Did you know that the new HIPAA Privacy and Security final rule came into effect March 26? The rule, more commonly known as the HIPAA Omnibus Rule brings about a drastic change in the way practices are supposed to handle breach notifications. This change is something you should be aware of.

Under the old rule, when a data breach occurred, health-care providers were presumed innocent of harming patients until the patients proved otherwise. Under the new rule, when a data breach occurs. The opposite is the case: Health-care providers are presumed guilty of harming patients, and will have to prove their innocence.

Additionally, the new rule includes business associates (such as vendors), which could catch providers off guard.

Small health-care providers without resources to understand the changes can rely on government programs to help them do risk analysis. In essence, the programs recommend that you identify all parties with access to health records and ensure that you are protecting those records in compliance with the new rule.

Although the rule was effective on March 26, providers and their business associates have 180 days to comply before the Office for Civil Rights begins enforcement, beginning on September 23. Until then, however, providers will still be held accountable under the old rules. If you need help ensuring that your systems are secure, please contact us today.

There are no federal rules specifying how health-care providers must spend their meaningful use incentive checks, but most are using it to either pay down debt incurred in qualifying for meaningful use or fund more information technology (IT) growth.

According to The Advisory Board Company, Medicare-eligible health-care providers received an average about USD$17,300 each, while Medicaid-eligible health-care providers received USD$21,600.

That may not sound like much when compared to the perceived cost of implementing an electronic medical record (EMR) in the first place. Some recently published surveys have come to the conclusion that EMRs can be money-losing proposition for some physicians. These reports highlighted that less than half of the participants saw, or would see, a positive return on investment. This data needs to be taken with a grain of salt, as it only factors in direct returns on the initial cost of investment, as in the cost of implementing an EMR would be more than the potential return from savings on technology.

This makes sense, as most clinics and offices can't simply raise fees to cover for the cost of new technology. The problem is, these findings are one-sided as the data from these surveys doesn’t factor in all of the non-tangible benefits of an EMR. These benefits can translate into extensive cost savings including: Greater efficiency, the ability to see more patients and increased billings. These three benefits alone will see a greater return on investment in the long run, see costs recouped faster and profits grow.

The fact that many health-care providers are using their incentive checks to fund more IT suggests they‘ve learned from their EMR-implementation experience that technology, despite it’s up-front costs, brings lower costs down the road.

Eighty percent of U.S. doctors believe virtual assistants would drastically change how they use electronic medical records (EMRs) within five years, thereby freeing time for them to spend with patients.

That information came from a survey conducted by Nuance Communications, a speech recognition company that has brought virtual assistants to consumers.

According to the survey, one in every three doctors spends 30 percent or more each day on administrative activities - and these activities could be eliminated or redirected using voice-enabled virtual assistants.

Also according to the survey, 73 percent of physicians believe virtual assistants would improve health care by helping them coordinate care between multiple caregivers, and 65 percent believe virtual assistants would allow them to provide more accurate, timely information to support care.

In particular, physicians surveyed seemed interested in intelligent and voice-driven, computerized physician order entry (CPOE) - a technology that uses sophisticated reasoning patterns beyond speech for ordering medications, laboratory tests and radiology exams.

Communities in which health-care providers work together to coordinate evidence-based hospital discharges can see a six percent drop in hospitalizations and rehospitalizations in just the first two years, according to a new project study.

For the project, described January 22 in the Journal of the American Medical Association (JAMA), the Colorado Foundation for Medical Care (CFMC) coordinated 14 of Medicare’s Quality Improvement Organizations (QIOs), which are funded by the Centers for Medicare & Medicaid Services to help achieve national quality goals through focused efforts at the community and provider level.

Together, the QIOs implemented community-wide evidence-based improvements in patient care transitions. This included starting community organizations, providing technical assistance, and monitoring of participation, effectiveness and adverse effects.

Jane Brock, chief medical officer at CFMC and lead author for the JAMA article, said "The project was successful because rather than focus on one hospital ward, or 100 patients, it engaged whole communities to improve care for large geographically-defined populations.”

The JAMA article is titled "Associations between quality improvement for care transitions in communities and rehospitalizations among Medicare beneficiaries." If you would like to learn more about the benefits of coordinated care, please contact us.

The earlier you familiarize yourself with ICD-10-CM, the easier the transition will be - so you may want to start now.

To recap, the ICD-9 code sets, which were used to report medical diagnoses and inpatient procedures, will be replaced by ICD-10 code sets. ICD-10 is more robust and descriptive than ICD-9, which is 30 years old, and has many outdated and obsolete terms.

You may ask why ICD-10 is any different from the annual code changes that already take place. The answer: ICD-10 codes have a completely different structure from ICD-9 codes. ICD-9 codes are mostly numeric and have three to five digits. ICD-10 codes are alphanumeric and contain three to seven characters. Like ICD-9 codes, however, ICD-10 codes will be updated every year.

Does the switch to ICD-10 affect you? More than likely. Everyone covered by HIPAA must transition to ICD-10 - including providers and payers who do not deal with Medicare claims. it's important to remember that all activity that happens in a doctor’s office will be covered. This is a big deal that will impact every doctor and those who aren’t prepared will experience significant loss of revenue.

The deadline for the transition is October 1, 2014. To help you make the transition, a widget for setting up a timeline for the switch to ICD-10 can be found here.

Year-end brings some important tax planning implications for physicians, because both the Tax Relief Act of 2010 and the Jobs Act of 2010 affected Section 179 of the tax code in a positive way. You can basically write off 100% of up to $139,000 of equipment and software you purchase this year. If you haven't taken advantage of this yet, there's still time!

