The Goals of the American Recovery and Reinvestment Act

The American Recovery and Reinvestment Act of 2009 emphasizes the need for the U.S. to move toward the use of electronic health records.  To encourage a widespread adoption of interoperable health information technology, the legislation called for the Office of the National Coordinator for Health IT working through NIST, to create a program for voluntary certification of health information technology that is in compliance with the applicable certification criteria to meet defined meaningful use requirements. Meaningful Use stage 1 started the U.S. down this path by pushing healthcare organizations to select an electronic health record and to start their path of digitization.

Most healthcare organizations focused historically on the financial aspects of digitization through implementation of billing and accounting solutions. Over the past few decades, as healthcare moved in this direction, it helped healthcare organizations to comply with the ever-changing, continuous complexity that healthcare payers inflicted upon healthcare providers.  As the cost of healthcare has increased, the complexity of delivery and payment requirements has also increased exponentially.  Along with the increasing complexity faced by healthcare providers in managing reimbursement, comes an ever growing downward pressure on the dollars they get paid.

Healthcare Insurance from a Historical Perspective

For many, healthcare coverage is taken for granted. The first Blue Cross plan was created in 1929.  By 1938, only 100,000 people in the U.S. were covered by health insurance.  In this era, the consumer was responsible for the paying for their services, and would file paperwork with the insurance company to get reimbursed. There was no real contact between the insurer and the healthcare provider. The next big wave of change was in 1945 when employer-based group insurance surged. There were wage and price controls during this time, and health insurance was used to attract employees by offering health coverage as a non-taxable incentive.

In 1975, the National Uniform Billing Committee (NUBC) started the design of a national claim form for medical claims. Prior to this, there weren’t any standards for medical billing. Each payer decided on it’s own what information would be required to pay a claim. It took NUBC seven years to design the first form the UB82 released in 1982.  Since that point, changes to the billing formats and the complexity of billing, has continued to grow at an ever-expanding rate.  When you look at these changes, and the burden they place on providers, it’s easy to see how healthcare costs from an administrative perspective have continued to climb.  In 1996, the HealthCare Insurance Portability and Accountability Act was introduced with numerous goals…one of which is Administrative Simplification.  Simplification was to be gained by requiring HHS to adopt national standards for electronic health care transactions and code sets, unique health identifiers, and security.

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Many of the standards and codes that have been promoted through HIPAA are the same standards that were adopted as standards for meaningful use. Within the Health and Human Services arena of healthcare this complexity is simply the tip of the iceberg.  Many of the states’ Medicaid programs have made adjustments to the HIPAA transactions, making standards across the country impossible.  In addition additional code sets such as DSM IV and DSM 5 add another layer of complexity usually contained within state required reporting, controlling reimbursement rates.

MU Stage One Digitization

Then along comes Meaningful Use Stage 1 (MUS1).  It started to move the bar beyond financial considerations, to consider the needs of the consumer and to focus on standards in preparation for a move to pay-for-performance. In order to pay-for-performance, you need to understand outcomes. The other side of pay-for-performance is the cost to deliver on those outcomes? What can you do to drive down costs? You can see the focus on this in Stage 1 with core components to drive down medication errors and cost, start tracking quality measures, and a focus on consumer education around high cost topics such as smoking cessation. But mostly it was about making sure you have a solid infrastructure to build upon…that your security is sound…that you’re collecting data in a way that is measurable through use of the adopted codification systems…and you had adopted, implemented or upgraded to a system that would carry you forward.

Now its time to move to the next stage.  Next time we will start our discussion of the 17 core objectives for MUS2 and the ROI you should be expecting.