More than 200,000 physicians and healthcare professionals will face penalties in 2016 for failing to demonstrate meaningful use of electronic health records in previous years, according to documentation released by the Centers for Medicare and Medicaid Services.

As expected, professional organizations representing physicians decried the penalties, which affect about 30 percent of eligible physicians and clinicians. About 5 percent of the nation’s hospitals also will see downward adjustments in reimbursement, CMS reported.

The widespread penalties are “yet another reminder that the program is not working for patients and physicians – and that reform is desperately needed,” said a statement from the American Medical Association.

Also See: EHR Meaningful Use to End in 2016, CMS Leader Says

The American Recovery and Reinvestment Act of 2009 establishes payment reductions for eligible professionals who are participating in the Medicare EHR Incentive Program but don’t demonstrate meaningful use. Reductions in Medicare Physician Fee Schedule payments will take effect in 2016 for providers that were not able to demonstrate meaningful use for EHR reporting period in 2014.

Provider payment adjustments are affected by providers’ estimated Medicare claims volume. CMS provided the following estimates:

* Payment adjustments of less than $100: 13,900 EPs
* Payment adjustments of $100 to $1,000: 103,000 EPs
* Payment adjustments of $1,000 to $5,000: 30,400 EPs
* Payment adjustments of $5,000 to $10,000: 56,000 EPs
* Payment adjustments exceeding $10,000: 5,700 EPs

The total number of eligible professionals penalized under the program is down about 19 percent from the 257,000 who saw Medicare payments decrease last year for failing to achieve meaningful use in 2013, said Robert Tennant,director of health information technology policy for the Medical Group Management Association. "It's still a very high number, and it's disappointing that the program wasn't retooled to the extent that it didn't exclude EPs from participating," he said. 

While CMS highlighted the fact that, “for the vast majority of EPs, the total dollar amount of the…downward payment adjustment is expected to be less than $1,000,” the AMA was quick to decry the widespread penalties among doctors and clinicians.

“The MU program’s one-size-fits-all approach has made compliance a challenge,” said Steven J. Stack, MD, current president of the AMA. “To avoid penalties, physicians are spending valuable time and resources on technology and data entry rather than their patients. Physicians should have the technology to move to alternative models of care. Instead, they are attempting to comply with conflicting regulations while employing a dizzying array of tech support.

“This is why the American Medical Association is working with the Administration to reform the Meaningful Use program,” Stack added. “We want it to succeed, and its goals are laudable. But we need changes so that, at this time next year, we again won’t have to hear about the hundreds of thousands of clinicians who cannot comply with the regulations.”

Eligible professionals may apply for hardship exemptions if they are unable to meet meaningful use requirements. “Exemptions are granted on a case-by-case basis, and only if CMS determines that compliance with the requirement…would result in a significant hardship,” CMS noted. Applicable reasons for hardship exemptions include infrastructure, such as insufficient Internet access; new EPs; extreme and uncontrollable circumstances, such as vendor issues or delays in rule publication; and other reasons affected by the type of provider, such as those having limited interaction with patients.

However, recently enacted legislation will make it easier for eligible professionals to apply for hardship exemptions, although it could take considerable time for rules to be put in place.

In addition, Tennant noted that exemptions will not affect 2016 payment reductions, because they reflect performance in 2014; EPs should be able to seek hardship exemptions for issues related to 2015, and Tennant expects that to be the case. However, uncertainties exist because of the recently announced plans to end the meaningful use program, and to what extent that will affect, or eliminate, penalties, he said.

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