Industry News

Electronic Health Records Financial Incentive Program – A laboratory perspective

By Jim Kasoff


Jim Kasoff, president of CompuGroup Medical’s Laboratory Division, has more than 25 years of experience in the health care industry. He initially joined Antek HealthWare, which is now CompuGroup Medical, Reisterstown, Md, as the director of products and services more than 10 years ago.


     When passed into law in February 2009, the American Recovery and Reinvestment Act legislation primarily revolved around economic recovery and reinvestment for American business and its workers. It also contains legislation that includes the Health Information Technology for Economic and Clinical Health Act (HITECH). The HITECH Act includes a $19 billion dollar payout to hospitals and physicians that demonstrate Meaningful Use (MU) of certified EHR systems. These funds are controlled by Centers for Medicare & Medicaid Services (CMS) Incentive Programs. The goal of the HITECH Act is to improve patient care, processes, and outcomes.
     For eligible providers (EPs) that meet requirements for Medicare, there is $44,000 in stimulus money available per provider over a 5-year period. For EPs that meet requirements for Medicaid, there is $63,750 available over a 6-year period.
     In order to comply with the MU requirements, providers must meet specific objectives. The objectives are broken down into two categories, Core and Menu sets. Core objectives are required and must be achieved in their entirety. The Menu set objectives allow EPs to select a subset of objectives. The number of Core and Menu set objectives that must be met vary based on the stage of EHR implementation.

The MU program follows a phased approached deployed in three stages:

  • Stage 1 Requirements: Final rule published September 27, 2010
  • Stage 2 Requirements: Final rule published August 23, 2012
  • Stage 3 Requirements: Currently in the proposal phase

     The 15 Core objectives are required and the specified measurement for each objective must be achieved. The Menu set objectives allow EPs to select five of the 10 objectives in Stage 1.
     For more information of the objectives, requirements and explanation of Stage 1 of MU, click here.

Key Changes from Stage 1 to Stage 2

  • Many of the Stage 1 Menu objectives became Core objectives in Stage 2.

  • Several objectives carry over from Stage 1, but the threshold of compliance increases in Stage 2. For example, a Menu set objective in Stage 1 stated EPs needed to incorporate a minimum of 40% lab results as structured data into their EHR. In Stage 2, the objective (in addition to becoming a Core objective) increases the measure to a minimum of 55% of lab results required to be incorporated into the EHR as structured data.
  • Several new objectives are introduced for Stage 2, many of them as Menu objectives.

As you can see from the diagram below, some of the Menu objectives transitioned to Core objectives.

MU2 Stage1-2 graphic 

17 Core Objectives:

| 1 | Use computerized provider order entry (CPOE) for medication, laboratory, and radiology orders

| 2 | Generate and transmit permissible prescriptions electronically (eRx)

| 3 | Record demographic information

| 4 | Record and chart changes in vital signs

| 5 | Record smoking status for patients 13 years old or older

| 6 | Use clinical decision support to improve performance on high-priority health conditions

| 7 | Provide patients the ability to view online, download, and transmit their health information

| 8 | Provide clinical summaries for patients for each office visit

| 9 | Protect electronic health information created or maintained by the Certified EHR Technology

| 10 | Incorporate clinical lab-test results into Certified EHR Technology

| 11 | Generate lists of patients by specific conditions to use for quality improvement, reduction of disparities, research, or outreach

| 12 | Use clinically relevant information to identify patients who should receive reminders for preventive/follow-up care

| 13 | Use certified EHR technology to identify patient-specific education resources

| 14 | Perform medication reconciliation

| 15 | Provide summary of care record for each transition of care or referral

| 16 | Submit electronic data to immunization registries

| 17 | Use secure electronic messaging to communicate with patients on relevant health information

Three of 6 Menu Objectives:
1. Submit electronic syndromic surveillance data to public health agencies

2. Record electronic notes in patient records

3. Imaging results accessible through CEHRT

4. Record patient family health history

5. Identify and report cancer cases to a State cancer registry

6. Identify and report specific cases to a specialized registry (other than a cancer registry)

     Perhaps the most significant core objective added to Stage 2 is EPs must use secure electronic messaging to communicate with patients on relevant health information and provide patients the ability to view online, download, and transmit their health information. This must occur within 4 business days of the information being available to the EP.

