Life Science Compliance Update

January 27, 2015

Secretary Burwell Announces HHS Quality Payment Goals, Introduces Timeline For Shifting Medicare Reimbursements From Volume to Value


Big changes are on the horizon in how Medicare reimburses healthcare providers. Yesterday, the Secretary of Health and Human Services (HHS), Sylvia Burwell, announced a timeline and measurable goals to move the Medicare program toward reimbursing providers based on the quality, rather than the quantity, of care they give their patients. 

The shift from the traditional fee-for-service Medicare payment structure to a more outcome-based model hinges on "alternative payment models." These payments emphasize patient outcomes over getting paid for individual medical services, notes Burwell. "In alternative payment models, providers are accountable for the quality and cost of care for the people and populations they serve moving away from the old way of doing things, which amounted to 'the more you do, the more you get paid.'"

In 2011, Medicare made almost no payments to providers through alternative payment models, according to HHS. Today, alternative payments tied to "quality" represent approximately 20 percent of Medicare payments. HHS aims to get that up to 30 percent by the end of 2016, and 50 percent by the end of 2018. 

Burwell expounded upon these models in yesterday's blog post announcing the government's plan: 

[T]hrough Accountable Care Organizations, providers partner together on a patient’s care and get rewarded for delivering better care while spending less. In a Patient Centered Medical Home model, instead of doctors working separately in their own siloes, care coordinators oversee all the care a patient is getting.  That means patients are more likely to get the right tests and medications rather than getting duplicative tests, procedures, etc. These medical homes typically offer patients access to a doctor or other clinician 7 days a week, 24 hours a day including through extended office hours on evenings and weekends.

Another example is a “bundled payment” model.  In this model, providers are reimbursed together for the entire cost of what’s called an “episode of care” – something like say a hip replacement.  So lab tests, pre-visits, hip replacements, and so forth are all paid for in the same lump sum – whether the same test is conducted once, twice or five times.  This creates an incentive to deliver better care that makes patients healthier and keeps them out of the hospital.

A major aspect of the government's effort relies on incentives to drive providers to these alternative payment models. Burwell lists two other strategies. First is a focus on "care delivery," which Burwell indicates will be developing policies to encourage greater integration within practice sites, coordination among providers, and attention to population health with a priority on prevention and wellness. “With more emphasis on coordinated care, patients are more likely to get the right tests and medications rather than taking tests twice or getting procedures they do not need,” her announcement states. Second, CMS is also working on information sharing to create more "transparency on the cost and quality of care, to bring electronic health information to inform care, and to bring the most recent scientific evidence to the point of care in order to bolster clinical decision-making."

HHS also announced the creation of a Health Care Payment Learning and Action Network, through which HHS will work together with private payers, employers, consumers, providers, state Medicaid programs, and other partners to expand alternative payment models beyond Medicare. 

A blog announcing the new value goals from Secretary Burwell is here, and a perspectives piece in the New England Journal of Medicine from Secretary Burwell is here.


The response to the reforms has been cautiously optimistic.  American Medical Association President Robert Wah said many of his members were frustrated and anxious about changes in the system and that while he was “encouraged” by the announcement, physicians needed more flexibility in the way the payments would be administered to be able to participate, the Wall Street Journal reports

Pharmaceutical Research and Manufacturers of America (PhRMA) president and chief executive officer John J. Castellani issued the following statement on Secretary Burwell’s announcement:

“PhRMA supports Secretary Burwell’s goal of advancing affordable, high quality and patient centered health care, and today’s announcement represents an important step forward."

“New medicines make important contributions to value in health care for patients, payers and policymakers, and we look forward to working with the secretary on this new initiative. As HHS works to evaluate and expand new models of health care payment and delivery, we believe it is essential they:

1)    Incorporate clear mechanisms for recognizing the value of new treatment advances, such as precision medicine and other new tests and treatments;

2)    Are grounded in strong quality measures and incentives, with emphasis on outcomes that matter to patients;

3)    Support shared decision making between providers and patients, which is informed by high quality evidence about the full range of available treatment options; and,

4)    Are transparent and enable manufacturers and other stakeholders to work collaboratively in support of high-quality, high-value health care.

