CMS Incentives

Take a Look at CMS’ New Medicare EHR Incentive Program Guide for Eligible Professionals (EPs)

The Centers for Medicare & Medicaid Services has created a new comprehensive tool, An Introduction to the Medicare EHR Incentive Program for Eligible Professionals, to help guide EPs through all of the phases of the Medicare Electronic Health Record (EHR) Incentive Program 1—from eligibility and registration to attestation and payment. Chapters provide information on:

    • EHR Incentive Program basics
    • How to participate (determining eligibility and registration)
    • Meaningful use and choosing measures Attestation
    • Helpful resources on the Medicare and Medicaid EHR Incentive Programs

The guide is interactive. Users can click on sections of the Table of Contents to learn more about specific areas of the program. Interactive tabs are also included at the bottom of each page where users can jump from chapter to chapter. Additionally, each section provides readers with user-friendly screen shots, charts, and links to the CMS website.

Note: If a user prefers a hard copy document, the guide can also be printed. Links are written out and hyperlinked throughout the guide.

The guide can be found on the Educational Materials section of the EHR website, along with several other helpful tools and resources for participants in the Medicare and Medicaid EHR Incentive Programs.

1. The Medicare and Medicaid Electronic Health Record (EHR) Incentive Programs were authorized under the Health Information Technology for Economic and Clinical Health (HITECH) Act, part of the American Recovery and Reinvestment Act of 2009. The programs provide incentive payments to eligible professionals, eligible hospitals and critical access hospitals (CAHs) as they adopt, implement, upgrade, or demonstrate "meaningful use" of certified EHR technology in ways that improve quality, safety, and effectiveness of patient-centered care. Under the Medicare EHR Incentive Program, eligible professionals can receive as much as $44,000 over a consecutive five-year period. Under the Medicaid EHR Incentive Program, eligible professionals can receive as much as $63,750 over six years. Under both the Medicare and Medicaid EHR Incentive Programs, millions of dollars are available for eligible hospitals and CAHs that satisfy program requirements.

This article provides guidance to professionals and hospitals that may be eligible for EHR incentive payments. However, we urge readers to refer to the regulations for definitive rules on eligibility, payment, and other requirements. To the extent anything in this guidance conflicts with such rules and regulations, our rules and regulations would take precedence. Regulations are available at: http://www.cms.gov/EHRIncentivePrograms/60_RegulationsNotices.asp#TopOfPage


 

CMS Incentives

Among other important information that we believe you will find helpful as a physician taking this journey into EHR adoption and meaningful use, are all of the incentive payments provided through the Centers for Medicaid and Medicare which you may obtain when take the first steps towards adopting an EHR. Currently, the Center for Medicaid and Medicare Services has made incentive payments available to physicians throughout various stages of adoption and attainment of meaningful use. This is one of the many advantages you have for becoming involved early.

Below is the information provided by CMS pertaining to Medicaid and Medicare Incentive Payments.

CMS finalizes requirements for the Medicaid Electronic Health Records (EHR) Incentive Program

The Centers for Medicare & Medicaid Services (CMS) today announced the final rule to implement the provisions of the American Recovery and Reinvestment Act of 2009 (Recovery Act) that provide incentive payments for the adoption and meaningful use of certified electronic health record (EHR) technology. The Medicare EHR incentive program will provide incentive payments to eligible professionals (EPs), eligible hospitals, and critical access hospitals (CAHs) that are meaningful users of certified EHRs. The Medicaid EHR incentive program will provide incentive payments to EPs and eligible hospitals for efforts to adopt, implement, upgrade, or meaningfully use certified EHR technology .

This fact sheet summarizes provisions in the final rule affecting state Medicaid programs and Medicaid providers.

The Office of the National Coordinator for Health Information Technology (ONC) is issuing a closely related final rule that completes the Secretary’s adoption of an initial set of standards, implementation specifications, and certification criteria for EHRs. ONC also issued a final rule establishing a temporary certification program for health information technology on June 24, 2010 and will issue a final rule for establishing a permanent program later this year.

