Making the Economics Work for You

Most health care organizations impacted by the CMS Interoperability Rule have very logically focused their attention and resources on interpreting what the new rule requires them to do within their own systems, in what timeframe, and at what cost. And to be sure, scoping the work and deploying the resources required to meet the compliance deadlines is a significant investment of time and money, but the compliance focus should be only the first action step for to the CMS Interoperability Rule.

Organizations should also take the time to thoroughly analyze how they can leverage the new data the CMS Interoperability Rule addresses, and how greater access to new data sets can support innovative approaches to care coordination, enhancing patient experience and improving health outcomes. That line of inquiry can also help identify potential internal funding resources beyond the IT budget and align with existing or planned investments in quality improvement or analytics. Access to more reliable data can greatly enhance capabilities. Ensuring one has the right functionality to use this data for member education and more ability to make provider decisions based on quality; providers can make better care decisions, eliminate redundancies and health plans can use analytics to their advantage to serve their current and prospective clients with greater targeted approaches.

One of the most critical components around the Final Rule is how much these changes will cost your organization to implement. While the opinions on cost estimates vary widely, as there is no federal funding allocated to health plans or hospitals for implementation, organization must determine how they intend to fund and account for these expenses.

Here is how CMS presented the estimated costs:

CMS estimated the implementation cost to health plans for these requirements at between $700K and $2.3 million per organization for the first year and $157K per organization per year for ongoing maintenance.¹ CMS acknowledged that payers may pass these costs to patients via increased premiums and notes individual market plans may absorb the cost or reduce non-essential health benefits.²

CMS estimated that between 1,392 and 3,407 hospitals will incur cost associated with upgrading or configuring their EHRs to meet the electronic notification requirement and estimated the initial per facility cost at about $1,700, plus an ongoing annual cost of $340 per facility.³

The state must include the costs in the development of plan capitation rates, which will be matched at the state’s medical assistance match rate. Medicaid agency implementation rates will be matched at 90% for system development, 75% for system maintenance and operations and 50% for general administrative costs.⁴ CMS estimates that the requirements will add a cost of less than 10 cents per enrollee to State Medicaid agencies.⁵

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¹Interoperability and Patient Access – Prepublication Final Rule – (CMS-9115-F) p. 365-366.
²Interoperability and Patient Access – Prepublication Final Rule – (CMS-9115-F) p. 72 and 395.
³Interoperability and Patient Access – Prepublication Final Rule – (CMS-9115-F) p. 371-372
⁴Interoperability and Patient Access – Prepublication Final Rule – (CMS-9115-F) p. 74 and 233.
⁵Interoperability and Patient Access – Prepublication Final Rule – (CMS-9115-F) p. 395-396.