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98% of Hospitals Avoid Meaningful Use Payment Adjustments

CMS has published details about the IPPS negative payment adjustments for fiscal year 2017, stating that a majority of hospitals have avoided them through successful meaningful use attestation.

By Sara Heath

- Ninety-eight percent of eligible hospitals and critical access hospitals will not be subjected to payment adjustments in 2017 due to their successful stage 1 or stage 2 meaningful use attestation, says the Centers for Medicare & Medicaid Services.


In a fact sheet, the federal agency describes the impending payment adjustments as a part of the Inpatient Prospective Payment System (IPPS) coming for fiscal year 2017.

Eligible hospitals and CAHs face payment adjustments depending upon their attestation to the Medicare EHR Incentive Programs. When a hospital successfully attests to the program, it avoids a negative payment adjustment. When it does not successfully attest to meaningful use, it does face a payment adjustment.

This cycle continues for the duration of the EHR Incentive Programs. When a hospital successfully attests to meaningful use in 2013, for example, it avoids the payment adjustment in 2015. In order to avoid the payment adjustment in 2017, the hospital must attest to the program again in 2015.

For fiscal year 2017, which has been determined by meaningful use reporting year 2015, hospitals may face a 75 percent negative payment adjustment.

However, as noted above, CMS saw many successful meaningful users this year, with 98 percent of eligible hospitals and CAHs completing one of the first two stages of the program. All of these hospitals avoided the negative payment adjustment.

The fact sheet also covered the details of hardship excepts, which are an alternative method by which hospitals and CAHs may avoid the negative payment adjustment. Through hardship exceptions, hospitals and CAHs may report a significant burden they faced during meaningful use attestation which prevented them from successfully reporting.

Hospitals and CAHs submitting a hardship exception may apply for one by April 1 of the year prior to the payment adjustment year. For the 2017 payment adjustment year, for example, hospitals and CAHs had to submit their hardship exception applications by April 1, 2016.

These exceptions are adjudicated on a case-by-case basis, and depend upon the hurdles hospitals faced in meaningful use attestation. According to CMS, hospitals may apply for a hardship exception based on the following criteria:

  • Infrastructure — Eligible hospitals must demonstrate that they are in an area without sufficient internet access or face insurmountable barriers to obtaining infrastructure (e.g., lack of broadband).
  • New eligible hospitals — Eligible hospitals with new CMS Certification Numbers (CCNs) that do not have time to become meaningful EHR users can apply for an exception for one full cost reporting period.
  • Unforeseen Circumstances — Examples may include a natural disaster or other unforeseeable barrier.
  • 2014 EHR Vendor Issues — An eligible hospital’s EHR vendor was unable to obtain 2014 certification or the hospital was unable to implement meaningful use due to 2014 EHR certification delays. Additionally, due to the Patient Access and Medicare Protection Act (PAMPA), the new streamlined hardship applications reduce the amount of information that eligible hospitals, eligible professionals, and CAHs have to submit to apply for an exception for calendar year 2016. 

These hardship exceptions were not originally part of the game plan for this reporting period. It wasn’t until the end of December 2015 that President Obama signed into law the option for hardship exceptions for the 2015 reporting year.

The law, S.2425, also included legislation covering Medicare payments for certain rehabilitation technologies, such as wheelchairs and other medical equipment. Most prominent, however, were the portions of the bill that made it easier for the government to award hardship exceptions.

This bill was welcomed by many healthcare professional societies, including the American Medical Association, which had long called for CMS to address the issue of hardship exceptions for hospitals which may not have been able to attest to the program for the 2015 reporting period.

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