CMS announces payment adjustments for EHR Incentive Program in FY2017

Hospitals that couldn’t show meaningful use of certified electronic health record (EHR) technology in their 2015 reporting will have their payments reduced by 75 percent in the next fiscal year, CMS announced.

The reduction would come from the hospital’s Inpatient Prospective Payment System (IPPS) rate. The adjustments have risen over the past several years, starting with a 25 percent decrease for FY2015 (for the 2013 reporting period) and then a 50 percent decrease for FY2016 (for the 2014 reporting period). The adjustment will stay at 75 percent past 2017.

The more than 4,800 hospitals eligible for the EHR Incentive Program can apply for a hardship exemption, based on factors like lack of broadband service or problems with their EHR vendor, but hospitals had to apply for an exemption by April 1.

Most hospitals won’t need an exemption or a payment adjustment, as CMS said 98 percent of eligible hospitals and critical access hospitals successfully demonstrated meaningful use “at either Stage 1 or Stage 2,” leaving around 100 hospitals who failed to meet those standards.

The agency’s fact sheet pointed out hospitals have to demonstrate meaningful every year to avoid reductions to payments.

“For example, an eligible hospital that demonstrates meaningful use for the first time in 2013 will avoid the payment adjustment in FY2015, but will need to demonstrate meaningful use again in 2015 in order to avoid the payment adjustment in FY2017,” CMS said.