CMS offers two choices in counting ED patients toward ‘meaningful use’

CMS FAQ plus Outpatient Observation Services and Place of Service Defined
Which Emergency Department patients should be included in the denominators of meaningful use measures?

Published 09/15/2010 11:48 AM   |    Updated 12/01/2010 10:54 AM   |    Answer ID 10126
Excerpted from FAQs on CMS site on 12/5/2010.A number of measures for Meaningful Use objectives for eligible hospitals and critical access hospitals (CAHs) include patients admitted to the Emergency Department (ED). Which ED patients should be included in the denominators of these measures for the Medicare and Medicaid Electronic Health Record (EHR) Incentive Programs? 

On September 17, 2010, we issued an FAQ that explained that our intent to include in the denominator visits to the emergency department (ED) of sufficient duration and complexity that all of the Meaningful Use objectives for which the ED is included would be relevant.  Therefore we explained that eligible hospitals and CAHs should count in the denominator patients admitted to the inpatient part of the hospital through the ED, as well as patients who initially present to the ED and who are treated in the ED’s observation unit or who otherwise receive observation services.  

Since that response was issued, we have received questions regarding which observation services should be included.  We have also received responses noting that the plain language of the regulation would allow for a reading that counts all emergency department visits, and not just those identified in our September 17th FAQ.  

Therefore, we are revising our FAQ to allow eligible hospitals and CAHs, as an alternative, for Stage 1 of Meaningful Use, to use a method that is consistent with the plain language of the regulation.  There are two methods for calculating ED admissions for the denominators for measures associated with Stage 1 of Meaningful Use objectives. Eligible hospitals and CAHs must select one of the methods below for calculating ED admissions to be applied consistently to all denominators for the measures. That is, eligible hospitals and CAHs must choose either the “Observation Services method” or the “All ED Visits method” to be used with all measures. Providers cannot calculate the denominator of some measures using the “Observation Services method,” while using the “All ED Visits method” for the denominator of other measures. Before attesting, eligible hospitals and CAHs will have to indicate which method they used in the calculation of denominators.  

Observation Services method.
The denominator should include the following visits to the ED: 
          –The patient is admitted to the inpatient setting (place of service (POS) 21) through the ED.  In this situation, the orders entered in the ED using certified EHR technology would count for purposes of determining the computerized provider order entry (CPOE) Meaningful Use measure.  Similarly, other actions taken within the ED would count for purposes of determining Meaningful Use.

          –The patient initially presented to the ED and is treated in the ED’s observation unit or otherwise receives observation services. Details on observation services can be found in the Medicare Benefit Policy Manual, Chapter 6, Section 20.6. Patients who receive observation services under both POS 22 and POS 23 should be included in the denominator.

All ED Visits method. An alternate method for computing admissions to the ED is to include all ED visits (POS 23 only) in the denominator for all measures requiring inclusion of ED admissions. All actions taken in the inpatient or emergency departments (POS 21 and 23) of the hospital would count for purposes of determining meaningful use.

For more information about the Medicare and Medicaid EHR Incentive Program, please visit

Related Excerpts  from Medicare Benefit Policy Manual 

1.  Outpatient Observation Services Defined

Chapter 6 – Hospital Services Covered Under Part B
(Rev. 128, 05-28-10)

20.6 – Outpatient Observation Services
(Rev. 107, Issued: 05-22-09, Effective: 07-01-09, Implementation: 07-06-09)
A. Outpatient Observation Services Defined
Observation care is a well-defined set of specific, clinically appropriate services, which include ongoing short term treatment, assessment, and reassessment before a decision can be made regarding whether patients will require further treatment as hospital inpatients or if they are able to be discharged from the hospital. Observation services are commonly ordered for patients who present to the emergency department and who then require a significant period of treatment or monitoring in order to make a decision concerning their admission or discharge.  Observation services are covered only when provided by the order of a physician or another individual authorized by State licensure law and hospital staff bylaws to admit patients to the hospital or to order outpatient tests. In the majority of cases, the decision whether to discharge a patient from the hospital following resolution of the reason for the observation care or to admit the patient as an inpatient can be made in less than 48 hours, usually in less than 24 hours. In only rare and exceptional cases do reasonable and necessary outpatient observation services span more than 48 hours. Hospitals may bill for patients who are directly referred to the hospital for outpatient observation services. A direct referral occurs when a physician in the community refers a patient to the hospital for outpatient observation, bypassing the clinic or emergency department (ED) visit. Effective for services furnished on or after January 1, 2003, hospitals may bill for patients directly referred for observation services.  

