The Low-Down on Future Meaningful Use Penalties — Meaningful Use Monday

Lynn Scheps is Vice President, Government Affairs at EHR vendor SRSsoft. In this role, Lynn has been a Voice of Physicians and SRSsoft users in Washington during the formulation of the meaningful use criteria. Lynn is currently working to assist SRSsoft users interested in showing meaningful use and receiving the EHR incentive money. Check out Lynn’s previous Meaningful Use Monday posts.

Meaningful Use penalties—or to use the politically correct word, “adjustments”—are scheduled to begin in 2015 for providers who are not meaningful users of certified EHR technology by 2014. There’s something about the prospect of incurring a revenue reduction that seems to evoke a visceral response among providers—even among those who do not find the potential incentive money motivating.

Here’s what you need to know about the penalties:

1) Penalties apply to Medicare only.
– Adjustments will be applied as a percent of Medicare Part B Professional Fee Schedule Charges.
– They are scheduled to begin in 2015, and continue as follows:
2015: 1%
2016: 2%
2017: 3%
2018 and 2019: may increase 1%/year, at the discretion of the Secretary of HHS.

2) There has been speculation by some industry pundits that the penalties will be delayed or not implemented at all, but to rely upon that as a given would be a mistake.

3) There are no penalties associated with the Medicaid program—adjustments do not apply to Medicaid revenue. Pursuing the EHR incentives as a Medicaid provider, however, does not totally insulate a physician from the penalties. If a Medicaid provider does not become a meaningful user by 2014, the revenue he/she generates under Medicare would be subject to the adjustments above.

About the author

Lynn Scheps

Lynn Scheps

Lynn Scheps is Vice President, Government Affairs at EHR vendor SRSsoft. In this role, Lynn has been a Voice of Physicians and SRSsoft users in Washington during the formulation of the meaningful use criteria. Lynn is currently working to assist SRSsoft users interested in showing meaningful use and receiving the EHR incentive money.

11 Comments

  • So…a physician who does, say, 18% Medicaid volume won’t qualify for the MU payments, but will have those Medicaid payments reduced for not being MU?

    Yeah, that won’t lead to more practices dumping Medicaid patients. At least the feds will have built 100s of new FQHCs to take them in.

  • Chip,
    Yes, a physician who has 18% Medicaid volume does not qualify for an EHR incentive under the Medicaid program. However, his Medicaid payments are NOT subject to future penalties for failure to demonstrate meaningful use. The only revenue that would be subject to future penalties is any MEDICARE revenue that the physician generates, above and beyond his Medicaid revenue.
    Lynn

  • What about Physician Assistants and Nurse Practitioners? Physician Assistants are not included unless they practice in a FQHC. Nurse practitioners are only eligible under the Medicaid program – but what if they don’t have 30% Medicaid volume? How do we prove they are meaningful users under the Medicaid program when they don’t meet threshold? Does that mean those nurse practitioners will be penalized for the Medicare patients they treat?

  • Yvette,
    Lynn can correct me if I’m wrong, but I’m pretty sure that penalties won’t be applied to those who don’t qualify for the EHR incentives. I guess time will tell on that, but I bet when the penalties go in place there will be some exceptions that let those providers avoid the penalties. In fact, my gut feeling is that very few people will be penalized.

  • John is correct. Penalties are only applicable to Medicare revenue, not Medicaid revenue, and a provider is only subject to penalties if he/she is eligible for incentives. Nurse practitioners are only eligible under Medicaid, so they Medicare revenue that they generate will not be reduced for not demonstrating meaningful use.

  • Is there any sense of how this will impact behavioral health and non-profit socal service agencies? We made the investment in a certified EHR in 2012; however, we have one provider (a psychiatrist) that is eligible for the incentives and the current clinical quality measures (none of which we collect) don’t really align with our scope of work, so other than the monetarty incentive, there isn’t much value-added on our end.

  • Jason,
    This is just a prediction, but I believe that those who can’t get the EHR incentive money will be exempted from the penalties, but we’ll see.

  • Are the cuts permanent? If one does not meet meaningful use by 2015 but does in 2018 do the cuts reverse?

  • Dr G,
    I think a lot could change with penalties over time, but I think that you’ll be able to avoid penalties if you are a meaningful user of an EHR. I think that’s going to be true every year as long as they are in effect.

  • Dr. G,
    The current regulations extend through 2019, with penalties as follows:
    2015: 1% Medicare Part B Allowed Charges
    2016: 2%
    2017: 3%
    2018: 3% or 4% at the discretion of the Secretary of HHS if fewer than 75% of eligible professionals have become meaningful users
    2019: 3% or 5% (same as above)

    Penalties are always tied to failure to demonstrate meaningful use 2 years prior, (referred to as a 2-year look back period, common to other government programs, such as PQRS, as well.)

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