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Rebecca Farley

Director, Policy & Advocacy, National Council for Behavioral Health

CMS Clarifies Expanded Hardship Exemption for Medicare Electronic Health Record Use

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The Centers for Medicare and Medicaid Services (CMS) has released new details explaining a recently announced expansion of the hardship exemption for healthcare providers who are unable to meet electronic health record Meaningful Use requirements this year.

Under the 2009 HITECH incentive program, Medicare providers who cannot demonstrate meaningful use of their electronic health records in a given year are subject to “payment adjustments” – in other words, they are penalized through reductions in their Medicare payments the following year. Current law allows for certain eligible professionals and facilities to receive a hardship exemption.

The new guidance expands the hardship exemption to cover more eligible providers and hospitals. It states that new participants in the Meaningful Use incentive program may apply for a hardship exemption from the 2015 payment adjustment if they “are new to the program and intended to demonstrate Meaningful Use for the first time in 2014, but [they] are not able to implement 2014 certified EHR technology for the 2014 reporting year.” The deadline for submitting a hardship exception application is July 1, 2014, for eligible professionals and April 1, 2014, for eligible hospitals.

Providers and facilities that are already participating in Meaningful Use incentive program will not face 2015 payment adjustments provided they met Meaningful Use criteria in 2013. However, if they cannot implement certified electronic health records for the 2014 reporting period, they will be able to apply for a hardship exemption from the 2016 payment adjustment. The 2016 hardship exception application form will be available after the close of the deadlines noted above for new Meaningful Use participants. The deadlines for submitting 2016 exception application forms are July 1, 2015, for eligible professionals and April 1, 2015, for eligible hospitals.

The agency clarifies that payment adjustments apply only to the Medicare electronic health record incentive program. Those participating in the Medicaid EHR Incentive program therefore “do not need to apply for a hardship exception,” CMS notes, although “if you are eligible for both programs, you must demonstrate Meaningful Use in either Medicare or Medicaid in order to avoid the payment adjustment or you may apply for a hardship exception.”