Meaningful Use Exemption Effective January 1, 2016

At the close of the 2015 calendar year United States Senate Bill 2425 – Patient Access and Medicare Protection Act – was signed into law by the President. Among S.2425 features includes an enhanced exemption provision for Meaningful Use Eligible Providers. While existing language in Meaningful Use regulation always allowed for an exemption, the passage of this Bill expanded the reach of this relief.

Effective January 1, 2016 a blanket hardship provision has been included in the law whereby an enhanced exemption is now present that would avail EP’s/EH’s from 2015 Meaningful Use “penalties” for 2017 payment adjustments. If an EP qualifies for the exemptions, the process has been smoothed out, too, and is more automated.


In 2009 the American Recovery and Reinvestment Act (ARRA) mandated payment adjustments be applied to Medicare Eligible Professionals and Hospitals who were not meaningful users of certified electronic health records technology. EP’s/EH’s were incentivized to upgrade system capabilities to accommodate E.H.R. certified platforms. Downward payment adjustments would be incurred by these same eligibles if they were not MU ready.

Hardship exemptions to MU readiness timelines now exist but will only be granted under certain very specific conditions. Further, according to CMS, “the exemption will only be granted if [it is determined] that the providers have demonstrated that the conditions pose a “significant” barrier to their achieving meaningful use.”

More information on how and when to apply can be found on the CMS E.H.R. Incentive Programs website. Special rules for Critical Access Hospitals, “new” hospital and those just joining the E.H.R. effort can also be found there.

CMS Qualified General Hardship Exemptions

General hardship exemptions are permissible under the following conditions:

  • Lack of Infrastructure: Eligible professionals must demonstrate that they are in an area without sufficient internet access or face insurmountable barriers to obtaining infrastructure. For example, lack of broadband.
  • Extreme and Uncontrollable Circumstances: Examples may include a natural disaster or other unforeseeable barrier.
    • E.H.R. Vendor Issues – The eligible professional’s E.H.R. vendor was unable to obtain certification or the eligible professional switched vendors.
  • Patient Interaction:
    • Lack of face-to-face telemedicine interaction with patient
    • Lack of follow-up need with patients
  • Practice at Multiple Locations: Lack of control over availability of CEHRT for more than 50% of patient encounters.


Of note, payment adjustments don’t disappear as MIPS comes into play. Under the new Merit-Based Incentive Program (MIPS) there will be separate payment adjustments under the Physician Quality Reporting System, Value-Based Payment Modifier and Medicare E.H.R. Incentive Program through the sunset date, December 31, 2018. MIPS payment adjustments begin calendar year 2019.

There are special rules for Critical Access Hospitals, “new” CAHs and EPs/EHs just starting an E.H.R. program. More information, hardship dates and applications can be found on the CMS Website.

If you would like to discuss this matter further, contact your BNN advisor at 800.244.7444.

Disclaimer of Liability: This publication is intended to provide general information to our clients and friends. It does not constitute accounting, tax, investment, or legal advice; nor is it intended to convey a thorough treatment of the subject matter.

Looking for more?