PMH Board Approves Expenditure For Electronic Records Upgrade

Marlinton, WV – During a special meeting on Wednesday night, the Pocahontas Memorial Hospital board considered a $300,000.00 expenditure for electronic health record system upgrades.

The U.S. government is offering financial incentives for doctors and hospitals to start using electronic health records. The Department of Health and Human Services estimates that full implementation of electronic health records in the U.S. could reduce medical spending in the U.S. – now $2 trillion every year – by as much as 20-percent, through time savings and reduction of duplication and waste.

The federal government, under the American Recovery and Reinvestment Act, known as the economic stimulus act, is providing as much as $27 billion over 10 years to support adoption of electronic health records. Under the stimulus act, PMH is eligible for as much as $60,000 from Medicare and Medicaid incentives, but must be using electronic records to a specified degree, Stage 1, by 2012 to qualify for the full incentive payment.

PMH CEO Barbara Lay told the board the hospital would have to spend more than $300,000 to purchase computer hardware and software to achieve Stage 1 by July 1. The CEO said grant money, totaling $68,000, was available to help the hospital pay for the upgrades. Lay said the hospital has about $250,000 in its checking account, but recommended using that money for other needs. Lay tells the board that low interest loans are available to pay for the electronic records upgrade.

“I did contact the Center for Rural Health Development,” she said. “They have some 4.5 percent money available, that they will loan, up to $650,000. I’ve, kind of, put that part on hold until we look at if we’ve turned ourselves around, financially, which, I think, December is going to show good improvement in that.”

Since 2005, PMH has paid more than $863,000 to electronic records contractor Healthcare Management Systems, HMS. Lay says she had doubts about the company as late as a year ago, but recommends that the hospital continue with the Nashvlle, Tennessee company.

“A year ago, I would never have thought I’d sit here before you and reccomend HMS,” she said. “But we do – our committee that’s been working on it – recommend that we do continue the road with HMS.”

The CEO recommends HMS because of the hospital’s previous investments with the company and good reports on the company’s system from Grant Memorial Hospital in Petersburg.

“Really, HMS, because of the investment that we’ve already had and now, especially since we’ve been able to talk to Grant Memorial,” she said. “They’re close by. They’re a critical access hospital. They went from one of the bigger software companies to HMS. As with all implementations, there have been some rocks in the road, but they feel like, for them, it was a good move.”

PMH chief financial officer Chad Carpenter said a member of his staff gained confidence in the HMS system after a training session at HMS corporate headquarters.

“We sent Aaron [Vaughan] to Nashville to HMS corporate headquarters for a week to do some training,” he said. “Going into that training, he was not a big fan of HMS. But, after he went down there, went through some training and talked to some other users, that are using HMS, he is more comfortable with it, now.”

Board chairman Dr. Robert Must says the main reason for the additional investment in electronic records is to avoid the loss of Medicare reimbursement money.

“The biggest incentive is, really, to get full reimbursement for our Medicare patients,” he said. “If we don’t meet the deadline, which I believe, now, for Stage 1 meaningful use, is October 15. Then, they start percentage incrementally reducing what they pay on Medicare patients.”

The board voted 6-0 to authorize payments of more than $300,000 to Health Management Services in order to achieve Stage 1 of electronic record keeping implementation.

The government-owned hospital has made strides to break even financially in recent years, but had a deficit of more than $263,000 in the fiscal year that ended on June 30, 2011.

In other business, the PMH board approved several written policies, as recommended in a recent audit report. The new policies include:

activation of rapid response team
disclosure of ownership
employee health policy
patient health records
performance improvement plan
process for prescription pad
and patient’s rights and responsibilities and walk-ins.

The next meeting of the PMH board is scheduled for January 26 at 6 p.m.