Skip to Main Content

June 28, 2024
Health Law Weekly

HHS Finalizes Rule on Provider Disincentives for Health Information Blocking

  • June 28, 2024

The Department of Health and Human Services (HHS) issued June 24 a final rule aimed at discouraging health care providers from improperly interfering with the access, exchange, or use of electronic health information.

The final rule from the Office of the National Coordinator for Health Information Technology and the Centers for Medicare & Medicaid Services (CMS) includes several disincentives that would kick in if the HHS Office of Inspector General (OIG) determines the provider engaged in information blocking.

In June 2023, OIG issued a final rule establishing civil money penalties for information blocking of up to $1 million per violation. That rule, however, applies only to developers of certified health IT, health information networks, and health information exchanges.

Under the final rule issued this week, hospitals that commit information blocking will not be considered meaningful electronic health record (EHR) users in the applicable reporting period and lose 75% of the annual market basket increase (for critical access hospitals, payment would be reduced to 100% of reasonable costs instead of 101%).

Physicians (including a group practice) committing information blocking also will not be considered meaningful EHR users and will receive a zero score in the Promoting Interoperability performance category of the Merit-based Incentive Payment System. The final rule clarifies that if an individual physician commits information blocking, the disincentive applies only to the individual if the physician reports as part of a group practice.

Information blocking Accountable Care Organizations (ACOs) or participants may be ineligible for the Medicare Shared Savings Program (MSSP) for at least one year and may not receive revenue they earned. The final rule also spells out the relevant factors, including the health care provider’s diligence in identifying and correcting the problem, that CMS will consider before applying a disincentive under MSSP.

HHS said other disincentives may be established in future rulemaking.

The American Hospital Association (AHA) expressed disappointment that “HHS chose to disregard most of the comments they received” on the proposed rule. AHA “is highly concerned that the disincentive structure retained in the final rule is excessive, confusing and imbalanced,” the group said.

The Medical Group Management Association acknowledged the need to establish appropriate disincentives for providers who commit information blocking but criticized the final rule’s stiff administrative financial penalties within Medicare quality programs.

“HHS could have chosen to work with providers to implement corrective action plans, but instead finalized unnecessarily punitive penalties that will financially damage practices and negatively impact Medicare patients. Preventing practices and ACOs from participating in MSSP runs counter to the transition to value-based care and undercuts the ability of providers within the ACO framework to succeed,” the group said in a statement.