See, Pub. 100-04, Medicare Claims Processing Manual, chapter 4, section 290, at  for billing and payment instructions for outpatient observation services.

Future updates will be issued in a Recurring Update Notification.

B. Coverage of Outpatient Observation Services
When a physician orders that a patient receive observation care, the patient’s status is that of an outpatient. The purpose of observation is to determine the need for further treatment or for inpatient admission. Thus, a patient receiving observation services may improve and be released, or be admitted as an inpatient (see Pub. 100-02, Medicare Benefit Policy Manual, Chapter 1, Section 10 “Covered Inpatient Hospital Services Covered Under Part A” at ). For more information on correct reporting of observation services, see Pub. 100-04, Medicare Claims Processing Manual, chapter 4, section 290.2.2.)  All hospital observation services, regardless of the duration of the observation care, that are medically reasonable and necessary are covered by Medicare. Observation services are reported using HCPCS code G0378 (Hospital observation service, per hour). Beginning January 1, 2008, HCPCS code G0378 for hourly observation services is assigned status indicator N, signifying that its payment is always packaged. No separate payment is made for observation services reported with HCPCS code G0378. In most circumstances, observation services are supportive and ancillary to the other separately payable services provided to a patient. In certain circumstances when observation care is billed in conjunction with a high level clinic visit (Level 5), high level Type A emergency department visit (Level 4 or 5), high level Type B emergency department visit (Level 5), critical care services, or direct referral for observation services as an integral part of a patient’s extended encounter of care, payment may be made for the entire extended care encounter through one of two composite APCs when certain criteria are met. For information about billing and payment methodology for observation services in years prior to CY 2008, see Pub. 100-04, Medicare Claims Processing Manual, Chapter 4, §§290.3-290.4. For information about payment for extended assessment and management under composite APCs, see §290.5.Payment for all reasonable and necessary observation services is packaged into the payments for other separately payable services provided to the patient in the same encounter. Observation services packaged through assignment of status indicator N are covered OPPS services. Since the payment for these services is included in the APC payment for other separately payable services on the claim, hospitals must not bill Medicare beneficiaries directly for the packaged services.

2. Place of Service (POS) Codes Defined

Chapter 26 – Completing and Processing
Form CMS-1500 Data Set
(Rev. 1970, 05-21-10)
(Rev. 1974, 05-21-10)
10.5 – Place of Service Codes (POS) and Definitions
(Rev. 1869; Issued: 12-11-10; Effective/Implementation Date: 03-11-10)  

21 Inpatient Hospital
A facility, other than psychiatric, which primarily provides diagnostic, therapeutic (both surgical and nonsurgical), and rehabilitation services by, or under, the supervision of physicians to patients admitted for a variety of medical conditions.

22 Outpatient Hospital
A portion of a hospital which provides diagnostic, therapeutic (both surgical and nonsurgical), and rehabilitation services to sick or injured persons who do not require hospitalization or institutionalization.

23 Emergency Room-Hospital
A portion of a hospital where emergency diagnosis and treatment of illness or injury is provided. 


ONC Listens: BluePrint at ONC Innovations Seminar

ONC Listens: BluePrint at ONC Innovations Seminar
On October 25, 2010, the ONC Innovations Seminar was led by BluePrint Healthcare IT in Washington, DC. The one-hour seminar entitled “HITECH in New Jersey: A View from the Private Sector” was part of a series featuring people from outside the Office of National Coordinator (ONC) for Health IT sharing their experiences and ideas with the Office. This post reports on how three of my BluePrint colleagues and I got to speak with about twenty members of ONC (including several on a conference line) and share our experiences.

