The Meaningful Use Hardship Exception: To File or Not to File?

Well, folks, the summer solstice has passed and the days are becoming imperceptibly shorter. In Southside Virginia the dog days of summer are upon us, and it is hot, really hot. The month of July is right around the corner and with it the deadline for filing the meaningful use hardship exception. Every year about this time I field a number of queries about this issue. There is a lot of well-intended, yet inaccurate information out there, so today let’s clear up the confusion and set the record straight.

Why you should care

As you may recall, when the MU program began in 2011, there was not a penalty associated with non-participation. You either demonstrated MU and collected a check from CMS or you ignored the program or were ineligible to participate. When 2013 rolled around, non-participation in the MU program carried additional consequences beyond missing out on the payment for successful attestation. If you did not successfully attest in 2013, your Medicare Part B physician fee schedule was reduced by 1.0% in 2015—CMS created a non-participation penalty and levied it 2 years later.

The MU hardship exceptions were created because CMS recognized there are many circumstances in which providers have valid excuses for not demonstrating meaningful use, and in these settings they should not incur a penalty. The hardship process was first introduced for the 2013 reporting period. If you submitted a valid excuse prior to the CMS deadline, and that excuse was accepted by CMS, you were not subject to the 1.0% penalty that year.

The hardship application we are discussing today must be in the hands of CMS by 11:59 pm EDT, July 1, 2015. That time stamp reflects just how serious they are—late applications will not be reviewed. The application under discussion today reflects what you did (or could not do) during calendar year 2014, and it’s purpose is to avoid the 2.0% Medicare Part B penalty you would otherwise face in 2016 for failing to demonstrate MU in 2014. Clear as mud, right?

Hardship application not necessary

Before we get into the nitty gritty of the application itself, let’s make sure we understand who does NOT need to go through this application process. The set of instructions on the CMS web site is actually very informative.

First and foremost, if you successfully demonstrated MU in 2014, you can stop reading this post. Remember this hardship exception is for people with a valid excuse that explains why they did NOT demonstrate MU last year. If you did successfully demonstrate MU in 2014, you will not incur a penalty in 2016. There is no reason to file a hardship exception this year.

Second, if you are new to practice, which in this context means you did not file a Medicare claim prior to 2015 you do not need to file a hardship exception this year. CMS tells us you will not be penalized in 2016 based on the claims data they review.

Third, if more than 90% of your patient encounters occur in the hospital (defined as place of service codes 21 or 23 on the claims), CMS will classify you as a hospital-based provider and declare you ineligible for the MU program (and the penalty), so there is no need to file the hardship exception.

Last, but not least, while it’s unusual, some nephrology practices employ radiologists and some access centers employ anesthesiologists. If you have providers registered in PECOS as radiologists, anesthesiologists, or pathologists for that matter, you do not need to file the hardship exception. You are off the hook by virtue of your specialty.

The 50% Rule

There are four reasons for filing for a hardship application, but the only one I have been asked about is the one related to our old friend the 50% Rule. You remember that rule don’t you? It started as an eligibility requirement necessary to play in the meaningful use pond. Basically the 50% Rule states that if more than 50% of your outpatient encounters occur in a venue(s) of care not equipped with certified EHR technology (CEHRT), you are not eligible to participate in the program. Note I have highlighted “outpatient encounters.” Everything we do outside the hospital (place of service 21 or 23) is part of this calculation, including your face-to-face encounters in a dialysis facility or a vascular access center. The related hardship exception was created so that this provider group would not be penalized for non-participation.

The hardship exception related to the 50% Rule is labeled “Lack of Control over the Availability of Certified EHR Technology.” Effectively you are attesting to the fact that more than 50% of your outpatient encounters occurred in a venue(s) not equipped with a certified EHR AND the decision to deploy a certified EHR in those venue(s) is outside of your direct control.

