Meaningful Use Money: How the Incentive Funds are Being Spent

Since the dawn of meaningful use, questions have swirled about how the money, the incentives, are being spent by those who receive them. In fact, it’s a question I’ve asked several colleagues, practicing physicians and healthcare leaders.

The answer typically depends on the person giving it. As such, no two answers are ever really the same, but there are some general responses offered.

The most common, from my perspective have something to do with responses such as “work to ensure better patient care,” “take steps to be more efficient” and “better meet our goals.”

I’m not oversimplifying matters. These are some of the actual responses I’ve received when I’ve asked the question.  That said, I have received just as many equally impressive responses ranging from something as simple as using the money to reinvest in the in the practice, expand technology even further and even hire addition staff.

A friend of mine, a physician who leads a highly successful and growing practice in Irving, Texas, used the meaningful use money to pay for the actual expansion of the building his practice is located in and added physicians to grow the business. Because of the funds, he’s able to ensure major growth for the foreseeable future with little more effort than it took him and his colleagues to attest.

Other physicians I’ve spoken with during the last two years are using their funds in a similar fashion – to add more technology, to replace failing infrastructure and simply make some administrative improvements.

Still others, on the other hand, are using the funds to pay back the debt and their financial obligations undertaken to implement the technology needed to meet meaningful use in the first place. Some are simply giving the money to their physicians as bonuses.

Laura Kreofsky

According to Laura Kreofsky, principal advisor for Impact Advisors, any factors determine how physicians and other eligible professionals use MU incentives.

“Those in a large group practice setting or employed by a hospital/healthcare system may never see the incentives – the funds are received and spent at an enterprise level,” Kreofsky said. “Often times in these settings the parent organization is using the MU incentives to offset EHR acquisition or upgrade costs or foster innovation in care delivery.

“In some cases, a portion of the incentives is returned to the EP to reward performance. Overall, this has been a ‘hot topic’ for medical groups and IDNs. On one hand, the organization funded and deployed the EHR to support the EPs in delivering care and achieving MU. On the other hand, the behaviors of the EPs and staff are what drive MU being achieved.

“Key to managing this conundrum is effective communication and allocating the incentives in a way so that physicians and EPs have sense of receiving some value/reward – cash or otherwise – for their contributions.”

She continues: “For physicians in solo or small group practices, the incentives are often used to fund EHR acquisitions and upgrades. There are substantial costs to MU beyond the initial EHR acquisition that catch many physicians by surprise.  For example, submission of data to an immunization registry (menu objective for Stage 1, core objective for Stage 2) will likely require a special interface that may not be included in the EHR base price.

“Similarly, in Stage 2 all providers will need to have certified capabilities to share data and enable secure messaging with patients; investments in patient portals will be needed.  Additionally, there are implementation and maintenance costs associated with these required add-ons.

“Finally, given MU incentives aren’t paid in a lump sum ($44,000 for Medicare EPs, $63,750 for Medicaid EPs) but rather paid out over a multi-year period, the use of the funds may change over time. The bolus of incentives are received in the first year – up to $18,000 for Medicare and $21,000 for Medicaid – which provides capital for a major EHR enhancement, in the remaining years of MU the incentives are substantially less.

“As such, physicians may simply use the incentive funds for operational needs.”


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