Editor’s note: For more on the Stage 2 proposed rules defining meaningful use of electronic health records, see Larry Wolf’s Health Affairs Blog post.

Late in the day on February 23, 2012, the Centers for Medicare and Medicaid Services (CMS) released the preliminary rules for Stage 2 Meaningful Use.  For those not deep in the weeds of Health Information Technology policy jargon, “Meaningful Use” is the federal standard for eligible physicians and hospitals to receive incentives through Medicare and Medicaid for adopting and using an Electronic Health Record.

So why is this important?  Well, first, a little bit of background.  Just about three years ago, Congress passed the Health Information Technology for Economic and Clinical Health (HITECH) Act and set aside nearly $30 billion for direct incentives for providers to start using EHRs.  Over the last three years, we have seen a lot of activity in Health IT policy, with the Obama Administration laying out that the incentives would be given out over three stages.  Stage 1, finalized about two years ago, was meant to start getting providers to move key clinical data into electronic format.  Much of the U.S. healthcare system was (and arguably still is) being delivered on paper, and Stage 1 was simply meant to transition providers to electronic systems.  The early read says that about 10-15 percent of providers (both physicians and hospitals) have received payments for Stage 1 through January, 2012.  Some proportion of both physicians and hospitals are likely to come on board over the remainder of this year.

Now, what’s the big deal about Stage 2?  Stage 2 was supposed to raise the bar, tie HIT adoption more closely to driving improvements in care, and to show that EHRs are beginning to make a difference.  Now that it’s here, though, the biggest news about Stage 2 is that there is no big news.

The Office of the National Coordinator (ONC) that oversaw the process of creating the stage 2 rules played it safe.  Skimming through the 455 pages of the Notice of Preliminary Rule Making, one sees a careful, incremental approach.  No sudden moves.  No surprises.  Some people who have clamored for more aggressive rules for Meaningful Use, including requiring that providers demonstrate actual improvements in care as a result of their use of the EHR, will be disappointed.  Those that have argued that MU rules are too hard and that we should just provide incentives for acquiring the technology may not be fully satisfied either.  The incremental approach of Stage 2 feels like the right balance.

What The Stage 2 Proposed Rules Say

Let’s talk about what is in here.  In Stage 1, eligible outpatient providers (essentially, physicians and nurse practitioners) had to meet 15 “core” requirements and 5 of 10 “menu” items.  Eligible hospitals had to meet 14 “core” requirements and 5 out of 10 “menu” items.  In Stage 2, CMS proposes that eligible providers now meet 17 core objectives and 3 of 5 menu items;  hospitals must now meet 16 core objectives and 2 of 4 menu items.  Additionally, the timelines have been extended, giving providers more time to get into Stage 1 and a longer ramp-up into Stage 2.  CMS makes a series of other smaller changes as well.  There were things in the Stage 1 rule that were cumbersome and unclear and have gotten streamlined.

However, beyond the details, here are three highlights that seem particularly important:

  1. The bar for meeting use requirements for computerized provider order entry (CPOE), arguably the most difficult but potentially the most important EHR functionality, has been raised:  now a majority of the orders that providers write will have to be done electronically.
  2. There is a major move to tie quality reporting to Meaningful Use.  We knew this was coming, but CMS has laid out a host of quality measures that may become requirements for reporting through the EHR.
  3. Health Information Exchange moves from the “can do it” to the “did do it” phase.  In Stage 1, providers had to show that they were capable of electronically exchanging clinical data.  As expected, in Stage 2, providers have to demonstrate that they have done it.

All of these substantive changes were completely predictable.  Congress, in passing HITECH, signaled that the three most critical components of Meaningful Use had to be 1) computerized prescribing with decision support, 2) automated quality reporting, and 3) health information exchange.  These three “functionalities” of the EHR are the hardest to achieve, and arguably the most important to drive improvements in care.  It is heartening to see federal policymakers continue to move forward on these three areas.

What Might Change In The Final Rules

Of these three priorities, the final rule for CPOE and HIE will likely remain similar to the preliminary ones; they are the logical follow-on to the Stage 1 criteria.  One area in which there will likely be significant trimming between the preliminary and final rule, though, will be the quality measures.  There are a lot of measures, and CMS has made an attempt to align them with broader healthcare delivery reform initiatives, such as patient-centered medical homes and better transitions of care.  Which measures will make the final cut, and whether they will be the ones that are most clinically important, is unclear.  The value of EHRs would be significantly enhanced if CMS could identify the most important of its myriad of delivery reform initiatives and align the Stage 2 rules with quality measures that support those initiatives.  It is unclear if CMS will be able to do it.

One final area that received a lot of attention at the HIMSS Meeting on the day of the release, when Farzad Mostashari (the National Coordinator for Health IT) previewed the Stage 2 rules, was the requirement to give patients greater access to their own data.  Again, the changes feel more incremental than radical.  In Stage 1, patients just had to be given an electronic copy of their data.  In the revised rules for Stage 1 and the proposed rules for Stage 2, more than 50 percent of patients need to have the ability to view, download, or transmit their data.  Further, 10 percent of patients actually have to do it – look at their data, download it, or transmit it to others.

Much like the change with Health Information Exchange, federal policymakers are trying to move the provider community from the “ability” to do things electronically to actually demonstrating that they are doing it.  While this is a laudable move, I suspect that many providers are going to push back.  It is not clear that 10 percent of patients will want to view, download or transmit their data to others.  It is hard to imagine that we are going to punish providers when their patients choose not to look at their own data.  Whether this part of the preliminary rule will make it into the final one is unclear.

So, what’s next?  The Notice of Preliminary Rule Making opens up a 60 day comment period for the entire medical community to weigh in on the stage 2 rules.  There will surely be plenty of feedback.  CMS has given itself plenty of room to scale back some of the measures and be responsive to those comments, but fundamentally, the final rules for Stage 2 will look a lot like the preliminary rules.

This is a good thing.  Stage 2 is an incremental step forward, emphasizing the right points and slowing down the train so everyone can get on board.  If we are going to fix our broken healthcare system, health IT will need to be a fundamental part of the solution.  However, it can’t and won’t be the primary driver.  Payment and delivery reform efforts from major payers, along with innovative business models from the private sector, will be needed to improve the delivery of the healthcare system. We just need to ensure that health IT is effectively and meaningfully deployed as widely as possible.  The preliminary rules from Stage 2 Meaningful Use are the right next step.