Here's how it works:

First, you can purchase up to $560,000 worth of equipment and software (which would have been only $200,000 prior to the new legislation.)

Also, the deduction limit, after adjustment for inflation, has increased to $139,000 (which would have been only $25,000 prior to the new legislation).

The new law also allows 50% bonus depreciation on qualified assets placed in service during 2012.

When applying these provisions, Section 179 is generally taken first, followed by the bonus depreciation (unless the business has no taxable profit in 2012).

That’s a lot to digest, so let’s look at an example. Say you buy $150,000 worth of equipment and software - including an electronic medical record (EMR) this year. The calculation below shows how much it actually costs you after tax incentives.

Equipment Purchase = $150,000 First-year (2012) writeoff = $139,000 50% bonus first-year depreciation (150,000-139,000)X 50% = $5,500 Normal first-year depreciation (20% in each of five years on remaining amount) = $1,100 Total first-year deduction (139,000+5,500+1,100) = $145,600 Tax savings (145,600 X 36% tax rate) = $50,960 Cost of equipment after tax (15,000 less all tax deductions) = $99,040

To take advantage of this deduction, your equipment or software must be in place on or before December 31, 2012 - so don’t delay.

Remember, successful businesses take advantage of tax incentives to help lower their operating costs. The Section 179 gives businesses such as yours an incentive to invest in themselves by adding capital equipment, and it’s easy to use.

Buying quality hardware, hiring external assistance, and getting buy-in from practice staff are key steps to a successful electronic medical record (EMR) system implementation, according to primary care physicians.

That information comes from a recent Medical Economics survey, in which 30 doctors were asked to identify what helped them prepare for EMR implementation.

Other tips were hiring a scribe to help with data-gathering and template-creation; identifying one main resource to guide the implementation process; establishing a timeline to complete online training each week before implementation; and setting up weekly telephone conference calls with your vendor.

According to the survey, almost half of participants hired an information technology (IT) professional or firm, 12% hired some other outside assistance, and 8% paid for assistance from a regional extension center.

The good news: Most of the doctors surveyed said they were making progress with their EMR implementations. A full 82% were e-prescribing and 74% were maintaining an active medication list. But, there was room for improvement: 19% of doctors have implemented one clinical decision support rule, and just 7% were electronically exchanging key clinical information with other entities.

The outcome of the presidential election is not expected to change the strength of the health-care IT sector, according to a new study by Mercom Capital Group.

Because health-care IT touches virtually everybody in some way, it's become a large market that piqued the interest of investors, and significant funding is flowing into private companies.

According to the study, conducted in the third quarter of 2012, health information management companies received $101 million of funding in 20 deals, followed by mobile health companies with $39 million in seven deals and social health network companies with $26 million in four deals. Another funded deal this quarter was $25.5 million raised by Telcare, a mobile health company that uses cellular machine-to-machine technology for diabetes and other chronic illnesses.

The reason for the strength: Federal programs such as the HITECH Act of 2009, which made greater amounts of health data available for use. This has made applications possible.

This is good news for health-care providers, because it ensures that innovative applications are available to help them pursue their goals of increased efficiency and patient safety.

The Centers for Medicare and Medicare Services (CMS) and the Office of the National Coordinator for Health Information Technology (ONC) have published the final rules for Stage 2 of meaningful use.

The federal incentive program for Medicare and Medicaid physicians to adopt electronic medical records (EMRs) began in January 2011. Stage 1 focuses on collecting data and starting to use decision-support tools.

To date, more than 120,000 eligible health-care providers have qualified to participate—significantly more than the federal government had hoped to enlist by now. Around $6.6 billion has been paid out in incentives.

Now it’s time for the next step. The big push with Stage 2 is to move beyond data collection to improving care. They contain 20 measures for physicians, of which 17 are core and three of six are menu. Stage 2 rules will become effective for program participants in the program no earlier than 2014.

One of the changes physicians might like is “batch attestation”. Providers who are part of groups will no longer have to attest to participation in the program one-by-one; they can do so together.

The rules also lower thresholds for some measures. In previous proposals for Stage 2, for example, providers had to send a summary-of-care record for more than 65 percent of transitions of care and referrals. Now, it’s 50 percent. The Stage 2 rules can be found in the Federal Register.

It hasn’t been long since the release of the Stage 2 meaningful use final rule—some 700 pages that will define how eligible Medicare and Medicaid providers can qualify for incentive payments—and it’s already getting mixed reviews.

Leaders of the Healthcare Information and Management Systems Society (HIMSS) say the rules allow the health-care community to continue down the road of ensuring health information technology supports the changing health care landscape.

The HIMSS named several significant policy decisions included in the rule, including moving the start date for Stage 2 to 2014; allowing a 90-day reporting period in the first year of Stage 2 and accepting 2013 as the attestation deadline.

Still, many providers are already suggesting there’s a problem—namely, the rule isn't flexible enough, posing difficulties for physicians with fewer resources.

"We remain concerned that physicians have to meet all of the required measures, and failing to meet just one measure would cause a physician to miss out on incentives and even face financial penalties," said Steven J. Stack, MD, board chair for the American Medical Association (AMA).

One problem is that the rule often makes a provider's ability to comply dependent on someone else. For example, 40 percent of lab results must be reported in the universal standard known as LOINC (for the Logical Observation Identifiers Names and Codes)—but some physicians, particularly in small groups and solo practices, may work with smaller labs that don’t use LOINC.

This leaves some issues to be ironed out before you switch over to Stage 2. If you have any questions regarding the switch, please contact us.