Hospitals Oppose ONC’s ‘Excessive’ Data Blocking Sanctions

In response to the federal authorities’ plan to implement data blocking regulations, hospitals and physician associations have voiced concerns that the fines are ‘excessive’ and ‘unfair’ and that they will deter people from taking part in value-based care initiatives.

October saw the long-awaited unveiling of a rule by the HHS Office of Inspector General (OIG) outlining “disincentives” for specific groups of healthcare providers, accountable care groups, and hospitals that were determined to have engaged in information blocking. This is defined in the 21st Century Cures Act as the deliberate obstruction of electronic medical data accessibility, exchange, or use, subject to certain exemptions or as required by law.

In contrast to the direct fines that HHS started levying on health IT organizations in September, it has stated its intention to focus on the providers’ involvement in current CMS initiatives.

More About the Proposed Regulation

The proposed regulation from the Department of Health and Human Services states that:

• Providers found to have engaged in information blocking would be subject to adjustments to their status in specific Medicare programs.
• This would lead to them receiving lower payments from those programs. 
• The Medicare Promoting Interoperability Program would no longer recognize an offending institution or critical access hospital as a significant EHR user during an eligible reporting period. 
• A critical access hospital could have payments lowered from 101% to 100% of reasonable expenses related to effective program participation, while the former institution would lose 75% of the yearly market basket rise.

The regulation would be put into effect once it is finalized. 

The American Hospital Association remarked, “It appears that CMS and ONC [the Office of the National Coordinator for Health IT] underestimated the real financial impact of a 75% decrease in yearly market basket updates for IPPS hospitals and a 1 percentage point reduction in the reimbursement for CAHs.”

A hypothetical situation, including an increase of 3.2% in the market basket and a decrease of 75% of that jump due to the disincentive, is cited by CMS and ONC in the proposed regulation.

According to the estimates made by CMS and ONC, the median disincentive amount for qualified institutions would be $394,353, with a range of $30,406 to $2,430,766 across eligible hospitals.

In its comments on the rule, AHA conveyed that by applying the formula outlined in the given scenario, a number of its members conducted estimations to gauge potential penalties. The findings indicated that the repercussions could exceed threefold the upper-level figure specified in the range published in the rule. Moreover, the average impact could be nearly significantly higher than the median value quoted in the rule.

The AHA expressed concern that the disincentives, which are based on different parts of provider payments, could lead to a confusing and unfair system wherein different years could result in different punishments for the same infraction, depending on the amount of time it takes for the violation to be reported to CMS.

The organization also pointed out that there is still a lot of misunderstanding around what kinds of actions would be considered information blocking, thus these penalties are too premature to be effective.