Medicare Boosts Incentives for Hospitals to Provide Data to Public Health Agencies

Updated federal rule promotes information-sharing through electronic health record systems

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Medicare Boosts Incentives for Hospitals to Provide Data to Public Health Agencies
Doctor at laptop station
David L. Ryan Boston Globe via Getty Images

A final rule announced Aug. 1 by the Centers for Medicare & Medicaid Services (CMS) makes changes for hospitals participating in the Medicare Promoting Interoperability Program that should result in better data to help improve responses to public health threats. The rule, which takes effect Oct. 1, gives hospitals greater financial incentives to report information electronically about patient illnesses, injuries, and treatments to state and local health departments.

In comments submitted in June, The Pew Charitable Trusts urged CMS to adopt several requirements that were ultimately included in the rule. For example, hospitals that take steps to use their electronic health record systems (EHRs) to share data with public health agencies—replacing slower and less efficient reporting methods such as phone calls and faxes—will avoid cuts in payments from Medicare that others could face if they do not connect their systems.

Public health officials rely on patient data from hospitals to help identify health threats and inequities in the communities they serve. But many agencies don’t receive nearly enough of this valuable information: Even before the COVID-19 pandemic, nearly three-quarters of hospitals experienced issues sending data to health departments. Furthermore, reports that were sent often lacked details such as patient contact information or demographic data.

Such problems persist today and, in some instances, have been aggravated by the many effects of the pandemic. That means state and local officials can miss opportunities to contain infectious diseases, respond to emerging threats, improve care for underserved residents, and, ultimately, save lives.

EHRs remain a key part of the solution. The earliest signs of a disease outbreak often appear in the symptoms and diagnoses recorded in these digital tools. Health departments can analyze EHR data to uncover demographic groups or areas in a community that are experiencing higher rates of a particular disease or adverse health outcome, which helps them target and tailor resources to residents most in need. Importantly, 96% of hospitals already use EHRs, and these systems can be configured to automatically transmit patient case reports, lab results, and more to the appropriate state and local authorities.

For many years, hospitals could qualify for federal incentive payments by demonstrating that they were using EHRs to improve patient care. Because Medicare is the largest single purchaser of health care in the United States, such incentives produce real changes. For example, after CMS required that hospitals report test results electronically to health departments, the share doing so rose to 92% from 55%.

Under the updated CMS rule, the program’s emphasis on interoperability and public health reporting will increase in three important ways. Hospitals will:

  • Earn additional points as part of the calculation of Medicare payment rates if they are taking steps toward using EHRs to share data electronically with health agencies.
  • Demonstrate progress by transitioning from establishing and testing these EHR connections to sending real clinical data to public health agencies within a limited time frame, beginning in 2024.
  • Report to CMS on their level of engagement with public health agencies to support the electronic exchange of patient data.

The last requirement could give federal, state, and local officials important insights into the barriers that hinder electronic public health reporting by health care facilities. In 2019, a nationally representative survey of the nation’s hospitals found that more than half had experienced one or more reporting challenges, most frequently related to a lack of staffing or limited technical capacity to send data to agencies. Small and rural hospitals were among those more likely to face difficulties.

CMS can update its incentives annually to promote interoperability. As it considers future changes, the agency should take steps to encourage hospitals to make measurable improvements in the timeliness and completeness of their public health reporting. For example, new requirements could measure the quantity and quality of data sent to public health agencies—such as the proportion of records that include critical information such as phone numbers, addresses, and patient race and ethnicity.

Successful public health strategies against COVID-19, monkeypox, community-level drivers of health inequities, and other critical health issues require good clinical data. Thanks to the widespread adoption of EHRs, hospitals can share this information with health agencies rapidly and efficiently. The changes to CMS incentives should help make such data connections a reality.

Lilly Kan directs The Pew Charitable Trusts’ public health data improvement project.

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