Meaningful Use Mash-Up: Update on Deadlines, Changes for Stage 2, and the Start of MU Audits

by Davis Wright Tremaine LLP

[authors: Jane Eckels, Adam H. Greene]

The march towards electronic health records (“EHRs”) and health information exchange continues. It is worth noting a number of recent changes to the Medicare and Medicaid Meaningful Use programs governing incentives for electronic health records, including:

  • The start date for Meaningful Use Stage 2 has been delayed until 2014, but health care providers continue to face the threat of Medicare payment penalties beginning in 2015 if they are not meaningful users in 2014 and each subsequent year;
  • Stage 2 will continue to push health care providers to meet more and higher levels of EHR use, including basing certain core measures on patient actions (such as what percentage of patients access their health information electronically);
  • Before long, all participating meaningful users will need to acquire and implement updated EHR technology that complies with 2014 certification criteria, but will have more flexibility to choose EHR technology that fits their needs; and
  • A contractor has begun to audit Stage 1 incentive recipients regarding the veracity of their attestations of meaningful use.

We recommend that every eligible hospital and practitioner develop and implement a meaningful use strategy, update the strategy as necessary to reflect continuing changes to the program, and include in their compliance programs EHR technology assessment, ongoing user education, and robust documentation to support attestations.

The meaningful use train slows a little, but continues to chug along
The Centers for Medicare & Medicaid Services (“CMS”) published the final rule for Meaningful Use Stage 2 on Sept. 4, 2012, in the Federal Register. CMS has delayed required compliance with Stage 2 of Meaningful Use from 2013 until 2014. Additionally, because all providers will need to adopt 2014-certified EHR technology, CMS has accounted for the necessary technology transition by allowing, during 2014 only, all meaningful use program participants to report on a 90-day period instead of the entire year.

Meanwhile, beginning in 2015, the HITECH Act mandates a financial penalty for providers not achieving meaningful use. An eligible professional (“EP”) or hospital can become a meaningful user under either the Medicaid or Medicare incentive program to avoid the downward payment adjustment. However, just the adoption, implementation, or upgrade of certified EHR technology—sufficient to earn incentive payments in the first year of the Medicaid program—is not meaningful use and will not allow a provider to avoid the Medicare payment adjustment.

If an EP demonstrates meaningful use in 2014 for the first time, the EP must attest to meaningful use no later than Oct. 1, 2014 to avoid the Medicare penalty. Because the initial reporting must cover a 90-day period, the absolute latest for EPs to begin meaningful use is July 1, 2014 to avoid a penalty.

Eligible hospitals first achieving meaningful use in 2014 must attest no later than July 1, 2014 (because their payment years use the federal fiscal year) to avoid the 2015 payment adjustment. This means they must begin their 90-day reporting period by April 1, 2014.

There are hardship exemptions to the payment penalty available under both the Medicare and Medicaid programs, covering areas such as: lack of infrastructure, newly practicing EPs or newly established hospitals, unforeseen circumstances, lack of EP interaction with patients, and EPs practicing at locations where the EP doesn’t have control over the availability of certified EHR technology.

If EPs and hospitals seek to maximize payments and avoid the potential for penalties, then they should be planning now how they will accomplish meaningful use to meet these deadlines, including consideration of potential certified EHR technology costs as part of their capital planning for 2013 and 2014.

CMS continues to raise the bar
Stage 2 retains the structure of a “core set” and “menu set” of objectives. All meaningful users must satisfy all core set objectives, and a minimum number of menu set objectives of their choice. As a general matter, the menu objectives from Stage 1 have become part of the core objectives for Stage 2, and new objectives have been designated for the menu set. For the objectives that continue within the core set, the measures required to achieve those items generally have been increased. 

CMS has retained some of the more controversial requirements from its proposed rulemaking that require patient activity, but have modified them to be less onerous. The patient access objective, which requires a provider to provide online access to health information to more than 50 percent of such provider’s patients, in its final form requires that five percent of patients actually access their online health record. This is a reduction from the initial proposed 10 percent threshold. Similarly, the objective that patients send secure messages to EPs was retained as a final requirement, but the threshold is five percent  instead of the initially-proposed 10 percent.

Stage 2 will require a significant increase in the electronic exchange of summary of care documents. Program participants will be required to provide summary of care documents for more than 50 percent of transitions of care and referrals, and 10 percent of these must be provided electronically. CMS also had proposed that a percentage of electronically sent summaries of care would need to be sent to an unaffiliated provider who is using an EHR from a different vendor. As finalized, the rules instead require a single summary of care document to be sent to a provider (regardless of whether or not it is unaffiliated) with an EHR from a different vendor, or the participating provider may complete a successful test with a CMS test EHR system.

