IT vendors say EHRs will meet unknown guidelines

electronic-health-recordElectronic health-record vendors are denying their latest marketing tactic is an attempt to reawaken a dormant market put to sleep as an unintended consequence of federal economic stimulus efforts.

But guarantees that products will meet future federal definitions of “meaningful use” are becoming the order of the day—even if no one is sure what that definition will be or when it will be released. The American Recovery and Reinvestment Act of 2009, or ARRA, made more than $17 billion available to hospitals and physicians to purchase health IT systems, but said healthcare providers must show they’ve put the new technology to “meaningful use” in order to qualify for up to $44,000 in payment incentives. “Meaningful use,” however, remains undefined.

Earlier this year, companies like GE Healthcare and NextGen Healthcare Information Systems guaranteed that their products will meet or—as a NextGen news release put it—“evolve to meet” federal standards required for reimbursement. Athenahealth recently upped the ante by guaranteeing that, not only will the company’s AthenaClinicals Internet-based EHR service meet federal standards, but the doctors who use it will receive a bonus payment for the 2011 program year under the terms of the economic stimulus legislation known as the Health Information Technology for Economic and Clinical Health Act, or HITECH Act.

A definition of “meaningful use” is still a few months away, observers believe, but they also insist that this is not necessarily leading to a delay in healthcare organizations purchasing an EHR system.

“I haven’t seen it as a reaction to people putting off decisions,” said Justin Barnes, vice president of marketing and government affairs for Greenway Medical Technologies and chairman of the Electronic Health Record Association, an affiliate of the Healthcare Information and Management Systems Society. “I have not personally heard of decisions being put off.”

Barnes compared the meaningful-use guarantees with previous warrantees companies may have issued ensuring that their products would help physicians meet standards required by the CMS’ Physician Quality Reporting Initiative.

“It’s an evolution of where we are as an industry,” he said.

Michael-Nolte-geAt GE Healthcare, Michael Nolte, vice president and general manager of Centricity EMR Marketing, agreed. “We’ve seen a doubling of activity levels,” Nolte said, adding that—while some may be delaying decisions, many others are not.

He also said that it’s believed that—“other than reporting nuances”—the meaningful-use definition will not be much different than existing or evolving standards put forth by the Certification Commission for Health Information Technology.

“We’re confident our software will support whatever the criteria look like,” Nolte said.

Robert Larson, director of market analysis at NextGen Healthcare, said he expected the meaningful-use standards to be released at the end of this year and that its “skeleton” will closely resemble CCHIT standards.

Larson added that there is really no way of measuring the impact—positive or negative—that the wait for meaningful-use standards is having on sales. That said, in a July 30 first-quarter earnings call, the president and CEO of NextGen’s parent company, Quality Systems, said the uncertainty is not helping.

“We remain very bullish on the stimulus impact as it continues to gain momentum throughout this year and into 2010,” said Steven Plochocki, according to a transcript of the call. “However, in the short run, the market continues to wait for clarity and certainty on the areas of meaningful use and certification.”

In the call, Quality Systems Chief Financial Officer Paul Holt notes that, although the company’s $66.6 million in first-quarter revenue represents a 21% increase from the prior year, the 36 cents earnings per share was off 10% from last year’s 40 cents figure. Holt noted that system sales were “impacted by uncertainty regarding final rules related to stimulus incentives as well as the way purchasing decisions are weighted to the timing of grant award announcements for federally qualified health centers. And this resulted in several opportunities being pushed into the September quarter and beyond.”

According to the transcript, NextGen President Patrick Cline noted that he thinks the guarantee of meeting meaningful-use criteria “helped us make a couple of sales that we might have not otherwise made.”

Plochocki also said that, in a July 29 meeting, a representative for National Coordinator for Health Information Technology David Blumenthal acknowledged awareness of the economic impact caused by the uncertainty.

“At that very same meeting, one of Mr. Blumenthal’s people spoke to ourselves and others and said, ‘We know we froze the market with the lack of clarification and lack of certainty. It wasn’t our intention, but we’re moving as quickly as possible,’ ” Plochocki said.

John Hallock, spokesman for Athenahealth, said vendors are missing the most important point.

“Guaranteeing that your software will work is the bare minimum—doctors are participating in HITECH for the check,” Hallock argued. “Hopefully, ‘meaningful use’ will be truly meaningful. The hope is that ‘meaningful use’ stimulates the use of clinical data to improve outcomes and not just the purchase of software.”