On December 18, Congress passed and President Obama signed into law a bipartisan budget agreement for federal fiscal year 2016. A package of Medicare changes was included, notably addressing the Meaningful Use penalties facing physicians and other healthcare professionals who bill Medicare (so-called eligible professionals or EPs) under the Electronic Health Record (EHR) Incentive Program.  Under that program’s rules, EPs and hospitals that do not meet Centers for Medicare and Medicaid Services (CMS) requirements for Meaningful Use in 2015 will see their Medicare Physician Fee Schedule payments reduced by 1 percent in 2017.

On October 16, 2015, CMS released a final rule modifying the program’s rules for 2015 through 2017 -- the “Modified Stage 2” rules -- and final rules for Stage 3.  The rules permit providers who were previously scheduled to be in a Stage 1 EHR reporting period for 2015 to use a lower threshold for certain measures.  Concerns about the ability to meet the Stage 3 requirements drove the push for passage of S. 2425. 

The changes to the Meaningful Use requirements in S. 2425 were sponsored by Sen. Rob Portman (R-OH) and Sen. Bob Casey (D-PA).  According to a summary provided by the bill’s sponsors, “an increase in the submission of hardship applications from [meaningful use] requirements in effect for 2015 is expected for reasons beyond providers’ control.”    

The new law permits CMS to grant a hardship exemption (that is, the requirement for meaningful use of an EHR does not apply) for any EP or hospital that applies for such an exemption prior to March 15, 2015.  CMS’s “eligible professionals” list for 2015 is available here.  EPs will have until March 15, 2016 to apply for the exemptions.  Hospitals will have until April 1.  Advocates for this legislation were disappointed to find that the enacted legislation does not include a proposed exemption for ambulatory surgery centers from meaningful use requirements. 

CMS must implement the provision through program instructions on its website and not through rulemaking.  Under prior law, EPs could apply for a hardship waiver by July 1, 2016.  EPs who miss the March 15, 2016 deadline still have the option to apply for a hardship waiver by July 1, 2016, but CMS will decide whether or not to grant them.