There’s no shortage of incentive programs coming out of the Centers for Medicare and Medicaid Services (CMS) these days. One example that we discussed recently on the pmFAQtory blog is the Physician Quality Reporting System (PQRS), which financially prods health care providers to report on certain quality measures.

CMS carrots also include the Medicare and Medicaid Electronic Health Records (EHR) Incentive Programs, which were set up via the Health Information Technology for Economic and Clinical Health (HITECH) Act, part of the 2009 federal stimulus bill.

Collectively known in the health care and health IT industries as HITECH, these programs offer financial incentives to “eligible professionals, eligible hospitals and critical access hospitals (CAHs) as they adopt, implement, upgrade and demonstrate the meaningful use of certified EHR technology,” says CMS. “Certified” is a key word here, as providers must use a certified health IT product to be eligible for incentive payments.

What is “meaningful use” and how can providers achieve it?
To be a meaningful EHR user, an eligible entity must demonstrate:

• The use of a certified EHR in a meaningful manner (e.g., e-prescribing)


• The use of certified EHR technology for electronic exchange of health information to improve quality of health care


• The use of certified EHR technology to submit clinical quality and other measures

To demonstrate the above three points (for 2011-2012, known as “stage one” of meaningful use), eligible professionals, hospitals and CAHs must fulfill certain objectives:

• Eligible professionals must meet 15 required “core” objectives, and five of 10 “menu set” objectives (see PDF list from CMS).


• Eligible hospitals and CAHs must meet 14 required “core” objectives, and five of 10 “menu set” objectives (see PDF list from CMS).

On top of this, there are also extensive clinical quality measure reporting requirements.

Finally, the eligible professional, hospital or CAH must attest (legally declare) to have demonstrated meaningful use with certified EHR technology.

What financial incentives are available?
There are two programs available, one for Medicare and one for Medicaid. For both programs, eligible professionals and hospitals may begin to participate this year. Hospitals can potentially receive payments under both programs, but professionals must choose to receive payments from one or the other. A complete outline of payments is on the CMS website, but here’s a summary:

• For the Medicare incentive program, eligible professionals (individual providers) can receive up to $44,000 over five years (through 2016). Eligible hospitals and CAHs begin with a $2 million base payment and can receive incentives over a total of four years (through 2015). Professionals, hospitals and CAHs who do not demonstrate meaningful use are subject to “payment adjustments” (reductions in Medicare reimbursements) beginning in 2015.


• For the Medicaid incentive program, eligible professionals can receive up to $63,750 over the six years they choose to participate (between 2011 and 2021). Eligible hospitals and CAHs begin with a $2 million payment and must enter the program no later than 2016. Unlike the Medicare incentive program, there are no payment adjustments for those not demonstrating meaningful use.

Why meaningful use?
The ultimate goal of meaningful use, of course, is to improve health by improving health care and health care delivery.

To that end, CMS sees meaningful use of EHRs as maintaining privacy and security while improving quality, safety, efficiency, care coordination, and population and public health; reducing health disparities; and engaging patients and families in their health care.

Overwhelmed yet?
Check out the CMS meaningful use website for more information. When you’re still confused, get in touch with pmFAQtory so we can help you navigate the process of achieving meaningful use.

The Physician Quality Reporting Initiative (PQRI), which we recently discussed in a pmFAQtory blog post, underwent some important changes for 2011.

For starters, the name has changed to Physician Quality Reporting System (PQRS), and the incentive payment to eligible providers has been cut in half, from 2 percent to 1 percent of total Medicare Part B allowed charges.

Due to its inclusion in the Patient Protection and Affordable Care Act of 2010, also know as the health care reform law, the PQRS program is here to stay — but is slowly being shifted from a “bonus payment” program to one that penalizes providers who don’t participate.

Consider the planned trend for PQRS incentive payments:

• 2010: 2 percent bonus


• 2011: 1 percent bonus


• 2012-2014: 0.5 percent bonus


• 2015: 1.5 percent penalty


• 2016 and beyond: 2 percent penalty

The penalties, which are set to begin in 2015, will presumably be withheld from a provider’s reimbursement payments. Reducing, via these penalties, the already-low Medicare reimbursements will only further squeeze providers, so if your organization isn’t participating in the PQRS, contact pmFAQtory and let’s talk about how we can help you get started.

