Long-Awaited Disincentives Rule for Providers Gives the Information Blocking Rule Teeth

At a Glance

• As it relates to clinicians, the Disincentives Rule relies on Medicare’s existing Merit-Based Incentive Payment System (MIPS) to apply disincentives to MIPS-eligible clinicians, including group practices, who have committed information blocking.
• HHS relied on Medicare’s Promoting Interoperability Program to authorize and create disincentives for hospitals and critical access hospitals that engage in information blocking, which could lose their recognitions as meaningful electronic health record users and become ineligible for annual market-based monetary increases.
• Accountable care organizations, ACO participants, and ACO providers or suppliers found to have committed information blocking will have their disincentives tied to the Medicare Shared Savings Program and may be ineligible to participate for at least one year, losing potential shared-savings revenue.

On June 24, 2024, the Department of Health and Human Services (HHS) finalized the Establishment of Disincentives for Health Care Providers That Have Committed Information Blocking (Disincentive Rule) under the 21st Century Cures Act. This long-awaited rule establishes disincentives for certain health care providers enrolled in Medicare that are found to have knowingly engaged in information blocking, which is defined as a practice that — except as required by law or as permitted in accordance with enumerated exceptions to the information-blocking prohibition — is likely to interfere with, prevent, or materially discourage access, exchange, or use of electronic health information (EHI).

This is a higher bar compared to other actors subject to the Information Blocking Rule, as the Office of Inspector General (OIG) — the agency in charge of investigating information-blocking claims — must demonstrate that a health care provider knew that a practice was likely to interfere with the access, exchange, or use of EHI and that the practice is unreasonable. If found to have engaged in information blocking, the Disincentives Rule establishes three disincentives for clinicians, hospitals and accountable care organizations (ACOs), which are further discussed below.

Clinicians

As it relates to clinicians, the Disincentives Rule relies on Medicare’s existing Merit-Based Incentive Payment System (MIPS) to apply disincentives to MIPS-eligible clinicians, including group practices, who have committed information blocking.

Under the MIPS value-based payment system, the amounts paid to a MIPS-eligible clinician under Medicare Part B depend on a clinician’s score in four performance categories: (1) cost, (2) quality, (3) improvement activities and (4) promoting interoperability. The Centers for Medicare and Medicaid Services (CMS) calculates the clinician’s final score by applying different weights to each of these four categories, and it determines whether the clinician will be subject to a positive, negative or neutral payment adjustment by comparing the final score to the pre-established threshold for that year. The promoting interoperability performance category requires the MIPS-eligible clinician to be a meaningful user of certified electronic health record technology (CEHRT). Because the specific requirements that a clinician must satisfy to be a meaningful user of CEHRT would be “substantially undermined and frustrated” by information blocking, HHS finalized its determination in the Disincentives Rule that a MIPS-eligible clinician who commits information blocking is not a meaningful CEHRT user and will, consequently, receive a zero in the promoting interoperability performance category.

As a result, a determination by OIG that a MIPS-eligible clinician committed information blocking will preclude that clinician from earning a positive MIPS payment adjustment. This disincentive, however, will not apply to MIPS-eligible clinicians who are not required to report on the promoting interoperability category, such as hospital-based clinicians, unless the clinician nonetheless submits data for this category.

Hospitals and Critical Access Hospitals

For hospitals and critical access hospitals (CAHs), HHS relied on Medicare’s Promoting Interoperability (PI) Program to authorize and create disincentives. Specifically, hospitals and CAHs that engage in information blocking could lose their recognition as a meaningful electronic health record (EHR) user under the PI Program during the applicable reporting period in which OIG refers its determination to CMS and, consequently, become ineligible for annual market-based monetary increases.

Specifically, if a hospital is not a meaningful EHR user, the hospital will become disqualified from receiving a 75% market-based increase that it otherwise would have received if it had remained a meaningful user of CEHRT. If CAHs are not considered meaningful users, they will receive only 100% reimbursement for reasonable costs, instead of the 101% reimbursement they would have otherwise received in an applicable year.

Accountable Care Organizations (ACOs)

Accountable care organizations, ACO participants, and ACO providers or suppliers found to have committed information blocking will have their disincentives tied to the Medicare Shared Savings Program (MSSP), as a condition of participating in the MSSP is coordinating care through enabling technologies. Specifically, these parties may be ineligible to participate in the MSSP for at least one year if found to have engaged in information blocking and, consequently, would lose potential shared-savings revenue. CMS could extend the one-year prohibition if OIG determined there were subsequent instances of information blocking.

Additionally, for ACO applicants that are health care providers, CMS may deny the ACO’s application to participate in the MSSP for the upcoming year, and for ACOs already participating in the MSSP, CMS could terminate the ACO’s participation agreement.

Key Takeaways

• The Disincentives Rule does not apply to health care providers that are not enrolled in Medicare. HHS has requested public input regarding the creation of disincentives for all health care providers, not just those enrolled in Medicare.
• OIG will not investigate health care providers for instances of information blocking that may have occurred prior to the Disincentives Rule’s effective date of July 31, 2024.
• Similar to what the Office for Civil Rights does for HIPAA breaches, the Office of National Coordinator for Health Information Technology will create a webpage where it will post information about health care providers found to have committed information blocking.
• Health care providers will have the right to an administrative appeal if the agency’s authority used to establish the disincentive provides for such appeals.
• Given this complicated disincentive structure that could lead to large penalties, now is a good time for health care providers to reevaluate their compliance with the Information Blocking Rule.