EHR Incentive Program Alert: Hospital Hardship Applications Due July 1, 2018

Hospitals eligible to participate in the Medicare electronic health record (EHR) incentive programs that failed to meet the 2017 meaningful use standards have until July 1, 2018 to submit a hardship application and potentially avoid reduced Medicare payments.

The Centers for Medicare & Medicaid Services (CMS) mandates that payment adjustments be applied to Medicare-eligible hospitals that are not “meaningful users” of certified electronic health record technology (CEHRT) under the EHR incentive programs (recently renamed the “Promoting Interoperability Programs”). By February 28, 2018, hospitals were required to attest to meaningful use of CEHRT, as measured by 10 objectives. Those that failed to successfully attest in 2018 to meaningful use of CEHRT in 2017 will be subject to the payment adjustment in 2019. The payment adjustment reduces the inpatient prospective payment system (IPPS) increase by 75% this year (amounts are adjusted each year). Thus, for example, if the IPPS rate increase is 2%, hospitals that failed to attest meaningful use would only receive a .5% IPPS increase.

However, hospitals may be exempt from the Medicare payment adjustment if they can show that demonstrating meaningful use would have resulted in a significant hardship. To be eligible for the hardship exception, the hospital must certify that the circumstance was beyond the hospital’s control, and the hospital must explicitly outline how the circumstance significantly impaired the hospital’s ability to meet meaningful use. The exceptions categories considered by CMS are “Insufficient Internet Connectivity” (e.g., lack of broadband) and “Extreme and Uncontrollable Circumstances,” which include:

  • Natural disaster (which damaged or destroyed the EHR),
  • Hospital closure,
  • Severe financial distress (bankruptcy or restructuring), and
  • EHR certification/vendor issues (e.g., issues with certification, such as delays or decertification; issues with the implementation of the CEHRT, such as switching products; or issues related to insufficient time to make changes to the CEHRT).

Hospitals do not need to file hardship applications if they successfully demonstrated meaningful use for Program Year 2017 or if they are new and obtained a new CMS Certification Number (CCN) from October 1, 2016 through July 1, 2018.

Hospitals that do plan to submit a hardship application should not wait until too close to the deadline to prepare their submissions. Notably, hospitals only have “one bite at the apple” to obtain a hardship exception since CMS’s determinations regarding hardship exceptions are final and cannot be appealed. Further, all documentation is required at the time of submission, and additional documentation will not be accepted. Thus, hospitals should assemble their application as soon as possible to leave time for thorough review before submission.

If you have any questions regarding the Hardship Exception Application or the EHR incentive program, please contact Jennifer E. Tyler or Madison M. Pool.

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