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The Wall Street Transcript has recently published its Health Care IT Report offering a timely review of the sector for investors and industry executives alike. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money.

Here’s a brief excerpt from the Health Care IT Report featuring expert commentary from Eugene Goldenberg, a representative with BB&T Capital Markets who covers pharmacy benefit managers (PBMs) and the post-acute care sector including home health, hospice and skilled nursing facilities.

TWST: Has meaningful use impacted health IT in the home health space?

Mr. Goldenberg: Unfortunately, it has nothing to do with home health. These meaningful use criteria and other federal incentives concerning health IT over last couple of years, and the stimulus money that goes with it, is geared toward physicians and hospitals. Other parts of health care, like post-acute care, nursing homes, home health, hospice, are not eligible for any of these incentives.

TWST: So without the federal incentives, are they moving toward more automation?

Mr. Goldenberg: There is definitely a benefit of improving the IT in the home health space, and we are seeing companies making these investments. However, it's a tougher pill to swallow, as these investments are being made out of pocket and are not subject to any incentive bonus payments for adoption. For home health companies, the goal is still to automate and move over to electronic health records, EHRs, much like the physicians and the hospitals, which are eligible for the federal stimulus monies. The idea is basically to digitize the paper that's out there, but the incentives are not there for home health, at least not from the federal government.

Therefore, these IT upgrades are funded by internal capital resources, and one significant driver for IT adoption in the home care space is the increasing regulatory environment. There are new restrictions and regulations, which make it almost impossible to run a business effectively on paper. Primarily, the two things I am talking about are face-to-face, F2F, documentation requirements and the new therapy-reassessment provision, both of which were implemented by CMS effective April 1 of this year.

TWST: What is therapy reassessment?

Mr. Goldenberg: Therapy reassessment is a new rule that dictates that at certain points over the course of the episode of care, the provider must reassess the patient to evaluate the progress and/or additional need for therapy. For home health, an episode of care is defined as a 60-day period with a typical patient, averaging roughly two episodes per admission. According to the new regulations, for each therapy discipline for which services are provided - i.e., physical therapy, occupation therapy, speech-language pathology - a qualified therapist, instead of an assistant, must assess the patient's condition measuring his or her activities of daily living - ADLs - such as eating, bathing, dressing, just to name a few. In addition, the reassessment should take place at defined points during a course of treatment - prior to the 14th and 20th therapy visit - and must be documented in the patient's clinical record. So the new provision requires providers to reassess the patient mid-episode.

TWST: You said home health is a small market for the large IT providers, but isn't there a move toward home health versus being in a hospital?

Mr. Goldenberg: There is. From a preference perspective, this is a relatively easy question to answer. I don't know anybody that would prefer to be at a hospital instead of the comfort of their own home. That being said, the home is not always the most appropriate setting for every patient. Home care is actually the fastest-growing component of post-acute care, projected to grow 9% annually through 2020. It is also one of the higher-margin areas of post-acute care, which recently has out the industry in the cross hairs for Medicare reimbursement cuts. I think it's just unfortunate that home care, hospice and other post-acute care providers were excluded from federal incentives for adopting technology, and they need to digitize just as much as other sectors, if not more.