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EHR Meaningful Use Penalties Affect Half of Eligible Providers

February 19, 2015:

Approximately half of eligible professionals—257,000 providers—are having their Medicare payments reduced by 1 percent in 2015 because of failure to meet meaningful use criteria under the electronic health record (EHR) incentive program. Two hundred hospitals were hit with similar penalties starting this past October. The Centers for Medicare and Medicaid Services announced the penalties in a December 17, 2014, press briefing.

CMS also announced that 28,000 providers will face a 1 percent reduction in payment for noncompliance with the electronic prescribing incentive program.

Among organizations decrying the number of EPs being penalized is the American Medical Association, which argues that penalties are counterproductive in achieving the program’s goal of promoting physicians’ use of technology to improve care and increase efficiency. There are three stages to reaching full participation in the EHR incentive program. The Medical Group Management Association notes that more physicians attested to passing the first stage than demonstrated compliance with stage 2 criteria, indicating that more time is needed to meet stage 2 requirements. The stage 3 proposed rule, which will address requirements for 2017 and beyond, is slated to be released this March.

In January, CMS announced that it will issue a rule outlining how it plans to realign the meaningful use incentive program to make it less burdensome on EPs. Among the proposals it is considering is moving the hospital timeline to the calendar year, reducing program complexity, lightening reporting criteria, and shortening the 2015 EHR reporting period to 90 days rather than the current full year. This last adjustment would buy EPs more time to comply with the criteria and avoid future penalties.

CMS reports that 400,000 out of slightly more than 500,000 EPs have adopted or meaningfully use EHRs to date. Those meeting the meaningful use attestation criteria stand to gain as much as $44,000 in additional payments. Those not meeting the criteria or professionals who are eligible but decline to participate receive annual penalties beginning in 2015 unless they qualify for a hardship exemption. Penalties for eligible hospitals began in 2014 unless the entities qualified for an exemption (hospitals are paid or penalized according to the federal calendar versus the calendar year for providers).

The EHR incentive program was instituted after passage of the American Recovery and Reinvestment Act of 2009 (ARRA), which stipulated that EPs, eligible hospitals, and critical access hospitals (CAH) that did not “meaningfully use” certified electronic health record EHR technology would be subject to “payment adjustments,” or penalties. The goal was to help health care professionals better coordinate care, prescribe more accurately, and communicate more efficiently.


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