Last Friday, the Centers for Medicare & Medicaid Services (“CMS”) proposed a one-year extension of Stage 2 of the meaningful use standards for Medicare and Medicaid electronic health record (“EHR”) incentive programs. Under the revised timeline, Stage 2 still begins in 2014 but will be extended an additional year through 2016. Stage 3 will now begin in 2017 for providers that have completed at least two years in Stage 2 by that time. This delay mirrors CMS’s previous one-year extension of Stage 1 for early adopters of EHR. What this means to providers is that their deadline for first coming into compliance with Stage 2 has not been extended, but they may have an additional year before they need to satisfy Stage 3 criteria. The proposed extension also does not significantly impact the upcoming Medicare payment reductions; eligible hospitals and professionals that have not begun satisfying meaningful use criteria in 2014 face reimbursement penalties scheduled to begin in 2015.

CMS expects to release the proposed rulemaking for Stage 3 meaningful use standards in the fall of 2014, along with the corresponding ONC proposed rules for the 2017 Edition of the ONC Standards and Certification Criteria. CMS has also indicated it will issue a 2015 Edition of the ONC Standards and Certification Criteria, but that this edition will be voluntary. Providers that implement 2014 Edition certified EHR products will not have to upgrade to 2015 Edition EHR technology.

According to CMS and ONC, the goal of the timeline change is twofold—(1) to focus efforts on the successful implementation of the enhanced patient engagement, interoperability, and health information exchange requirements in Stage 2; and (2) to utilize data from Stage 2 participation to inform policy decisions for Stage 3 requirements. In other words, the proposed extension appears less focused on assuring provider compliance and more focused on providing the government additional time to develop the Stage 3 requirements.