CMS Broadens Meaningful Use Hardship Exceptions

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By Alex Ruoff

Jan. 22 — The CMS published its new, streamlined system for providers and hospitals seeking a hardship exception from penalties associated with the federal meaningful use program for electronic health records, the agency announced Jan. 22.

The Centers for Medicare & Medicaid Services posted a revised application and instructions for a hardship exception from Medicare payment penalties for failing to meet the requirements of the meaningful use program in 2015. The new application allows providers to apply for an exception under certain categories instead of the CMS considering each application on its own merits.

The revised system will be temporary and is meant to assist providers and hospitals that struggled to upgrade their electronic health records in 2015, the CMS said in a release. Providers have until March 15 while hospitals as well as critical access hospitals have until April 1 to apply under the revised system.

The CMS will also consider applications for hardship exceptions from meaningful use program penalties from groups of providers. Multiple providers may now submit a single application for a hardship exception, the CMS said.

The changes were mandated by the Patient Access and Medicare Protection Act of 2015, signed into law Dec. 28.

The law gave the CMS the ability to create automatic exceptions for providers from Medicare penalties for failing to comply with the federal Medicare Electronic Health Record Incentive Program. Currently, the CMS can only approve hardship exceptions on a case-by-case basis, making it difficult for providers and hospitals in the program to know ahead of time whether they'll be hit with a Medicare penalties (248 HCDR, 12/29/15).

Penalties

The CMS expects 209,000 health-care providers to face a Medicare payment adjustment in 2016 for failing to meet requirements of the meaningful use program in 2014, according to a CMS document released in December. Penalties are assessed two years after the program year in the meaningful use program.

The CMS expected to pay the 209,000 health-care providers between $377 million and $700 million less due to these payment adjustments. The CMS only posted a range of payment adjustments, not exact figures.

In 2015, 257,000 health-care providers were assessed a total of $200 million in Medicare payment adjustments for failing to ever meet the requirements of the meaningful use program.

The program's penalty phase, which began in 2015, levies a 1 percent reduction in Medicare reimbursements each year that a provider doesn't successfully participate. Providers who faced a 1 percent penalty in 2015 and again failed to meet the program's requirements face a 2 percent penalty in 2016, likely accounting for the increase in total penalties despite fewer providers facing penalties.

Hospitals penalties are assessed by reducing the annual inpatient prospective payment system (IPPS) increases for hospitals that don't meet MU requirements. In 2015, hospitals were to be penalized 25 percent of their IPPS increase. The percentage goes up to 50 percent in 2016 and as high as 75 percent in future years.

The CMS has yet to release 2016 penalty data for hospitals in the meaningful use program.

To contact the reporter on this story: Alex Ruoff in Washington at aruoff@bna.com

To contact the editor responsible for this story: Janey Cohen at jcohen@bna.com