Feds announce final penalties for information blocking. Hospitals and medical groups aren’t happy.

The federal government has finalized its rules to prevent information blocking, and violators could face some stiff financial penalties.

Health & Human Services Secretary Xavier Becerra says a new federal rule to prevent information blocking is designed to improve patient care.

The U.S. Department of Health & Human Services unveiled the final penalties for blocking information on Monday. The government is working to ensure that hospitals, doctors, and insurers are sharing health information freely, and has developed “disincentives” meant to deter organizations from blocking data.

Hospitals and medical groups could see less federal aid if the health department determines that they are blocking information. Under federal estimates, hospitals could lose hundreds of thousands of dollars if they are found to be blocking information. Clinicians could see penalties of hundreds of dollars, while medical groups could see penalties costing them thousands of dollars.

The penalties reflect the health department’s earlier proposal. Hospitals and other providers had urged the government to revise its approach.

Health & Human Services Secretary Xavier Becerra said in a news release that the sharing of information is essential to better patient care.

“This final rule is designed to ensure we always have access to our own health information and that our care teams have the benefit of this information to guide their decisions,” Becerra said in a statement.

Under the rule, hospitals that are found to be blocking information would receive a 75% reduction in their “market basket” update, or the annual price index used to help set Medicare’s inpatient payments.

Critical access hospitals who are found to have blocked information would be limited to the reimbursement of 100% of their “reasonable costs,” instead of 101%.

Under the government’s rule, hospitals could see a median “disincentive amount” of $394,353 and a range of roughly $30,000 to $2.4 million across eligible hospitals. But the American Hospital Association, which has criticized the health department’s plans, previously said some hospitals could see “an average impact that is nearly 10 times higher” than the median quoted in the rule.

The hospital association expressed its frustration with the health department’s final penalties.

“AHA is disappointed that HHS chose to disregard most of the comments they received and is highly concerned that the disincentive structure retained in the final rule is excessive, confusing and imbalanced,” the association said in a statement Monday.

The health department also announced provisions aimed at Accountable Care Organizations.

Under the rule, an Accountable Care Organization, an ACO provider or participant that is found to be blocking formation wouldn’t be able to participate in the Medicare Shared Savings Program for at least one year. Providers wouldn’t get the revenue they would have earned through the program, the department says.

The measures for hospitals would be put in place 30 days after publication of the final rule.

The rule also includes penalties aimed at clinicians and medical groups. Clinicians would receive reduced reimbursements under the Merit-based Incentive Payment System.

The government has estimated that the median “disincentive” for a clinician would be $686. Groups with two to 241 clinicians could see penalties ranging from $1,372 to $165,326, according to federal estimates. The health department clarified that if an individual clinician within a group is guilty of information blocking, the clinician would face the penalty, rather than the group.

Anders Gilberg, senior vice president of government affairs for the Medical Group Management Association, said he understands the need for disincentives to deter providers from blocking information. But he said the government’s approach is too harsh.

“We are disappointed the Administration chose to move forward with significant administrative and financial penalties within existing Medicare quality programs,” Gilberg said in a statement.

“HHS could have chosen to work with providers to implement corrective action plans, but instead finalized unnecessarily punitive penalties that will financially damage practices and negatively impact Medicare patients,” Gilberg added.

The MGMA is also asking the health department to offer more guidance for providers, including educational materials clearly explaining what constitutes information blocking.

The Office of the National Coordinator for Health Information Technology has been tracking information blocking reports since April 2021. According to the office’s tally, there have been 1,052 complaints of information blocking, mostly from patients who have been seeking information or third parties requesting information on the behalf of patients.

Late last year, the federal government launched the Trusted Exchange Framework and Common Agreement (TEFCA), the interoperability framework designed to improve the sharing of health information between hospitals, healthcare organizations, insurers and patients.