Stimulus Funds

Decoding Stimulus Funds

The Health Information Technology Meaningful Use and Certification rules have been released.

As you are aware, the American Recovery and Reinvestment Act of 2009 gave authority to the Centers for Medicare & Medicaid (CMS) to provide incentives for providers who become meaningful users of certified EHRs.

“Widespread adoption of electronic health records holds great promise for improving health care quality, efficiency, and patient safety. The Recovery Act’s financial incentives demonstrate Congress’ and the Administration’s commitment to help providers adopt and make meaningful use of EHR technology so they can give better care and their patients’ experience of care will improve.”
--- David Blumenthal, M.D., M.P.P. National Coordinator for Health Information Technology, 2010 

The American Recovery and Reinvestment Act (ARRA) has made billions of dollars of funding available through Medicare and Medicaid incentive programs for those that achieve “meaningful use.” This can be a substantial support in your transition to an EHR. However, determining how to qualify for those funds is not a simple task. The act requires specific kinds of use, certified systems, and has a timetable for implementation that affects payments. 

On average, implementing an EHR costs about $35K per provider.  To find out how these incentives can defray the costs of an EHR, read on.

The Meaning of Meaningful Use
Certification Impacts Reimbursement
Medicare/Medicaid Incentive Programs

The Meaning of Meaningful Use

The final CMS rule:

Specifies initial criteria that eligible professionals (EPs), eligible hospitals, and critical access hospitals (CAHs) must meet to demonstrate meaningful use and qualify for incentive payments. 

• Includes both “core” criteria that all providers must meet to qualify for payments, while also allowing provider choice among a “menu set” of additional criteria.
• Outlines a phased approach to implement the requirements for demonstrating meaningful use. This approach initially establishes criteria for meaningful use based on currently available technological capabilities and providers’ practice experience. CMS will establish graduated criteria for demonstrating meaningful use through future rulemaking, consistent with anticipated developments in technology and providers’ capabilities.

For the complete Electronic Health Record Incentive Program Final Rule please go to http://www.ofr.gov/inspection.aspx#spec_C.

John Halamka published an Analysis of the Final Standards Rule at Life as a Healthcare CIO.

The New England Journal of Medicine published The "Meaningful Use" Regulation for Electronic Health Records (Blumenthal) http://content.nejm.org/cgi/content/full/NEJMp1006114/.

Click here for an overview of the changes and a comparsion of the Notice of Proposed Rulemaking and the Final Rule.

Certification Impacts Reimbursement

The ONC regulations specify the technical capabilities that EHR technology must have to be certified and to support providers in achieving the “meaningful use” objectives. The rule:

• Sets initial standards, implementation specifications, and certification criteria for EHR technology under the incentive program.
• Coordinates the standards required of EHR systems with the meaningful use requirements for eligible professionals and hospitals
• With these standards in place, providers can be assured that the certified EHR technology they adopt is capable of performing the required functions to comply with CMS’ meaningful use requirements and other administrative requirements of the Medicare and Medicaid EHR incentive programs. 

The Final Rule for Electronic Health Record Technology has also been posted and can be found at http://www.ofr.gov/inspection.aspx#spec_H.

Medicare/Medicaid Incentive Programs

CMS is establishing the EHR Incentive program through formal rule making. A proposed rule on the EHR incentive programs (and the definition of meaningful use) was published, and CMS accepted public comments for 60 days, which ended on March 15, 2010. More than 2,000 comments were received. CMS released the final rule on July 13, 2010. This rule provides many of the parameters and requirements for the Medicare & Medicaid EHR Incentive Programs.

Medicare Payment Incentives for Eligible Professionals

• The Recovery Act establishes financial incentives beginning in January 2011 for eligible professionals (EPs) who are meaningful EHR users.  Beginning in 2015, payment adjustments will be imposed on EPs who are not meaningful EHR users.

• Hospital-based physicians who substantially furnish their services in a hospital setting are not eligible.
• Incentive Payments

The incentive payment is equal to 75 percent of Medicare allowable charges for covered services furnished by the EP in a year, subject to a maximum payment in the first, second, third, fourth, and fifth years of $15,000; $12,000; $8,000; $4000; and $2,000, respectively. For early adopters whose first payment year is 2011 or 2012, the maximum payment is $18,000 in the first year.

There will be no payments for meaningful EHR use after 2016.There would be no payments to EPs who first become meaningful EHR users in 2015 or thereafter.

For EPs who predominantly furnish services in a health professional shortage area (HPSA), incentive payments would be increased by 10 percent.

• Payment Adjustments:

The Medicare fee schedule amount for professional services provided by an EP who was not a meaningful EHR user for the year would be reduced by 1 percent in 2015, by 2 percent in 2016, by 3 percent for 2017 and by between 3 to 5 percent in subsequent years. 

For 2018 and thereafter, if the Secretary finds that the proportion of EPs who are meaningful EHR users is less than 75 percent, then the reductions will be increased by 1 percentage point each year, but by no more than 5 percent overall.

Medicaid Payment Incentives to Providers

• Certain classes of Medicaid professionals and hospitals are eligible for incentive payments to encourage the adoption and use of certified EHR technology.  Eligible professionals include physicians, dentists, certified nurse-midwives, nurse practitioners, and physician assistants who are practicing in Federally Qualified Health Centers (FQHCs) or Rural Health Clinics (RHCs) led by a physician assistant. 
• Eligible professionals must meet minimum Medicaid patient volume percentages, and must waive rights to duplicative Medicare EHR incentive payments.  Eligible professionals may receive up to 85 percent of the net average allowable costs for certified EHR technology, including support and training (determined on the basis of studies that the Secretary will undertake), up to a maximum level, and incentive payments are available for no more than a 6-year period.  
• Acute care hospitals with at least 10 percent Medicaid patient volume would also be eligible for payments, as would children's hospitals of any patient volume. Entities that promote the adoption of certified EHR technology, as designated by the State, are also eligible to receive incentive payments through arrangements with eligible professionals under certain conditions.

EPs may not receive an incentive under both Medicare and Medicaid in a given year.  CMS and the States will develop means to prevent such duplicate payments.  CMS expects that the prevention of duplicative payments will be addressed more fully through notice and comment rulemaking.