CMS Issues Final Rule for Stage II Meaningful Use

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By Adrienne Dresevic, Esq. and Carey F. Kalmowitz, Esq.

September 2012—On September 4, 2012, in conjunction with the final rule adopted by the Office of National Coordinator for Health Information Technology (“ONC”) for Electronic Health Record Technology standards, CMS published in the Federal Register the Final Rule for Stage II Meaningful Use Criteria. The regulations define the criteria that eligible professionals (“EPs”), eligible hospitals, and critical access hospitals (“CAHs”) must meet to continue participating in the Medicare and Medicaid Electronic Health Record Incentive Programs. An overview of the meaningful use incentives and how they impact radiologists was published in the February 2010 issue of Link (available here). Below is a summary of some of the more notable provisions of the Stage II Meaningful Use regulations.

Implementation and Demonstration Deadline Delays

The regulations delay implementation of Stage II criteria until 2014 and require that, for 2014 only, providers must only demonstrate meaningful use for a 3 month reporting period, allowing providers adequate time to update to 2014 Certified EHR Technology.

Meaningful Use – Stage II Objectives

The rule established 20 objectives necessary to attain meaningful use in Stage II. EPs must now meet 20 objectives (17 core and 3 of 6 menu objectives), and eligible hospitals and CAHs must meet 19 objectives (16 core and 3 of 6 menu objectives). Providers must also provide a summary of care record for more than 50% of transitions of care and referrals, and more than 10% of these summaries must be provided electronically.

A new Stage II core objective for EPs was added, requiring use of secure electronic messaging to communicate with patients on relevant health information. For hospitals/CAHs, a new Stage II core objective requires automatic tracking of medications through the entire process, from order to administration. Additionally, the regulations revised Stage I objectives to provide for patient access to medical records online. Several additional menu objectives were introduced, and many Stage I menu objectives were incorporated into Stage II core objectives.

Clinical Quality Measures Reporting, Hospital-based EP Opt-in, and Payment Adjustments

Reporting of Clinical Quality Measures (CQM) to CMS must be done electronically by 2014 for all participants at or beyond Stage II. Reporting may be done either individually or as a group, though each EP must still meet all of the core objectives and a sufficient number of menu objectives.

The rule also allows hospital-based EPs (EPs who furnish at least 90% of their services in the inpatient or emergency room settings) to opt in to the EHR incentive program if they did not receive reimbursement for implementation of certified EHR technology from an eligible hospital.

As to providers who do not adopt certified EHR technologies and meet meaningful use objectives by 2015, the regulations adopt a payment adjustment scheme with potential reductions in reimbursement of up to 5% by 2019. However, because CMS acknowledged that meeting the Stage II criteria was not plausible for certain specialties (specifically, radiology), it defined certain exceptions to the payment adjustments promulgated in the regulations.

Hardship Exceptions Finalized

The final rules define four categories of exceptions to the payment adjustments for noncompliance with meaningful use objectives: infrastructure, new EPs, unforeseen circumstances, and specialist/provider type.

Infrastructure – This exception is designed for EPs practicing in an area without sufficient internet access or insurmountable barriers to obtaining infrastructure which prevent them from adopting satisfactory EHR technology.

New EPs – For newly practicing EPs, a limited 2 year exception to payment adjustments is provided to allow for acquisition and implementation of certified EHR technology to meet the requirements of the regulations.

Unforeseen Circumstances – Applicable in narrow circumstances on a case-by-case basis, this exception allows for such unforeseen circumstances or events that impede compliance with the regulations. CMS uses natural disasters as an example of a potential exception under this category.

Specialist/Provider Type – This exception may be satisfied in two ways: first, where there is a lack of face-to-face or telemedicine patient interactions and a lack of need for follow-up care; or second, a lack of control over the availability of certified EHR technology for EPs practicing in multiple locations. Importantly, CMS specifically identified radiologists for the use of this hardship exception. Because hospital-based radiologists are exempted from the payment adjustments, the exception applies only to non-hospital-based radiologists. Note that radiologists who are meaningful users or plan to be may still participate in the program. Radiologists should remain attentive to future guidance related to this hardship exception, as CMS plans on issuing forthcoming guidance regarding operationalizing the hardship exceptions.


Adrienne Dresevic, Esq. graduated Magna Cum Laude from Wayne State University Law School. Practicing healthcare law, she concentrates in Stark and fraud/abuse, representing various diagnostic imaging providers, eg, IDTFs, mobile leasing entities, and radiology and multi-specialty group practices.

Carey F. Kalmowitz, Esq. graduated from NYU Law School. Practicing healthcare law, he concentrates on corporate and financial aspects, eg, structuring physician group practice transactions; diagnostic imaging and ancillary services, IDTFs, provider acquisitions, CON, compliance, and Stark and fraud/abuse.

The authors are members of The Health Law Partners, P.C. and may be reached at (248) 996-8510 or (212) 734-0128, or at www.thehlp.com.

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