Other significant changes to PQRS in 2011 include:

• For claims-based reporting of individual quality measures, providers only need to report on 50 percent of eligible cases (down from 80 percent).


• For 2011-2014, eligible providers will be able to receive an additional 0.5 percent incentive payment, on top of the standard 1 percent payment, by participating in a “maintenance of certification” program. More details are in this PDF from the Centers for Medicare and Medicaid Services (CMS).


• The release of a revised list of quality measures; you can find an updated list and notes from CMS in this ZIP file.

The PQRS is complicated. pmFAQtory offers you expert guidance as you work to implement or refine PQRS in your practice. Contact us today.

As we’ve discussed, medical coding is the process of assigning standardized numbers to diagnoses/diseases, causes of death, and inpatient and outpatient medical procedures. The primary reason for medical coding is to ensure consistent classification and billing, as it enables physicians, medical centers, and third-party payers to “talk” in the same language.

So where do these codes come from? There are four major “code sets” in the medical coding world, each with a different use:

• International Statistical Classification of Diseases and Related Health Problems (ICD), maintained by the World Health Organization


• International Statistical Classification of Diseases and Related Health Problems, Clinical Modification (ICD-CM), maintained by the Centers for Medicare and Medicaid Services and the National Center for Health Statistics


• Healthcare Common Procedure Coding System (HCPCS), maintained by the Centers for Medicare and Medicaid Services


• Current Procedural Terminology (CPT), maintained by the American Medical Association

Here’s how they fit together:

ICD-9: The ninth revision of the ICD code set, ICD-9 was used to classify mortality (death) in the U.S. until Jan. 1, 1999, and is now obsolete (replaced by ICD-10).

ICD-9-CM: The ninth revision of the ICD code set with “clinical modifications,” ICD-9-CM is used today in the U.S. to classify morbidity (diagnoses/diseases) and inpatient medical procedures. It consists of three volumes: volume one (tabular listing of diagnosis codes), volume two (index of diagnosis codes), and volume three (procedure codes). An ICD-9-CM code has between three and five characters, such as 560, 553.3, or 560.81.

ICD-10: The 10th revision of the ICD code set, ICD-10 replaced ICD-9 for classifying mortality in the U.S. as of Jan. 1, 1999.

ICD-10-CM: The 10th revision of the ICD code set with “clinical modifications,” ICD-10-CM is an expanded and revised version of ICD-9-CM, and will be put into use in the U.S. as of Oct. 1, 2013, to classify morbidity. An ICD-10-CM code has between three and seven digits; examples are M05.339 and S26.020D.

When you hear rumblings that medical centers are anxious about planned ICD changes, it’s this forthcoming implementation of ICD-10-CM across the U.S. that’s causing the angst.

HCPCS: A two-level code set used to classify outpatient medical procedures. Level one consists of CPT codes (see below), while level two classifies non-physician services and supplies, such as ambulance transportation and medical equipment.

CPT: Serves as HCPCS level one and is used in the U.S. today to classify all outpatient medical and surgical procedures (ICD-9-CM volume three is used to classify inpatient procedures). A CPT code has five digits, such as 39520 or 00756.

A subset of CPT codes, called evaluation and management (E&M) codes, are used to classify non-surgical physician visits/consultations.

Put another way, in the U.S. today …

• ICD-9-CM volumes one and two are used to classify morbidity


• ICD-9-CM volume three is used to classify inpatient hospital procedures


• ICD-10 is used to classify mortality


• HCPCS level one (CPT) is used to classify outpatient procedures


• HCPCS level two is used to classify medical equipment, supplies, and drugs

The intersection of medical coding and health care information technology — pmFAQtory’s field — is pretty clear-cut. For humans, sorting through various code sets and tens of thousands of individual medical codes, while at the same time ensuring compliance with payer regulations, is about as much fun as doing taxes by hand.

That’s why numerous technological solutions have surfaced to help medical centers more efficiently assign codes and ensure accuracy. pmFAQtory specializes in guiding health care organizations as they implement these systems, which sit within a complex health IT landscape. We’ll examine that landscape in more detail in the next few weeks.