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HHS Proposes Information Blocking Penalties for Health Systems

Analysis  |  By Eric Wicklund  
   October 30, 2023

The proposed penalties, if made final, could be levied on healthcare organizations that knowingly and unreasonably interfere with the access, exchange, or use of electronic health information.

Federal officials are proposing penalties for healthcare organizations accused of information blocking.

The Health and Human Services Department has released a proposed rule that would establish three specific “disincentives” for healthcare providers found by the HHS Office of the Inspector General (OIG) to have knowingly and unreasonably interfered with the access, exchange, or use of electronic health information except as required by law or covered by regulatory exception. Public comments on the proposal will be accepted through January 2, 2024.

The proposed rule complements information blocking penalties established by the OIG in June for other parties, such as health information technology vendors, health information exchanges, and health information networks. Companies found by the OIG to have violated the rule can be fined as much as $1 million per violation.

With that penalty in place, HHS is now targeting health systems.

“HHS is committed to developing and implementing policies that discourage information blocking to help people and the health providers they allow to have access to their electronic health information,” HHS Secretary Xavier Becerra said in a news release. “We are confident the disincentives included in the proposed rule, if finalized, will further increase the appropriate sharing of electronic health information and establish a framework for potential additional disincentives in the future.”

The disincentives, coordinated through the Centers for Medicare & Medicaid Services (CMS) are as follows:

  • Under the Medicare Promoting Interoperability Program, an eligible hospital or critical access hospital (CAH) would not be a meaningful electronic health record (EHR) user in an applicable EHR reporting period. The impact on eligible hospitals would be the loss of 75 percent of the annual market basket increase; for CAHs, payment would be reduced to 100 percent of reasonable costs instead of 101 percent. 
  • Under the Promoting Interoperability performance category of the Merit-based Incentive Payment System (MIPS), an eligible clinician or group would not be a meaningful user of certified EHR technology in a performance period and would therefore receive a zero score in the Promoting Interoperability performance category of MIPS, if required to report on that category. The Promoting Interoperability performance category score typically can be a quarter of a clinician or group’s total MIPS score in a year. 
  • Under the Medicare Shared Savings Program, a health care provider that is an Accountable Care Organization (ACO), ACO participant, or ACO provider or supplier would be deemed ineligible to participate in the program for a period of at least one year. This may result in a health care provider being removed from an ACO or prevented from joining an ACO. 

The proposed rule is set ty be published in the National Register on November 1, after which the public comment period will be set for 60 days. The Office of the National Coordinator for Health Information Technology (ONC) and CMS will host an information session on the proposed rule within the next few weeks.

Eric Wicklund is the associate content manager and senior editor for Innovation, Technology, and Pharma for HealthLeaders.


The 21st Century Cures Act, passed in 2016, made sharing electronic health information the expected norm in healthcare, with some exceptions established by HHS.

Healthcare organizations who prevent consumers and others from accessing, exchanging, or using their health data are subject to penalties enforced by the Centers for Medicare & Medicaid Services.

Comments on the proposed penalties will be accepted through January 2, 2024.

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