Read PhRMA's Principles for Payment Delivery and Reforms here


November 11, 2014

Electronic Health Records: AMA Offers Blueprint to Improve Meaningful Use Program


As physicians continue to adopt electronic health records as a part of the Meaningful Use program, we have provided updates from the Centers for Medicare & Medicaid (CMS) and the National Coordinator for Health IT (ONC). Recently, the continued struggle physicians face meeting Meaningful Use requirements prompted the American Medical Association (AMA) to release a blueprint guide with the goal of revamping the program. In October, the AMA sent the blueprint to CMS Administrator Marilyn Tavenner and Karen DeSalvo, the National Coordinator for Health IT.

Stakeholders continue to raise concerns that many organizations have been unable to show evidence that they will meet Meaningful Use requirements. AMA has argued for additional flexibility in all stages of the Meaningful Use program, with the goal of encouraging physicians to continue integrating electronic health records (EHRs) into their practices. The flexibilities include the removal of penalties for physicians who are making an effort to take part in Meaningful Use but are not meeting 100 percent of the program's requirements. The AMA recommends that physicians who meet at least 50 percent of the requirements in the current stages be able to avoid financial penalties and that Stage 3 include just ten required measures.

AMA Meaningful Use Blueprint

The AMA recommends adopting a more flexible approach for meeting Meaningful Use (MU), adding additional hardship exceptions for all stages of the program and to more physicians, improving quality reporting, and addressing usability challenges such as removing the requirement that only licensed medical professional and credentialed medical assistants be allowed to enter orders.

The blueprint highlights ways CMS and ONC can improve the Meaningful Use program. As a part of its recommendations, the AMA is asking the Administration to make objectives physicians find demanding an optional requirement. Furthermore, the AMA recommends that CMS and ONC take the opportunity with Stage 3 to make the Meaningful Use program less primary care centric by expanding options within the health IT objectives to meet the needs of specialists and requiring physicians to meet no more than ten requirements.

The Big Picture

The AMA’s essential purpose in this blueprint is the recognition that Meaningful Use requirements were designed to increase patient choice and quality of care. However, the AMA argues that many requirements are actually decreasing the efficiency of patient visits. The blueprint raises four major points: Physician adoption of EHRs and participation in reporting programs; Evidence on Meaningful Use; Cost to meet Meaningful Use; and the Path forward for Meaningful Use.

Physician Adoption of EHRs and Participation in Reporting Programs

As reported by data from the National Center for Health Statistics, 78 percent of office-based physicians are using some form of an EHR, but only 23.5 percent are using one that is considered “fully functional.” Not surprisingly, large physician practices are employing EHR use than solo practitioners. The AMA cites that estimates show only 18 percent of physicians will be eligible for MU incentives.

Evidence on Meaningful Use

An article in JAMA Internal Medicine found mixed results comparing outcomes of physicians at Brigham and Women’s hospital in Boston who participated in MU compared to those not participating. The article concludes participation in the MU program was “associated with marginally better quality for two measures, worse for two measures, and not associated with better or worse quality for three measures.”

Additionally, the AMA blueprint also cites an analysis in the Annals of Internal Medicine that found mixed results concerning the impact of health information technology on patient outcomes. The study notes that health information technology has been shown to improve quality by increasing adherence to guidelines, enhancing disease surveillance, and decreasing medication errors, but the effects of EHRs on efficiency and cost were mixed to negative.

Cost to Meet Meaningful Use

The AMA’s concern is that the costs of Meaningful Use outweigh incentives provided under the program and also the costs estimated by CMS to purchase and maintain EHRs. Physicians incur “significant expenses” updating EHRs and as recently reported in Health Affairs, physicians experience a negative return on investment—averaging a $43,743 loss over five years.

The AMA’s concern is that neither CMS nor ONC has studied the cost of purchasing and maintaining an EHR, multiple interfaces, and the expenses incurred to exchange data. The additional burden of financial penalty is unlikely to further motivate physicians and may impede progress in adopting and using the new technology. AMA urges “CMS and ONC to study the total costs of compliance with MU to understand the impact this program is having on practices.”

Path Forward for Meaningful Use

The AMA’s blueprint argues that without reforms, MU will negatively impact the quality and access to care for patients in several ways. First, it will jeopardize patient safety by mandating the use of technology before it is thoroughly tested and evaluated. Second, there will be increasing administrative burdens such as overly prescriptive data collection mandates and measures. Third, if physicians and patients are unable to access data stored in a previous EHR system, access to patient information will be interrupted, hindering care coordination. Fourth, physicians will see decreasing efficiency, since some MU requirements add new tasks and EHRs require additional time to input data, translating to fewer patients seen.

