The Department of Health and Human Services (HHS) finalized a rule that sets penalties, including cuts to Medicare payments, for providers found guilty of blocking the free flow of electronic health data. The penalties are largely similar to HHS’ proposal last fall, including the potential to miss out on annual payment increases, earn lower quality scores and be suspended from a major value-based payment program in Medicare. The penalties will be effective 30 days after the rule is published in the Federal Register, but disincentives under the Medicare Shared Savings Program will not be imposed until after January 1, according to HHS.
Background on Rule
Since 2000, with the implementation of the first Health Insurance Portability and Accountability Act (HIPAA) Privacy Rules, HHS has been committed to ensuring access to healthcare and has focused on the impact that access to health records has on an individual’s quality of care. The broad umbrella of access initiatives has included healthcare information technology (Health IT) interoperability with the 2009 introduction of the electronic medical record (EMR) Meaningful Use incentive program (through the Health Information Technology for Economic and Clinical Health Act (HITECH)) intended to encourage healthcare provider implementation of electronic health records.
The Meaningful Use program was transitioned by CMS to the Medicare Access and CHIP Reauthorization Act (MACRA) Merit-Based Incentive Payment System (MIPS) program, Promoting Interoperability program, and Affordable Care Organizations (ACO) shared savings program. OCR’s access initiative was announced in 2019 with its aggressive enforcement activity followed by the 21st Century Cures Act (Cures Act) regulations setting interoperability standards and prohibiting information blocking practices.
As emphasized by HHS Secretary Xavier Becerra, “[w]hen health information can be appropriately accessed and exchanged, care is more coordinated and efficient, allowing the health care system to better serve patients. But we must always take the necessary actions to ensure patient privacy and preferences are protected – and that’s exactly what this rule does.”
The Cures Act, enacted in 2016, established provisions to promote interoperability and patient access to electronic health information (EHI). A critical component of the Cures Act is the prohibition of information blocking, which refers to practices that interfere with the access, exchange or use of EHI. Effective April 5, 2021, and amended in December 2023 through the HTI-1 Rule, the Office of the National Coordinator for Health Information Technology (ONC) issued regulations defining information blocking and establishing permissible exceptions.
Continuing HHS’ commitment to encouraging permitted access to and exchange of EHI, the final rule specifically focuses on establishing disincentives for healthcare providers found by the HHS Office of Inspector General (OIG) to have committed information blocking. Importantly, the Cures Act definition of healthcare providers is not limited to the HIPAA regulated providers and includes both individual providers and their group practices, hospitals or other organizations through which an individual renders services.
Finalized Disincentives
HHS has finalized three categories of disincentives applicable to healthcare providers determined by the OIG to have engaged in information blocking. First, in the Medicare Promoting Interoperability program, eligible hospitals and critical access hospitals (CAHs) reporting Promoting Interoperability and found by OIG to have committed information blocking will be excluded from being considered meaningful electronic health record (EHR) users. This exclusion may lead to significant financial penalties, including a reduction of 75 percent of the annual market basket increase for eligible hospitals and a decrease in payment to 100 percent of reasonable costs for CAHs (from 101 percent). The exclusion applies to the reporting period during which the information blocking practice occurred.
Under the Merit-Based Incentive Payment System (MIPS), eligible clinicians and groups who are Medicare Part B providers and are determined by OIG to have engaged in information blocking will be denied the meaningful user status within MIPS. The final rule amends the MIPS definition of Meaningful User to exclude an information blocker. This denial will result in a zero score in the Promoting Interoperability performance category, significantly impacting the overall MIPS score and potential payment adjustments. Denials apply to the performance reporting period during which the information blocking practice occurred. Groups that are not information blockers will not be penalized for an individual clinician’s information blocking actions, but will be required to submit MIPS reporting without the data from that individual clinician.
Finally, for Medicare providers that are in an ACO, ACO participant, or ACO provider or supplier found by OIG to have committed information blocking may be ineligible to participate in the CMS Shared Savings Program for at least one year. This will result in loss of revenue from the Shared Savings Program.