Two divisions of the U.S. Department of Health and Human Services (HHS) – the Centers for Medicare & Medicaid Services (CMS) and the Office of the National Coordinator (ONC) – released the "21st Century Cures Act: Establishment of Disincentives for Health Care Providers That Have Committed Information Blocking" proposed rule describing the long-awaited disincentives applicable to certain healthcare providers determined to have committed information blocking (Proposed Rule). The Proposed Rule also provides information related to the HHS Office of Inspector General's (OIG) investigation of claims of information blocking and referral of providers to the appropriate agency to be subject to appropriate disincentives. In addition, the Proposed Rule establishes how information would be shared with the public about providers who have committed information blocking. Enforcement of penalties is already in place for certain actors as of Sept. 1, 2023. (See Holland & Knight's previous blog post, "Information Blocking Enforcement Penalties Begin Sept. 1, 2023," July 18, 2023.) Enforcement of disincentives for certain healthcare providers would begin upon finalization of this Proposed Rule.

The Proposed Rule does not apply to all healthcare providers as defined in the 21st Century Cures Act. Instead, only those who provide services through specific CMS payment programs would be subject to the disincentives outlined in this rule. Therefore, the Proposed Rule requests input on how HHS can build on the current proposal to establish disincentives for other healthcare providers, particularly those not participating in CMS programs identified in this proposed rule. The Proposed Rule will be published in the Federal Register on Nov. 1, 2023, and the comment period will be open until Jan. 2, 2024, at 11:59 p.m. ET.

Highlights of the Proposed Rule

The Proposed Rule does not apply to all healthcare providers and represents only the "first step" by the ONC and CMS, and proposals of additional disincentives are likely. Other takeaways from the Proposed Rule include:

• The proposed disincentives will have a greater financial impact on larger hospitals and group practices, and when applied to an accountable care organization (ACO) have the potential to negatively impact "innocent" participating providers.
• The proposed disincentives directly tie information blocking actions by healthcare providers to failures to demonstrate meaningful use of electronic health records.
• CMS recognized the existing regulatory authorities for promoting interoperability as an appropriate structure for disincentives for healthcare providers, hospitals and critical access hospitals (CAHs) participating in the Medicare Merit-Based Incentive Payment System (MIPS) and Promoting Interoperability payment programs.
• Proposed disincentives also tie information blocking to an ACO's failure to share health information through enabling technologies.
• CMS recognized as an appropriate disincentive the existing regulatory authorities pursuant to the Medicare Shared Savings Program (MSSP) program to terminate ACO participation for violation of applicable laws, including the Cures Act and its Information Blocking regulations. CMS program integrity reviews of ACOs will include an information blocking compliance review. An ACO-related disincentive is for at least one year and may extend if not remediated.
• The applicable year for the disincentive will be the year in which OIG makes the determination and not the year in which the conduct occurred.
• Upon OIG determination of information blocking, CMS will notify the offending healthcare provider. Appeals of determinations will be allowed as permitted by the regulatory authority through which the disincentive is enforced.
• OIG determinations of information blocking and CMS disincentive actions will be published.
• Healthcare providers can be subject to multiple disincentives, but CMS will take appropriate steps to prevent applying disincentives for actions that arise from another information blocking actor's conduct such as a certified health technology that does not provide functions needed to exchange electronic health information (EHI) in accordance with the regulations.
• OIG may refer allegations to the Office for Civil Rights (OCR) when related to privacy, security or access discrimination, and OCR's enforcement is not limited to information blocking. OIG may also confer and consult with the ONC and the Federal Trade Commission (FTC) as needed.

Proposed Disincentives

Under the Proposed Rule, healthcare providers participating in several existing CMS programs would be referred to CMS for disincentives.

Medicare Promoting Interoperability Program

An eligible hospital or CAH that the OIG determines to have committed information blocking would not be a meaningful electronic health record (EHR) user in an EHR reporting period. As a result, an eligible hospital would not be able to earn the three quarters of the annual market basket increase associated with qualifying as a meaningful EHR user, while a CAH subject to this disincentive would have its payment reduced to 100 percent of reasonable costs, from the 101 percent of reasonable costs it might have otherwise earned, in an applicable year. CMS projects that the median disincentive amount is $394,353.

Merit-Based Incentive Payment System

A MIPS-eligible clinician would not be a meaningful EHR user in a performance period if the OIG determines the clinician committed information blocking during the calendar year of the reporting period. The MIPS-eligible clinician, if required to report on the Promoting Interoperability performance category of MIPS, would not earn a score in the performance category (a zero score), which is typically a quarter of the total final composite MIPS performance score. The final MIPS score is the basis for a per claim payment adjustment on claims submitted two years after the performance period. For that reason, an information blocking determination would result in the future reduction of revenue from claims submitted in the future (i.e., a 2024 determination will affect 2026 claims payments). HHS estimates a median individual disincentive amount of $686 for an eligible 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 (the estimated 2.5th to 97.5th percentile of group sizes).

Medicare Shared Savings Program

A healthcare provider that is an ACO, ACO participant or ACO provider/supplier that the OIG determines has committed information blocking would be barred from participating in the MSSP for at least one year. As a result, an ACO may be prohibited from contracting with CMS and participating in the MSSP and an ACO participant or ACO provider/supplier may be removed from an ACO or prevented from joining an ACO.

The disincentive provision does not limit the number of disincentives that an appropriate agency may impose on a healthcare provider. Instead, a healthcare provider would be subject to each appropriate disincentive established by an agency that is applicable to the provider. HHS expects that imposing cumulative disincentives would further deter healthcare providers from engaging in information blocking.

OIG Investigation

CMS refers to the prior OIG Final Rule on Enforcement regarding its investigation process and priorities for enforcement. When investigating allegations of healthcare provider information blocking conduct, OIG will consider if the conduct 1) resulted in, are causing or have the potential to cause patient harm; 2) significantly impacted a provider's ability to care for patients; 3) were of long duration; and 4) caused financial loss to federal healthcare programs or other government or private entities. This varies from the priorities related to developers of health information technology (health IT) and health information networks (HINs)/health information exchanges (HIEs), as the definition of intent to commit information blocking for healthcare providers does not require actual knowledge.

Transparency for Information Blocking Determinations, Disincentives and Penalties

In an effort to promote transparency and provide guidance about how and where information blocking impacts the nationwide health information structure, HHS will publish certain details about information blocking enforcement. Specifically, HHS intends to publicly release information, including applicable settlements, penalties and disincentives about actors that the OIG determines to have committed information blocking. This information would be posted on ONC's public website. For healthcare providers, the Proposed Rule proposes posting: healthcare provider's name, business address (to ensure accurate provider identification), the practice found to have been information blocking, the disincentive(s) applied and where to find additional information, where available, about the determination of information blocking that is publicly available via HHS or another part of the U.S. government. The rule also proposes posting information about HINs/HIEs and health IT developers of certified health IT that have been determined by the OIG to have committed information blocking and have either resolved their civil money penalty (CMP) liability with the OIG or had a CMP imposed by the OIG for information blocking. Specifically, to ensure accurate identification of actors, HHS proposes to post the type of actor (e.g., HIN/HIE or health IT developers of certified health IT) and the actor's legal name, including any alternative or additional trade name(s) under which the actor operates. In the case of a resolved CMP liability, HHS would post the practice alleged to be information blocking.

Next Steps

ONC and CMS will host an information session on the Proposed Rule on Nov. 15, 2023.