but if you’re a provider who’s close to reaching Meaningful Use Stage One compliance, the incentive is to get there before the Supreme Court rules in June.

ICD-10

Unlike Meaningful Use, ICD-10 is in no way connected to the Patient Protection and Affordable Care Act. Rather, it is a pure compliance issue for providers.

Basically, the health care system has a set of codes that are used to describe specific conditions. Under the current system – known as ICD-9 – there are 14,000 different diagnostic codes. To improve quality of care, the Centers for Medicare and Medicaid Services (CMS) have required providers to adopt a more detailed coding system called ICD-10 in order to more accurately identify conditions. For example, if you break a bone in your wrist, the current code is for a broken wrist, whereas the new code will identify the actual bone in your wrist that is broken. Under ICD-10, there will be 68,000 different diagnostic codes.

Just as with Meaningful Use, it is very costly and time-consuming to make the conversion to ICD-10, and CMS has relaxed some early-stage deadlines because physicians and small providers were having difficulties getting their claims paid using the new system. But many hospitals have already committed to making the upgrade and are well into the conversion process. That process will not be affected by the Supreme Court’s actions.

View From Nashville

In the big scheme of things, the health care provider community in Nashville is probably leading the nation when it comes to hitting Meaningful Use benchmarks and converting to ICD-10.

There are approximately 5,000 hospitals in the U.S., and estimates now are that 1,500 of those hospitals, roughly 30 percent, are well-positioned to be ready to use electronic health records and the new coding system by the deadline the government has set. Of that 1,500, 500 are owned by hospital management companies based in Nashville.

Of the $21 billion in the Meaningful Use incentive pool, probably 10 percent of that amount has already been paid out to Nashville-based companies that have completed the first stage of Meaningful Use.

While the nation’s health care industry waits in a kind of limbo for the Supreme Court to reach its verdict on the future of Obamacare, many in the industry – including many in Nashville – are not slowing down in their adoption of information technology, which holds much of the hope for improving health care in the future.

Fletcher Lance leads the national health care practice at North Highland and is based in the Nashville, Tenn. office. He joined the company in 2005 and has more than 18 years of experience in health care management and information technology consulting. Lance works with health care providers, payers and health care IT ventures. A few of the companies he has worked with include Healthways, Inc., Renal Advantage Inc., and HealthSpring, Inc.