The Recovery Act amended the Medicaid statute to provide for a 100 percent Federal financial participation (FFP) match for state expenditures for provider incentive payments to encourage Medicaid health care providers to adopt, implement, upgrade or meaningfully use certified EHR technology. It also established a 90 percent FFP match for reasonable state expenses related to administration of the incentive payments and to promote EHR adoption and health information exchange.

On September 1, 2009, CMS released a State Medicaid Director’s Letter that provided preliminary guidance on state expenses related to activities in support of the administration of incentive payments to providers. CMS has worked with all States and territories to facilitate their planning efforts for the purposes of administering the incentive payments to providers, ensuring their proper payments, and auditing and monitoring of such payments, and participating in statewide efforts to promote interoperability and meaningful use of EHRs. Subsequent guidance to States on implementation funding will be forthcoming.

The final rule CMS released today provides further guidance to states and Medicaid providers on the Medicaid EHR Incentive Program. CMS anticipates that the majority of States will launch their Medicaid EHR Incentive programs between January and August of 2011.

The Medicaid provisions of the final rule address seven topics:

· Eligibility

· Payments

· Adopting, implementing, or upgrading certified EHR technology

· Demonstrating meaningful use of EHR technology

· Conditions for FFP for states

· Financial oversight/combating fraud and abuse

 

The paragraphs below summarize the rule’s treatment of these topics.

 

{slide=Eligibility|closed}

The final rule:

· Discusses Medicaid EPs and eligible hospitals that may participate. EPs are physicians (primarily doctors of medicine and doctors of osteopathy), dentists, nurse practitioners, certified nurse midwives, and physician assistants practicing in a Federally Qualified Health Center (FQHC) led by a physician assistant or Rural Health Clinic (RHC) that is so led. Eligible hospitals that can participate are acute care hospitals (which include cancer and critical access hospitals) and children’s hospitals;

· Specifies that eligible professionals and hospitals must meet patient volume thresholds, measured by a methodology selected by the state. The two options offered in the final rule include: 1) a ratio where the numerator is the total number of Medicaid patient encounters (or needy individuals) treated in any 90-day period in the previous calendar year and the denominator is all patient encounters over the same period; or 2) a similar ratio where the state may take into account Medicaid patients on a primary care patient panel. For all eligible professionals except pediatricians, the minimum patient volume threshold is 30 percent; for pediatricians, it is 20 percent. Eligible professionals practicing at FQHCs/RHCs must demonstrate that more than 50 percent of their clinical encounters occurred at an FQHC/RHC over a six-month period, and that they had a minimum of 30 percent of their patient volume from needy individuals. Needy individuals are those receiving medical assistance from Medicaid or the Children's Health Insurance Program, individuals who are furnished uncompensated care by the provider, or individuals furnished services at either no cost or reduced cost based on a sliding scale determined by the individual’s ability to pay.

· Reiterates a statutory requirement that EPs must also not be hospital-based; meaning, that the EP provides “substantially all of his or her professional services in a hospital setting.” Substantially all” is defined to mean that 90 percent or more of the services are performed in an inpatient or emergency department setting. The proposed rule aligns the definition of hospital-based with the Medicare definition, but allows states to develop a process to verify that EPs are not hospital-based, and therefore eligible to participate..

· Specifies that an acute care hospital is a primary health care facility where the average length of patient stay is 25 days or fewer. Hospitals with an average length of stay of 25 days or fewer and with a CMS Certification Number (CCN) that has the last four digits in the series 0001 – 0879 or 1300-1399 are eligible. This specification will include short term general hospitals, the 11 cancer hospitals, and critical access hospitals in the United States , District of Columbia , and U.S. territories. Acute care hospitals also must have 10 percent Medicaid patient volume in order to participate..

· For children’s hospitals, specifies that only those hospitals that have CCNs in the 3300-3399 series will be considered children’s hospitals.

· Specifies that entities promoting the adoption of certified EHR technology can be designated by states for EPs to voluntarily assign their incentive payments. The statute allows eligible professionals to assign their incentive payments to their employer or to state-designated "entities that promote the adoption of certified EHR technology." The definition of such an entity requires the entity to enable oversight of the business, operational and legal issues involved in the adoption and implementation of EHR and/or the exchange and use of electronic health information between participating providers, in a secure manner.

