On June 24, 2024, the Department of Health and Human Services (“HHS”) released a final rule (“Disincentives Final Rule”) establishing disincentives for certain healthcare providers that have committed information blocking. The information blocking disincentives directly impact Medicare-enrolled healthcare providers or suppliers including hospitals, critical access hospitals, MIPS-eligible clinicians, and ACOs. The Disincentives Final Rule has been submitted to the Office of the Federal Register for publication and will become effective 30 days after Federal Register publication.

Information blocking occurs when a health care provider knowingly engages in a practice that unreasonably and likely interferes with, prevents, or materially discourages the access, exchange, or use of electronic health information, unless otherwise required by law or covered by an exception. Examples of information blockings include:

• Contract limitations that restrict a physician’s use and exchange of medical information;
• Charging excessive fees to create electronic health record (“EHR”) interfaces or connections with other information technology entities;
• Using technical or non-standardized methods of implementing EHR and other health information technology that block the access, exchange, or use of medical information.

The Disincentives Final Rule was created pursuant to the 21st Century Cures Act, and established “disincentives” or negative conditions for health care providers that are found to be in violation as determined by an OIG investigation.

Health care providers subject to the Disincentives Final Rule must be Medicare-enrolled providers or suppliers. This rule goes hand-in-hand with the OIG’s June 2023 final rule that established civil monetary penalties of up to $1 million per violation against information blocking actors, but excluded healthcare providers. For more Crowell insights on that rule, see our prior client alert.

Upon an OIG finding that a health care provider has committed information blocking and referred the party to CMS, the health care provider is subject to three major disincentives:

1. Certain hospitals will be ineligible for meaningful EHR user status.  The Medicare Promoting Interoperability (PI) Program establishes that eligible hospitals and critical access hospitals that engage in information blocking will be ineligible for annual market-based monetary increases granted to qualifying EHR users. Hospitals subject to this disincentive would be ineligible to earn the three quarters of the annual market basket increase associated with qualifying meaningful EHR users. Critical access hospitals will have its payment reduced from 101% to 100% of reasonable costs it might have otherwise earned in an applicable year.
2. Merit-based Incentive Payment System (MIPS) eligible clinicians will not be meaningful EHR users. MIPS clinicians who have committed information blocking will not be considered meaningful EHR users and will receive a zero score in the MIPS Promoting Interoperability performance category. The score is typically a quarter of an individual MIPS eligible clinician’s total final score in a performance period/MIPS payment year, unless an exception applies and the MIPS eligible clinician is not required to report measures for the performance category. This disincentive applies only to the individual even if he or she reports as part of a group.
3. Accountable care organization (“ACO”) participants, providers, or suppliers may be ineligible to participate in the Medicare Shared Savings Program (MSSP) for at least one year. ACO providers found to have committed information blocking may not receive revenue they would otherwise have earned through the Shared Savings Program. Before applying this disincentive, CMS will consider “relevant facts and circumstances” which include, but are not limited to the following:
   • the nature of the health care provider’s information blocking;
   • the health care provider’s diligence in identifying and correcting the problem;
   • the time since the information blocking occurred; and
   • whether the provider was found to be an information blocker previously.

Finally, HHS may establish additional disincentives through future rulemaking.

Key Takeaways

As we previously noted, the disincentives apply to health care providers that are eligible for enumerated programs but not, for example, pharmacists, pharmacies or laboratories that are actors under the ONC Information Blocking Rule but do not participate in the PI, MIPS or MSSP. Any appeals of the disincentives are only available under existing authorities of the appropriate agencies and are not specifically provided under the Cures Act for the OIG’s findings of information blocking. It is critical for impacted health care providers to assess their policies and practices against the information blocking requirements and develop (or verify the establishment of) organizational policies and practices to assure compliance with the information blocking rules and avoid violations.

For more information on how this Rule could impact your organization or for further guidance on how your organization can prepare for compliance, please contact our team.