November 15, 2016

Meaningful Use Changes in 2017 OPPS Final Rule

On November 14, 2016, the Centers for Medicare and Medicaid Services (CMS) published the 2017 Outpatient Prospective Payment System (OPPS) final rule in the Federal Register. The rule finalizes changes to the Electronic Health Record (EHR) Incentive Program and loosens certain meaningful use requirements.

Background on EHR Incentive Program

The EHR Incentive Program began in 2011 to encourage eligible professionals and eligible hospitals to adopt, implement, upgrade (AIU) and demonstrate meaningful use of certified EHR technology. Initially, eligible hospitals and eligible professionals were provided a financial incentive for satisfying certain standards. Currently, participants are penalized for failure to satisfy the required standards.

For hospitals paid through the Inpatient Prospective Payment System (IPPS), failure to demonstrate meaningful use of certified EHR technology in a calendar year impacts their rate in the following fiscal year. The payment adjustment is applied as a reduction to the applicable percentage increase to the IPPS payment rate. For example, failure to satisfy the standards in 2013 resulted in a 25 percent negative adjustment to the IPPS update scheduled for October 1, 2014. Failure to satisfy the standards in 2014 resulted in a 50 percent negative adjustment to the IPPS update scheduled for October 1, 2016. Failure to satisfy the standards in 2015 resulted in a 75 percent negative adjustment to the IPPS update scheduled for October 1, 2017. Failure to satisfy standards in 2016 and beyond will likewise result in a 75 percent negative adjustment to the IPPS update.

Critical access hospitals (CAHs) that fail to demonstrate meaningful use will experience a negative adjustment in the same reporting year. A CAH is normally paid 101 percent of its reasonable costs during a calendar year. But if a CAH did not demonstrate meaningful use in 2015, it was only paid 100.66 percent of its reasonable costs. In 2016, the amount goes down to 100.33 percent of its reasonable costs, and in 2017 and later the amount goes down to 100 percent of its reasonable costs.

In 2015, 98 percent of eligible hospitals and CAHs successfully demonstrated meaningful use and did not receive a negative adjustment to its rates.

Eligible Professionals (EPs) who fail to demonstrate meaningful use of EHR will receive an adjustment to the amount they receive under the physician fee schedule. The payment reduction starts at 1 percent and increases each year that an eligible professional does not demonstrate meaningful use, to a maximum of 5 percent. 

In 2016, the EHR reporting period for a payment adjustment year for EPs who are new participants is any continuous 90-day period in 2016. New participants who successfully demonstrate meaningful use for this period and satisfy all other program requirements will avoid the payment adjustment in calendar year (CY) 2017 if the EP successfully attests by October 1, 2016, and will avoid the payment adjustment in CY 2018 if the EP successfully attests by February 28, 2017.

In 2016, the EHR reporting period for a payment adjustment year for EPs who are returning participants is the full CY 2016. Returning participants who successfully demonstrate meaningful use for this period and satisfy all other program requirements will avoid the payment adjustment in CY 2018 if the EP successfully attests by February 28, 2017.

Regarding the standards that must be satisfied to avoid the payment adjustment, 2017 is a year of transition. Hospitals and EPs may either satisfy the Modified Stage 2 standards or the Stage 3 standards. Beginning in 2018, participants must satisfy the Stage 3 standards to avoid a payment adjustment.

Changes in OPPS Final Rule

Reporting Period
CMS finalized its proposal to provide more flexibility with the reporting period in 2016 and 2017. Previously, hospitals were expected to demonstrate compliance with the standards during the entire calendar year. Now, hospitals need only demonstrate compliance during a 90-day period in each calendar year — any continuous 90-day period between January 1, 2016, and December 31, 2016. The 2015 reporting period was also 90 days, but had to be between October 1, 2015, and December 31, 2015. Now hospitals can choose any 90-day period to demonstrate compliance.

Change Standards
The final rule eliminates the Clinical Decision Support (CDS) and Computerized Provider Order Entry (CPOE) objectives and measures for eligible hospitals and CAHs, due to these rules having “topped out” based on high performance. The agency also reduced the criteria EPs, hospitals and CAHs must meet in order to participate in the EHR Incentive Programs. These criteria, outlined in stages, establish the thresholds and requirements that participating entities must meet. The final rule reduced the thresholds and requirements for a subset of the remaining objectives and measures in Modified Stage 2 for 2017 and Stage 3 for 2017 and 2018. These revised measures are the agency’s attempt to reduce the administrative burdens associated with the program and place a greater emphasis on quality of care.

The agency is requiring EPs, eligible hospitals and CAHs that have not previously demonstrated meaningful use to attest to these modified Stage 2 objectives and measures, rather than Stage 3 objectives. This change stems from the agency’s belief that it is unrealistic to expect eligible entities to attest to the Stage 3 objectives and measures in the 2017 system. New participants must attest to the modified Stage 2 measures and requirements by October 1, 2017.

Measurement Calculation
The final rule changes the policy for measure calculations for actions outside of the EHR reporting period as well. For all meaningful use measures, actions included in the calculation’s numerator must occur within the EHR reporting period if that period is a full calendar year. If the period is less than a full calendar year, then it must occur within the year in which the EHR reporting period occurs.

EPs Transitioning to MIPS
In an effort to further advance the use of certified EHR technology, the final rule creates a one-time hardship exemption from the 2018 payment adjustment for EPs who are new to the EHR Incentive Program and transitioning to the new Merit-Based Incentive Payment System (MIPS) in 2017.

The final rule will go into effect January 1, 2017. The agency will accept public comment until December 31, 2016.

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