 

{slide=Payments}

The final rule:

· Specifies payment amounts, the basis for payments, and the process for making payments including that there must be no duplication with Medicare for EPs; EPs can receive up to $63,750; pediatricians with more than 20 percent, but less than 30 percent Medicaid patient volume will receive two-thirds of the maximum amount; and hospital payments are based on a formula outlined in the statute;

· Aligns with the Medicare incentive program, where possible. This includes allowing states to initiate their programs as early as January 2011.

· Finalizes the maximum incentive payments introduced in the statute, verified through analysis of studies on the average allowable cost of EHR technology undertaken by the Secretary;

· Requires states to verify the eligibility and disburse payments to Medicaid eligible providers;

· Specifies that while some eligible hospitals may receive incentives from Medicare and Medicaid, EPs must select one program. Furthermore, Medicaid EPs and hospitals must select one state from which to receive their incentive in each year.

· Specifies that states must have a system capable of coordinating with a national database to verify provider eligibility, identity, collect certain data, etc. This system must coordinate and/or make payments.

For hospital payments, the calculation is:

(Overall EHR Amount) * (Medicaid Share)

or

Overall EHR Amount

Equals

{Sum over 4 year of [(Base Amount Plus Discharge Related Amount Applicable for Each Year) * Transition Factor Applicable for Each Year]} *

Medicaid Share

Equals

{(Medicaid inpatient-bed-days + Medicaid managed care inpatient-bed-days) divided by [(total inpatient-bed days) times (estimated total charges minus charity care charges) divided by (estimated total charges)]}

 

{slide=Adopting, Implementing, or Upgrading Certified EHR Technology}

The final rule:

· Discusses that providers in their first year of participation in the Medicaid incentive payment program may demonstrate that they have adopted (e.g. acquired, purchased or secured access to), implemented (e.g. installed or commenced utilization of ) or upgraded to certified EHR technology in order to qualify for an incentive payment;

· Describes the methodology for demonstrating adoption, implementation and upgrading, and for states to monitor these activities;

 

{slide=Demonstrating Meaningful Use of Certified EHR Technology}

The final rule:

· Finalizes a shared minimum definition of meaningful use with Medicare. However, CMS will allow states to request CMS approval to require that four public health related measures be core instead of menu measures for Medicaid providers and to specify some of the destination and transmission details;

· Discusses how clinical quality measures reporting will be submitted to the states by Medicaid providers, such as via attestation or electronically via EHRs.

 

 

{slide=Conditions States Must Meet to Receive 90 Percent FFP}

The final rule:

· Specifies the prior approval conditions that must be met in order to receive FFP for reasonable administrative expenses;

· Establishes the Health Information Technology Advance Planning and Implementation Documents and the requirements for requesting FFP and for the content of the State Medicaid Health Information Technology (HIT) Plans, which describe how States plan to implement their Medicaid EHR Incentive programs..

 

 

{slide=Financial Oversight/Combating Fraud and Abuse}

The final rule:

· Provides that the states will fight fraud and abuse, including ensuring that there shall be no duplication of payment between the Medicare and Medicaid programs as a requirement of the State Medicaid HIT Plan;

· Requires that there will be recoupment of monies if overpayments or erroneous payments are found to have been paid;

· Requires a provider appeals process for eligibility, payments, and determinations of meaningful use as a requirement of the State Medicaid HIT Plan;

· Reiterates CMS’ process for financial oversight of the Medicaid Budget and Expenditure System.

The final rule may be viewed at http://www.cms.gov/EHRIncentivePrograms

 

 

{slide=Other Departmental HITECH Activities}

ONC serves as the principal federal entity charged with coordinating the overall effort to implement a nationwide health information technology infrastructure that allows for the electronic use and exchange of health information.

Specifically, the ONC is authorized by Title XXX of the Public Health Service Act (PHS) to provide grant funding to support states’ efforts in achieving meaningful use of certified EHRs. To that end, on August 20, 2009, the Vice President announced the availability of two grant programs to help hospitals and health care providers implement and use EHRs.

