August 2011

Editors:
Raymond D. Aller, MD
Hal Weiner

Cost of meeting federal mandates: Whose IT fee should it be?

Changes in federal regulations are like a row of dominoes—one move can set off a complex series of modifications to laboratory information systems and electronic health record systems. But when do these changes translate into additional software charges?

It’s a tricky question that many laboratory information system vendors are finding difficult to answer, especially as they work to make their software compliant with the meaningful use requirements of the American Recovery and Reinvestment Act of 2009 and other regulations.

Vendors vary markedly in how they handle the expense associated with rendering software compliant with federal mandates, says Kelly McLendon, president of Health Information Xperts, Titusville, Fla. For example, while some companies consider meaningful use requirements to be an optional update, others are including this functionality as part of their standard maintenance fees. The latter are typically vendors with certified electronic health record systems. “By and large, if someone bought an EHR assuming to meet meaningful use, that vendor will probably provide software upgrades as part of the maintenance contract, except for things such as implementation,” McLendon says.

Some companies, such as SCC Soft Computer, Clearwater, Fla., do not charge for software changes resulting from federal mandates, but they do charge for updates required by state laws. “If there are any costs associated with a state mandate, we share the cost of the production of [an update] among clients in that state,” says Gilbert Hakim, SCC founder and CEO.

The Horizon Lab Solutions group of McKesson Provider Technologies, Alpharetta, Ga., evaluates federally mandated software changes on a case-by-case basis to determine whether to include them as part of annual maintenance or charge separately for them, says Joseph Stabile, senior product marketing manager for Horizon Lab Solutions.

How lab information system vendors approach meaningful use, specifically, is across the board. “Some vendors consider it optional because it is an incentive program, while others consider it a mandate because penalties are levied for noncompliance,” says CAP TODAY “Newsbytes” editor Raymond Aller, MD. “If there are penalties for noncompliance, that sounds like a regulation to me,” he adds.

With respect to stage one meaningful use, McKesson’s Stabile says: “We are not charging existing lab customers under maintenance agreements for migrating from the current version of our Horizon Lab software to the certified version, but customers do pay for the implementation services associated with the upgrade. They also pay software, maintenance, and implementation services fees for developing interfaces with public health agencies at the state, county, or local level.”

“It’s reasonable that vendors would levy a charge for a nonstandard interface—but I hope the public health sector soon agrees on standard transactions that eliminate the need for such customized interfaces,” says Dr. Aller. “It’s gratifying,” he continues, “that some LIS vendors are providing the capability to comply with the laboratory component of meaningful use at no extra charge.”

But because not all companies are forthright about their approach to maintenance and update fees, the best way for labs to protect themselves against surprise charges is to know how to negotiate a contract, McLendon says. Following are questions that purchasers of laboratory information systems should ask before signing a contract.

• How often does the vendor perform updates?
• How many version upgrades does the vendor typically release each year?
• What is included as part of the vendor’s standard maintenance fee? (Ask specific questions and inquire about costs related to complying with federal mandates.)
• How much do the vendor’s customers typically pay for implementation, beyond the maintenance fee? (Most companies charge an annual maintenance fee of 18 percent to 24 percent of the initial purchase price of the system.)
• What version of the software will the laboratory need to adopt to receive support, and how long will the vendor provide support for that version?
• What kind of user group arrangement is available?

To help its physician members contract with electronic health record system vendors, the Ohio State Medical Association recently developed a set of 30 pre-negotiated terms with participating software vendors through its EHR Standards of Excellence program (www.osma.org). For upgrades due to government mandates, the terms say “the company agrees to provide continuous and unlimited upgrades or new releases and patches . . . under the service maintenance agreement at no additional cost.”

