Nancy Fabozzi's Blog


First Week of April 2014 - Good News, Bad News Week for the Health IT Industry

04 Apr 2014 | by Nancy Fabozzi
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First, the bad news (and it IS bad). On April 1, 2014, President Obama signed into law the Protecting Access to Medicare Act (HR 4302). The new legislation provides a temporary (one-year) fix for the Sustainable Growth Rate (SGR) which calls for cuts in Medicare reimbursement to physicians. On March 27, a proposal to delay the start of ICD-10 to October 1, 2015 was attached—seemingly out of the blue—to the SGR bill, which was then approved by the House and Senate without much discussion or debate before it was signed by the President.

At the time of this writing, there was no official response from CMS but plenty of other stakeholders have weighed in on the new delay. The general consensus is one of disappointment and frustration, especially among larger hospitals, IDN's, and payers, most of whom were ready to proceed with ICD-10 this year. These constituents have been highly critical of the delay, citing wasted time and efforts that will ultimately result in higher expenditures and loss of critical momentum that could have significant downstream impact on other critical IT projects.

The biggest concern about ICD-10 has been coming from small physician practices and specialty practices, key stakeholders of the American Medical Association (AMA), an organization that has been highly critical of the ICD-10 timeline—and one that holds significant political sway in Washington. The key question now is how will constituents make use of the extra time? Some payers and providers will continue testing and training in order to minimize disruption when—and if—the ICD-10 conversion takes place. Some may lobby that the wisest course is to skip ICD-10 altogether and just wait to move to ICD-11 in 2018. In our opinion, the arbitrariness of this move by Congress is very disturbing and could have negative implications for Meaningful Use (MU) down the road. Some providers and others are now even doubting that MU penalties, set to begin in 2015, will ever be enacted. That assumption, which is not unreasonable given how Congress has acted with SGR and ICD-10, could further undermine and railroad momentum for MU.

Now for some more positive news, and a bit of a sigh of relief—for now anyway. Another important development pertains to patient safety and health IT. On April 3, 2014, a joint report was issued by the Food and Drug Administration (FDA), the Federal Communications Commission (FCC), and the Office of the National Coordinator for Health Information Technology (ONC), entitled FDASIA Health IT Report: Proposed Strategy and Recommendations for a Risk-Based Framework. The report, which was mandated by Congress, discusses the development of a risk-based framework for health IT.

The report's recommendations are not binding and do not create new requirements but rather provide suggestions on how to further the discussion on patient safety and health IT. The three areas of health IT discussed in the report are administrative (primarily billing and financial functions), health management (primarily documentation and data exchange and management), and medical device-related IT. With regards to administrative and health management IT, the FDA says that they believe in "a limited, narrowly-tailored approach that primarily relies on ONC-coordinated activities and private sector capabilities". Furthermore, the report finds that no new areas of FDA oversight are needed for those areas at this time. However, the report does call for the creation of a Health IT Safety Center, which would be a public-private entity, created by ONC, in collaboration with FDA, FCC, and the Agency for Healthcare Research and Quality (AHRQ), and with involvement of other Federal agencies and health IT stakeholders. As for medical-device related IT, an area which potentially poses the greatest risks for patient safety, FDA is already focusing on this and will continue to do so.   Functionalities that fall under this category include computer aided detection software (mHealth-related products), remote display or notification of real-time alarms from bedside monitors, and robotic surgical planning and control, among other areas.

Overall, the report takes a very collaborative approach which will incorporate public commentary and debate. In summary, the FDA, FCC, and ONC say they are devoted to creating a health IT risk framework that promotes innovation, protects patient safety, and avoids regulatory duplication, an attitude which should be welcomed and embraced by health IT vendors.

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