Recent Healthcare Regulations and Relationship to Digital Technologies

Recently there have been significant developments with regards to healthcare regulatory requirements. One might look at the impacts on digital technologies depending upon whether they are mandates directed specifically at technology or aimed at clinical issues. I will touch on some of the most important.

  1. HITECH Act. The most far-reaching healthcare IT regulatory requirements are those contained in the HITECH Act , the portion of the ACA which deals with electronic health records. Electronic health records (EHRs) were mandated to improve quality and decrease cost. What has been found however is that hospital and physician billing has increase by $1B more in 2011 than in 2010, primarily due to changes in billing code patterns. This has been documented to temporally relate to the adoption of EHRs. An analysis by the New York Times revealed that hospitals receiving Federal incentive payments for EHR adoption had a 15% higher reimbursement rate than those not receiving the EHR adoption incentives. A report by the Office of the Inspector General determined that the majority of higher billing was done by physicians in the fields of internal medicine, family practitioners, and emergency room physicians. The articles in the New York Times imply that this was somehow fraudulent or inappropriate billing. I would submit that physicians were previously coding for lesser charges because of the lack of sufficient documentation to bill for higher fees. Regardless of the etiology of changes in billing patterns, that the regulations have had the desired positive effect on adoption of EHRs.
  2. The ‘transformation’ of practice guidelines to Federal regulation. The Department of Justice has been investigating ‘inappropriate’ implantations of implantable defibrillators (ICDs). There have been consensus guidelines in place (Am Heart Assn, Heart Rhythm Society, European Cardiology Society, and others) for years. A study published in the Journal of the American Medical Association concluded that 22.5% of patients receiving ICDs did so without meeting guidelines criteria. There are always exceptions to guidelines (which have disclaimers recognizing that all patients may not fall into the neatly defined categories), for which they are called guidelines. The government has taken this study and unleashed a DOJ investigation of hospitals based on these guidelines. An excellent discussion of this issue may be found at The DOJ is now examining audited charts with physicians and other clinicians, and have become healthcare practitioners, albeit from a forensic analysis perspective. They have no medical background and do not understand clinical issues presented to defend some of these cases. The absence of electronic records for the vast majority of those cases will make defending them, I believe, more difficult. Most of the ‘inappropriate’ implants were a result of implanting too early after a heart attack or bypass surgery. Clinical decision support tools have recently been developed to track patients at risk of sudden death but who have not yet met criteria for implantation of a defibrillator. Hopefully this will both decrease ‘inappropriate’ implants and avoid a backlash of losing track of patients at risk.
  3. Economic penalties for hospital readmissions. There are now economic penalties for hospitals where patients are readmitted to any facility within 30 days of discharge with diagnoses of pneumonia, heart attack or congestive heart failure. These penalties were recently revised. This has spurred a cottage industry of services from IT to home-based patient monitoring solutions, most of which are unproven. There have been a few studies demonstrating very impressive outcomes. The fear of penalties has put hospitals into a ‘sky is falling down’ mentality, leaving them grasping at solutions which sound promising. Because of the complexity of the causes and therefore potential fixes of the problem, there was little time for most institutions to develop comprehensive plans of attack. In addition, there are other looming mandate deadlines including Stage 2 of MU (see below) and the ICD-10 diagnostic code changes. What is really needed is the implementation of IT resources which involve informatics in identifying patients most at risk of readmission and the algorithmic implementation of technologies and processes proven to result in lower readmission rates.
  4. Meaningful Use is the term for regulatory requirements that EHRs need to meet. These requirements are divided temporally and operationally into three stages. The requirements for Stage 2 are now finalized and EHR vendors and providers are scrambling to meet them. These are much more involved than Stage 1 and focus on the exchange of information between healthcare IT systems and the communication of data. The American Hospital Association and physicians have argued against Stage 2 requirements. It will be too costly for some of the hundreds of EHR vendors to meet Stage 2 requirements. In this way government regulation will themselves affect the IT marketplace.
  5. Quality measure reporting is now an important part of healthcare. The system is moving away from fee for service reimbursement to outcomes based reimbursement. There are now mandated physician quality measures. In addition, there is a Group Practice Reporting Option for larger physician groups. All group practices participating in 2012 Physician Quality Reporting GPRO, regardless of size, are required to report on all quality measures within six disease modules as well as care coordination/patient safety measures: Care coordination/patient safety (Care), COPD, Coronary artery disease, diabetes, heart failure, high blood pressure, peripheral vascular disease, and preventive care. There are now companies and subsidiaries of companies devoted to the management of patient data with the goal of hospitals and providers using it to develop operations and care patterns which will result in better outcomes. ACOs and other institutions with bundled payment systems will look at this type of data as a lifeline.

anyone involved in healthcare knows that regulations rule the landscape. The motives behind these requirements might be noble. However lower costs and higher quality have both yet to be demonstrated. There has been much discussion about whether algorithms will replace doctors. One clearly sees the relationship of recent healthcare regulations on digital technology. Twenty years ago we would not be having this discussion. Let’s use IT to analyze this relationship in order to get on the right path. I am all for technology, and believe proven technology will help patients. I am for EHRs and believe they are a long time coming (I used an EMR in 1997). I am not for an already broken healthcare system under the gun from many angles with mandates at one time. Mandates will not markedly improve the system. Innovation and creative destruction of this inefficient and costly albatross we call American healthcare will.

About davidleescher

David Lee Scher, MD is Founder and Director at DLS HEALTHCARE CONSULTING, LLC, which specializes in advising digital health technology companies, their partners, investors, and clients. As a cardiac electrophysiologist and pioneer adopter of remote patient monitoring, he understood early on the challenges that the culture and landscape of healthcare present to the development and adoption of digital technologies. He is a well-respected thought leader in mobile and other digital health technologies. Scher lectures worldwide on relevant industry topics including the role of tech in Pharma, patient advocacy, standards for development and adoption, and impact on patients and healthcare systems from clinical, risk management, operational and marketing standpoints. He is a Clinical Associate Professor of Medicine at Penn State College of Medicine.
This entry was posted in digital health, FDA, Healthcare IT, healthcare reform, healthcare vendors, Implantable Defibrillators, informatics, mHealth, sudden cardiac arrest, technology, wireless health and tagged , , , , , , , , . Bookmark the permalink.

1 Response to Recent Healthcare Regulations and Relationship to Digital Technologies

  1. Thanks for sharing this information . Very insightful and informative

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