Clinical Quality Measures (“CQMs”) are no longer tied to a specific stage. Beginning in 2014, whether a first-time Stage 1 meaningful user or a Stage 2 meaningful user, EPs must complete nine of 64 available CQMs. Of those nine, an EP must diversify across at least three domains identified in the National Quality Strategy (NQS) that HHS submitted to Congress: patient and family engagement, patient safety, care coordination, population and public health, efficient use of health care resources, and clinical processes/effectiveness.  Hospitals must complete and submit 16 of 29 available CQMs, also covering at least three NQS domains. Additionally, electronic reporting of CQMs will debut in 2014. All Medicare participants in at least their second year of meaningful use will be required to electronically report CQMs to CMS. Each state may determine whether and how Medicaid providers participating in that state’s program will electronically report CQMs to that state.

Finally, there will be some changes to Stage 1. Because all program participants (regardless of stage) will need to update to 2014 EHR technology (discussed below) and such technology will be geared towards Stage 2 objectives, program participants that are in Stage 1 will face some changes that more closely align Stage 1 with Stage 2. For example, Stage 1 previously required providers to provide patients with an electronic copy of their health information and copies of their discharge instructions. For Stage 2, these objectives have been replaced with the objective to provide patients the ability to view online, download, and transmit their health information, and the 2014 EHR technology is required to meet this newer objective. Stage 1 participants also will need to have 2014 EHR technology to qualify for meaningful use and, instead of satisfying the prior core requirements of providing patients with an electronic copy of their health information and discharge instructions, they will need to provide 50 percent of patients the ability to view online, download, and transmit their health information (without regard to whether patients take action, which is a Stage 2 measurement).

The Stage 2 rule also modifies the definition of “patient encounters” to create a more expansive definition. This likely will allow more providers to meet the Medicaid patient volume thresholds and qualify for participation in the Medicaid Meaningful Use program. In addition, certain children’s hospitals that did not have a CMS certification number can now participate in the Medicaid program.

Congratulations on your new EHR; Time to upgrade
HHS also published new standards and certification criteria for certified EHR technology on Sept. 4, 2012. Beginning in 2014, all program participants, regardless of meaningful use stage, must have Certified EHR Technology (CEHRT) that meets the 2014 edition requirements outlined in this new rule. All EHR systems meeting the new requirements will contain base functionality. Under the new scheme, however, program participants would need to have only as much CEHRT as required for their specific stage—that is, sufficient CEHRT to cover the applicable core set objectives and the specific menu objectives that they intend to seek. Accordingly, a Stage 1 participant will not need to purchase EHR features that are only necessary for satisfying Stage 2, and a Stage 2 participant will not need to purchase EHR features pertaining to menu objectives that the participant does not intend to satisfy. An EHR certified to the 2011 criteria, however, will no longer suffice.

Accordingly, EPs and hospitals must be cognizant that, if they intend to participate in 2014, even if participating at Stage 1, their current EHR technology that has been certified to 2011 criteria will need to be updated to reflect 2014 criteria. If EPs or hospitals are not yet participating but are in the process of purchasing CEHRT, then they may be well served to include the costs of the 2014 upgrade in their current discussions with vendors.

You didn’t think they would just take your word, did you?
As promised, we also are seeing audits of Stage 1 meaningful user payment recipients. In April 2012, CMS awarded a $1.2 million contract to Figliozzi and Company to perform audits of Stage 1 recipients. The solicitation for the contract states that “[u]pon the completion of the audit, the contractor is required to communicate non-compliances identified to organizations or personnel. CMS Management will evaluate the evidence in order to make a final determination of each “meaningful EHR users’ eligibility.” It is unclear whether noncompliance will simply result in a revocation of prior meaningful use payments, or if it will be treated as potential false claims (e.g., subject to treble damages and additional fines).

In July 2014, some meaningful use program participants began receiving audit letters. According to reports, the letters seek four categories of documentation:

  • Documentation from the Office of the National Coordinator for Health IT that shows the provider used a certified EHR system for meaningful use attestation;
  • Information about the method used to report emergency department admissions;
  • Documentation that supports the provider’s attestation for the core set of meaningful use criteria; and
  • Documentation that supports the provider’s attestation for the required number of menu set meaningful use objectives.

Audited entities only receive two weeks to produce the requested documentation. Accordingly, it is imperative that EPs and hospitals seeking meaningful use payments organize and maintain all the documentation necessary to demonstrate that their EHR technology is certified and that they have met each applicable measure.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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