CMS Bends on Final Stage 2 Meaningful-Use Rules for EHRs

August 23, 2012

The Centers for Medicare and Medicaid Services (CMS) today released the final version of its second-generation criteria for "meaningful use" of electronic health records (EHRs) that will make it easier for physicians to earn bonuses and avoid penalties.

In the final version, the agency chose to delay implementation of the so-called Stage 2 performance measures for EHRs until 2014, a year later than originally scheduled. These performance measures range from electronically prescribing to incorporating lab results as structured data. While this delay is good news for physicians, they did not get every regulatory break they had hoped for.

Organized medicine had lobbied CMS earlier this year to relax a proposed version of the Stage 2 rules for the government's meaningful-use incentive program, saying it would discourage physicians from adopting the technology. Under the incentive program, which began last year, clinicians can receive up to $44,000 under Medicare or up to $64,000 under Medicaid by demonstrating that they use EHRs in ways that improve patient care. At the same time, physicians who do not digitize their charts according to CMS standards face Medicare penalties beginning in 2015.

Physicians who earned a Medicare bonus in 2011 did so by meeting Stage 1 criteria for meaningful use. Stage 2 criteria were scheduled to kick in for those physicians in 2013, and failure to satisfy them that year would incur a penalty in 2015. Organized medicine protested that physicians needed more time to make the switch to Stage 2, and CMS obliged. According to the final Stage 2 rules released today, no physician — including those who earned bonuses in 2011 or 2012 — will have to satisfy the Stage 2 criteria until 2014.

Cutting Physicians Slack on Thresholds

The Stage 2 criteria for meaningful use of EHRs consist of 17 mandatory performance measures and any 3 of 5 elective measures, for a total of 20. There also are 20 measures under Stage 1, but 15 are mandatory, and 5 are elective.

Most of the Stage 1 measures migrated to Stage 2, but became harder to meet. How much harder was a matter of debate between CMS and organized medicine. In the end, physicians won some battles and lost others.

CMS, for example, wanted to raise the bar for electronic prescribing. The Stage 1 measure required physicians to electronically transmit more than 40% of their scripts — those eligible for electronic transmission, that is — to the pharmacy. CMS proposed increasing the threshold to 65% in the first draft of the Stage 2 rules, but the American Medical Association (AMA) and other medical societies countered that 50% would be more realistic. CMS settled on 50%.

The agency also eased a requirement for physicians to give patients the ability to view their health data online, and download or transmit it if they like. Under the proposed Stage 2 rules, more than 10% of a physician's patients would have had to access their data online for this measure to be satisfied. Organized medicine wanted to junk this measure, saying that CMS should not hold physicians accountable for patient behavior beyond their control. In the end, CMS kept the measure, but lowered the threshold to 5%, adding that it was achievable.

Four Exceptions to Meaningful-Use Penalties

In addition to cutting physicians slack on performance measures, the Stage 2 rules create 4 hardship exceptions to the Medicare penalty in 2015 for not achieving meaningful use:

  • Infrastructure: Clinicians must prove that they practice in an area with inadequate Internet access or "insurmountable barriers" to obtaining it.

  • New practitioners: Clinicians who begin practicing in 2015 would be exempt from the meaningful-use penalty in 2015 and 2016, but they would have to demonstrate meaningful use in 2016 to avoid the penalty in 2017.

  • Unforeseen circumstances: Physicians may be able to avoid a penalty if natural disaster or some other unforeseeable event prevented them from meeting EHR meaningful-use criteria. CMS will consider this exception on a case-by-case basis, and sparingly so.

  • Scope of practice: Medicare will refrain from penalizing physicians who cannot achieve meaningful use by virtue of how they practice. They may not routinely see patients face to face, for example, or they may practice in multiple locations where they have no control over the availability of EHR technology.

CMS, however, nixed a proposed exception having to do with physicians near the end of their careers. The AMA and its allies wanted to exempt physicians from the meaningful-use penalty and others like it if they were currently eligible for Social Security benefits, or would be by 2014. They said digitizing their practices at this late stage would be unfair.

In its final Stage 2 rules, CMS said that plenty of older physicians are earning meaningful-use bonuses. A practitioner's age, the agency concluded, does not constitute "a significant hardship."

More information on the Stage 2 meaningful-use criteria released today is available at the CMS Web site. The final Stage 2 rule itself is available at the Office of the Federal Register's Web site.