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Member Research and Reports

Member Research and Reports

Hospitals Could Face Penalties for Missing Electronic Health Record Deadline, Michigan Study Finds

Many of the nation’s hospitals struggled to meet a federally mandated electronic health records deadline, and as a result could collectively face millions of dollars in reduced Medicare payments this year, a University of Michigan study shows.

Adler-Milstein

[Photo: Dr. Julia Adler-Milstein]

More than half of U.S. hospitals were on the hook to meet a new set of “meaningful use” of electronic health records criteria — known as the stage two criteria — by the end of the fiscal year that ended in July. The new study’s data, which was gathered in late 2013, suggests that many may have missed the milestone. At the time, only 5.8 percent of those hospitals were on track to adopt all 16 of the stage two meaningful use goals.

Hospitals that bill the Medicare program and did not meet the criteria in fiscal year 2014 will be subject to financial penalties in fiscal year 2015.

“There was likely a big scramble before the deadline, but my sense is that it would have been hard for a lot of those hospitals to meet that deadline,” said Dr. Julia Adler-Milstein, an assistant professor in health management and policy at U-M SPH, who co-led the research.

The study suggests that, where hospitals are not able to meet criteria, they are not always to blame. Vendors must upgrade their products to make necessary functions available to meet the criteria. These challenges, however, appear to be concentrated in specific types of hospitals.

“Policymakers may want to consider new targeted strategies to ensure that all hospitals move toward meaningful use of electronic health records,” Dr. Adler-Milstein said. “We found that rural and small hospitals lag behind, suggesting a need to expand federal efforts to help these institutions select, purchase, implement, and successfully use electronic health records in ways that earn them incentive payments and enable them to engage in new care delivery and payment models.”

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