Hospitals that do not demonstrate meaningful use of electronic medical records during a reporting period in Fiscal Year 2018 will receive reduced Medicare payments for that year, according to a reminder from the Centers for Medicare and Medicaid Services.

And the payment reductions are significant, the agency notes.

Eligible hospitals participating in both the Medicare and Medicaid EHR Incentive Programs face payment adjustments unless they demonstrate meaningful use under one of the programs. More than 4,800 hospitals are eligible.

As of Oct. 1, 2017, hospitals that are eligible to participate in the program but are not meaningful EHR users are subject to a payment adjustment—a cut in payments. “This payment adjustment is applied as a reduction to the applicable percentage increase to the Inpatient Prospective Payment system rate (IPPS), thus reducing the update to the IPPS standardized amount for these hospitals,” according to CMS.

Also See: How to optimize your patient portal for meaningful use Stage 3

A hospital that was eligible for meaningful use in 2013 but did not report will experience a 25 percent reduction in the applicable percentage increase for 2015. In 2016 for the reporting period in 2014, the payment cut is 50 percent of the applicable percentage increase, and it jumps to 75 percent in 2017 for the 2015 reporting period, and going forward.

Eligible hospitals may seek a hardship exemption to avoid reduced Medicare payments, but exemptions are considered on a case-by-case basis, CMS says. For example, an agency could find that for a certain hospital, becoming a meaningful EHR user would have been a significant hardship. Applications for a hardship exemption should be submitted no later than July 1 of the year before an applicable payment adjustment.

Examples of hardship include a hospital without sufficient internet access or lack of broadband, natural disaster or other unforeseeable barriers, or having a vendor that is unable to have its electronic health record certified.

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