When it comes to meaningful use, Will Melson, president of the Atlanta-based Broadwell Group, tries to get EHR vendors to add a guarantee to his clients’ contracts that the vendor’s product will meet such requirements. However, he believes this will become less necessary as software increasingly offers the nine core and 15 optional functions required for meaningful use compliance. In the meantime, laboratories should be aware that they may face additional software charges. While many of these costs are legitimate, others may be driven by shake-ups in the software market. Software company consolidation—and the need for those firms to pass on additional overhead costs—has led some vendors to seek new revenue streams, Melson says. “When a software company buys another company, their costs go up initially, and they look to pass on the costs to stay afloat,” he explains.

The bottom line: If laboratory IT purchasers aren’t sure what’s covered under their maintenance agreement, they need to ask. And they need to get all details of a new maintenance agreement in writing. “If you don’t negotiate it in the contract,” says Melson, “it’s very unlikely the vendor will give it to you.”

ONC releases health care IT teaching materials

The Office of the National Coordinator for Health Information Technology has made available to the public a trove of free health information technology teaching materials.

The ONC-funded Curriculum Development Centers Program produced the teaching materials, which have been used for the past year by 82 schools that are part of the ONC Community College Consortia Program. The community colleges have used the materials in six-month-long health information technology training courses.

The ONC released the materials so other entities, such as health care institutions and regional health IT extension centers, could use them for in-service training, continuing education, and other purposes.

The training materials consist of 20 curriculum components that cover such topics as workflow process redesign, technical support, networking, usability, and project management. Three of the components offer hands-on laboratory experience. Each component is made up of several units that can be modified and combined with other units.

The teaching materials are available on the ONC’s Web site at www.onc-ntdc.org.

Standard Register announces acquisition of Dialog Medical

Standard Register recently purchased Dialog Medical, a provider of informed consent and patient education systems.

Dialog Medical will operate as a wholly owned subsidiary of Standard Register’s health care business unit. Standard Register Healthcare markets document-management and workflow automation solutions.

Standard Register
Phone: 888-772-6245

Companies offer training products to address ICD-10 coding standard

With two years until the federally mandated ICD-10 coding standard takes effect, companies such as 3M and QuadraMed are releasing products to help hospitals and other health care entities tackle implementation.

3M Health Information Systems has launched the 3M ICD-10 Education Program. The program’s 22 Web-based training modules provide a content-rich ICD-10 curriculum in the context of specific job functions. Based on staff responsibilities, trainees are matched to the education track most relevant to their work. The program offers self-testing tools and advanced reporting features for measuring staff progress over time.

QuadraMed has added to its ICD-10 Countdown Program the e-learning suite of Elsevier/MC Strategies. The e-learning suite includes a readiness assessment tool; lessons on anatomy and physiology; and curriculums addressing documentation improvement, coding, and medical terminology.

Users of the ICD-10 Countdown Program will be able to practice coding scenarios in a simulated environment while reviewing related educational materials.

3M Health Information Systems
Phone: 800-367-2447

QuadraMed
Phone: 877-823-7263

New foundation focuses on improving informatics skills

Technology Informatics Guiding Education Reform, or TIGER, became an incorporated entity last month. The legal entity, called the TIGER Initiative Foundation, will focus on preparing the clinical workforce to use technology and informatics to improve the delivery of patient care.

The founding principles of TIGER include engaging clinicians in developing a nationwide health information technology infrastructure; accelerating adoption of smart, standards-based, interoperable, patient-centered technology; and preparing nurses to use technology and informatics to improve patient care.

TIGER began as a grassroots initiative in 2006, with support from more than 70 organizations and a grant from the Robert Wood Johnson Foundation.

Two Fold Software adds new feature to LIMS

Two Fold Software has added to its Qualoupe lab information management system secure Web reporting functionality for generating on-demand reports.

Users can run internal reports from within each Qualoupe application, and advanced software associates each report with its application. For example, reports within the sample manager module are predominantly sample centric. Users generating the reports select current record set, single record, or run a new query.

The Qualoupe reporting application is browser based.

Two Fold Software
Phone: +44 (0) 1844 208598