Failure to Comply: Penalties for Electronic Medical Record Non-Certification

12 Feb Failure to Comply: Penalties for Electronic Medical Record Non-Certification

Tick tock, tick tock: there is less than a year left for hospitals and eligible healthcare professionals to demonstrate meaningful use of certified electronic health record technology. Those who fail to comply, or who cannot prove hardship, will pay a price – literally.

The Health Information Technology for Economic and Clinical Health Care Act (HITECH Act), signed into law in 2009, calls for incentive payments to be made to providers who can prove meaningful use. It is these incentives that are at risk if eligible providers cannot meet deadlines for compliance.

Who Is Affected by the HITECH Act?

These new regulations apply to individual healthcare providers, specifically doctors of:

• Medicine
• Osteopathy
• Optometry
• Podiatric medicine
• Chiropractic
• Dental medicine or surgery

Additionally, the law affects healthcare organizations:

• Critical access hospitals
• Medicare hospitals qualifying as subsection (d)

Who Is Exempt?

There are many types of providers who do not need to demonstrate meaningful use or compliance with the HITECH Act:

• Nurse practitioners
• Certified nurse midwives
• Physician assistants who are employed at a PA-led, federally qualified health care center or rural health clinic
• Children’s hospitals
• Cancer hospitals
• Acute care hospitals

Two Types of Penalty for Noncompliance

1. Reduction of Incentive Rewards: As you likely already know, there have been plenty of financial incentives for providers who demonstrate meaningful use. These incentives were and continue to be higher for early adopters, so that providers who started back in 2011 would be eligible for up to $44,000 in reward money. Many providers used the incentive rewards to pay for new IT systems and software. The penalty for slower implementation is that the total amount you can claim is reduced. Adopters beginning in 2014 will only be eligible to receive $24,000. Remember, these payments are spread out over a several year period starting from 2011 through 2016. Losing this money will make it more difficult for providers to meet the costs of upgrading their medical records systems to a level of compliance.
2. Reduced Medicare Reimbursement: This is where it gets really painful. If Medicare eligible professionals do not comply with EMR requirements by January 1, 2015, the reimbursement of Medicare claims will be reduced by 1% annually. This downgrade in coverage will continue each year that the provider fails to demonstrate compliance, until 2017, when the penalty jumps to 3%. For example, noncompliant providers in 2015 will be covered for only 99% of claims. In 2016 they will be covered for only 98% of claims.

How To Avoid Penalty

You might be able to avoid penalty, but only for a short time. There are two options. First, you may be able to file for a hardship exception. A hardship exception must be reapplied for each year, and may be granted for no more than five total years. Individual providers in the fields of anesthesiology, radiology or pathology may qualify for hardship exception if they can prove two things:

1. They have no face-to-face interaction with patients
2. There is no need for follow-up visits with patients

Hospitals and healthcare facilities may qualify for hardship exception under three criteria:

1. Deficient infrastructure, such as lack of broadband internet access
2. New eligible hospitals or CAHs, for which hardship exception is limited to one year
3. Unforeseen circumstances such as natural disasters that prevent or delay compliance

The second way to avoid penalty is to achieve a minimum of 75% compliance by January 1, 2015. There is less than a year left for providers to upgrade and implement, so if you haven’t started yet, now is the time to get moving on what may be a time-consuming process.

Don’t miss out on your incentive rewards, and definitely don’t suffer penalty. To demonstrate meaningful use, a provider or hospital must utilize certified IT software and follow the reporting schedule laid out in the law. Work with 1st Solution USA to find expert IT staff to help your office convert painlessly and claim the money it deserves.