Furthermore, there is concern EHRs may inhibit access to innovative technology, as they are designed to meet a voluminous number of MU criteria, instead of specifically targeted at adopting revolutionary technology. Additionally, MU may hinder other innovation solutions if physicians are too focused trying to meet program requirements and cannot dedicate time to develop health care improvements for their specific specialty or practice. Due to these challenges, AMA is concerned that MU will slow the movement to alternate payment/delivery models of care.

The blueprint concludes with a warning, but optimistic look toward the future: “If changes are not made, we fear the prescriptive nature of both the MU program and the EHR certification requirements will continue to stifle innovation and fuel a growing frustration among physicians. In the end, the loser will be not only the doctor, but the patients they serve. There is, however, cause for optimism if we use the experiences gained to date to shape the program moving forward.”


The AMA blueprint moves beyond merely raising warnings and into solutions by offering specific improvements to the MU program. The AMA recommends MU policy modifications in four areas: (1) adopting a more flexibility approach for meeting MU; (2) expanding hardship criteria; (3) improving quality reporting; and (4) addressing physician usability challenges.

Adopt a More Flexible Approach for Meeting Meaningful Use

The blueprint calls MU’s “all-or-nothing approach” the single greatest barrier physicians face to meeting program requirements. The program requires 100 percent compliance at all times to earn an incentive and avoid a penalty, but AMA points out that only certain measurements are relevant in some care settings and that EHR technology may create barriers in meeting some requirements.

To add more flexibility, the AMA recommends removing the existing all-or-nothing approach by adopting a 50 percent threshold for incurring a penalty and 75 percent threshold for earning an incentive for MU Stages 1-2. The AMA also calls for optional measures, notably ones that have been the most challenging for the vast majority of physicians. This includes MU Objectives for a patient to be able to view, download, and transmit” health information; “transitions of care,” and “secure messaging.” Click here for a chart detailing the requirements for meaningful use.

AMA’s flexible approach addresses other specific measures in the MU program. Notably, the blueprint calls for the removal of percentage/thresholds for measures and the concept of “menu vs. core” for Stage 3. It also asks for the inclusion of new health IT measures in the MU program to expand options for specialist participation in Stage 3. The AMA wants MU requirements to allow physicians to meet no more than 10 measures under Stage 3.

Expand Hardship Criteria

The Health Information Technology for Economic and Clinical Health Act (HITECH) allows the Secretary to grant hardships to physicians, subject to annual renewal, to avoid a financial penalty if certain circumstances are met. AMA’s blueprint believes additional hardship categories should include: (1) establish a quality hardship; (2) expand the “unforeseen circumstances” hardship; (3) continue the exemption for anesthesiologists, radiologists, and pathologists; (4) provide an exemption for hospitalists; and (5) provide an exemption for physicians close to retirement.

The AMA has requested ONC and CMS align the quality reporting requirements of the PQRS and the EHR, but proposed rules have not yet addressed the problem. As such, AMA asks CMS to provide an exemption for physicians from having to meet the MU quality requirements if they have successfully participated in the PQRS program. Furthermore, the current hardship application is narrowly construed and the variety of challenges facing physicians, such as practice closure, bankruptcy, and EHR vendor issues all threaten their ability to meet MU. AMA wishes to expand the “unforeseen circumstances” hardship category to cover such circumstances.

Specialists, like some physicians, also face difficulties complying with MU requirements. The blueprint outlines burdens on specialists, including the current state of commercially available EHRs, particularly with respect to standalone specialty system products, certification of technology appropriate for these specialists, workflow challenges, nature of the patient relationship, and patient data needs. To address this burden, the blueprint requests an assured continuation of the hardship exception for anesthesiologists, pathologists, and radiologists. Finally, AMA recommends that CMS create a hardship category for hospitalists or observation care, or request that CMS remove observation patients from the mix of outpatient services counting toward the emergency physician threshold.

