Eligible Professionals May Apply for a Hardship Exception from Meaningful Use Penalties

As part of the American Recovery and Reinvestment Act of 2009 (ARRA), Congress mandated that payment adjustments be applied to Medicare eligible professionals (EPs) who are not meaningful users of Certified EHR Technology under the Medicare EHR Incentive Programs.

Medicare EPs who are not meaningful users will be subject to a payment adjustment beginning on January 1, 2015.

But, exceptions are available under certain limited circumstances.


Which practitioners are subject to MU payment adjustments and when do the payment adjustments begin?

  • EPs who participate in the Medicare EHR Incentive Program.
  • EPs who can participate in either the Medicare or Medicaid EHR Incentive Programs.
  • These payment adjustments will be applied beginning on January 1, 2015, for Medicare EPs.
Which practitioners are NOT subject to MU payment adjustments?
  • Medicaid EPs who can only participate in the Medicaid EHR Incentive Program and do not bill Medicare.

How much are the payment adjustments and how are they applied?

The payment adjustment will be applied to the Medicare physician fee schedule (PFS) amount for covered professional services furnished by the EP during the year (including the fee schedule amount for purposes of determining a payment based on the fee schedule amount).

The payment adjustment is 1% per year and is cumulative for every year that an EP is not a meaningful user. Depending on the total number of Medicare EPs who are meaningful users under the EHR Incentive Programs after 2018, the maximum cumulative payment adjustment can reach as high as 5%.

For additional details on MU payment adjustments, please see the Payment Adjustments and Hardships Exceptions Tipsheet for Eligible Professionals released by CMS.

Are there any
payment adjustment exceptions available for Medicare EPs who cannot meet MU deadlines?

Yes. EPs who cannot meet MU deadlines may be eligible to receive a hardship exception from CMS. But, CMS has explained that
these exceptions will be granted only under specific circumstances and only if CMS determines that providers have demonstrated that those circumstances pose a significant barrier to their achieving meaningful use.

Hardship exceptions are available in the following categories:
  • Infrastructure - EPs 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 EPs - Newly practicing EPs who would not have had time to become meaningful users can apply for a 2-year limited exception to payment adjustments. Thus EPs who begin practice in calendar year 2015 would receive an exception to the penalties in 2015 and 2016, but would have to begin demonstrating meaningful use in calendar year 2016 to avoid payment adjustments in 2017.
  • Unforeseen Circumstances - Examples may include a natural disaster or other unforeseeable barrier.
  • Patient Interaction - Lack of face-to-face or telemedicine interaction with patients; Lack of follow-up need with patients.
  • Practice at Multiple Locations - Lack of control over availability of CEHRT for more than 50% of patient encounters
CMS will be providing additional details on the requirements and application process in the future.




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