The Electronic Health Records (EHR) Incentive Program was implemented by the Centers for Medicare and Medicaid Services (CMS) pursuant to the Health Information Technology for Clinical and Economic Health Act of 2009 (HITECH).  This Program provides incentive payments to Eligible Hospitals, Critical Access Hospitals and Eligible Providers (collectively, “eligible providers”) who make a Meaningful Use (MU) of certified EHRs.  Frequently Asked Question (FAQ) No. 9920 issued in November 2013 by CMS about the EHR Incentive Program deals with whether providers must participate in the Program every year in order to stay eligible for the incentives.  FAQ 9920 clarifies that eligible providers do not have to meet MU in the prior year to be eligible for EHR incentives the following year.

Between February 17, 2009, when HITECH was enacted and the issuance of the Stage 1 EHR Program final regulation on July 28, 2010, a common interpretation of HITECH’s qualification criteria was that eligible providers who participated in the Medicare EHR Incentive Program (as opposed to Medicaid) must meet MU in consecutive years to stay eligible for the EHR incentives each year.  In fact, confusion about this may not have been helped by the CMS Official Web Site for the EHR incentive programs.  On the Official Web Site (as of this writing), in a chart that summarizes the differences between the Medicare and Medicaid incentive programs, CMS states summarily, without elaboration, as follows: “Providers must demonstrate meaningful use every year to receive incentive payments.”  CMS further distinquishes between the Medicare and Medicaid programs by summarizing the incentive payments under Medicare as “Payments over 5 consecutive years,” while as to Medicaid the chart states “Payments over 6 years, does not have to be consecutive.”  CMS FAQ 9920, together with CMS FAQ 7737 issued on 2/27/2013, help to fill in critical information omitted from the CMS Medicare/Medicaid program comparison chart and its Official Web Site.

CMS FAQ 9920 makes clear that, under the Medicare Program, although eligible providers will not get EHR incentives in a year in which they do not meet MU, they are still eligible to qualify for the EHR incentive payment the following year.  In fact, CMS says that eligible providers “are highly encouraged to continue to attest and earn incentive payments for future participation years.”  CMS FAQ 9920 goes on to note that if a provider registered to participate in the Medicare EHR Incentive Program for the first year but later withdrew their attestation, that provider may have an opportunity to start over and repeat their first year if a CMS post payment or prepayment audit has not been initiated.

CMS FAQ 7737 clarifies that, likewise, under the Medicaid Program (which continues through 2021), eligible providers do not have to meet MU in consecutive years to qualify for the Medicaid EHR incentive payments in following years except that “after 2016, eligible hospitals must have participated in the previous year in order to receive a payment.”  Additionally, all eligible providers in the Medicaid Incentive Program are required to meet two years of Stage 1 in their first two years of MU and then proceed to Stage 2, regardless of not having participated in the EHR incentive payments in consecutive years.  See FAQ 7737.

Stage 1 Final Rule Preamble. FAQs 9920 and 7737 are not inconsistent with the text of the preamble to the 276-page, Stage 1 MU final regulation.  In response to a comment asking “whether payment years must be consecutive for an EP or eligible hospital to receive all years of incentive payments,” CMS’ answer was, in essence, “no”, although not stated so plainly.  CMS said:

“[I]f a Medicare EP receives an incentive in CY 2011, but does not successfully demonstrate meaningful use or otherwise fails to qualify for the incentive in CY 2012, CY 2012 still counts as one of the EP’s five payment years and they would only be able to receive an incentive under the Medicare EHR incentive program for three more years as CY 2013 would be there third payment year.”   75 Fed. Reg. 44314, 44319 (July 28, 2010).

In sum, eligible providers need not meet MU in the prior year to qualify for EHR incentive payments in the following year.  This may be important for eligible providers who met Stage 1 MU last year but find themelves struggling to meet MU during 2014 due to the competing deadlines of implementing not only Stage 2 MU, but also ICD-10-CM, the HIPAA Omnibus Rule, Value Based Purchasing Program payment reforms and various aspects of the Affordable Care Act!  But if you decide to give yourself a break from Stage 2 MU implementation this year, just remember that you will be lessening the total EHR incentive payments available over the long haul under HITECH.

NOTE (1/30/2014):  Unless CMS revises the scheduled reimbursement reduction that is to begin on January 1, 2015 for eligible providers who are not meaningful users in consecutive years, eligible hospitals and eligible professionals who do not attest to meaningful use for the 2014 payment year may face a reduction in reimbursement in FY2016 and CY2016, respectively.  When reimbursement reductions will take effect for a particular provider, the total reduction that will be applied, and other factors determining a reduction (e.g., participation in the Medicaid EHR Incentive Program and hardship exceptions) deserve close study by each eligible provider based on that provider’s facts and circumstances.  For additional information, visit the CMS EHR Incentives Program webpage titled “Payment Adjustments and Hardship Exceptions“.

Reminder:  This subject matter is complex and how it applies to any particular individual or organization may vary significantly depending on specific facts and situations. Readers of the blog should always seek competent legal advice that is specific to their circumstances.