HHS Proposes ‘Disincentive’ Penalties for Information-Blocking Providers

Some 500,000 clinicians and many hospitals could be subject to new payment reductions or “disincentives” for violating the federal information blocking rule, which prohibits healthcare providers from preventing patients from accessing their electronic health information, if a new rule proposed by HHS is finalized.

The three categories of providers or “actors” who could be affected if an HHS Office of Inspector General investigation finds they have violated the rule include:

• Clinicians participating in the Medicare Quality Payment Program. They would receive a zero score in the “promoting interoperability performance category” of Medicare’s Merit-Based Incentive Payment System (MIPS), which is typically a quarter of the total score. They would be deemed not a meaningful user of certified electronic health record technology.
• Healthcare providers participating in accountable care organizations (ACOs), or Medicare Shared Savings Programs. They would lose eligibility to participate in such programs for at least 1 year, and thus would not receive revenue they otherwise would have earned through the program.
• A hospital that participates in the Medicare Promoting Interoperability Program. These facilities could lose 75% of their annual market basket increase. A critical access hospital (25 or fewer acute care beds) could see payments reduced from 101% of reasonable costs to 100%.

In a blog post accompanying the announcement, HHS’s National Coordinator for Health Information Technology Micky Tripathi, PhD, MPP, and CMS’s Principal Deputy Administrator and Chief Operating Officer Jonathan Blum, MPP, estimated that a median disincentive loss for a participating clinician found guilty of information blocking would be $686, while a six-clinician group would see a loss of a median $4,116, with a range from $1,372 to $165,000 from two to 241 clinicians.

Tripathi and Blum noted that the 21st Century Cures Act of 2016, which outlined the regulatory framework for preventing information blocking, was written because “sharing electronic health information is the expected norm in health care.”

A 2015 report to Congress spelled out numerous ways in which health systems and other entities “were exercising control over electronic health information in ways that limited its availability for access, exchange, and use,” in effect preventing patients and their caregivers from receiving timely information about their health.

The information blocking rule specifies eight categories of exceptions, but absent those, providers are expected to proactively make health information available to their patients and their caregivers.

According to CMS, 573,126 physicians and non-physicians were participating in ACO programs in 2023, and would theoretically be covered under this rule if finalized, and 719,516 providers would be eligible for disincentives under the MIPS, although not all report on the promoting interoperability performance category. Some providers may be in both programs.

The proposed rule would apply to the third and last major category of the 2016 federal law. In June, the HHS Office of Inspector General finalized a rule setting forth up to $1 million in penalties per violation for health information networks or exchanges, as well as health IT developers of certified health IT systems, with enforcement beginning September 1.

In a media call Monday, Steven Posnack, MHS, the Deputy National Coordinator for Health Information Technology, described the proposed rule as affecting “a pretty large footprint of healthcare providers,” but acknowledged there are still many providers who meet the federal definition of a healthcare “actor,” but who are not participating in CMS’s incentive payment programs. They include some clinicians in renal dialysis facilities, blood centers, and ambulatory surgical centers, as well as emergency medical service providers, pharmacists, and workers in pharmacy laboratories.

The Office of Inspector General is asking in the proposed rule for public suggestions on appropriate disincentives that would cover these groups for future rulemaking.

According to HealthIT.gov, 812 claims of information blocking have been filed with the agency, an overwhelming number by patients against their providers.

The Office of Inspector General will investigate complaints, prioritizing practices that resulted in, caused, or had the potential to cause patient harm; significantly impacted a provider’s ability to care for patients; were of long duration; and caused financial loss to federal health programs or other government or private entities.

Posnack said the proposed rule also spells out terms of transparency about those actors who have been determined to have engaged in information blocking, with names, types of providers, civil monetary penalties levied, and disincentives administered being posted. The agency’s hope, he said, is that “people can learn from information blocking determinations as time goes on.”

Several physician organizations, including the American Medical Association, said they couldn’t comment until they finished studying the 78-page rule.

Susan Dentzer, president of America’s Physician Groups, which represents some 170,000 physicians, said “it’s a guess on our part, admittedly, but it is not very likely that many physician practices would be reported to the OIG [Office of Inspector General] as engaging in information blocking and would subsequently be found to have done so by the OIG.”

More information on the proposed disincentives rule can be found here.

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