The public comments are in! The Centers for Medicare & Medicaid Services (CMS) and the Office of the National Coordinator for Health Information Technology (ONC) are now reviewing the 136 comments they received on a proposed reg released in late October 2023 related to information blocking “disincentives” that would apply to certain healthcare providers.

The proposed reg would establish disincentives for healthcare providers who violate the information blocking requirements established under the 21st Century Cures Act. At a high level, information blocking occurs when a health information technology (IT) vendor, network, or healthcare provider acts in a way that prevents or impedes the exchange of certain electronic health information. The overarching mandate includes nuanced requirements and exceptions (healthcare requirements are complicated, as you know!) To learn more about the information blocking regulations, check out McDermott Will & Emery’s overview here. Comments on the proposed reg were due on January 2, 2024.

To help me walk through the reg and stakeholders’ major comments, I’m bringing in my colleagues Kristen O’Brien and Lauren Knizner.

Overview of the Proposed Reg

We’ll start with a quick overview of the law and reg before diving into the comments. While the information blocking requirements have been in effect for a while, up until this point no penalties have been established for healthcare providers that the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) determines have committed information blocking. Importantly, the 21st Century Cures Act created a bifurcated approach to enforcing the information blocking prohibition, with separate provisions for health IT vendors and networks, which are subject to civil monetary penalties, and healthcare providers, who are subject to “appropriate disincentives.” Before the proposed reg, many stakeholders were uncertain how HHS would interpret the term “disincentives.”

In the reg, HHS proposes the following disincentives that leverage existing CMS quality reporting programs to levy varying financial impacts on providers found to have committed information blocking:

• A hospital or critical access hospital (CAH) would not be a meaningful electronic health record (EHR) user under the Medicare Promoting Interoperability Program in an EHR reporting period if OIG refers, during the calendar year of the reporting period, a determination that the hospital or CAH committed information blocking. As a result, a hospital would not be able to earn the three quarters of the annual market basket increase associated with qualifying as a meaningful EHR user, and a CAH would have its payment reduced to 100% of reasonable costs, from the 101% of reasonable costs it might have otherwise earned. CMS estimates that this proposal could result in a median disincentive amount of $394,353.
• A clinician would not be a meaningful EHR user under the Promoting Interoperability performance category of the Merit-based Incentive Payment System (MIPS) in a performance period if OIG refers, during the calendar year of the performance period, a determination that the clinician committed information blocking. Clinicians who are subject to MIPS and are required to report on the Promoting Interoperability performance category would receive a “zero” score for that performance category. Because the Promoting Interoperability category is 25% of the total MIPS score, the clinician could only earn a maximum total MIPS score of 75 points (assuming perfect scores in the remaining categories), which could result in the clinician receiving a negative payment adjustment. CMS estimates that the median individual disincentive amount could be a loss of $686 for a clinician, while an estimated median group of six clinicians could see a loss of $4,116, with a range of $1,372 to $165,326 for group sizes ranging from two to 241 clinicians.
• For the Medicare Shared Savings Program (MSSP), CMS proposes that a healthcare provider that is an accountable care organization (ACO) or part of an ACO, if determined by OIG to have committed information blocking, would be barred from participating in the MSSP for at least one year. This may result in a healthcare provider being removed from an ACO or prevented from joining an ACO, and where a healthcare provider is an ACO, this would prevent the ACO’s participation in MSSP. Suspension from the MSSP would result in the ACO losing out on any shared savings revenue—potentially millions of dollars—that it otherwise would have earned, among other potential consequences.

Click here for a full summary of the proposed reg.

Overarching Comments

Many commenters supported the overall goal of the 21st Century Cures Act to ensure that electronic health information is exchanged seamlessly and that patients and physicians are able to receive the information they need to make the best possible healthcare decisions. However, many commenters disagreed with HHS’s proposed “all or nothing” approach outlined in the reg, which bases the financial penalties on healthcare providers’ Medicare quality and valued-based program participation without calibrating the penalties to the severity of the alleged offense. In other words, commenters argued that the penalty amounts would be determined by factors other than the actual information blocking conduct. They also argued that since this is the first time that HHS has used its authority to institute disincentives, HHS should prioritize provider education and opportunity for corrective action instead of imposing harsh financial penalties. Stakeholders also expressed concern that HHS did not provide a fair appeals process, noting that healthcare providers and hospitals should have meaningful opportunity to address allegations of information blocking and should be able to appeal any determination of information blocking before HHS imposes a financial disincentive.

