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The Centers for Medicare & Medicaid Services (CMS) recently released its second set of rules that guide health care providers as they adopt electronic health record (EHR) systems.

Health Care Reform Resources for Providers

Stage Two EHR Meaningful Use: Proposed Rules Released

  • 3/26/2012

Stage Two EHR Meaningful Use: Proposed Rules Released

The Centers for Medicare & Medicaid Services (CMS) recently released its second set of rules that guide health care providers as they adopt electronic health record (EHR) systems. The rules focus primarily on two areas: how health care entities exchange key clinical information about patients, and how these facilities provide patients online access to their health information.

The announcement included news that providers have an additional year to implement the changes, but don’t get lulled into complacency. The delay extends the implementation for Stage 2 for those who have already achieved Stage 1 meaningful use.

“You can still adopt earlier,” says Deb Freeland, a health care partner with CliftonLarsonAllen. “And the earlier that a hospital can implement stage two, the earlier they can continue to receive incentive payments.”

The proposed rules are now in a six-month comment period.

Stage two timeline

The extension of stage two was instituted to provide vendors the time to develop certified EHR technology. In the stage one final rule, any provider who first attested to stage one criteria for Medicare in 2011 would begin using stage two criteria in 2013. This proposed stage two rule delays the start of the new criteria until 2014.

Stage two criteria for meaningful use

The focus of the proposed stage two meaningful use criteria is twofold:

  • To increase the electronic capturing of medical information in a structured format
  • To increase the exchange of clinically relevant information between providers of care at care transitions (e.g. between a primary care physician and hospital)

Like stage one, stage two requires eligible professionals and hospitals to meet a set of core objectives, and then choose from a menu of additional objectives as follows:

Provider Group Stage One Requirements Proposed Stage Two Requirements
Eligible professionals (EPs) Core objectives: 15 Menu objectives: 5 of 10 Total: 20 Core objectives: 17 Menu objectives: 3 of 5 Total: 20
Eligible hospitals and critical access hospitals (CAHs) Core objectives: 14 Menu objectives: 5 of 10 Total objectives: 19 Core objectives: 16 Menu objectives: 2 of 4 Total objectives: 18

These new requirements apply unless you qualify for an exclusion. As indicated in the table above, the core objectives have increased by two for both groups.

In addition, the core objectives in stage one have been upgraded. For example, a core objective in stage one is to “provide patients with an electronic copy of their health information upon request.” In stage two it becomes: “to provide patients with the ability to view their record online, download it, and then transmit their health information.”

Another change from stage one is around the exchange of patient information. Stage two asks providers to go beyond the “exchange of key clinical information” to “the exchange of information during transition between providers of care.”

Stage two quality measures

Stage two updates the reporting requirements on specified clinical quality measures:

Provider Group Stage One Clinical Quality Measures Stage Two Clinical Quality Measures
Eligible professionals 6 12
Eligible hospitals and CAHs 15 24

“EHR is part of the process to improve quality,” says Freeland. “The idea is to tie quality measures to the clinical measures, and to use the EHR to find the gaps in care and the quality of care.”

Payment adjustments

Eligible providers qualify for Medicare and Medicaid incentive payments when they roll out certified EHR technology and demonstrate “meaningful use” of that technology by achieving the CMS objectives. Under the proposed stage two rules, those not meeting meaningful use criteria will be subject to Medicare payment adjustments (i.e., be penalized) beginning in 2015.

CMS has proposed that any successful meaningful user in 2012 would avoid payment adjustment in 2015. Also, any Medicare provider that first meets meaningful use in 2014 would avoid the penalty if they can demonstrate meaningful use at least three months prior to the end of the calendar or fiscal year, and meet the registration and attestation requirement by July 1, 2014, for eligible hospitals or October 1, 2014, for eligible professionals.

“If a provider hasn’t met the meaningful use by 2015, they will start getting a percentage adjustment in their Medicare repayment — and they will also lose out on incentives,” notes Freeland. The percentage of payment reduction increases every year from 2015 to 2020.


The proposed rule also outlines three exceptions to these payment adjustments:

  1. The lack of availability of internet access or barriers to obtaining information technology (IT) infrastructure
  2. A time-limited exception for newly practicing EPs or new hospitals that would not otherwise be able to avoid payment adjustments
  3. Unforeseen circumstances, such as natural disasters, which would be handled on a case-by-case basis

How we can help

“Even though stage two is delayed, we know what it looks like, and implementing these changes will not happen overnight. Get yourself further down the road in trying to accomplish what EHR is intended to do: reform health care by providing better care for the patient and incenting providers to get there,” says Freeland. The criteria and expectations of providers will continue to escalate in stage three. We can help assess your EHR readiness.

Additional resources

CMS presentation on stage two 
CMS EHR meaningful use overview 

Deb Freeland, Health Care Partner or 317-569-6230