ONC Innovations Seminar
Sachin Jain MD, MBA, Special Assistant to David Blumenthal; and Wil Yu, Special Assistant for Innovation to the National Coordinator, invited the BluePrint team to Washington, DC to lead Monday’s ONC Innovation Seminar. Members of BluePrint had previously worked with the New Jersey and Delaware Valley HIMSS chapters to invite Jain and Yu to speak and meet with attendees at the chapters’ joint fall conference in Atlantic City in September.

Jain initiated the ONC Innovations Series, which in its official description took “place every one to two weeks (for members of the ONC staff) and will bring in noted experts from the health IT community including technologists, patient and community advocates, grantees, academic researchers, government officials and others.”

Seminar leaders have included Michael Porter (Harvard Business School and thought leader on Competitive Advantage), Mark McClelland (former head of FDA and CMS, now heading the Engleberg Center for Health  Care Reform at Brookings), Peter Pronovost  (Johns Hopkins physician and leader in patient safety), Lonny Reisman (Aetna’s chief medical officer), Richard Baron (Philadelphia area physician with Greenhouse Internists) and Rushika  Fernandopulle (an Atlantic City physician).

Case Studies
Speaking with ONC members at its October 25 seminar, BluePrint used three case studies to illustrate health IT challenges and how it was helping hospitals solve them: fast-tracking meaningful use security risk assessments; developing and implementing a workflow software tool to manage access to enterprise-wide software; and setting up a five-stage security and privacy framework at a community hospital to strengthen physician relationships and foster greater trust with patients. It also described its two-hour seminars offered to hospital leadership to prepare for meaningful use and readiness to receive EHR incentive payments.

BluePrint’s Public Policy Role—New Jersey and beyond
The seminar pointed out the new momentum fostered by New Jersey’s health IT leadership—statewide Health IT Coordinator Colleen Woods and Bill O’Byrne, executive director of NJ-HITEC, the state’s regional extension center. New Jersey submitted its HIE operational plan to ONC in August, and NJ-HITEC kicked off its clinician sign-up program for meaningful use support in October.

Based on working with hospital CIOs, Vikas Khosla, the President and CEO of BluePrint, described the transformation of hospital and multi-hospital system CIOs from systems implementation and management executives to leaders of healthcare change management. Founded in 2003 to advise hospitals and multi-hospital systems on security and privacy issues, BluePrint has taken on a public policy role as well, including producing a series of workshops on HITECH Breach Enforcement in collaboration with NJ HIMSS and having Vikas serve as a subject matter expert for the state HIT Committee on Privacy and Security.

The ONC’s Listening Continues
This seminar series demonstrates one way ONC listens and learns. Another example, for which registration just opened this week, is the Personal Health Record Roundtable on December 3 in Washington, DC, to be chaired by HHS Chief Privacy Officer Joy Pritts. The roundtable will hear panels of “researchers, legal scholars, and representatives of consumer, patient, and industry organizations” in order to prepare recommendations, as stipulated in HITECH Act,  “related to the application of privacy and security requirements to non-HIPAA Covered Entities, with a focus on personal health record vendors and related service provider.”

To the readers of e-Healthcare Marketing,  who are used to seeing this blogger’s collections of information and reports about Health IT and EHRs, thank you for taking the time to read about  the Washington trip of Vikas Khosla, President and CEO; Gregory Michaels, Director, Security and Compliance Solutions; Mohit Pasricha, Chief Solutions Architect, and me, Mike Squires, Vice President, Strategic Development and Public Policy, BluePrint Healthcare IT .
Mike Squires

Blumenthal Blogs on Health IT-based Patient Safety and Commissioned IOM report

Returning to the Source to Help Achieve Patient Safety Goals
Thursday, October 7th, 2010 | Posted by: Dr. David Blumenthal originally on ONC’s Health IT Buzz Blog and republished here by e-Healthcare Marketing blog.