Financial Impact of the Proposed Disincentives

Many stakeholders felt that the reg skipped over an important carrot for improving compliance—helping healthcare providers better understand the complex information blocking rules and providing an opportunity for providers to self-correct—and instead started with the stick of reducing Medicare payments. Commenters stated that an overly punitive approach would negatively impact already struggling physicians, practices, and hospitals that are working with limited resources and dealing with increasing Medicare payment shortfalls. They were also concerned that the hefty potential penalties would discourage participation in Medicare quality and value-based care programs (such as the MSSP), contrary to CMS’s stated goal of increasing participation. Commenters also expressed concern that healthcare providers could be subject to multiple disincentives based simply on their participation in multiple programs, and that there was no proposed process in place to ensure that the application of multiple disincentives did not result in grossly excessive penalties.

Overall, commenters recommended that HHS prioritize education efforts and give healthcare providers an opportunity to correct any problematic practices before imposing harsh financial penalties that could impact patient access to care. Commenters emphasized that the information blocking regulations are extremely complex, that healthcare providers are still working to understand these complicated rules, and that a first step of education and self-correction is consistent with the enforcement approach taken for other novel and complex requirements.

Lack of a Fair Appeals Process

Some commenters also stated that the proposed appeals process outlined in the reg is insufficient and unfair. Under the proposed reg, the only way to appeal a disincentive would be to appeal through the Medicare quality program’s appeal process, and programs offer varying appeals rights. Commenters noted that different healthcare providers would have different rights to appeal the imposition of a disincentive (with some providers having no appeal rights) depending on their particular Medicare program. Commenters also noted that the proposed appeals approach would only enable a healthcare provider to appeal the actual disincentive. Commenters expressed serious concerns that there is no clear way for a provider to challenge an allegation of information blocking earlier in the process nor to challenge an OIG finding that the provider committed information blocking.

Overall, commenters recommended that HHS establish a clear appeals process that enables healthcare providers to address information blocking allegations and to challenge the determination that they are “information blockers.” They also recommended that HHS revise the current program-based appeals approach and instead allow all healthcare providers to appeal a disincentive regardless of their particular Medicare program.

“All or Nothing” Approach

Commenters noted that the disincentives would result in negative financial impacts based on the type of provider and their Medicare reimbursement program (effectively creating different punishments for different clinicians and facilities), rather than on the severity of the information blocking conduct. Commenters also noted that an OIG finding that contains a single instance of information blocking would have the same impact as one that contains multiple instances of information blocking perpetrated over an extended time period. In other words, one instance of information blocking triggers the same disincentive as multiple instances of information blocking. Commenters pointed out that the actual financial impact of the proposed disincentives is not directly tied to the severity of the offense, which they felt was an arbitrary way of disincentivizing bad behaviors.

Overall, commenters recommended that HHS consider mitigating factors that would calibrate the amount of the disincentive to the severity of the conduct, so that any disincentive ultimately imposed would be proportionate to the healthcare provider’s behavior.

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Based on these public comments, HHS will now start drafting final disincentives to put into place. Since HHS received pushback on its general approach, it will be interesting to see what changes, if any, HHS incorporates in the final disincentives reg. As HHS conceded in the proposed reg, the proposed disincentives only cover some actors and leave many other providers without any “appropriate disincentive” for the time being. Many commenters questioned why HHS took this approach and did not leverage a framework similar to the penalty structure under the Health Insurance Portability and Accountability Act or consider more alternatives than presented in the rulemaking.

Further, while there have only been 869 claims of information blocking (out of the millions of possible healthcare encounters when information exchange occurs), the vast majority of these complaints have been made against healthcare providers. Because healthcare providers are on the front lines of patient care, they will likely continue bearing the brunt of patient frustrations related to perceived information blocking, even when providers may not be the cause of delayed or unfulfilled information requests. Will the presence of disincentives for providers increase the number of complaints? What other effects will the disincentives have, and will they create more complexity for Medicare quality reporting and value-based care programs? These are some of the main questions we’ll be monitoring over the coming months and years ahead.

Until next week, this is Jeffrey (and Kristen and Lauren) saying, enjoy reading regs with your eggs.

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