1
Context

The Centers for Medicare and Medicaid Services (CMS), an agency in the Department of Health and Human Services (HHS), is responsible for providing health coverage for seniors and people with disabilities (Medicare), for limited-income individuals and families (Medicaid), and for children (Children’s Health Insurance Program, CHIP)—totaling almost 100 million beneficiaries. Collectively, these programs make CMS the largest purchaser of health care in the United States, and it interacts with thousands of health care providers across the country ranging from individual physicians to hospitals large and small, as well as with other providers such as ambulance services and rural health centers. The agency’s core mission was established more than four decades ago, with a mandate to focus on the prompt payment of claims which now totally more than 1.2 billion annually.1

More recently, CMS has been mandated to undertake new and expanded responsibilities for driving national improvements in such areas as the adoption of health information technology (IT), the collection and analysis of information to promote health and wellness, the support of health care quality, the elimination of health disparities, and improvement in the efficiency of health care services. Recent legislation affecting CMS includes the Patient Protection and Affordable Care Act of 2010 (Public Law [P.L.] 111-148), the American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5; specifically the portion of ARRA known as the Health Information Technology for Economic and Clinical Health [HITECH] Act of 2009), and the Children's Health Insurance Program Reauthorization Act of 2009 (Public Law 111-3).2 The HITECH Act, for example, calls for improvements in health care nationwide through the

1

Julie C. Boughn, Chief Information Officer, Centers for Medicare and Medicaid Services, “CMS Systems Briefing,” presentation to the committee, July, 23, 2010. Via teleconference.

2

Numerous other pieces of legislation affect CMS on a continual operational and policy basis, including the following: the Clinical Laboratory Improvement Act (P.L. 90-174), Conditions for Coverage and Conditions of Participation (42 CFR 482), the Deficit Reduction Act (P.L. 109-171), the EHR Incentive Program (42 CFR 412, 413, 422, and 495), the Emergency Medical Treatment and Labor Act (P.L. 99-272), the Tax Relief and Healthcare Act (P.L. 109-43), the Medicare Prescription Drug and Modernization Act (P.L. 108-173), the Privacy Act of 1974 (P.L. 93-579), the Paperwork Reduction Act (P.L. 104-13), the Economic Recovery Act (P.L. 111-5), and the Health Insurance Portability and Accountability Act (P.L. 104-191).



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1 Context The Centers for Medicare and Medicaid Services (CMS), an agency in the Department of Health and Human Services (HHS), is responsible for providing health coverage for seniors and people with disabilities (Medicare), for limited-income individuals and families (Medicaid), and for children (Children’s Health Insurance Program, CHIP)—totaling almost 100 million beneficiaries. Collectively, these programs make CMS the largest purchaser of health care in the United States, and it interacts with thousands of health care providers across the country ranging from individual physicians to hospitals large and small, as well as with other providers such as ambulance services and rural health centers. The agency’s core mission was established more than four decades ago, with a mandate to focus on the prompt payment of claims which now totally more than 1.2 billion annually.1 More recently, CMS has been mandated to undertake new and expanded responsibilities for driving national improvements in such areas as the adoption of health information technology (IT), the collection and analysis of information to promote health and wellness, the support of health care quality, the elimination of health disparities, and improvement in the efficiency of health care services. Recent legislation affecting CMS includes the Patient Protection and Affordable Care Act of 2010 (Public Law [P.L.] 111-148), the American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5; specifically the portion of ARRA known as the Health Information Technology for Economic and Clinical Health [HITECH] Act of 2009), and the Children's Health Insurance Program Reauthorization Act of 2009 (Public Law 111-3).2 The HITECH Act, for example, calls for improvements in health care nationwide through the 1 Julie C. Boughn, Chief Information Officer, Centers for Medicare and Medicaid Services, “CMS Systems Briefing,” presentation to the committee, July, 23, 2010. Via teleconference. 2 Numerous other pieces of legislation affect CMS on a continual operational and policy basis, including the following: the Clinical Laboratory Improvement Act (P.L. 90-174), Conditions for Coverage and Conditions of Participation (42 CFR 482), the Deficit Reduction Act (P.L. 109-171), the EHR Incentive Program (42 CFR 412, 413, 422, and 495), the Emergency Medical Treatment and Labor Act (P.L. 99-272), the Tax Relief and Healthcare Act (P.L. 109-43), the Medicare Prescription Drug and Modernization Act (P.L. 108-173), the Privacy Act of 1974 (P.L. 93-579), the Paperwork Reduction Act (P.L. 104-13), the Economic Recovery Act (P.L. 111-5), and the Health Insurance Portability and Accountability Act (P.L. 104-191). 1

