As part of the 2009 ARRA act, the HITECH Act established Medicare and Medicaid EHR Incentive Programs. In 2011, these payments become available to eligible healthcare providers and eligible hospitals when they adopt certified EHR technology and successfully demonstrate meaningful use of the technology in ways that improve quality, safety, and effectiveness of patient-centered care.
The average cost per provider for implementing an EHR is currently about $30,000. EHR incentive programs have been established to help defray costs and to support a provider’s transition to using HIT and to using an EHR in meaningful ways.
- Medicare and Medicaid Incentive Programs
- Medicare Incentive Payments
- Medicaid Incentive Payments
- Payment Program Timeline
The Medicare and Medicaid EHR Incentive Programs, available to eligible providers, offer a financial reward for the meaningful use of certified EHRs to achieve health outcomes and efficiency goals. In addition to these federal financial incentives, there are RI incentive programs for which you might be eligible, as well as RI REC subsidy payments.
If you are eligible for both the Medicare and Medicaid EHR Incentive Programs, you must select only one in which to participate. You can receive as much as $44,000 over a five-year period through Medicare; for Medicaid, reimbursement is as much as $63,750 over six years.
Registration for the Medicare program began January 3, 2011, and qualifying providers could receive the first incentive payment in May. To successfully complete the online registration process, first familiarize yourself with the Medicare Incentive program requirements and review the step-by-step registration guide. Instructions for attestation in the Medicare Incentive Program will be available in April.
Registration for the RI Medicaid program will begin in July, 2011. The RI Department of Human Services is working with CMS on the details of the program.
The Medicare and Medicaid Incentive Programs differ in their requirements for an eligible professional (EP) and eligible hospital (EH).
EPs who are eligible for both incentive programs may not receive an incentive from both Medicare and Medicaid in the same year. Before 2015, these EPs must initially elect to receive payments from only one program and may switch between the two only once after receiving an incentive payment. CMS and the States will develop ways to prevent such duplicative payments.
Medicare Program Eligibility
A Medicare EP must not be hospital-based and is a doctor of medicine or osteopathy; doctor of dental surgery or dental medicine; doctor of podiatry; doctor of optometry; or a chiropractor. (A provider is considered hospital-based if 90% or more of his or her services are performed in a hospital inpatient or emergency room setting.)
A Medicare EH is an acute care hospital in one of the 50 US states or the District of Columbia that is paid under the hospital inpatient prospective payment system. Critical Access Hospitals and Medicare Advantage Hospitals are also eligible for incentive payments.
Medicaid Program Eligibility
A Medicaid EP must not be hospital-based and is a physician, nurse practitioner, certified nurse-midwife or dentist, or a physician assistant who provides services in a Federally Qualified Health Center or Rural Health Clinic that is led by a physician assistant. (A provider is considered hospital-based if 90% or more of his or her services are performed in a hospital inpatient or emergency room setting.)
To qualify for an EHR incentive payment, a Medicaid EP must meet one of the following criteria:
- Have a minimum 30% Medicaid patient volume
- Have a minimum 20% Medicaid patient volume and is a pediatrician
- Practice predominantly in a Federally Qualified Health Center or Rural Health Center with a minimum 30% patient volume attributable to needy individuals.
A Medicaid EH is an acute care hospital with at least 10% Medicaid patient volume or a children’s hospital.
Starting in 2011, Medicare incentive payments become available for EPs and EHs that are meaningful users of certified EHR technology. Because of the Medicare eligibility requirements, regardless of the year, hospital-based physicians who substantially provide their services in a hospital setting are not eligible to receive Medicare incentive payments.
Medicare Incentive Payment Amounts
- An EP can receive incentive payments for up to 5 years, with payments beginning as early as 2011. The maximum amount of total payments is $44,000.
- The incentive payment is equal to 75% of Medicare fee-for-service allowable charges for covered services furnished (ie, provided) by an EP in a payment year, subject to a maximum payment.
- For an early EHR adopter whose first payment year is 2011 or 2012, the maximum payment is $18,000 in the first year. Incentive payments decrease if the first year is after 2012, with annual payment limits in the first, second, third, fourth and fifth years of $15,000, $12,000, $8,000, $4,000 and $2,000, respectively (see table below).
- There will be no payments to an EP who first becomes a meaningful EHR user in 2015 or 2016.
- There will be no payments for meaningful EHR use after 2016.
- Incentive payments are increased by 10% for an EP who predominantly furnishes services in a health professional shortage area.
For 2015 and 2016, a Medicare EP who does not successfully demonstrate meaningful use will have a 1% payment reduction in Medicare fee-for-service reimbursement. This reduction increases up to 5% for every year that an EP does not demonstrate meaningful use.
To be eligible for Medicaid EHR incentive payments, a Medicaid EP must adopt, implement, upgrade or demonstrate meaningful use of certified EHR technology in the first year of participation and successfully demonstrate meaningful use in subsequent years. The EP must meet minimum Medicaid patient volume percentages and must waive rights to duplicative Medicare EHR incentive payments.
Medicaid Incentive Payment Amounts
- For calendar years 2011 to 2021, a Medicaid EP may receive up to 85% of the net average allowable costs for certified EHR technology, including support and training up to a maximum level. Incentive payments are available for up to ten years.
- Incentive payments are made by the State based on the calendar year.
- An EP may receive a maximum of $21,250 for the first calendar year in which an incentive payment is received, with payments limited to $8,500 for the subsequent 5 years of program participation (see table below).
- Acute care hospitals with at least 10% Medicaid patient volume are eligible for incentive payments, as are children's hospitals of any patient volume. Designated State entities that promote the adoption of certified EHR technology are also eligible to receive incentive payments through arrangements with EPs under certain conditions.
There are no payment reductions in Medicaid reimbursement. However, if you are a physician who accepts both Medicare and Medicaid reimbursement, you must demonstrate meaningful use by 2015 (in either the Medicare or the Medicaid EHR incentive program) or you will have a Medicare fee-schedule reduction for all your Medicare claims.
The table below provides a comparison of the differences between the Medicare and Medicaid Incentive Payment Programs.
|Legend:||AIU||=||Adopt, Implement or Upgrade|
|CAH||=||Critical Access Hospital|
The table below lists the dates for registration, attestation (ie, demonstrating meaningful use) and incentive payments for the Medicare and Medicaid programs for eligible providers:
|EHR Incentive Program Timeline|
|January 2011||Registration for the EHR Incentive Program begins|
|January 2011||Medicaid EPs – States may launch their program if they so choose|
|April 2011||Attestation* for the Medicare EHR Incentive Program begins|
|May 2011||EHR incentive payments begin|
|November 30, 2011||Last day for EHs and CAHs to register and attest to receive an incentive payments for FFY 2011|
|February 29, 2012||Last day for EPs to register and attest to receive an incentive payment for CY 2011|
|2015||Medicare payment adjustments begin for EPs and EHs that are not meaningful users|
|2016||Last year to receive a Medicare EHR incentive payment or to initiate participation in Medicaid EHR Incentive Program|
|2021||Last year to receive Medicaid EHR Incentive Payment|
*Beginning in 2012, providers will have to demonstrate meaningful use by electronically attesting through a secure CMS website. Each EP will need to demonstrate requirements of meaningful use to qualify for EHR incentive payments. Details about the form of attestation and the clinical measures to report are forthcoming.