With only a fraction of hospitals and eligible professionals being ready to report for the Medicare and Medicaid electronic health record (EHR) incentive programs using the 2014 certified EHR technology criteria (aka, Meaningful Use Stage 2), the administration has issued a proposed policy to allow reporting using Stage 1 criteria for one more year.

Under the proposed rule issued by the Centers for Medicare and Medicaid Services (CMS) and the Office of the National Coordinator for Health Information Technology (ONC), providers and hospitals would be allowed to use either just the 2011 edition certified EHR technology criteria (Meaningful Use Stage 1) or a combination of Stage 1 and Stage 2 criteria for the 2014 EHR incentive programs reporting period. Then, starting next year, everyone would be required to report using Stage 2 criteria.

The rule also formalizes CMS’s previously stated intention to continue Stage 2 through 2016 and not begin Stage 3 until 2017.

CMS and the ONC had been under increasing pressure to change the deadline because many developers of certified EHR systems were not ready with Stage 2-certified updates to their programs in time for providers to roll out the changes at all of their facilities before the incentive program reporting deadline. However, the extension of the deadline — while fair to hospitals and providers who through no fault of their own would have missed the original deadline — also moves certain key changes that advance interoperability of EHR systems further into the future. With 370,000 hospitals and professionals nationwide having received EHR incentive payments so far, fiscally conservative lawmakers have grown increasingly frustrated that the government is not yet realizing the cost savings from interoperability of systems that were promised when the incentive program was first created.

In the press release, Karen DeSalvo, M.D., M.P.H, M.Sc., national coordinator for health information technology put the best spin possible on the extension of Stage 2.

“Increasing the adoption of EHRs is key to improving the nation’s health care system and the steps we are taking today will give new options to those who, through no fault of their own, have been unable to get the new 2014 Edition technology, including those at high risk, such as smaller providers and rural hospitals,” she stated.

The rule is open for comments for the next 60 days and would become final in mid-July, just in the nick of time to beat the 2014 reporting deadline.