HHS Finalizes Info Blocking Penalties For Providers

Dive Brief:

• Federal regulators finalized a rule on Monday that sets penalties, including cuts to Medicare payments, for providers found guilty of blocking the free flow of electronic health data.
• The penalties are largely similar to the HHS’ proposal last fall, including the potential to miss out on annual payment increases, earn lower quality scores and be suspended from a major value-based payment program in Medicare.
• The penalties will be effective 30 days after the rule is published in the Federal Register, but disincentives under the Medicare Shared Savings Program won’t be imposed until after Jan. 1, according to the HHS. Regulators also said they won’t investigate allegations of information blocking committed before the rule goes into effect.

Dive Insight: 

Putting punishments in place for providers that block the exchange of electronic health information has been a complex and yearslong project for the HHS.

In 2020, the Trump administration finalized regulations that officially barred information blocking, enacting key stipulations of the 21st Century Cures Act passed four years prior. The law included punishment for health IT vendors that are found information blocking — fines of up to $1 million per violation, which the HHS put in place last year — but included no such roadmap for guilty providers.

As a result, regulators had difficulty landing on concrete disenctives for providers, which are the entities most frequently blamed for information blocking.

The Office of the National Coordinator for Health Information Technology, which oversees U.S. health IT, has received roughly a thousand claims of possible information blocking since April 2021. The vast majority accuse providers of blocking data exchange.

The new HHS final rule lays out penalties for providers participating in three federal quality programs. In the Medicare Promoting Interoperability Program, which rewards providers for adopting electronic health records, hospitals found to be information blocking won’t be able to earn 75% of the annual market basket increase, cutting into Medicare payments.

Meanwhile, critical access hospitals will have their payment reduced to 100% of reasonable costs, instead of 101%.

Clinicians in Medicare’s Merit-based Incentive Payment System will receive a zero score in the Promoting Interoperability performance category, which is typically one-quarter of their final score in a given year. That will cut into their financial rewards from the quality improvement program.

In addition, providers in accountable care arrangements that block the exchange of information could be ineligible for the Medicare Shared Savings Program, an arrangement in which groups of providers coordinate to lower costs and improve quality in Medicare, for at least a year.

Providers pushed back on the agency’s penalty structure when it was proposed, and similarly came out swinging against the final disincentives.

The final rule will financially damage practices with “unnecessarily punitive” penalties,” Anders Gilberg, senior vice president of government affairs for the Medical Group Management Association, said in a statement Monday.

Still, federal regulators will use enforcement discretion, and won’t investigate conduct that took place before the final rule is effective, Alex Baker, senior policy advisor at ONC, said during a press call Monday.

The CMS will also consider additional circumstances before penalizing providers in the Shared Savings program, according to the senior policy advisor.

“Those could be things such as the nature of a healthcare provider’s information blocking or the time since the information blocking occurred,” Baker said. 

The HHS’ Office of the Inspector General has priorities for information blocking investigations too. It plans to focus on cases that could cause patient harm, significantly impact providers’ ability to care for patients, take place for a long time or cause federal healthcare programs or private entities to lose money, according to the rule.

Still, there’s more work to do on information blocking, including developing penalties for providers who don’t participate in these quality programs and adopting exceptions to information blocking rules, regulators said. 

“This is a law that will require continued implementation,” Steven Posnack, deputy national coordinator for health information technology, said during the briefing.