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Absence of EMR in your specialty practice might lead to Medicare payment penalties

By: Nextech | December 11th, 2014

Absence of EMR in your specialty practice might lead to Medicare payment penalties Blog Feature

Have you implemented certified EMR/EHR technology in your specialty practice? The 2009 American Recovery and Reinvestment Act (ARRA) required reimbursement penalties for all Medicare eligible healthcare providers who do not comply with Meaningful Use. 

As an important part of the ARRA legislation, Meaningful Use offers incentives (in the form of payments) to eligible professionals who integrate EMR/EHT software systems into their organizational delivery processes for the purpose of improving patient care. Structured on a sliding scale, these incentives lessen depending on degree of adherence to Meaningful Use, eventually progressing downward into payment penalties, or “adjustments” for non-compliance. These payment adjustments are essentially reductions in the Physician’s Medicare Fee Schedule.

Therefore, EMR/EHR software systems are now an absolute necessity if you don’t want to face payment penalties from the Centers of Medicare and Medicaid Services (CMS).

CMS will begin to enforce these payment adjustments on January 1, 2015. Eligible healthcare professionals who are able to partake in either Medicaid or Medicare EHR Incentive Programs will be affected by this payment adjustment mandate. However, healthcare providers who are only eligible for the Medicaid EHR Incentive Program and don’t bill Medicare will not be held liable. 

How are these Medicare payment penalties applied to medical specialty practices?

Eligible healthcare professionals who do not demonstrate Meaningful Use for a particular calendar year will get a percentage reduction in their Medicare fee schedule for that year. This is how the percentages break down:

  • 2015: - 1%
  • 2016:   -2%
  • 2017:   -3%

CMS will utilize its resources and survey tactics to isolate those eligible professionals who will receive pay adjustments in 2015 based on applicable data from the previous several years. So, here is what you need to know:

  1. Eligible professionals who initially demonstrated meaningful use in 2011 or 2012 must demonstrate meaningful use for the entirety of 2013 to be safe from pay adjustments in 2015.
  2. Eligible professionals who initially demonstrated meaningful use in 2013 must do so for at least a 90-day period to prevent the Medicare payment reduction in 2015.
  3. Eligible professionals who initially demonstrated meaningful use in 2014 must do so for at least a 90-day period before October 1, 2014 to avoid payment penalties in 2015.


From 2015 onward, eligible professionals must demonstrate meaningful use every year to avert pay adjustments in subsequent years. See graph below for illustration:

Pay Adjustment Year





Full Year EHR Reporting Period






Avoid payment adjustments As an example, if a physician does not demonstrate meaningful use in 2015, then he or she will get a 3% reduction in his Medicare Physician’s Fee schedule in 2017, regardless of whether it was the first or third year in Meaningful Use non-compliance. Payment adjustments may go up to as high as 5% if the U.S Department of Health and Human Services finds that there are less than 75% of meaningful users worldwide after 2018.

There are, of course, exceptions to ARRA pay adjustment mandate. Doctors who are just starting out in their medical profession will receive a two year exemption from the payment adjustments. This gives them enough time to establish EMR/EHR systems for use in practice. Healthcare providers who don’t have adequate access to the internet are also exempt, as are doctors who are affected by a natural disaster such as a serious earthquake or hurricane.

Avoiding payment adjustments

The way to avoid payment adjustments if you are a Medicare-eligible healthcare provider is to improve your patient care through the adoption, implementation, and use of EMR/EHR technology in your medical organization/practice. Demonstrating meaningful use through appropriate EMR/EHR software will guarantee zero risk of payment adjustments to your revenue cycle. 

At Nextech, we want to assist you in your compliance with Meaningful Use so that you would not have to incur unnecessary payment penalties for the extremely vital patient care and medical services that you deliver. We offer state-of-the-art EMR/EHR software systems and will walk you through step-by-step on how to integrate or upgrade them in your practice.