On February 24, 2012 the Centers for Medicare & Medicaid Services (“CMS”) released a Notice of Proposed Rulemaking setting forth the “Stage 2” Meaningful Use requirements.  The proposed rule specifies the Stage 2 criteria that eligible providers must meet in order to qualify for Medicare and/or Medicaid EHR incentive payments.


The American Recovery and Reinvestment Act of 2009 specifies three main components of Meaningful Use:

•   Stage 1:  “Meaningful use” consists of transferring data to EHRs and being able to share information, including electronic copies and visit summaries for patients.  Stage 1 began in 2011 and remains the starting point for all providers.

•    Stage 2:  “Meaningful use” includes new standards such as online access for patients to their health information, and electronic health information exchange between providers.  This Stage is to be implemented in 2014 and is the subject of the new proposed rule.

•    Stage 3: “Meaningful use” includes demonstrating that the quality of health care has been improved.  This stage is expected to be implemented in 2016.

At the end of the day, “meaningful use” means providers need to show they are using certified EHR technology in ways that can be measured significantly in quality and in quantity.


•    Stage 2 Meaningful Use and Objective Measures:  The proposed Stage 2 criteria raise the number of core objectives (which are required) as compared to menu objectives.  Physicians and other eligible professionals must meet (or qualify for an exclusion) to seventeen core objectives and three out of five menu objectives.  Hospitals will have to meet (or qualify for an exclusion) to sixteen core objectives and two out of four menu objectives.

•    Achievement:  Where Stage 1 objectives have for the most part been retained at the Stage 2 level, the proposed rule raises the achievement threshold for various measures.  For example, under Stage 1 of meaningful use, more than 40 percent of all permissible prescriptions written by an eligible provider (“EP”) had to be transmitted electronically using Certified EHR Technology. CMS is now proposing a threshold of 65 percent for this measure.  In proposing the increase, CMS acknowledges that the ease of meeting this measure depends heavily on the availability of pharmacies in their local area that accept electronic prescriptions.  As such, a new proposed exclusion allows EPs to exclude this objective, if no pharmacies within 25 miles of an EP’s practice location at the start of his/her EHR reporting period accept electronic prescriptions.

•    Reporting on Clinical Quality Measures:  The proposed Stage 2 rule also continues the Stage 1 requirement that providers report on specified “clinical quality measures” (“CQMs”) in order to qualify for incentive payments.  There are twelve Stage 2 CQMs for eligible professionals and twenty-four for hospitals.  In an effort to lessen administrative burdens, CMS is now proposing to align these reporting requirements with existing requirements (such as the Physician Quality Reporting System (“PQRS”), CMS’s existing Hospital Inpatient Quality Reporting (“HIQR”), the Shared Savings Program, and Joint Commission accreditation measures).

•    Payment Adjustments:  In addition, the proposed rule makes clear that, beginning in 2015, providers will face Medicare payment adjustments if they fail to demonstrate meaningful use of certified EHR technology and fail to meet other program participation requirements.

•    Timeline Delay:  Finally, Stage 1 has been extended an additional year, allowing providers to attest to stage 2 in 2014, instead of in 2013.

The proposed rule may be downloaded into a pdf format from the following site:

Comments are due 60 days after publication in the Federal Register.