EHR Penalties after Meaningful Use Failure

While at HIMSS I had a discussion with the consulting firm Stoltenberg Consulting. I was really intrigued by their approach to EHR consulting and will likely write more about it later. Plus, the started what in many ways became a theme of my HIMSS experience around rural healthcare EHR. You can be sure I’ll be writing about rural EHR here on this site and on Hospital EMR and EHR much more in the future.

In our casual introductory conversation we had a good discussion about how many of the smaller hospitals look at meaningful use and the EHR incentive money. Needless to say, many of these smaller institutions are faced with a huge challenge when it comes to adopting an EHR and showing meaningful use. Many of these rural hospitals barely have an IT staff and the CFO usually takes care of the IT environment. I heard one story at HIMSS where the IT person at a rural hospital started out as the janitor and his home IT skill made him the most qualified person to help.

Needless to say, rural and smaller hospitals have some real challenges facing them when it comes to EHR adoption and showing meaningful use of that EHR. Although, an even worse thought struck me in my discussions about these smaller hospitals.

Imagine many of these smaller hospitals making a good faith effort to adopt EHR and show meaningful use. It’s not that hard to see many of these hospitals falling short of the meaningful use standard. What will this mean to that organization? They’ve spent millions on an EHR. They won’t get the EHR incentive money they likely used as a justification for the EHR spending. To add insult to injury, now they’re going to get penalized for not being meaningful users of an EHR.

This scenario honestly makes me sick to even consider. Something similar could easily happen in small ambulatory practices as well. The scale of the damage will just be different. I expect in meaningful use stage 1 this won’t likely be a problem since it’s self attestation. However, this could become a much bigger issue in meaningful use stage 2.

Although, consider an organization who fails a meaningful use stage 1 audit. In most cases you can’t go back and fix whatever you failed in the audit. You’d be in a very similar situation where you have to return the EHR incentive money and would be open to the meaningful use penalties. At least that’s my understanding of how the EHR penalties will be implemented. If you know otherwise, I’d love to hear it.

While I think the above scenarios are brutal, hopefully this will also serve as a warning for those hospitals pursuing EHR and the EHR incentive money. Be sure you are able to show meaningful use or you’ll not only lose out on the incentive money, but you’ll also be open to the EHR penalties. Not to mention, are you ready for a meaningful use audit?

About the author

John Lynn

John Lynn

John Lynn is the Founder of, a network of leading Healthcare IT resources. The flagship blog, Healthcare IT Today, contains over 13,000 articles with over half of the articles written by John. These EMR and Healthcare IT related articles have been viewed over 20 million times.

John manages Healthcare IT Central, the leading career Health IT job board. He also organizes the first of its kind conference and community focused on healthcare marketing, Healthcare and IT Marketing Conference, and a healthcare IT conference,, focused on practical healthcare IT innovation. John is an advisor to multiple healthcare IT companies. John is highly involved in social media, and in addition to his blogs can be found on Twitter: @techguy.


  • John, there is no doubt that the number of CMS EHR Incentives audits are increasing for both EPs and EHs. In the last few months we have already begun to see prepayment audits, which is first. The audit process is not a criminal proceeding and there is ample time for the attesting provider to supply required documentation. From what I have seen two of the biggest gaps are the absolute lack of a Security Risk Analysis or a test of the Exchange Key Clinical Information. If the auditors do make a Final Determination that the attestation documentation does not support meaningful use the incentives will be recouped. However, there is an appeal process that is available to providers if their audit process doesn’t go their way.

  • Thanks for the information Jim. Very interesting stuff. The challenge if they fail on the Security Risk Analysis, for example, is that if you don’t have proof that you did one, that doesn’t seem like something they’ll just let you go back and fix. Either you did it or you didn’t. No appeal process will solve that if you didn’t do it (and many didn’t).

  • Re: “This scenario honestly makes me sick to even consider”
    Imagine how I feel. Here I am with a nursing background, a degree in computer information systems, over 10 years testing EHR/EMR systems at vendor sites during the software development cycle and a recent graduate of the HIT Program and I couldn’t land a job in EHR implementation to save my soul. I was doing cartwheels to get the attention of recruiters and HR managers who only care if the word “Microsoft” appears in your experience. The worse of the worse was when a recruiter called and needed someone who had Centricity Enterprise experience to do a contract for UCFS. I excitedly told the recruiter that when I was testing Centricity at IDX(now GE), UCFS was one of our clients and I was the lead for testing their system enhancements and upgrades and even worked directly with the IT staff remotely. I could picture the “duh” hanging over her head from my end of the phone. There was some obscure key word she wanted to hear (although probably a word she didn’t know the meaning of)that apparently was the magic word and since she didn’t hear it I was not considered. I’ve never seen a bigger disconnect on putting qualified people in jobs for this whole EHR, meaningful use, implementation mandate.

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