On March 30, the Department of Health and Human Services’ (HHS) Centers for Medicare & Medicaid Services (CMS) published its proposed rulemaking for Stage 3 of the Medicare and Medicaid Electronic Health Records (EHR) Incentive Program in the Federal Register. According to HHS, the proposed Stage 3 rule, if adopted, would simplify the EHR Incentive Program, give providers increased flexibility, and drive EHR interoperability. HHS in turn expects these improvements would enhance the delivery and quality of care provided to patients.

Presently under the Health Information Technology for Economic and Clinical Health (HITECH) Act, eligible professionals (EPs), eligible hospitals, and critical access hospitals (CAHs) that meaningfully use health information technology certified by the Office of the National Coordinator for Health Information Technology (ONC) can qualify for incentive payments under Medicare and Medicaid. If finalized, the proposed Stage 3 rule would establish new meaningful use criteria for participating professionals and hospitals to meet in order to qualify for Medicare and Medicaid incentive payments, and avoid downward payment adjustments under Medicare. The proposed rule also seeks to improve and streamline the meaningful use structure already in use by replacing outdated measures such as paper-based workflows, chart abstraction, or other manual actions and with an electronic format and by removing outmoded performance measures.

Under the proposed rule’s current language, EPs, CAHs, and eligible hospitals could start demonstrating Stage 3 meaningful use in 2017, but by 2018 all providers not qualifying for a hardship exception would need to demonstrate Stage 3 meaningful use or face payment adjustments.

The Stage 3 rule would also establish new reporting guidelines for the clinical quality measurements (CQMs) that EPs, eligible hospitals, and CAHs must report in order to qualify for incentive payments and avoid payment adjustments. For instance, Stage 3 would encourage electronic CQM submissions for Medicare participants in 2017, and require electronic submissions starting in 2018.

HHS is seeking public comments on several issues raised in the proposed rule, such as how “meaningful use” will be defined under Stage 3; replacing the current 90-day EHR reporting period for the initial reporting year with a full calendar year period; whether states should continue to have flexibility to specify how relevant data may be transmitted and reported under the Medicaid EHR Incentive Program; and HHS’ evaluation process for considering whether performance measures are effectively “topped out” and no longer able to be improved; among others.

The public comment period for the proposed rule runs through May 29, 2015.