The grants made available under Section 3012 of the PHS Act provide funding for Health Information Technology Regional Extension Centers that will provide primary care, small and solo practice clinicians with technical assistance in selection, acquisition, implementation and meaningful use of certified EHR technology. ONC has funded 60 new Health Information Technology Regional Extension Centers (RECs). The purpose of the Regional Extension Center program is to provide physicians with the guidance and personalized support they need to adopt and meaningfully use EHRs. The objectives are to support 100,000 primary care providers in the United States and its territories by 2012. While direct REC assistance is prioritized to primary-care providers, all providers will be encouraged to participate in outreach and educational opportunities made available through the program and the program will extend best practices in health IT implementation to all physicians.

The grants made available under Section 3013 of the PHS Act provide funding for the State Health Information Exchange Cooperative Agreement Program. This grant funding opportunity establishes funding through cooperative agreements to support efforts to achieve widespread and sustainable health information exchange (HIE) within and among states, and to facilitate and expand the secure, electronic movement and use of health information among organizations according to nationally recognized standards. state programs to promote HIE will help to realize the full potential of EHRs to improve the coordination, efficiency and quality of care. These grants will support statewide planning and implementation and funding for the states’ overall HIT strategy.

State Medicaid programs are a critical, decisional partner in these comprehensive statewide plans for the electronic exchange of health information. Additionally, CMS recognizes that Medicaid EHR incentives are one important part of overall planning efforts for statewide HIT adoption and HIE that will be supported by these grant programs.

Ultimately, the Recovery Act provisions are not solely about information systems or information technology, but about improving health care quality and leveraging a wide range of stakeholders and resources, existing and projected, to achieve this goal through the exchange of health information.

Additional information on the Medicare and Medicaid EHR Incentive Programs, including a link to the text of the final rule, can be found at http://www.cms.gov/EHRIncentivePrograms.

 

 

{slide=CMS finalizes requirements for the Medicaid Electronic Health Records (EHR) Incentive Program}

The Centers for Medicare & Medicaid Services (CMS) today announced a final rule to implement the provisions of the American Recovery and Reinvestment Act of 2009 (Recovery Act) that provide incentive payments to providers for the meaningful use of certified EHR technology. The Medicare EHR incentive program will provide incentive payments to eligible professionals (EPs), eligible hospitals, and critical access hospitals (CAHs) that are meaningful users of certified EHRs. The Medicaid EHR incentive program, in the initial year, will provide incentive payments to eligible professionals and hospitals for efforts to adopt, implement, upgrade or successfully demonstrate meaningful use of certified EHR technology.

This fact sheet focuses on the Medicare EHR Incentive Program.

The Office of the National Coordinator for Health Information Technology (ONC) will be issuing a closely related final rule that completes the Secretary’s adoption of an initial set of standards, implementation specifications, and certification criteria for EHRs. ONC also issued a final rule establishing a temporary certification program for health IT on June 24, 2010 and anticipates issuing a final rule for establishing a permanent certification program later this year. Providers must meaningfully use such certified EHR technology to qualify as meaningful users in these incentive programs.

 

 

{slide=Medicare Eligible Professionals (EPS)}

A Medicare EP is a doctor of medicine or osteopathy, a doctor of dental surgery or dental medicine, a doctor of podiatric medicine, a doctor of optometry, or a chiropractor, who is legally authorized to practice under state law. A qualifying EP is one who successfully demonstrates meaningful use for the EHR reporting period.

Hospital-based EPs who furnish substantially all their services in a “hospital setting” are not eligible for incentive payments. The Continuing Extension Act of 2010 modified the definition of a hospital-based EP as performing substantially all of their services in an inpatient hospital setting or emergency room. The rule has been updated to reflect this. Hospital-based EPs are now defined as EPs who furnish 90 percent or more of their allowed services in a hospital inpatient setting, or hospital emergency department.

A qualifying EP can receive EHR incentive payments for up to five years with payments beginning as early as 2011. In general, the maximum amount of total incentive payments that an EP can receive under the Medicare program is $44,000.

· For the first year for which an EP applies for and receives an incentive payment, the EHR Reporting Period is 90 days for any continuous period beginning and ending within the year. For every year after the first payment year, the EHR reporting period is the entire year.

· A Payment Year equals a Calendar Year (CY).Incentive payments for this program end after 2016.

· A qualifying EP will receive an incentive payment equal to 75 percent of Medicare allowable charges for covered professional services furnished by the EP in a payment year, subject to maximum payments.

