2013: The Year of the Penalty

Last week I mentioned my time in New Orleans at the RPA meeting. On Saturday morning I had the opportunity to speak to the group about the CMS incentives impacting nephrologists. In the aftermath of that presentation, the looming meaningful use penalty has been a source of confusion. So in the midst of March Madness, let’s revisit this confusing issue.

 

The majority of nephrologists are familiar with the “bonus” or positive side of the financial incentive structure. You basically do what is expected (e-prescribe, report PQRS, or demonstrate meaningful use) and then after a variable interval of time, you receive an incentive payment. The challenging piece of this puzzle is the other side of the incentive program—the penalty. The penalty is universally calculated as a percentage of the provider’s entire Medicare Part B book of business. Neither CMS, nor the docs for that matter, have an interest in participating in “payback” program. That is to say, pay the doc his or her Part B allowable, then later extract the penalty from those who were not meaningful users in this case. As such, CMS must survey provider behavior well ahead of the program year in order to determine upon whom to levy the penalty. Take a look at the slide I used in New Orleans last week to describe the 1.0% 2015 meaningful use penalty:

 

 

This year is the payment adjustment reporting period or “surveillance period” for the penalty side of the 2015 incentive. During 2013 CMS will largely determine whom to penalize in 2015. If you demonstrate meaningful use during 2013, either for the first time or as your second or third year of participation in the program, CMS will recognize your successful participation during the 2015 payment adjustment reporting period and they will not levy the 1.0% 2105 penalty.

 

If you do not demonstrate meaningful use in 2013, there are still a couple of ways to avoid the 2015 penalty. You could apply for one of the hardship exceptions we have discussed in this forum before. As a reminder, those hardship exceptions include:

1. Providers who are new to the practice of medicine (these docs can receive a two-year exception from the payment adjustment).
2. Providers who practice in multiple locations but do not control the availability of certified EHR technology in all locations.
3. Extreme circumstances that exist outside the provider’s control (examples provided include your practice closing or a natural disaster destroying your EHR).
4. Providers who have insufficient access to the internet.
5. Providers who are non-hospital based anesthesiologists, radiologists or pathologists.

 

In order to avoid the 2015 penalty via one of these five hardship exceptions, the provider must apply for the exception by October 15, 2013. CMS tells us the link to the site to apply for one of these exceptions will be available in the future: “Information on how to apply for a hardship exception will be posted on the CMS EHR Incentive Programs website (www.cms.gov/EHRIncentiveProgram) in the future.” When I checked this weekend, I was unable to locate the information. Stay tuned.

 

The last way to avoid the 2015 penalty applies to providers who are new to the program. If, entering 2014, you have never participated in the meaningful use program and you elect to do so in 2014, as long as you complete your attestation by October 1, 2014, you will avoid the 2015 penalty.

 

In summary, there are effectively three ways to avoid the looming 2015 meaningful use penalty:

1. Demonstrate meaningful use this year, or
2. File for a hardship exception prior to October 1, 2013, or
3. If next year is your first year in the program, attest before October 1, 2014.

 

Do you have questions or comments about the looming meaningful use penalty? Drop us a comment and join the conversation.