Meaningful Use Incentive Adjustments – Here Come the Sticks

MU Adjustments Based on Two Years of Activity

by Jim Tate
Twitter: @JimTate

For years we have talked about the carrot and stick approach to the CMS EHR incentive program. First came those lovely front loaded incentives that drove EHR adoption. Then, almost as an afterthought, we vaguely mentioned the penalties (“fee adjustments”). Well the carrots are getting smaller and the sticks are coming. For many Medicare providers who have delayed jumping in with both feet, it may already be too late to avoid the penalties. Let’s look at the facts.

CMS states clearly: “If Medicare eligible professionals, or EPs, do not adopt and successfully demonstrate meaningful use of a certified electronic health record (EHR) technology by 2015, the EP’s Medicare physician fee schedule amount for covered professional services will be adjusted down by 1% each year. The adjustment schedule is as follows:

• 2015-99% of Medicare physician fee schedule covered amount
• 2016-98 % of Medicare physician fee schedule covered amount
• 2017 and each subsequent year-97% of Medicare physician fee schedule covered amount

If less than 75% of EPs have become meaningful users of EHRs by 2018, the adjustment will change by 1% point each year to a maximum of 5% (95% of Medicare covered amount).”

That doesn’t sound too bad, right? Just get your act together by 2015 and all will be well. However, that is not the case. The penalties are based on activity two years prior. That’s right you pretty much have to have your act together in 2013 to duck those 2015 “fee adjustments”. Permit me to quote directly from CMS scripture: “EPs who first demonstrated meaningful use in 2011 or 2012 must demonstrate meaningful use for a full year in 2013 to avoid payment adjustments in 2015. They must continue to demonstrate meaningful use every year to avoid payment adjustments in subsequent years……..EPs who first demonstrate meaningful use in 2013 must demonstrate meaningful use for a 90-day reporting period in 2013 to avoid payment adjustments in 2015. They must continue to demonstrate meaningful use every year to avoid payment adjustments in subsequent years.” 

Now for you Medicaid EPs there is a bit of a twist. In the Medicaid EHR Incentive program there are no penalties against Medicaid reimbursements but you will be penalized for those Medicare charges if you don’t reach meaningful use. Kind of a “damn if you do, damn if you don’t” situation.

I can hear the wheels turning out there. What if I practice where there is no broadband Internet access? What if my town is hit by an tornado/hurricane/firestorm/tsunami? What if I never actually see a patient in person? What if there in no way on Gods’s green earth I will ever achieve meaningful use? Funny you should ask. CMS has outline a process for hardship exceptions that should put your mind at ease for some of you. For the rest the stage is now being set for those who will begin receiving reduced payments in 15 months. A stitch in time save nine.

Jim Tate is founder of EMR Advocate and a nationally recognized expert on the CMS EHR Incentive Program, certified EHR technology and meaningful use. Contact him at info@emradvocate.com.

4MedTraining and Certifications Check out the 4Med online curriculum. Details on their latest course, Certified Meaningful Use Professional (CMUP), can be found under EHR and MU Training. The course is designed as a learning platform for physicians, hospitals, vendors and health IT professionals. Click here to learn more. Use discount code HITECH to receive 20% off.