Modern Healthcare

Billions of dollars in federal electronic health-record incentive payments appear to be in jeopardy as hospitals, physicians and other eligible professionals who got an early start on the payment program face a more stringent set of criteria for 2014.

So far, only a tiny fraction of participants have met the benchmarks.

As the island that once was behavioral health is drawn closer to the mainland of the United States healthcare system, thanks to healthcare payment reform, health information technology companies that serve both types of providers are also coming together in a variety of ways.

This collaboration between Netsmart, an electronic health records developer that specializes in behavioral health, and Allscripts, an EHR developer for inpatient and ambulatory care providers, is the latest example of the trend.

Wall Street may or may not be going through its long-awaited correction these days, but regardless, it still seems to have a hearty appetite for digital health initial public offerings. That appetite is provoking venture capitalists to fund ever-more startups.

Through June 2014, $2.3 billion has been sunk into digital health offerings compared with $2 billion in all of 2013, reports digital healthcare accelerator Rock Health.

“We think there's going to be four to five IPOs each year for the next five years,” said Steve Kraus, the lead healthcare partner at Bessemer Venture Partners, Cambridge (MA). That's based on the interest that healthcare IT startups have gotten from private sources such as angel (small) and venture (big) capital investors.

The Centers for Medicare and Medicaid Services intends to eliminate the exclusion for continuing medical education in the Open Payments program, more commonly known as the Sunshine Act, which requires drug and device companies to disclose payments to physicians.

The reversal was included in the proposed Physician Fee Schedule for 2015, which also would make changes that would benefit primary-care medicine at the expense of payments to specialties.

The regulations also include a variety of changes to the Shared Savings Program for accountable care organizations, the Physician Quality Reporting System and the incentive program for electronic health records. And it would expand the array of telehealth services that qualify for Medicare reimbursement.

National Nurses United has launched a media campaign criticizing the effects of what it called “digitalized care.” The multipronged campaign specifically criticizes electronic health records and bedside computers, saying they “too often fail” and lead to diagnoses and treatments based on “generic population trends” instead of individualized assessments.

The campaign also references a December report from HHS' Office of Inspector General, which said EHRs allow hospitals and physicians to cover up fraud or medical malpractice. Studies have come down on both sides of the tech debate.

A recent analysis in the Annals of Emergency Medicine said EHRs in emergency rooms potentially overwhelm physicians, leading to self-reported increases of wrong orders. However, other studies, such as one in 2013 in BMJ Quality & Safety, said digitized records have the ability to help hospitals improve patient care, such as by reducing readmissions.

The possible presence of healthcare data on cellphones helped put the devices in a legal class worthy of heightened constitutional protections from warrantless searches by police, the US Supreme Court ruled. That unanimous decision, while narrowly focused on balancing the privacy rights of individuals and the “legitimate government interests” needed to enforce the law at the time of a person's arrest, could have broader healthcare implications, healthcare privacy specialists contend.

The decision could be used as a reference point, highlighting the special nature of healthcare information, as the healthcare industry wrestles to find a similar balance between patients' consent rights over disclosure of their medical records and the interests of healthcare providers, researchers and other commercial entities in getting less-fettered access to those records.

“I certainly didn't see any immediate potential impact for the healthcare industry, but I did find it interesting in demonstrating the court's continuing commitment to health information privacy,” said Adam Greene, a privacy lawyer with Davis Wright Tremaine in Washington. “It sets up precedent in the government having a very strong stake in protecting patient privacy above other interests.”