Mostashari backs payment plan that replaces SGR | Vital Signs | The healthcare business blog from Modern Healthcare

Modern Healthcare

Article published February 10, 2014

Mostashari backs payment plan that replaces SGR

By Joseph Conn


Dr. Farzad Mostashari, the former head of the Office of the National Coordinator for Health Information Technology, is gung ho on a major change to the federal health IT incentive payment program incorporated in the proposed Medicare payment system for physicians to replace the sustainable growth-rate formula.

The legislation, unveiled Feb. 6 with bipartisan support, would eliminate penalties for noncompliance with Medicare meaningful-use criteria by 2017. The Medicare portion of the EHR incentive payment program, created under the American Recovery and Reinvestment Act, has already paid out about $4.1 billion to more than 218,000 physicians and other eligible professionals to adopt and meaningfully use EHRs.

“I think people need to really go down into a little bit of the details to appreciate what’s being proposed and, more importantly, what’s not being proposed,” said Mostashari, now a visiting fellow at the Brookings Institution, a New York-based think tank. Mostashari said Brookings has been tracking the legislation closely as it develops. “As far as I can see, this is all good,” he said. “The penalties are being phased out at the same time a value-based program is being started.” The timing, he said, is designed so there will be no gaps between old and new programs.

“What the Senate bill says, the determination of meaningful use will continue to be made by the Medicare program,” Mostashari said, with a strong push—and financial incentives of up to 10% of Medicare payments—toward alternative payment systems.

The way Mostashari sees it, financial incentives for meaningful use, which end in 2016 under the current Medicare portion of the EHR incentive payment program—will be baked into the proposed new Merit-Based Incentive Payment System, or MIPS.

“The carrots are renewed in a sense, because it’s part of the value-based purchasing model,” he said. Meanwhile, CMS will continue to determine meaningful use, which becomes a component of MIPS.

Another change contemplated by the legislation would induce providers to use a clinical decision support tool before ordering clinical images, such as CT scans, which Mostashari also likes.

“High-cost diagnostic imaging is a big and fast-growing item. The traditional approach to this on the part of payers is to put in place obstacles and prior authorization requirements. That drives doctors nuts.” A physician might spend an hour on the phone seeking prior approval from a payer’s representative who is “going through an opaque check list,” Mostashari said.

Mostashari noted that a study report, “A Technology Solution for the High-Tech Diagnostic Imaging Conundrum,” published in the August 2012 edition of the American Journal of Managed Care, showed promising results from a pilot project in Minnesota using an imaging CDS tool added to the EHRs of participating healthcare providers at four provider organizations.

The study showed orders that matched an appropriateness criteria increased from 79% to 89% after CDS implementation while overall orders for MRIs dropped 20% and CT scans fell 36%.

“The time to get approval went from an hour down to a second and it was just as effective as the manual operation in blunting excess utilization,” Mostashari said.

Reducing excess images is not only a cost-cutting measure, he said. “Inappropriate imaging is a safety hazard,” he said, noting estimates that 4% of all cancers are related to radiation exposure. The CDS proposal in the legislation is “a very sensible way to begin to implement decision support.”

Follow Joseph Conn on Twitter: @MHJConn

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