The Medicare EHR Incentive Program in 2014

Beginning in 2014, the Medicare Electronic Health Records (EHR) Incentive Program will offer different reporting options than in years past to eligible professionals (EPs) who meaningfully use EHR technology. EPs will be required to report using the new 2014 criteria regardless of whether they are participating in Stage 1 or Stage 2 of the EHR Incentive Program.

The program was established under the Health Information Technology for Economic and Clinical Health (HITECH) Act, which authorizes the U.S. Department of Health and Human Services to provide financial incentives to EPs and hospitals that “meaningfully use” EHR technology. HITECH is part of the American Recovery and Reinvestment Act of 2009 (ARRA).

This column responds to questions that surgeons may have regarding the 2014 reporting options, important deadlines, and penalties associated with noncompliance and nonparticipation.

What are the 2014 Medicare EHR Incentive Program reporting criteria?

As mentioned previously, EPs who participate in the EHR Incentive Program will have different reporting options in calendar year (CY) 2014 than in previous years. Regardless of the reporting stage, EPs participating in the program will have the option of reporting on a quarterly basis. The Centers for Medicare & Medicaid Services (CMS) implemented the reporting change to allow EPs sufficient time to upgrade or adopt EHR that meet the Office of the National Coordinator’s (ONC’s) 2014 certification criteria, which will allow EHR technology to be more efficient as well as provide improved security, interoperability, data portability, and other features.

Table 1. 2014 quarterly reporting timeline for EPs

2014 quarterly reporting for EPs beyond year one reporting
(choose only one)
Submission period for meaningful use
(Stages 1 and 2)
January 1–March 31, April 1–June 30,
July 1–September 30, or October 1–December 31
Two months following the end of the reporting period
(January 1–February 28)

EPs who began their first year of reporting in CY 2011, 2012, or 2013 may report quarterly in 2014. CMS has designated dates for the 2014 EHR Incentive Program quarters, which are shown in Table 1.

First-year program participants should report on any 90-day period. EPs have until July 3, 2014, to begin reporting and should submit their data by October 1, 2014, to avoid being penalized in 2015. EPs who begin reporting after July 3, 2014, are still eligible to receive up to the 2014 EHR incentive payment of $24,000. However, they will also receive the 2015 program penalty of –1 percent.*

What are the EHR incentive payments and penalty amounts?

The Medicare EHR Incentive Program payments began in CY 2011. EPs who began meeting the Stage 1 meaningful use requirement in 2011 or 2012 may earn an incentive payment totaling $44,000 over five years.

  • If EPs began reporting in 2013, they may earn a total incentive payment of $39,000 over a four-year period.
  • If EPs begin reporting in 2014, they may receive a total incentive payment of $24,000 over a period of three years. No incentives are scheduled for EPs who first become meaningful users in 2015 and beyond.

Although program penalties are not applied until CY 2015, the performance period for this penalty will occur before the payment penalty year. In other words, surgeons will need to be able to achieve Stage 1 of meaningful use before 2015 to avoid the payment penalty in 2015. And even though the incentive payments are set to end by 2016 for EPs who participate in the program by 2014, the penalties will begin in 2015 and will continue indefinitely. Table 2 describes the incentives and penalties from 2011 to 2015 and beyond.

Table 2. Maximum total amount of EHR incentive payments for a Medicare EP*

2011 2012 2013 2014 2015 and on
2011 $18,000
2012 12,000 $18,000
2013 8,000 12,000
2014 4,000 8,000 12,000 $ 12,000
2015 2,000 4,000 8,000 8,000 $0; -1 percent of Medicare fee schedule (penalty)
2016 2,000 4,000 4,000 $0; -2 percent of Medicare fee schedule (penalty)
2017 0 0 0 0 $0; -3 percent of Medicare fee schedule (penalty)
TOTAL $44,000 $44,000 $39,000 $24,000 $0
Note: Medicare EHR incentive payments are subject to the mandatory reductions in federal spending known as sequestration. This 2 percent reduction will be applied to any Medicare EHR incentive payment for a reporting period that ended on or after April 1, 2013. If the final day of the reporting period occurred before April 1, 2013, those incentive payments will not be subject to the reduction. Maximum incentive amounts do not reflect the 2 percent cut.
*Centers for Medicare & Medicaid Services. Accessed Oct. 22, 2013.
A CY equals a payment year.

How can I determine my reporting stage in 2014?

CY 2014 marks a pivotal point in the EHR Incentive Program, as it will be the first year some EPs will begin or continue participating in Stage 1 of the program and others will begin participating in Stage 2 of the program.