· In general, a qualifying EP can receive an annual incentive payment as high as $18,000 if their first payment year is 2011 or 2012.Otherwise, the annual incentive payment limits in the first, second, third, fourth, and fifth years are $15,000, $12,000, $8,000, $4000, and $2,000 respectively. In general, the maximum amount of total incentive payments that an EP can receive under the Medicare program is $44,000.

· An EP who predominantly furnishes services in a geographic Health Professional Shortage Area (HPSA) is eligible for a 10 percent increase in the maximum incentive payment amount. The maximum amount of total incentive payments that such an EP can receive under the Medicare program is $48,400.

· Payment calculations for EPs who first demonstrate meaningful use in 2014 will be made as if they began meaningful use in 2013.(That is, if an EP were to first demonstrate meaningful use in 2014, the EP would receive $12,000 for that year, the second year’s amount as if they had begun in 2013). The last year for which an EP can begin receiving incentive payments in this program is 2014. The total maximum EHR incentive payment amounts for Medicare EPs is outlined in the table below:

Calendar Year

First CY for which the EP Receives an Incentive Payment

2011

2012

2013

2014

2015 and
subsequent years

2011

$18,000

---

---

---

---

2012

$12,000

$18,000

---

---

---

2013

$8,000

$12,000

$15,000

---

---

2014

$4,000

$8,000

$12,000

$12,000

---

2015

$2,000

$4,000

$8,000

$8,000

$0

2016

---

$2,000

$4,000

$4,000

$0

TOTAL

$44,000

$44,000

$39,000

$24,000

$0

· EPs who meet the eligibility requirements for both the Medicare and Medicaid EHR Incentive Programs may participate in only one program, and must designate the program in which they would like to participate.After a payment is made, EPs will be allowed to change their program selection once before 2015.

· Payments under Medicare will be disbursed through a single payment contractor to the Tax Identification Number (TIN) provided by the qualifying EP.

· Provided they meet certain conditions, EPs can reassign the entire amount of their incentive payment to one employer or entity.

· Incentive payments also will be made to qualifying Medicare Advantage (MA) organizations for the adoption and meaningful use of EHR technology by their affiliated EPs.

· MA-Affiliated EPs must furnish, on average, at least 20 hours/week of patient-care services and be employed by the qualifying MA organization; -or must be employed by, or be a partner of, an entity that through contract with the qualifying MA organization furnishes at least 80 percent of the entity’s Medicare patient care services to enrollees of the qualifying MA organization.

· EPs who do not successfully demonstrate meaningful use of certified EHR technology will be subject to payment adjustments for their covered professional services beginning in 2015.MA organizations will also be subject to payment adjustments if their affiliated EPs do not demonstrate meaningful use of certified EHR technology beginning in 2015.

 

 

{slide=Medicare Eligible Hospitals}

An eligible hospital for Medicare incentive payments is a “subsection (d) hospital” that is paid under the hospital inpatient prospective payment system (IPPS). Hospitals must be located in one of the 50 states or the District of Columbia .

· Eligible hospitals may receive incentive payments for up to four years, beginning with fiscal year beginning 2011 (October 1, 2010 – September 30, 2011), provided they successfully demonstrate meaningful use of certified EHR technology.

· Eligible hospitals may qualify to receive payments from both the Medicare and Medicaid EHR Incentive Programs.

· A qualifying hospital is an eligible hospital that successfully demonstrates meaningful use of certified EHR technology for the EHR reporting period during a payment year.A Payment Year is a Federal Fiscal Year (FFY).

· For the first year an eligible hospital demonstrates meaningful use of certified EHR technology, the EHR Reporting Period equals any 90 continuous days beginning and ending within the year. For every year thereafter, the EHR reporting period is the entire year.

· Eligible hospitals may qualify to receive incentive payments for up to four years beginning in FY 2011. The last year for which an eligible hospital can begin receiving incentive payments for this program is 2015.

· The incentive payment for each eligible hospital will be calculated based on

1. An initial amount which is the sum of a $2 million base amount and the product of a per discharge amount (of $200) and the number of discharges (for discharges between 1150 and 23,000 discharges) ;

2. the Medicare share which has as its numerator Medicare fee-for-service and managed care acute-care inpatient bed-days and as its denominator the product of total acute care inpatient days and the percentage of hospital’s total charges that are not attributed to charity care; and

(3) a transition factor which phases down the incentive payments over the four year period.

