On October 6, the U.S. Department of Health and Human Services (HHS) announced that the Centers for Medicare & Medicaid Services (CMS) and Office of the National Coordinator of Health Information Technology issued a final rule with comment period ("Final Rule") simplifying certain requirements of the Medicare and Medicaid EHR Incentive Programs (the “Incentive Programs”). CMS issued a fact sheet on the Incentive Programs.

The Incentive Programs, established by the American Recovery and Reinvestment Act of 2009, provide for certain incentive payments to eligible providers, eligible hospitals and critical care hospitals to promote the adoption and meaningful use of health information technology and electronic health records (EHR). Under the Incentive Programs, eligible providers, eligible hospitals and critical care hospitals must demonstrate “meaningful use” of EHR technology that can be qualitatively and quantitatively measured. The Incentive Programs’ meaningful use requirement is composed of three stages. 

The Final Rule seeks to simplify the requirements that eligible providers, eligible hospitals and critical care hospitals must satisfy to qualify for incentive payments and to avoid negative payment adjustments under the Incentive Programs. Specifically, the Final Rule: 

  • extends the reporting period required by the Incentive Programs to 90 days and aligns the reporting period to the calendar year; 
  • removes duplicative reporting requirements under the Incentive Programs; 
  • provides that the requirements of Stage 3 of the Incentive Programs’ meaningful use requirement will be optional in 2017, but mandatory in 2018; 
  • strengthens and enhances certain cybersecurity measures; 
  • implements a new merit-based incentive payment system based upon the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) (which Congress passed in early 2015 to replace the sustainable growth rate (SGR) formula, previously discussed here); 
  • establishes additional objectives and measures of meaningful use for eligible providers, eligible hospitals and critical care hospitals; and 
  • establishes the use of application program interfaces to enable connection among EHR systems and to provide increased patient access to EHR. 

The Final Rule includes a 60-day public comment period to facilitate additional comments regarding Stage 3 of the meaningful use requirement. CMS said that these additional comments will be used to inform future rulemaking and policies related to the Incentive Programs and the implementation of MACRA.