CMS Reopens the Medicare Payment Adjustment Hardship Exception Application Submission Period for Certain Providers and Hospitals

Centers for Medicare & Medicaid Services (CMS) recently announced the reopening of the submission period for hardship exception applications for eligible professionals and eligible hospitals that have been unable to fully implement 2014 Edition Certified Electronic Health Record Technology (CEHRT) due to availability delays. Qualified providers will now have until Nov. 30, 2014 to submit hardship exception applications to avoid Medicare payment adjustments in 2015.

This extended application deadline applies to eligible professionals and eligible hospitals that:

• Were unable to fully implement 2014 Edition CEHRT due to availability delays; and
• Were unable to attest by Oct. 1, 2014 for eligible professionals or by July 1, 2014 for eligible hospitals using the new flexibility options for the 2014 reporting period.

CMS published a final rule on Sept. 4, 2014, permitting several options for reporting meaningful use for the 2014 reporting period, as discussed here, including demonstrating meaningful use using a 2011 Edition CEHRT or a combination of 2011 and 2014 Edition CEHRT. Some of these options only apply to providers that were unable to fully implement 2014 Edition CEHRT due to an availability delay.

As mandated by the American Recovery and Reinvestment Act of 2009, beginning in 2015 CMS will apply payment adjustments to Medicare eligible professionals and eligible hospitals who are not meaningful users of CEHRT. Eligible professionals and eligible hospitals are exempt from the payment adjustments if they can show a significant hardship in demonstrating meaningful use. Hardship applications must be resubmitted every year and will not be granted for more than five years.

CMS will grant an automatic hardship exception for 2015 for certain providers, including:

• New eligible professionals and eligible hospitals in their first year of participation in the Medicare EHR incentive program (note: demonstrating meaningful use in 2014 will be required to avoid payment adjustments in 2016)
• Hospital-based eligible professionals (who provide more than 90% of services in an inpatient or emergency department of a hospital)
• Eligible professionals who perform 90% of their claims for an inpatient department, an emergency department or for certain observational services
• Eligible professionals with certain Medicare Provider Enrollment, Chain, and Ownership System (PECOS) specialties six months prior to the first day of the payment adjustment. These specialties include anesthesiology, pathology, diagnostic radiology, nuclear medicine, and interventional radiology. Eligible professionals who may qualify under this category should verify that their PECOS specialty is up to date.

Eligible hospitals that do not qualify for a hardship exception and do not demonstrate meaningful use will be subject to a 25% reduction to the percentage increase to the Inpatient Prospective Payment System (IPPS) payment rate for 2015. The reduction to the percentage increase to the IPPS payment rate will increase to 50% in 2016, and 75% thereafter. For eligible professionals, CMS will apply the payment adjustments to the Medicare physician fee schedule. Eligible professionals who are subject to the payment adjustments for 2015 will receive between 98% - 99% of the physician fee schedule, depending on whether the electronic prescribing payment adjustment applies as well. Depending on the number of Medicare eligible professionals who demonstrate meaningful use, CMS may apply a reduction of up to 95% of the physician fee schedule as early as 2019.