Use the checklist found in Table 3 to determine when to begin reporting, or visit

Table 3. Checklist for Medicare EHR Incentive Program participation by year

First year
of participation
Second year
of participation
Third year
of participation
Fourth year
of participation
CY 2014
  • Begin Stage 1
  • Report for 90 consecutive days
  • Report on all measures as required
  • Continue Stage 1
  • Report Stage 1 for one quarter
  • Report on all measures required
  • Begin Stage 2
  • Report Stage 2 for one quarter
  • Report on all measures required
  • Begin Stage 2
  • Report Stage 2 for one quarter
  • Report on all measures required

What steps do I need to take to begin or continue reporting Stage 1 in 2014?

To begin Stage 1, EPs should first register with the CMS registration and attestation system. EPs may enroll in this system even before they have certified EHR technology. To meet the meaningful use objectives, EPs must use certified EHR technology that has been approved by the ONC and is certified as meeting 2014 requirements. View a list of the ONC-certified EHR systems at

An EP must meet the following objectives to begin reporting:

  • 15 core objectives
  • Five out of 10 menu set objectives
  • Three core clinical quality measures (CQMs) or three alternative core clinical quality measures if the three core are inapplicable and three additional CQMs

For the three additional CQMs, EPs may choose any measures that are appropriate to their specialty or practice. The 2014 CQMs are available at

What steps do I need to take to begin reporting Stage 2 in 2014?

CY 2014 is the first year of Stage 2 of the EHR Incentive Program. Only EPs who began reporting in 2011 or 2012 will be allowed to begin reporting for Stage 2 in 2014. As in Stage 1, EPs must register with the CMS registration and attestation system. For Stage 2, EPs must report:

  • 17 core objectives
  • Three menu set measures
  • Nine CQMs, of which at least three should be from one of the six National Quality Strategy domains

Refer to the following website to obtain a list of core objectives and menu set objectives available for Stage 2:

Use the following link to download available CQMs acceptable in 2014 for Stage 2:

I want to report Physician Quality Reporting System (PQRS) and EHR CQMs simultaneously. Are the reporting requirements different?

In 2013, CMS offered EPs the option of reporting on certain measures through the PQRS-Medicare EHR Incentive Pilot program, which allows EPs to report on specific EHR measures available in the PQRS program through their PQRS-qualified and ONC-certified EHR system. By reporting through this program, EPs can satisfy two requirements: the CQM component of the Medicare EHR Incentive Program and the requirements for satisfactory reporting under the 2013 PQRS. For 2014, EPs beyond their first year of meaningful use who wish to streamline efforts and electronically submit CQMs to receive credit for both the PQRS and EHR Incentive programs should report for one full CY for the EHR Incentive Program instead of a quarter.

Additional information on the PQRS-EHR streamlined reporting option is available. EPs should note that if they participate in the quarterly reporting option for the 2014 EHR Incentive Program, they must still report for one full CY for the 2014 PQRS program to receive independent credit for both programs.

How do I qualify for an exception for this program?

If an EP claims an exception and it is approved by CMS, the EP will become ineligible to receive an incentive payment and will be exempt from any penalties. An exception must be filed by July 1, 2014, to avoid the 2015 penalty; EPs may need to reapply for most of these exceptions on an annual basis. CMS is in the process of updating its website to provide information on how to apply for the exceptions and the specific requirements to qualify for the exceptions. Refer to Table 4 for a list of the exceptions.

Table 4: Exceptions available for EHR Incentive Program*

Exception Description
Insufficient Internet access EPs must demonstrate that they are in an area without sufficient Internet access or face insurmountable barriers to obtaining the necessary infrastructure (such as lack of broadband)
New EP Newly practicing EPs who would not have had time to become meaningful users may apply for a two-year limited exception to payment adjustments
Extreme circumstances outside of the
EP’s control
Examples include a natural disaster or another unforeseeable barrier
Lack of patient interaction EPs must demonstrate that they meet the following criteria:

  • Lack of face-to-face or telemedicine interaction with patients
  • Lack of follow-up need with patients
Lack of control over availability of certified EHR technology (CEHRT) Lack of control over availability of CEHRT for more than 50 percent of patient encounters
*Centers for Medicare & Medicaid Services. Accessed Oct. 22, 2013.

What resources are available to help me begin reporting?

The ACS and CMS offer several resources pertaining to the EHR Incentive Program, including the following:

  • ACS EHR Web page
  • CMS website, and refer to the Stage 2 resource for requirements as well as guidance on reporting CQMs in 2014:
  • CMS EHR Web page
  • CMS PQRS Web page for more information on the PQRS-EHR streamlined reporting option

The College has partnered with AmericanEHR Partners. ACS Members may register with the AmericanEHR Partners to receive additional information on EHR vendor ratings, listen to podcasts, request proposals from vendors, receive e-newsletters, and more.

*Any changes that CMS may make to the 2014 deadlines will be reported in ACS NewsScope, the ACS Advocate, and the Bulletin.

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