Two landmark reports by the Institute of Medicine (IOM) changed Americans’ perception of their health care system and launched today’s drive to improve the quality and safety of medical care in America. The reports were To Err Is Human, published in 1999, and Crossing the Quality Chasm, released in 2001. 

Both these reports highlighted the important potential role that health information technology (HIT) could play in improving health care quality and reducing medical errors. In fact, Recommendation #9 in Crossing the Quality Chasm called for “renewed national commitment to building an information infrastructure” and said: “This commitment should lead to the elimination of most handwritten clinical data by the end of the decade.”

The end of that decade is now just three months away, and not to mince words, we’re behind the ambitious schedule that the IOM report envisioned. Nonetheless, we have at last made the substantial commitment that was called for in the report.  

Last year in the HITECH Act, Congress and the President authorized $27 billion in Medicare and Medicaid incentive payments for providers who adopt and make meaningful use of certified electronic health records (EHRs). At the same time, the Act created $2 billion in new programs to support the transition to HIT-assisted care. And this summer, the regulatory framework was completed for Stage 1 of the Meaningful Use path toward an EHR-based future in health care.

With the engines of change now in place, it is time to bring closer focus to other key issues for achieving the full potential benefits of HIT. One of these is the issue of improving patient safety. 

We know, both in theory and practice, that HIT-assisted care can reduce errors and improve patient safety. In particular:  

  • Reliable access to complete personal health information is the foundation of safe and effective care. EHRs are inherently superior to paper in delivering such access.    
  • Even more uniquely, EHRs can use their computing power to automatically cross-check personal information and other sources. With such backup, clinicians can be automatically alerted when drugs or other treatments may be contraindicated because of allergies, potential drug interactions, or other factors.

At the same time, however, it would be naïve to suppose that HIT-assisted care can deliver its full patient safety benefits in a single stroke – or that HIT will not present its own safety issues. Clinicians need to become familiar with new EHR systems, which will take time. EHR systems themselves need to evolve and improve. We need to ensure that the “decision support” information they provide is accurate and personalized. Their interfaces need to grow in user-friendliness. Even safety alerts need to find the right medium and avoid producing “alert fatigue.”

These challenges can be met – and indeed, the very “fix-ability” of HIT-based care can be one of its primary safety benefits. HIT systems tend to record and expose patient safety problems when they occur, while paper-based care too often hides them. And EHRs are amendable to rapid, systemic correction of problems – while corrections in a non-systemic, paper-based clinic can take years to accomplish, even when they are identified.

How can we maximize patient safety through HIT-based care? What roles and actions by government, the private sector, and health care providers themselves can help achieve the full potential benefits that were sought in those seminal IOM reports?

As we address these questions, there is no better source of guidance than the IOM itself, building on the same expertise and convening power that produced its initial reports 10 years ago. For that reason, the Office of the National Coordinator for Health Information Technology has contracted with IOM for a follow-up one-year study. In this study, IOM will:  

  • Identify approaches to promote the safety-enhancing features of HIT while protecting patients from any safety problems associated with HIT and preventing HIT-related patient safety problems before they occur;
  • Identify approaches for surveillance and reporting activities to bring about rapid detection and correction of patient safety problems;
  • Address the potential roles of private sector entities such as accrediting and certification bodies as well as patient safety organizations and professional and trade associations; and
  • Examine existing authorities and potential roles for key federal agencies, including the Food and Drug Administration, the Agency for Healthcare Research and Quality, and the Centers for Medicare & Medicaid Services.

As this study is carried out, we will move where appropriate to improve surveillance, reporting, product safety, and clinician performance. But at the same time, we will anticipate a “deep dive” in knowledge synthesizing and a new round of productive recommendations from the IOM.