 

 

{slide=Incentive Payment Calculation for Eligible Hospitals:}

Incentive Payment Amount equals [Initial Amount] x [Medicare Share] x [Transition Factor]

· o Initial Amount equals $2,000,000 + [$200 per discharge for the 1,150th – 23,000th discharge]

· o Medicare Share equals Medicare/(Total*Charges)

Medicare equals [number of Acute Care Inpatient Bed Days for Beneficiaries Where Payment May be Made under Part A] plus [number of Acute Care Inpatient Bed Days for MA Beneficiaries]

Total equals [number of Total Acute Care Inpatient Bed Days]

Charges equals [Total Charges minus Charges for Charity Care*] divided by [Total Charges]

*If data on charity care are not available, then the Secretary will use data on uncompensated care as a proxy. If the proxy data are also not available, then “Charges” will be equal to 1.

· Transition Factor

Consecutive Payment Year

Transition Factor

1

1

2

¾

3

½

4

¼

· For eligible hospitals that begin to be meaningful EHR users after 2013, their payment calculations will be made as if they began meaningful use in 2013. Their transition factor is modified accordingly. (For instance, if a hospital were to begin EHR meaningful use in 2014, the transition factor used for that year would be ¾, as if 2014 were the second payment year for a meaningful user starting in 2013 and so on for subsequent years).

Transaction Factor for Medicare FFS Eligible Hospitals

Fiscal Year

Fiscal Year that Eligible Hospital First Receives the Incentive Payment

2011

2012

2013

2014

2015

2011

1.00

---

---

---

---

2012

0.75

1.00

---

---

---

2013

0.50

0.75

1.00

---

---

2014

0.25

0.50

0.75

0.75

---

2015

---

0.25

0.50

0.50

0.50

2016

---

---

0.25

0.25

0.25

· Payment adjustments begin in FY 2015 for hospitals that do not demonstrate meaningful use of certified EHR technology.

· Incentive payments will be made to qualifying Medicare Advantage (MA) organizations for the adoption and meaningful use of EHR technology by their affiliated eligible hospitals.

· A MA-affiliated hospital is an eligible hospital that is under common corporate governance with the MA organization and primarily serves individuals enrolled in MA plans offered by the MA organization.

· The annual payment update for inpatient hospital services for eligible hospitals that are not meaningful EHR users will be reduced beginning in FY 2015. MA organizations will be subject to payment reductions if their affiliated hospitals are not meaningful EHR users beginning in FY 2015.

 

 

{slide= CRITICAL ACCESS HOSPITALS (CAHs)}

A qualifying CAH is a certified critical access hospital that meets the definition of a meaningful EHR user for an eligible “subsection (d)” hospital.

· CAHs can qualify to receive payments from both the Medicare and Medicaid EHR Incentive Programs.

· Qualifying CAHs may receive incentive payments for up to four payment years beginning with cost reporting periods that begin in FY 2011. The year with a cost reporting period that begins in FY 2015 is the last payment year for which a qualifying CAH can receive incentive payments as a meaningful EHR user.

· Qualifying CAHs can receive incentive payments for the reasonable costs incurred for the purchase of depreciable assets like computers and associated hardware and software, necessary to administer certified EHR technology, excluding any depreciation and interest expenses associated with the acquisition.

· A qualifying CAH will receive an incentive payment amount equal to the product of its reasonable costs incurred for the purchase of certified EHR technology and its Medicare share percentage. The Medicare share percentage equals the lesser of (1) 100 percent; or (2) the sum of the Medicare share fraction for the CAH and 20 percentage points.

· Payment adjustments begin in FY 2015 for CAHs that are not meaningful EHR users.

Additional information on the Medicare and Medicaid EHR Incentive Programs, including a link to the text of the final rule, can be found at http://www.cms.gov/EHRIncentivePrograms.

{/slides}

Copyright © 2011 PSM-HITREC. All Rights Reserved. Funded by: USHHS, Office of the National Coordinator for Health Information Technology (ONC).