Hospitals have been neglecting to update their electronic health records, and as a result they may miss the deadline mandated by the federal government. This could mean that these hospitals would face millions of dollars in reduced Medicare payments this year, says a University of Michigan study published in the journal Health Affairs.

The Stage 2 criteria is part of the Medicare and Medicaid EHR Incentive Programs designed to provide financial assistance to hospitals to use the certified EHR technology to improve patient care. In order to participate in stage 2, providers need to demonstrate stage 1 of meaningful use. One of the “meaningful use” objectives of stage 2 criteria is that hospitals must maintain electronic health records.

The deadline to create and update these records was the end of the fiscal year: July. While many hospitals had enrolled for the stage 2 meaningful use goals, according to the study, most hospitals may have missed the milestone. The data for this study was gathered toward the end of 2013, and by that time only 5.8 percent of those hospitals were on track to adopt all 16 of the stage 2 meaningful use goals.

Hospitals that bill the Medicare program and didn't meet the criteria in fiscal year 2014 will be subject to financial penalties in fiscal year 2015. "There was likely a big scramble before the deadline, but my sense is that it would have been hard for a lot of those hospitals to meet that deadline," said coresearcher Julia Adler-Milstein, an assistant professor in the U-M School of Information and the U-M School of Public Health, in a statement.

The criteria set forth by the Centers for Medicare and Medicaid are relatively easy and include parameters such as using electronic health records to enter orders for medication as well as lab and radiology tests to chart patients' vital signs and to record patient demographics. Other activities, which may be considered difficult, are making health records accessible to patients online, sharing electronic data with other providers who care for the same patients, and submitting electronic data to vaccine registries.

"The stage 2 criteria ask hospitals to do several new things with their electronic health records and the areas that are most challenging are those that require engaging patients, public health and other providers to a greater degree — groups that are outside the four walls of the hospital," Adler-Milstein said.

The criteria are the second tier of compliance with the 2009 Health Information Technology for Economic and Clinical Health Act, also known as HITECH. The act requires that hospitals maintain electronic records instead of paper ones. The first stage of compliance requires the hospitals to conform to only a basic set of criteria, but later stages require that the hospital adhere to higher standards and deliver them on time.

The more than half of hospitals that were scheduled to meet the stage 2 meaningful use criteria in 2014 were the first wave to begin adopting digital medical records. The study also found that more and more hospitals are adopting the electronic health record system. Nearly 60 percent of hospitals now have at least a basic system. And 90 percent of those were on track to achieve many of the 16 core criteria.

But not able to meet deadlines is not always the hospital’s fault, according to the study. In specific types of hospitals, vendors may not be upgrading their systems to provide a seamless availability of functions.

"Policymakers may want to consider new targeted strategies to ensure that all hospitals move toward meaningful use of electronic health records," Adler-Milstein said. "We found that rural and small hospitals lag behind, suggesting a need to expand federal efforts to help these institutions select, purchase, implement and successfully use electronic health records in ways that earn them incentive payments and enable them to engage in new care delivery and payment models."

Source: Adler-Milstein J, DesRoches CM, Furukawa MF et al. More Than Half of US Hospitals Have At Least A Basic EHR, But Stage 2 Criteria Remain Challenging For Most. Health Affairs. 2014.