Payment Adjustments and Hardship Exceptions

Payment Adjustments

In the American Recovery and Reinvestment Act of 2009 (ARRA), Congress mandated that payment adjustments should be applied to Medicare Eligible Professionals and Eligible Hospitals that are not meaningful users of Certified Electronic Health Record (EHR) Technology under the Medicare EHR Incentive Program.

  • If a provider is eligible to participate in the Medicare EHR Incentive Program, they must demonstrate meaningful use in either the Medicare or Medicaid EHR Incentive Program to avoid a payment adjustment.
  • Medicaid providers who are only eligible to participate in the Medicaid EHR Incentive Program are not subject to these payment adjustments.
  • Providers must continue to demonstrate meaningful use every year to avoid payment adjustments in subsequent years.

July 1, 2017 Deadline for Hardship Exceptions

The deadline for Eligible Professionals (EPs) to submit Hardship forms for the 2018 payment adjustment, based on the 2016 EHR reporting period is July 1, 2017. To learn if you may be subject to Medicare Payment Adjustments, review the information at the CMS Payment Ajustments & Hardhsip Information website. Providers may apply for a hardship exemption, if they meet certain criteria. You can download the Instructions and Application Form to see if you meet the specific criteria for a hardship exemption.

Not All Providers Apply for Hardship Exceptions

Some providers will automatically be granted a hardship exception. CMS will use Medicare data on these providers to determine their hardship exception.

The following providers do not need to submit a hardship application:

  • New providers to the profession in their first year (both eligible professionals and eligible hospitals)
  • Eligible professionals who are hospital-based: a provider is considered hospital-based if he or she provides more than 90% of their covered professional services in either an inpatient (Place of Service 21) or emergency department (Place of Service 23) of a hospital*
  • Eligible professionals in which 90% of their claims include Place of Service 21, Place of Service 23 and certain observation services using Place of Service 22.
  • Eligible professionals with certain PECOS specialties (05-Anesthesiology, 22-Pathology, 30-Diagnostic Radiology, 36-Nuclear Medicine, 94-Interventional Radiology) 6 months prior to the first day of the payment adjustments. Eligible professionals should verify that their PECOS specialty is up to date.

The CMS Payment Adjustments & Hardship Exceptions Tipsheet for Eligible Professionals has been updated, and has more details on how the payment adjustments are applied. The guideline also includes a table illustrating the timeline for meeting meaningful use to avoid ongoing payment adjustments.

The CMS Payment Adjustments and Hardship Exceptions webpage has the latest guidance and links to resources.

For questions, contact the Vermont EHRIP Team at

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(Page last updated 06/11/2017)