Impact Insights

Looking at MU Hardship Exceptions in 2014

Moving forward, hospitals and eligible professionals (EPs) who fail to achieve meaningful use (MU) in any year will be subject to penalties.  Given that some hospitals and EPs will face circumstances outside their control though, CMS established a series of “hardship exceptions” in the Stage 2 Final Rule.  If an exception is granted for a specific year, the hospital or EP will be exempt from the penalty that would otherwise apply if MU requirements for that year are not met. (For a detailed look at EP-specific hardship exceptions, see the recent Impact Advisors primer MU Hardship Exceptions for Eligible Professionals.)

Achieving MU in 2014 has brought unforeseen challenges though.  All providers – regardless of whether they are on Stage 1 or Stage 2 – need to use EHRs that are certified to the 2014 Edition criteria from ONC.  Many vendors have struggled to upgrade and certify their products in such a short time frame – and providers in turn have been challenged to implement those new capabilities.

As a result, CMS recently announced it will permit additional “flexibility” when granting hardship exceptions for the 2014 reporting period.  Specifically, a special category of hardship exception called “2014 Vendor Issues” was established for situations when an EHR vendor is “unable to obtain 2014 certification,” or in cases when the hospital or EP is “unable to implement meaningful use due to 2014 EHR certification delays.”

Determining which application to submit for a hardship exception for the 2014 reporting period depends on the year when the penalty will apply.  For previous attesters, the penalty for failing to achieve MU in 2014 will be applied in 2016 – so these providers would need to submit the 2016 Hardship Exception Application.  Providers who have never achieved MU will actually be penalized in 2015 if they fail to successfully attest three months before the end of the 2014 reporting period – so these providers would need to fill out the 2015 Hardship Exception Application.

Scenario for 2014 reporting period Year of penalty if MU not achieved in 2014 Form for hardship exception in 2014 Application Due Date
Hospital – not previously achieved MU FY2015 EH 2015 Hardship Exception Application 4/1/14*
EP – not previously achieved MU CY2015 EP 2015 Hardship Exception Application 7/1/14
Hospital – previously achieved MU FY2016 EH 2016 Hardship Exception Application 4/1/15
EP – previously achieved MU CY2016 EP 2016 Hardship Exception Application 7/1/15

*Due Date has passed

The additional “flexibility” in 2014 is definitely welcome news for hospitals and EPs who are struggling to implement newly-certified EHR capabilities, but there are a few important points to consider:

  • There are still no guarantees that a hospital or EP will actually receive an exception if they apply.  As with most categories of hardship exceptions, CMS plans to review applications for “2014 Vendor Issues” on a case-by-case basis.
  • A hospital or EP can apply for a hardship exception for any year, but the additional flexibility was only announced for 2014.  By 2015, CMS expects these issues to be largely resolved and for providers to be up and running on newly-certified capabilities.

The Bottom Line

Until we see just how “flexible” CMS actually is when granting exceptions, providers should continue to do everything they can to meet MU requirements in 2014 – even if they plan to apply for a hardship.  Even in extreme situations when it seems likely that an exception might be granted, providers still should not remain idle.  Except for first time attesters, every hospital and EP will be responsible for a full year of MU in 2015 – and there are no indications that the additional “flexibility” offered in 2014 will again be available.

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