Don't let EHRs topple over the 'fiscal cliff'

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Now that the election is over, the government should be turning to the next big issue: sequestration, also known as the "fiscal cliff." These automatic budget cuts will have a devastating impact on electronic health records, even though the Meaningful Use program itself is not on the chopping block. 

Sequestration is a provision of the 2011 Budget Control Act, which called for automatic cuts in discretionary spending as a last resort to reduce $1.2 trillion in debt over 10 years. Discretionary programs are those that Congress funds each year through appropriations. The government now is gearing up for sequestration, since the "super committee" of lawmakers failed to reach a compromise last year to reduce the debt. That would mean an automatic 8.2 percent cut for most programs in 2013; Medicare would be cut 2 percent. Sequestration is slated to begin in January.

If this occurs, it will slash billions of dollars from Medicare, the National Institutes of Health, and other health programs, according to the Office of Management and Budget's September report on the effect of sequestration on government programs.

Interestingly, the Meaningful Use incentive program, which recently has been soundly criticized by several GOP Senators and Congressmen, is safe from these cuts, since it's considered a "mandatory" program. Mandatory programs, where the money to fund them is specified by statute, are not affected by sequestration.

But even if the incentive program doesn't suffer direct cuts from sequestration, the process still will significantly affect EHRs. Here's how:

  • EHR adoption, implementation may slow: The automatic budget cuts would slash $11.085 billion from the Medicare program, which would come from provider payments. Some providers may decide that without those Medicare reimbursements, they can't afford a new or upgraded EHR. At the same time, a report released by several provider groups warned that the Medicare cuts caused by the sequestration will result in the loss of about 760,000 jobs in the health care sector, with about 496,000 in the first year alone. If those job losses include health IT personnel, it may also be harder for providers to transition and maintain their EHRs.
  • The Meaningful Use incentive program may stall: With cuts to reimbursement, some providers may join the incentive program in order to earn the incentive and make up some of the shortfall. But if EHR adoption slows, the momentum to participate in the program may also be adversely affected.
  • Using EHRs for research and public health may be thwarted: Sequestration would cut $2.5 billion from NIH's funding, which would cause NIH to "halt or curtail scientific research," according to the OMB report. The Centers for Disease Control and Prevention will lose $464 million. Two of the biggest large-scale benefits of EHRs are the ability to conduct research with the data and improve public health by populating immunization and other registries. The whole healthcare industry, not just EHR users, would suffer if EHRs can't be used as intended for those purposes.
  • EHR fraud could proliferate: There's been a lot of recent concern regarding the use of EHRs to engage in improper billing. But if sequestration occurs, money dedicated to healthcare fraud and abuse control would be reduced by $25 million. That's good news for the fraudsters, bad news for everyone else.   

The OMB report "urged" Congress to work together to pass a debt reduction bill so that sequestration would not occur.

I'm with OMB. Surely the lawmakers are professional enough to do their jobs and compromise on how programs should be funded. These Draconian, across-the-board automatic cuts seem haphazard, counterproductive and much more far-reaching than anyone could have predicted. - Marla