Improve Quality Reporting

Health IT infrastructure challenges are an additional burden on meeting MU requirements. AMA’s blueprint urges CMS not to expand quality reporting requirements until these challenges are resolved, more flexibility is instituted, and quality measures are updated more frequently to comply with clinical practice guideline changes. To address these challenges, the blueprint offers recommendations in six areas: (1) improve alignment with PQRS; (2) lack of a quality infrastructure; (3) new eCQMs (electronic clinical quality measures); (4) core measures; (5) eCQM rulemaking cycle; and (6) registry participation and interoperability.

For MU quality reporting to count towards PQRS, physicians must take into consideration a significant number of detailed rules and requirements. Therefore, the AMA recommends a number of improvements to streamline reporting with PQRS. For example, the blueprint proposes to deem physicians who successfully participate in PQRS, regardless of the reporting mechanism, to have successfully met the MU quality measure requirements. Other recommendations are similarly aimed to increase flexibility for physicians to successfully meet MU requirements.

Through the blueprint, AMA expresses its concerns with the HIT Policy Committee, CMS, and ONC, arguing that all three are not focusing on resolving underlying challenges with reporting quality measures before recommending more advanced measures and the “Innovation Pathway” (starts at slide 18), an alternative way for meeting MU quality reporting requirements. Many proposed measures made by the HIT Policy Quality workgroup assume interoperability and that the advanced stages of MU are in-place. Therefore, argues the blueprint, before any measures go forward there should be real-world testing in multiple types of physician practice settings and sizes to ensure the EHR can capture and calculate the measures without putting an undue burden on physicians.

The blueprint’s recommendations also focus on clinical measurements and rulemaking. Specifically, before new electronic clinical quality measures go forward, AMA writes there should be real-world testing in multiple types of physician practice settings and sizes to ensure the EHR can capture and calculate the measures without putting an undue burden on physicians. To further improvement quality measurements, the blueprint also urges CMS to continue to allow physicians to report on a menu set of measures for compliance with the quality objective. AMA also reiterates the need for CMS to scale down the number of required quality measures due to the lack of eCQMs in the program. Finally, in terms of rulemaking, CMS and ONC should develop a process to eliminate measures that no longer follow the latest clinical evidence and more clearly define what constitutes a minor specification change that can be incorporated into CMS’ implementation guides versus a major change that requires rulemaking.

Address Physician Usability Challenges

The AMA is understandably concerned by physician frustration with MU, and believes it may lead to lower participation levels. A recent IDC Health Insights survey found that 58 percent of ambulatory physician users were not satisfied with their EHR technology and that “despite achieving meaningful use, most office-based providers find themselves at lower productivity levels than before the implementation of their EHR. Workflow, usability, productivity, and vendor quality issues continue to drive dissatisfaction.” Additionally, an article published in the American Journal of Emergency Medicine found that documentation takes 30-40 percent of a workday, with electronic charting taking 30 percent longer than paper charts. 

The AMA concedes that not all workflow issues are directly related to EHR software design. The blueprint cites that some stem from limited training and sub-optimal implementation required by practice or organizational policy. Additionally, regulatory requirements including overly proscriptive MU requirements and demands imposed by commercial payers play a role. The AMA’s essential point is that workflow disruptions are likely to get worse as the MU program becomes increasingly challenging.

The blueprint raises additional concerns, including federal requirements EHR vendors must meet to obtain certification, pointing out that these mandates hinder their ability to address usability concerns and develop more user-friendly products. Furthermore, a number of repots have indicated growing concerns over patient safety related to EHR usability. The blueprint cites a disconnection with EHR design, implementation, and the clinician’s workflow as major contributors to patient safety issues and events.

AMA concludes with a variety of suggestions, offering that further MU stages may need to be held back until there is sufficient guidance and testing of new standards or the required use of new technology is incorporated into aspects of the program which do not interfere with direct patient care. The blueprint finally recommends several steps to improve EHR technology, with the end goal to incorporate well-developed data management principles to promote consumer choice and EHR flexibility.


The AMA’s blueprint comes on the heels of growing stakeholder concern about the Meaningful Use program, especially as it progresses beyond the initial stages. The AMA is frustrated by physicians’ struggles to meet the requirements and the blueprint is an opportunity to modify possible roadblocks facing EHR adoption in the United States. By offering additional flexibilities for physicians, the AMA believes the ultimate goal of Meaningful Use—improving patient care—will be realized. We will monitor EHRs and Meaningful Use as it continues to impact medical practices around the country.


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