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CMS Releases Final Rule on Stage 2 Meaningful Use Standards

August 28, 2012
Health Care Alert

On August 23, 2012, the Centers for Medicare & Medicaid Services (CMS) released a final rule governing Stage 2 of the Medicare and Medicaid Electronic Health Record (EHR) Incentive Programs which seeks to expand “meaningful use” of certified EHR technology. The final rule can be viewed here.

Notably, while CMS originally established a timeline that would have required providers who first demonstrated meaningful use in 2011 to meet the Stage 2 criteria in 2013, the final rule gives providers more time—until 2014—to meet the criteria in order to qualify for an incentive payment. According to CMS commentary accompanying the final rule, the rationale for this delay is to provide “the needed time for vendors to develop [certified EHR technology].”

The Office of the National Coordinator for Health Information Technology (ONC), Department of Health and Human Services also released a related final rule on August 23 adopting certification criteria that certified EHR technology will need to include to, at a minimum, support the achievement of meaningful use by eligible professionals (EPs), eligible hospitals, and critical access hospitals (CAHs) under the Incentive Programs. A copy of the ONC final rule can be viewed here.

Other highlights from the Stage 2 final rule include the following:

  1. Stage 2 Meaningful Use Objectives - Nearly all of the Stage 1 core and menu objectives that were proposed are being finalized for Stage 2. The “exchange of key clinical information” core objective from Stage 1, however, was re-evaluated in favor of a “transitions of care” core objective in Stage 2. According to CMS, the former objective was difficult for providers to understand and achieve while the “transitions of care” objective is more robust and focuses on the provision of a summary of care record and medication reconciliation in connection with such transitions. Also, a “Provide patients the ability to view online, download, and transmit their health information” Stage 2 core objective replaces the “Provide patients with an electronic copy of their health information” objective.
    Two new objectives in the final rule are: “Use secure electronic messaging to communicate with patients on relevant health information” for EPs, and for eligible hospitals and CAHs: “Automatically track medications from order to administration using assistive technologies in conjunction with an electronic medication administration record (eMAR).”
  2. Reporting on Clinical Quality Measures (CQMs) - In order to qualify for incentive payments, EPs, eligible hospitals and CAHs must report on specified clinical quality measures. EPs will report on nine CQMs (out of a potential list of 64). CMS’ expectation is that EPs will select the CQMs that best apply to their scope of practice or unique patient population, or both. Likewise, the expectation is that eligible hospitals and CAHs will select measures that best apply to their patient mix. Eligible hospitals and CAHs will report on 16 CQMs (out of a potential list of 29 CQMs). For EPs, eligible hospitals and CAHs in their first year of demonstrating meaningful use, CQM data must be submitted via attestation. For those beyond their first year, CQM data must be reported electronically to CMS via a CMS-designated transmission method. 
  3. Medicare Payment Adjustments - Medicare payment adjustments are required by statute to take effect in 2015. Payment adjustments will be determined by prior reporting periods, however. EPs and eligible hospitals that are meaningful EHR users in 2013 will not be subject to a payment adjustment in 2015. If such providers first meet meaningful use in 2014, they may still avoid a payment adjustment in 2015 so long as they are able to demonstrate meaningful use at least three months prior to the end of the calendar year (for EPs) or fiscal year (for eligible hospitals) and meet the registration and attestation requirement by July 1, 2014 (for eligible hospitals) or October 1, 2014 (for EPs).
  4. Hardship Exceptions - The final rule outlines four categories of hardship exceptions that will exempt qualifying EPs from these payment adjustments in 2015 and perhaps subsequent years. The exemptions are subject to annual review and in no case may an EP be granted an exemption for more than five years.
    The categories of hardship exceptions in the final rule are: (i) insufficient Internet connectivity, (ii) a limited two-year exception for new EPs, (iii) extreme circumstances (e.g., a practice or hospital closure, a natural disaster which destroys an EHR system, severe financial distress resulting in bankruptcy), and (iv) specific type of practice exceptions (e.g., for EPs that lack face-to-face interactions with patients and lack the need to follow up with patients). The lack of Internet connectivity, extreme circumstances and new CAHs/eligible hospital exceptions are also exception categories for eligible hospitals and CAHs.

Although this delay in the requirement to meet Stage 2 criteria is likely welcome news to hospitals and EPs, being proactive now will help ensure that your organization understands and is in a good position to comply with these updated Stage 2 meaningful use criteria. For more information on the Medicare and Medicaid Electronic Health Record Incentive Programs or final rules discussed in this Alert, please contact any member of the Honigman Health Care Department .