Healthcare Finance News
December 19, 2013 - for the online version go HERE.
The decision by the U.S. Department of Health and Human Services
to push back by one year the deadline for compliance with meaningful
use stage 2 is good news for hospitals and physician practices. Many
providers have had trouble marshalling adequate financial resources
toward meeting even the stage 1 deadline on implementation of electronic
It has been slow going even for large hospital
systems such as Catholic Health Initiatives (CHI), which established a
$2.2 billion OneCare capital budget in 2011. Those funds go, in part, to
reaching stage 1 meaningful use compliance by the July 1, 2014
deadline. About 20 of CHI’s 87 hospitals will not make that deadline,
incurring millions of dollars in penalties.
About 15 of the
company's 87 hospitals will be entering stage 2 in 2014, which began,
for hospitals, on Oct. 1, 2013. The start date for physician practices
is January 1, 2014. Hospitals initially had two years to complete stage
2. But in December, HHS officials announced a one-year extension to October 2016.
extension of the stage 2 deadline for us is great,” said Ann D.
Shepard, RN-BC, MSN, Vice President and Chief Nursing Informatics
Officer at CHI. Shepard pointed out that the extra breathing room is
doubly important because CHI hospitals and every other hospital in the
country has to switch over to the ICD-10 coding system by October 1, 2014. Hospitals may now be able to reallocate stage 2 “dollars” to ICD-10 efforts. The American Hospital Association
told the Senate Finance Committee last July that a survey it completed
found that the vast majority of hospitals are on track for the
transition to ICD-10, but see meaningful use as the single most
challenging competing priority.
But, said Russell Branzell, CEO of
the College of Healthcare Information Management Executives, “We still
believe there's going to be a pressure point in 2014 for ICD-10 and
Given the extra year to certify all its hospitals to
stage 2, Shepard stated that none of CHI's hospitals expect to be
penalized for failing to meet stage 2 meaningful use standards in 2016.
Most health systems hope they’ll be able to say the same thing.
Capitol Connection is a monthly column looking at the financial implications of healthcare policy.