HHS Medicare Incentive Program a Challenge for Tech Companies

As HHS proposes new rules on accountable care, IT vendors may need to adjust their health care IT portfolios to cash in on the shared savings program.

With HHS (the Department of Health & Human Services) announcing its Medicare incentive program for ACOs (accountable care organizations), IT vendors will need to modify their health care platforms to take advantage of the potential savings.

ACOs are groups of health care companies that join together to coordinate care for Medicare patients and earn incentives based on positive outcomes, such as longevity of life, or whether a condition such as diabetes or hypertension has been contained.

The Medicare Shared Savings Program proposes new rules on how health care organizations-whether they're a doctor's office, hospital, laboratory, supplier or long-term care facility-can be accountable for quality of care and share data on patients' treatment.

Under the proposal announced on March 31, HHS will offer incentives to providers in ACOs that meet quality-of-care goals. Incentives for ACOs would be linked with the meaningful use incentives for EHRs (electronic health records).

The ACO incentive program will present new challenges for IT as far as retooling EHR and HIE (health information exchange) platforms. Applications will need to be able to identify, produce, calculate and distribute shared savings among providers in an ACO, according to Shahid Shah, CEO of IT consulting firm Netspective Communications and author of the Healthcare IT Guy blog.

"The IT required for meaningful use is a quite different from what is required for ACOs and will be nowhere as easy for existing legacy EHRs to simply retool their current platforms like they could for meaningful use," Shah told eWEEK. "Getting data out across disparate systems is going to be a problem."

The ACO rule could also bring some difficulties for IT vendors regarding telehealth technology, John Moore, managing partner for Chilmark Research, wrote in an e-mail to eWEEK.

"The Medicare Shared Savings Program encourages the use of telehealth and remote monitoring, and most EHRs are not well equipped to accept this data," he said.

With physicians sharing both clinical and administrative data, they'll be able to avoid unnecessary repetition of expensive procedures, Shah said.

The government pays incentives if ACOs are able to keep costs in check, but unlike the government's meaningful use guidelines on EHRs, no penalties result from not following HHS' ACO guidelines, Shah noted.

The ACO incentives are provided for under the Affordable Care Act President Obama signed on March 23, 2010.

"Section 3022 of the Affordable Care Act requires CMS (the Centers for Medicare & Medicaid Services) to establish a shared savings program to facilitate coordination and cooperation among providers to improve the quality of care for Medicare fee-for-service beneficiaries and reduce unnecessary costs," CMS reports.

"The Affordable Care Act is putting patients and their doctors in control of their health care," HHS Secretary Kathleen Sebelius said in a statement. "Accountable care organizations will improve coordination and communication among doctors and hospitals, improve the quality of the care their patients receive and help lower costs."

CMS is seeking public comments on the rule, before it takes effect on Jan. 1, 2012. The agency will hold open forums to help the public understand how ACOs operate. Health care providers forming an ACO must meet quality standards in five areas: patient/caregiver care experiences, care coordination, patient safety, preventive health and at-risk population/frail elderly health.

In a related development, on March 21 HHS announced its National Quality Strategy to coordinate health care initiatives between the public and private sector. HHS outlined the use of EHRs as a way for the health care industry to measure quality.