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promotion of the meaningful use of electronic health records (EHRs), and it charges CMS with monitoring and auditing the implementation of associated meaningful-use criteria.3 Meeting historical, emerging, and future requirements will depend heavily on the ability of CMS to evolve its information systems and software to provide the needed functionality, fraud prevention, assurance of information security and confidentiality, and interoperability— internally as well as with current and future external IT systems. In working to meet historical, emerging, and future requirements, CMS faces a clear tension between its continuing mission to be an efficient claims-payment organization and its newly mandated mission to be a significant driver in transforming the U.S. health care system. This challenge and tension play out at multiple levels—from the policy level to the levels of management structure and business process and system architecture. In terms of ongoing operational requirements, CMS must continue to handle a very large volume of claims and other activities in a timely and secure manner even as regular changes to statutes and regulations mean that business processes, software code, databases, and systems must be adjusted frequently, and sometimes substantially. These ongoing operational requirements are currently being met with a very large and complex information technology infrastructure that incorporates hardware, software, and communications systems that vary considerably in age, capability, and sophistication. The ability of this infrastructure to continue to keep up with the ongoing changes demanded of it—particularly as the agency takes on its newly mandated leading role in modernizing the nation’s health care system and underlying health information technology—is an understandable source of concern. For strategic advice on addressing these and future challenges, CMS requested that the National Research Council (NRC) conduct a study that would lay out a long-term, forward- looking vision for the Centers for Medicare and Medicaid Services, taking account of CMS's mission, business processes, and IT requirements. This interim report, presented at the conclusion of the first of the study’s two phases, presents the very preliminary observations of the study committee—the NRC’s Committee on Future Information Architectures, Processes, and Strategies for the Centers for Medicare and Medicaid Services—with respect to the new demands on CMS and areas in which changes will be needed. These observations are organized in three broad categories: (1) emerging requirements for information; (2) challenges involving the transformation of enterprise data and technology management; and (3) organizational, administrative, and cultural challenges. The HITECH Act of 2009 promotes the adoption and “meaningful use” of EHRs by eligible 3 professionals and hospitals. Professionals and hospitals receive incentive payments if they adopt the use of electronic health records and carry out a series of measurable objectives intended to ensure that the systems are used to improve the quality and efficiency of care. The meaningful-use objectives are framed as being relevant to quality, safety, efficiency, and the reduction of disparities; patient and family engagement; care coordination; population and public health; and privacy and security. Examples of these objectives include using computerized provider order entries, reporting on specific clinical quality metrics, and providing clinical information to patients. Professionals and hospitals can request incentive payments in 2011 by attesting to achieving the objectives, and they must submit their measures to CMS electronically by 2012. Starting in 2015, penalties are to be assessed against those not meeting the objectives. 2

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In this first brief phase of its study, the committee has had limited opportunity to gather data and conduct its deliberations. Thus this report is necessarily preliminary in nature, is not comprehensive, and does not provide findings or recommendations. The committee received a series of briefings by teleconference from CMS staff, and it convened an information-gathering workshop on September 27 and 28, 2010, to hear a range of perspectives internal and external to CMS. In addition to those sources of background and related information, this report draws on the committee members’ individual expertise and experience with health IT specifically and with IT systems in general (see Appendix B for biosketches of the members of the study committee). The committee has not yet completed its fact-finding activities. For example, it has yet to receive much formal input on Medicaid or CHIP. In its final report, to be issued in 2011 at the completion of the second phase of its study, the committee will review the current state of and plans for the evolution of CMS's IT infrastructure. That report will provide a framework for analyzing and guiding decision making on how to evolve business processes, practices, and information systems to meet today's continuing needs and tomorrow's new demands. 3