There is every reason to believe that HIT-assisted care will be transformative for American medicine, but no reason to think the change will be easy or instantaneous. We are returning to the IOM as a key partner in helping to refine the course that it first helped to chart a decade ago.
To post comments, please go to ONC’s Health IT Buzz blog.

NJIT Receives More than $23 Mil for NJ Regional Extension Center: NJ-HITEC

NJIT Receives More than $23 Million in Recovery Funds
for Regional Extension Center To Facilitate Use of  EHRS

NJ Health Information Technology Extension Center (NJ-HITEC)
NJ-HITEC Web Site:
NEWARK, Apr 7 2010 Press Release from NJIT produced in full.

Donald H. Sebastian, PhD

Donald H. Sebastian, PhD

The White House announced yesterday that New Jersey Institute of Technology (NJIT) will receive more than $23 million of the $2 billion allocated by the American Recovery and Reinvestment Act of 2009 to achieve widespread meaningful use of health IT and facilitate use of an electronic health record (EHR) by every person by the year 2014.  The newborn New Jersey Health Information Technology Extension Center (NJ-HITEC) initiative proposed by NJIT Senior Vice President for Research and Development Donald H. Sebastian, PhD, principal investigator, will assist New Jersey’s health care providers in their significant use of health information technology through outreach, consultation and user support for the state’s primary care providers serving at-risk population centers.  

“This federal program shows that health care reform is about more than just insurance.  We can drive down costs and improve care through the re-engineering of medical practice. Information technology is a critical enabler,” said Sebastian. “Roughly 80 percent of the state’s physicians serve at-risk population areas–the large urban regions of Newark, Trenton, Camden and Atlantic City– and these providers will be the primary receivers of grant-assisted services supporting them to achieve meaningful use of electronic healthcare record systems.”

William O’Byrne, State Coordinator, Office of Health Information Technology Development, State of New Jersey pointed out that, “NJ-HITEC staff will offer client practices one-stop shopping, coordinating the delivery of services and technology from public and private sources. This brokered service-organizational model, based upon NJIT’s decades of experience in managing statewide extension efforts with high impact, will leverage existing public and private-sector partners and eliminate the need for large administrative overhead.”  New Jersey’s 19 community colleges will act as exclusive partners for the delivery of outreach and awareness training throughout the state.  The NJIT Division of Continuing and Professional Education will complement these efforts.

Director of the New Jersey Division of Medical Assistance and Health Services, John R. Guhl added, “I am pleased to see that New Jersey’s university of science and technology has stepped forward to lead this effort. NJIT has a solid track record in deploying an array of outreach and extension programs and also has the technical expertise to bring fresh ideas and emerging technologies to the field with objectivity and credibility.”

Thomas M. Bartiromo, vice president and chief technology officer at Saint Barnabas Health Care System, indicated that,  “Our whole delivery approach will take advantage of the strong partnerships formed with New Jersey Hospital Association, Health Information Management and Systems Society, Medical Society of New Jersey, NJ Community College Consortium for Workforce & Economic Development, New Jersey Department of Health and the New Jersey Human Services– without which this new Center would not be realized.  The HIT Extension Center award to NJIT is fantastic news for New Jersey, its patients, hospitals and physician community.  This will provide much-needed assistance for physician practices to further their adoption of Health Information Technology, achieve meaningful use of an EHR and participate in Health Information Exchange/s. This also provides an opportunity for the planned NJ Health Care Innovation Center to work closely with the HITEC to prioritize areas for system solutions and innovations to and from the field.  This platform will help create the conditions for continuous HIT Innovation to occur in New Jersey.” 

Tom Gregorio, senior vice president administration and chief information officer, Meadowlands Hospital and executive director of Health-e-cITi NJ, a regional healthcare information exchange  (HIE), explained “this award to NJIT represents the final step in aligning the HIE efforts in the state with the federal requirements providing physicians with the capabilities to become meaningful users of Healthcare Information Technology.  Health-e-cITi NJ is proud to have contributed to the efforts and is proud to be a part of the collaboration with NJIT.   I would also like to thank Don Sebastian for his relentless leadership and vision in making sure that NJIT and the state is in front of the line when it comes to healthcare innovation technology.  His vision for the University and the State are sure to place the program among the models for the country.”

