The Healthcare Penalties Are Coming!!

We all know about the Meaningful Use penalties. The PQRS penalties. The Value Based Modifier penalties. Individually, they’d all be annoying, but I don’t think most healthcare organizations have understood what these penalties will be in aggregate.

This hit home to me when I was reading a smartly titled post by Jim Tate called “What you don’t do in 2015 will cause 9% CMS penalties in 2017” Here’s how he describes the penalties that are in store for healthcare:

MU: Failing to achieve MU in 2014 will bring a 2% penalty beginning in 2016 with a 1% annual increase up to 5%.

Physician Quality Reporting System (PQRS): Non-participation brings a Medicare reimbursement reduction of 2.0% in 2016 based on 2014 data.

Value-Based Modifier(VBM): The VBM, which many providers are not aware of, is linked to PQRS. Beginning in 2016, eligible providers (EPs) in groups with 10 or more EPs will be subject to a penalty based on performance. In 2017, this will include all EPs, not just those in larger groups.

Taken together, this adds up to a 9% penalty in 2017 based on 2015 participation.
To avoid these penalties, immediately assess your current participation in the MU, PQRS, and VBM programs. If you are not on track you must take steps to mitigate your risk as soon as possible.

Risk mitigation is the right way to describe it. As I mentioned in the beginning, I don’t think that many providers are planning ahead to avoid these penalties. I also don’t think they realize the long term consequences of the choices they make today.

Thanks Jim for waking us up to the reality.

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.


  • The penalties are less than the cost of a EHR and all its requirements, clicking, attesting, audit risk, etc. Plus penalties never work. Ever. It may drive EPs from taking more Medicare patients, or opting out of Medicare. Maybe that was the plan all along. Unless I am wrong VBM and PQRS are linked. These are so complicated, really there is nothing the average EP can do about them. Our group did periop group in a claims based version in 2013 and we did all the work, expected an incentive and they still are penalizing us. We called quality net who administers the support for CMS, and told us to fill out an informal review. We did that, and one of the questions was “are you incentive eligible?” which we were for 2013. We clicked yes and they were immediately denied by CMS as that meant we got an incentive. Huh? So called quality net again and they told us to redo the review, and say No to the incentive eligible question, which we did, and we got immediately denied again saying it was a duplicate review. So we called again, and they said that they had to do some work on our review and reapply in a week. We did that and the same dumb incentive eligible question was there (we asked them to fix that for everyone else, they never did ) and our review went in. 3 months later, still have not heard a thing. Still getting penalized. Called quality net and they said we may not hear for awhile. Plus I asked if they deny the review what is next, they said nothing, we get penalized, even though we did all the work , all the claims are correct and we have documentation of all the PQRS measures we checked. Crazy. That is the typical frustration with these programs, even if you do the work, they penalize anyway and clawback as much as they can. So its probably best just to forget them all. Again maybe that is the idea, drive us out of Medicare. Certainly these programs do NOTHING for improving care nor efficiency or safety or usability, even security. They make life MUCH worse for the front line EP and that is why you are seeing the stampede away from MU and all these complicated overwhelming programs.

  • I agree with the previous caller :-). Especially on:
    “Certainly these programs do NOTHING for improving care nor efficiency or safety or usability, even security.”

    They do the opposite, requiring Physicians to document to the patient they performed ……. in the EHR, can’t even use Paper. Therefore, have Physicians don’t even look at Patient anymore. This whole thing is not going in the direction of better Patient Care, just better useless Data Collection.

    But as a vendor, we participate. We participate in all the meetings to figure out what the Heck Medicare wants the Doctors to do. We participate in all the meetings where expert Consultants charge a fortune to clarify what takes place in the first meeting is correct. We make all the modifications in the Application Software to meet said requirements, and of course still have to implement it with Training to the Users of the Meetings Above. We then help with the Reporting, and of course the Audit of Said.

    Add all that up, multiply it by 2 for all our internal meetings on how to meet the requirements and I beg you or anyone in Medicare PQRS to answer one Simple Question:


    Simple Question, awaiting a Simple Answer.

  • I can’t even begin to comprehend the level of frustration felt by those who try to play by the rules and run into what’s been described above. Obviously, I don’t know their history, when they did what, or how well they did it.

    There’s a large hospital connected practice I know which went EPIC a few years ago. First time I was there with someone, we practically had to beg to get portal access; these days there are portal posters in every room, and you walk out with the info you need to sign up. And a doctor we met who makes it clear he considers it a necessary evil has clearly mastered it, making the EHR part of the exam, not a hindrance. The only problem I saw there with different doctors is that each one repeats all of the ‘every visit’ questions already gone over by an assistant – but that only took a minute or two.

    Part of what seems to make it work there; everyone using it now seems well trained, no pecking away, no having problems finding things – they just use it, efficiently. There seems to be plenty of support and training, and I’m sure that helps.


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