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Brief History of EHR Incentive Payments, Payment Adjustments

By Vera Gruessner

The Centers for Medicare & Medicaid Services (CMS) oversee the Medicare and Medicaid EHR Incentive Programs, meaningful use payments, and payment adjustments for eligible professionals and hospitals including critical access hospitals (CAHs).

Under the Medicare EHR Incentive Program, healthcare facilities may receive a maximum incentive payments of $44,000 over the course of five sequential years. The payments first started in 2011 and will continue until the end of 2016. Meanwhile, the Medicaid EHR Incentive Program confers a maximum of $63,750 over six years. In order to receive these incentives, eligible professionals and hospitals must prove they are meaningfully using certified EHR technology (CEHRT) in their practices. After first-year entities participated in the program, they could obtain as much as $18,000. In subsequent years, incentive payments were lower, ending with $2,000 by the fifth year for Medicare eligible professionals.

In 2009, Congress passed a ruling within the American Recovery and Reinvestment Act that assigned payment adjustments or penalties to eligible medical professionals and hospitals that did not meet meaningful use requirements of CEHRT under the Medicare EHR incentive program. Eligible providers who do not meet meaningful use will receive one-percent payment reduction in the first year, which will rise in every subsequent year to a maximum of five percent.

Healthcare providers who are eligible only for the Medicaid program will not have the burden of these payment adjustments. For those who serve both Medicare and Medicaid patients, they will be subject to payment adjustments if they fail to meet meaningful use requirements.

The first penalties began on October 1, 2014 for Medicare hospitals. Eligible professionals who did not meet meaningful use requirements received their first payment adjustment after January 1, 2015. Recently, CMS announced that approximately 78,000 eligible professionals are subject to meaningful use penalties of more than $2,000.

“The penalties physicians are facing as a result of the Meaningful Use program undermine the program’s goals and take valuable resources away from physician practices that could be spent investing in better and additional technologies and moving to alternative models of care,” Steven J. Stack, MD, President of the American Medical Association, said in a statement. “The AMA continues to work with the Administration to improve the Meaningful Use program and looks forward to seeing how CMS’ anticipated new rules address these issues this spring.”

Despite the burden of the penalties, CMS does offer exceptions to those truly having difficulty implementing CEHRT and meeting the requirements of meaningful use. Those who are eligible but unable to meet meaningful use requirements due to a significant hardship are allowed to file for a meaningful use hardship exemption by completing an application. Upon approval of the hardship, it is valid for one year only and a subsequent application must be presented the following year. A hardship exemption may not be granted for any longer than five years.

There are also a handful of cases in which entities will not need to submit hardship exemption applications but will automatically be given an exception. These include new providers in their first year of service and professionals of specific PECOS specialties among others.

For those who wish to avoid a payment penalty in subsequent years, the National Library of Medicine offers tools that help providers meet EHR certification conditions and reach meaningful use stipulations.

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