“The New Jersey Chapter of HIMSS is excited at the potential for adoption of transformational technology by our physicians that NJ-HITEC, a Regional Extension Center, will help spearhead,” said Richard S. Temple, president, New Jersey Chapter of HIMSS.

NJIT President Robert A. Altenkirch, PhD, extolled the collaboration. “Every member of the partnership that secured this grant is to be congratulated for their dedication and tireless efforts. Their success is a substantial contribution to more effective and economical delivery of health care and, most importantly, to better health for the people of New Jersey,” he said. 

NJIT, New Jersey’s science and technology university, at the edge in knowledge, enrolls more than 8,400 students in bachelor’s, master’s and doctoral degrees in 92 degree programs offered by six colleges: Newark College of Engineering, College of Architecture and Design, College of Science and Liberal Arts, School of Management, Albert Dorman Honors College and College of Computing Sciences. NJIT is renowned for expertise in architecture, applied mathematics, wireless communications and networking, solar physics, advanced engineered particulate materials, nanotechnology, neural engineering and e-learning. In 2009, Princeton Review named NJIT among the nation’s top 25 campuses for technology and among the top 150 for best value. U.S. News & World Report’s 2008 Annual Guide to America’s Best Colleges ranked NJIT in the top tier of national research universities.
#        #       #

NJ-HITEC Web Site:

NJ Provides Guidance on Sep 18 Call-in#2

Guidance to Be Provided on the RFA for Health Information Exchange Projects –Sept 18, 2009:
Phone-in details below. State issues Sept 17 press release  about call.
Per NJ HIMSS Sept 17, 2009 e-mail: “The State of New Jersey will host another conference call, jointly sponsored by the New Jersey Hospital Association and the New Jersey Chapter of HIMSS, to answer questions and disseminate information about next week’s upcoming Health Information Exchange Request for Applications deadline.

The call will be taking place tomorrow, September 18th, at 1:30PM.  Anyone interested in submitting an application for possible Federal funding for a proposed Health Information Exchange in New Jersey or anyone desiring more information about this process is strongly urged to attend this call.” 

DATE:           Friday, September 18, 2009
TIME:            1:30pm
CALL-IN #:   877-214-6371
CODE:           953415
Please note that the line can hold 125 people so if there is excess, the State will accept email questions.

“The RFA solicits innovative, community-level health data exchange projects to submit to the federal government for potential grant funding, and is available at

See earlier e-Healthcare Marketing post on NJ Grants.
For context, you may want to review New Jersey’s Letter of Intention to ONC for NJ’s HIE Cooperation Agreement or LOIs from seven other States that have been published online.

New Jersey Health Information Technology Act (pdf)
NJ P.L. 2007, c.330: Approved January 13, 2008

Interoperability Convergence: Physician, Facility, Hospital Alignment

June 10, 2009 Conference on Interoperability Convergence:
Physician, Facility & Hospital Alignment

Conference Center at NJHA, Princeton, NJ
“Spring Conference where the importance of working together is the focus. Hospitals, physicians and the entire management team need to find solutions to work together not only in the clinical setting, but also through IT…series of interactive presentations and displays by…vendors/sponsors.”

Keynote speaker, Simon Samaha, MD, is president and chief executive officer of Summit Medical Group, appointed in 2009.  Among other responsibilities at Cooper University Hospital, where he previously served, Samaha was Chief Information Officer.  Samaha earned his MBA at New York University Stern School of Business, his MS in Information Systems at Drexel University, and his MD at Saint Joseph University in Lebanon. Samaha was named in Modern Healthcare’s 2001 list of Up and Comers and is board-certified in internal medicine

Register online via credit card, or make checks payable to NJHIMSS.