Incorporation of laboratory results into the EHR as structured data

Stage 1: Incorporate a minimum of 40% of laboratory results as structured data is a Menu set objective.  For this to occur in real time, an HL7 interface from the LIS to the EHR should be implemented.  

Stage 2: Incorporate laboratory results into the EHR as structured data is a Core objective in demonstrating MU. In addition, the minimum percentage in the measure of this objective increases from 40% in Stage 1, to 55% in Stage 2. In Stage 3, it is currently proposed that 90% of laboratory results will need to be incorporated into the EHR as structured data. (See Table 1)

Table1 Results

Incorporation of Computerized Physician Order Entry (CPOE) for laboratory orders

Stage 1: CPOE only required for 30% of medication orders; laboratory orders were not mentioned as part of this Core objective.

Stage 2: CPOE remains a Core objective, but now requires 60% of medication, 30% of laboratory, and 30% of radiology orders created by the EP. The most practical way to accomplish the laboratory requirement is to have your EHR send laboratory orders (requisitions) directly to your laboratory information system. (See Table 2)

Table2 CPOE

     Table 3 (below) represents the payment schedule for Medicare EPs. It outlines the incentive payments based on your starting date and targets for achieving MU.

Table3 PaymentSchedule

     In addition to the increased requirements finalized in Stage 2, the ONC has also published proposed EHR certification criteria for 2014. Amongst the proposed requirements are several laboratory initiatives that include:

  • The use of Logical Observation Identifiers Names and Codes (LOINC). This is a database and international standard for identifying laboratory tests and values/results.

  • Incorporate laboratory tests and values/results certification criterion into the health record (ambulatory setting). This requires capability of receiving results in accordance with HL7.
  • Require certification of SNOMED CT (Systematized Nomenclature of Medicine — Clinical Terms). This is a comprehensive international collection of medical terms. In a laboratory setting it may be used to normalize Computerized Provider Order Entry for the Laboratory Order Entry.
  • Enable a user to electronically create laboratory tests and values/results for electronic transmission in accordance with HL7.

     Stage 2 is a necessary step on the way to health care interoperability. This allows patient data to get out of the physicians’ offices, by providing access to patients, referring providers, health care entities, and (in the case of Clinical Quality Measures) the government.
     It seems that the overall outcome of the HITECH act will not realize an immediate improvement in outcomes, but it will begin the process by driving practices to share data externally with other health care entities and directly with the patient.
     Clearly, the transition to EHR technology is a challenge for any physician practice and all involved partners, including IT consultants, software vendors, business associates, and patients. The most practical approach is to start the adoption process as soon as possible. It is a complicated and expensive process to implement an EHR, however, if your practice waits too long, federal funds will expire and over time your Medicare and Medicaid claim payments will be reduced. 
     As a result, the financial penalties imposed on providers could turn out far more costly than the investment in an EHR. An additional risk of not adopting an EHR is physicians may eventually be viewed as behind the times by patients, referring physicians, and hospitals. This could eventually lead to fewer patients as they seek more modern health care options. Finally, when an owner prepares to sell or merge, the valuation experts must try to project future value of the practice by analyzing a variety of factors. The use of a MU certified EHR is a key factor in determining a practice’s total value.

Note CompuGroup Medical’s updated listing in CLP‘s 2013 Market Guide:

CompuGroup Medical US
Category: Software Programs
228 Business Center Drive
Reisterstown, MD 21136
(800) 359-0911
Fax: (410) 517-0331

Jim Kasoff, president of CompuGroup Medical’s Laboratory Division, is a contributing writer for CLP. Kasoff has more than 25 years of experience in the health care industry. He initially joined Antek HealthWare, which is now CompuGroup Medical, as the director of products and services more than 10 years ago. Prior to joining CompuGroup Medical, Kasoff was a laboratory administrator at the Baltimore Medical Group, where he implemented LabDAQ. He also has experience outside of the lab as the chief operating officer for a 13-site physician practice with 56 physicians. CompuGroup Medical Laboratory Division is the developer of LabDAQ Laboratory Information System and LabNexus Laboratory Outreach Solution. For more information, contact Editor Judy O’Rourke,