Many people have emailed me about the Meaningful Use Stage 2 Hardship application for hospitals and eligible professionals.
The most common question is - if I apply for hardship, what happens to my incentives and penalties? Here is my understanding:
Put simply, if you want to get an incentive you have to do MU. For *Medicare* providers once they start their first payment year their yearly clock for incentives keeps ticking regardless of whether they do MU or not. So miss a year = no incentive. The following year would be whatever the next available incentive is scheduled to be, NOT the one that was just missed. So there is no such thing as deferred incentives.
Applying for hardship means not doing MU, which means no incentive for that year (which means gone forever). If a provider is favorably granted the hardship then they would not be subject to the penalty to which that hardship is applicable. In the case of 2014 performance, it is the basis for the 2016 penalty.
So to make it real.
If a (non-first-time) provider applies for a hardship for 2014 performance, presumably that means they cannot demonstrate MU, which means no 2014 incentive, but when granted the hardship it means they avoid being penalized in 2016.
If a provider does MU in 2014, they get the 2014 incentive AND avoid the 2016 penalty.