Have Regulators Underestimated Cost of EHR Systems?

Proposed federal regulations to implement a massive federal initiative aimed at convincing physicians to adopt digital patient record systems may prove “untenable” for many small-practice and solo-practice physicians, according to comprehensive reviews of the regulations submitted to the government by APA and other physician groups.

APA joined 95 other medical groups in a March 15 letter from the AMA to federal regulators at the Centers for Medicare and Medicaid Services (CMS) regarding regulations proposed in December 2009 to govern a $19 billion federal health information technology (HIT) program.

The proposed regulations would implement a provision of the American Recovery and Reinvestment Act to provide incentives to physicians and hospitals to adopt costly HIT systems, which have at their heart digital patient record programs known as electronic health record (EHR) systems.

Among the many concerns highlighted by the AMA letter was that federal regulators have underestimated the high cost to physician practices of EHR adoption and ongoing overall HIT system maintenance. Officials at CMS estimate that EHR system adoption or upgrades of existing systems to meet federal standards will cost on average about $54,000 per physician employee in a practice, while annual maintenance will cost an average of $10,000 per physician employee.

Once the regulations are finalized, the federal program will provide “incentive payments” of up to $44,000 over five years to physicians who show “meaningful use” of qualified EHR technology (Psychiatric News, March 20, 2009).

But both the federal cost estimates and proposed payments could be dwarfed by the true cost to physicians of HIT systems that would comply with all of the proposed regulations.

“[P]hysicians would need to make these investments up front, and even those eligible for the maximum incentives would experience costs that could exceed the maximum incentives available,” the AMA letter noted.

Many of the AMA's concerns were echoed in a letter that APA Medical Director James H. Scully Jr., M.D., sent to federal regulators on the same day that the AMA sent its letter.

Scully highlighted aspects of the proposed federal regulations likely to hurt small-group and solo practitioners, which include most psychiatrists. Specifically, Scully raised concerns that the extent and number of proposed federal regulations governing the use of qualifying EHRs would impose a serious administrative burden on smaller practices.

Additionally, APA is concerned that the proposed regulations will require all physicians who want federal EHR funds to collect patient data in 25 areas not related to mental health and record them in the EHR systems to show “meaningful use.” APA urged federal regulators to allow physicians to collect a smaller number or none of these data types.

Additionally, APA urged the Department of Health and Human Services to ensure that “adequate technical support” is put in place for what will be a technologically challenging national HIT initiative. This assistance should include Web sites, toll-free telephone numbers, direct outreach to providers, and “comprehensive guidance.”

Another critical concern for psychiatrists that Scully highlighted is the need for adequate patient-privacy protections. Although he praised the law's provisions and regulators' efforts to ensure robust privacy protections of sensitive information contained in EHRs, such systems will not be required to incorporate many of the strongest privacy measures until 2015. Since the EHR legislation was first debated, APA has continued to urge regulators to move the effective date of the required privacy protections to the first phase of the national EHR program implementation in 2011. Otherwise, mental health patients in particular—due to societal stigma against mental health care and people with mental illness—may not trust that their information will be well protected.

“There are always concerns that patients may withhold information or avoid treatment if they cannot trust that privacy of sensitive information will be protected,” Scully wrote.

Federal regulators accepted thousands of public comments on the proposed regulations by the mid-March deadline and are expected to use them in crafting final regulations that will be issued in several months. Payments to qualifying physicians will start in 2011.

The proposed regulations are posted at <www.modernhealthcare.com/assets/pdf/CH680921230.PDF>.