The Centers for Medicare and Medicaid Services' plan to provide financial incentives for EHR use in small physician practices has not been greeted by widespread enthusiasm.

For instance, 68 percent of respondents to a December Healthcare Information and Management Systems Society (HIMSS) survey says the plan would have little or no effect, while only 27 percent believed it would have a substantial impact.

Starting with two sites in 2008, CMS will initially provide payments to participating practices of 20 physicians or smaller based on the use of EHRs to manage patient care, with higher payment for more sophisticated use.

Tying incentives strictly to EHR use levels may be a first for CMS, but the EHRs will still be used to support meeting quality goals, stresses Debbie Van Hoven, a CMS research analyst working on the project. “The focus is still really on the quality piece,” she says. “They will have to meet quality requirements not yet established to get the incentives.”

Although still awaiting further details on the project, some researchers who work with small physician groups were encouraged by the announcement. They say that if it signals a broader shift toward CMS eventually paying for EHR use tied to quality goals, it could have widespread significance.

“It's a smart move on CMS' part,” says Jeff Hummel, M.D., medical director for clinical informatics at Seattle-based Qualis Health, a CMS-funded quality improvement organization for Idaho and Washington. “Offering this type of financial incentive collapses the time frame it takes for these smaller offices to get systems up and running,” he says. “These areas can become laboratories for learning about incentives from CMS as well as other payers.”

While Van Hoven says she couldn't make definitive statements about what path CMS might take, she did say, “We definitely conduct these demonstrations to better understand how healthcare financing can be structured. There are several models out there such as pay for performance.”

She adds that another goal of the project is to encourage private-sector payers to move in the same direction.

Others involved in small-practice EHR implementation believe the time for demonstration projects is over. They say it's obvious that small practices need financial incentives to implement EHRs targeting quality goals.

“They're calling it a demonstration project. What are they trying to demonstrate, that water runs downhill?” asks Allen Wenner, M.D., a senior faculty member for the High-Performance Physician Institute, a Raleigh, N.C., nonprofit group that helps physician practices with EHR implementations. “This might have been a good step 10 years ago, but now it's too little, too late.”

Some physician organizations are withholding judgment until CMS reveals more details.

Steven Waldren, M.D., director of the Center for Health Information Technology at the American Academy of Family Physicians (Leawood, Kan.), says, “The fact that CMS is starting to pay for quality is huge.”

After AAFP members responded enthusiastically to the announcement, Waldren sent a letter to CMS asking what physicians need to do to participate and what magnitude of incentives it is considering but, as of press time, he was still awaiting a response.

It's clear that financing and reimbursement are what's holding up adoption of the technology among smaller practices, Waldren adds, as those factors remain the top impediment listed in member surveys AAFP does. “And that really hasn't changed since 2003, despite the fact that the prices of the products have come down since then.”

Family physicians are thirsty for change in the way they are reimbursed to reflect quality rather than volume, Waldren says, but they are also concerned that if the incentives aren't aligned properly, they are going to get the short end of the stick.

Current family practice automation tends to center on efficiency gains from messaging, e-prescribing and document handling, and less on quality and safety issues, because so far there's been less incentive on that side of the equation. “Projects like this one may address that concern,” Waldren says.