One of the concerns I have heard raised goes something like this: “In 2013 I overcame the 50% hurdle because I accessed my office-based certified EHR from within the dialysis canter and entered the necessary patient data to meet meaningful use and I was paid the incentive for successfully attesting for MU. How can I now claim a hardship exception related to the 50% Rule?” Well, funny you should ask. If you have a chance, take a look at the top of page 30 in this transcript from a CMS-sponsored call explaining this specific hardship exception and its impact on nephrologists in dialysis facilities. The Cliff Notes version is this: we have the opportunity to continue to do that (access our office-based certified EHR in the dialysis center, capture the MU data, and use that data in combination with what happens in the office for our attestation). Or we can file for the hardship exception. Importantly each hardship exception is reviewed independent of what you did last year or the year before.

Nitty Gritty

So if you are still reading let me address a couple of points about the application itself, which are common sources of confusion. As noted above, the essence of this hardship exception is asking you to attest to two things: More than half of your outpatient encounters occurred in a venue(s) of care that was not equipped with a certified EHR AND the decision to deploy a certified EHR is beyond your direct control. If you are filing this application because of the 50% Rule, you must complete section 2.3. I have copied an important part of that section below:

Figure 1: Section 2.3 MU Hardship Exception Application

If you check all of the boxes labeled 1-4 in figure 1, there is no need to send in additional justification with your hardship application. Questions 1-4 are asked in order to establish whether or not you control the decision to deploy a certified EHR in these venues of care (dialysis facilities or vascular access centers). But many nephrologists are either medical directors, joint venture partners or both, and if that’s the case you would be wise not to check boxes 1 (medical directors) or 2 (JV partners). Instead, what’s more appropriate is to draft a note to include with your application (referred to in italics in figure 1 as provide justification to be considered for this hardship exception). In my view, and let me emphasize this is my view alone (which along with a couple of bucks will get you a cup of coffee), the justification that one might consider goes something like this:

• Medical directors do have a managerial role of sorts and are in fact responsible for medical oversight within the facility. Having said that, a dialysis facility medical director does NOT control the decision to deploy a certified EHR within the facility. You could certainly ask for a certified EHR, but at the end of the day it is the owner of the facility who controls that decision.
• Joint venture partners by definition have an ownership stake. But most JV partners I know have a minority equity position in the facility and typically the dialysis organization has the majority position. Again as a JV partner you could ask, but it is the majority partner that controls the decision to deploy a certified EHR within that facility.

If you step back and think about it, and I have thought about this more than I care to admit, this makes sense. Compare it with your office practice. Unless you are part of a large vertically integrated health system, you very likely control the decision to deploy CEHRT in the office. If you elect not to deploy, you cannot file this hardship exception because you do control the decision to deploy a certified EHR in your office-based medical practice. Next, consider the medical director of a nursing home, a venue of care that, like the dialysis facility is excluded from the meaningful use framework. If you are the medical director of a nursing home, you can jump up and down every day of the week, demanding the installation of a certified EHR, but the decision to deploy CEHRT remains in the hands of the owner of that nursing home.

By the way, before we finish this discussion, I should point out that there are dialysis facilities and vascular access centers that are utilizing certified EHR within their facilities. If you have encounters in such a facility, those encounters must be counted in the 50% calculus. You must include them with your office-based encounters as encounters in a venue of care with a certified EHR. In many cases, this hardship exception is off the table for nephrologists who find themselves in this position.

To file or not to file

As always, the decisions you make need to be the appropriate decisions for your specific circumstances. I offer the above as one perspective. The insights I share related to this topic come from years of exposure to the MU framework, broad reading on the topic, and countless conversations with a variety of folks in the industry. Of course after all of that, I could be wrong. But at the end of the day, the architects of this program did not have nephrologists in mind when they put the MU framework together, and they certainly were not thinking about our dialysis population and the unique interactions we have with those patients in a variety of outpatient venues.

Many nephrologists successfully filed for the 2015 hardship, and I suspect many more will do so before July 1 to appropriately avoid the 2016 penalty. There is plenty of sunshine in the days surrounding the summer solstice. How are you spending these long summer days? Are you planning to file a hardship exception? Drop us a note and join the conversation.

Terry Ketchersid, MD, MBA, practiced nephrology for 15 years before spending the past seven years at Acumen focused on the Health IT needs of nephrologists. He currently holds the position of Chief Medical Officer for the Integrated Care Group at Fresenius Medical Care North America where he leverages his passion for Health IT to problem solve the coordination of care for the complex patient population served by the enterprise.