Minnesota and North Dakota.
Incentives
The Medicare Electronic Health Record (EHR) incentive program will provide incentive payments to eligible professionals (EPs), eligible hospitals, and critical access hospitals (CAHs) that are meaningful users of certified EHR technology. The focus on meaningful use is a recognition that better health care does not come solely from the adoption of technology itself but through the exchange and use of health information to best inform clinical decisions at the point of care.
Medicare Incentives for Eligible Professionals
The incentive value is to be 75% of allowed Medicare charges for professional services for a payment year with yearly maximums as described in the below table if the EP is a meaningful EHR user. The program begins in 2011 and will continue through 2016. EPs can participate for up to five years throughout the duration of the program. The last year to begin participation in the Medicare EHR Incentive Program is 2014. To receive the maximum EHR incentive payment, Medicare EPs must begin participation by 2012.
Table 1: Maximum Medicare Incentives for EPs
2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | Incentive |
|---|---|---|---|---|---|---|---|
Stage 1 | Stage 1 | Stage 2 | Stage 2 | $2,000 | $44,000 | ||
Stage 1 | Stage 1 | Stage 2 | $4,000 | $2,000 | $44,000 | ||
Stage 1 | Stage 1 | $8,000 | $4,000 | $39,000 | |||
Stage 1 | $8,000 | $4,000 | $24,000 | ||||
| Penalty (deduction from Medicare chages) if not at Stage 3 by January 1 of that year: | 1% | 2% | 3% | ||||
EPs with more than 50% of their Medicare services in a health professional shortage area (HPSA) can receive a 10% increase in the maximum incentive payment they receive. An EP eligible for the HPSA bonus that has their first year of implementation in 2011 or 2012 could receive an incentive payment of $48,400. Those who implement in 2013 or 2014 could receive an incentive payment of $45,100. This additional 10% HPSA incentive is not available for EPs who participate in the Medicaid EHR Incentive Program.
The above incentive payment schedule does not apply to hospital-based EPs (i.e., pathologists, anesthesiologists, emergency physicians). Hospital-based professionals furnish substantially all of their services in a hospital setting (whether inpatient or outpatient) and through the use of the facilities and equipment, including qualified EHRs, of the hospital. The determination of hospital-based professionals is made by the site-of-service and without regard to employment or billing arrangement between the EP and any provider.
Medicare EPs who also qualify as Medicaid EPs must choose between the Medicare and Medicaid incentive programs when they register. They cannot choose both.
Incentive payments to EPs are made either directly to the professional or the professional may reassign it to another entity. EPs who work in multiple sites and achieve meaningful use by combining the work they did at multiple sites still may only assign their payment to one entity. In the first year of demonstrating meaningful use, a payment will be made when the EP reached their Medicare allowable charges limit or the end of the year, whichever comes first. Medicare EHR incentive payments to EPs will be made on a rolling basis after CMS has ascertained that he EP met meaningful use for the reporting period and the EP has met the maximum allowable charges threshold. In the event that the EP does not meet the maximum allowed charges threshold by the end of the calendar year, payment will be made following the deadline to submit claims for the period. Payments will be made approximately 4-6 weeks after successful attestation. Payments to Medicare providers will be made to the taxpayer identification number (TIN) selected at the time of registration, through the same channels their claims payments are made. The form of payment (electronic funds transfer or check) will be the same as claims payments. While CMS expects that Medicare incentive payments will begin in May 2011, payments will be held for EPs until the EP meets the $24,000 threshold in allowed charges.
More information on Medicare Incentive Payments for EPs >
Medicaid Incentives for Eligible Professionals
Medicaid EPs are defined as those professionals who are:
- Not hospital-based provider with at least 30% Medicaid patient volume;
- Not hospital-based pediatrician with at least 20% Medicaid patient volume; or,
- An EP who practices in a FQHC or RHC with at least 30% patient volume attributable to needy individuals.
Hospital-based is defined as a professional (such as a pathologist, anesthesiologist, or emergency physician) who furnished substantially all services in a hospital setting (whether inpatient or outpatient) and through the use of the facilities and equipment, including EHR, of the hospital. Determination of hospital-based status is made on the basis of site of services and without regard to any employment or billing arrangement made between the professional and any other provider.
Medicaid EHR Incentive Payments to Non Hospital-based Providers with at Least 30% Medicaid Patient Volume
Such professions include:
- Physicians (Doctor of Medicine, Doctor of Osteopathy, and in some states optometrists)
- Dentists
- Certified Nurse Mid-wives
- Nurse Practitioners
- Physician
Assistants (PAs) who practice in a FQHC or RHC that is led by a PA. The PA
would be leading a FQHC or RHC if:
- The PA is the primary provider in a clinic (i.e., when there is a part-time physician and full-time PA, the PA would be considered the primary provider);
- The PA is a clinical or medical director at a clinical site of practice; or,
- The PA is an owner of a RHC.
Payments cover up to 85% of net allowable costs for EHR technology, support services, maintenance, and training for a provider to adopt and operate the EHR technology. Allowable costs for Year 1 payments are the average costs, from studying EPs, for the purchase and initial implementation or upgrade of EHR technology, including support services for training for adoption and initial operation of the technology. The net average for Year 1 cannot exceed $25,000 so if the net average cost of an EP is $25,000, they would receive a payment in Year 1 of $21,250 (85% x $25,000 = $21,250). Year 1 cannot be after 2016.
Allowable costs for subsequent year payments are the average cost, from studying EPs, for operation, maintenance, and use of technology. This excludes the initial purchase and implementation and training costs from Year 1. The net average for subsequent years cannot exceed $10,000 per year so if the net average cost of an EP in a subsequent year is $10,000, they would receive a payment of $8,500 (85% x $10,000 = $8,500). No payments are made after 2016 and subsequent year payments cannot be for more than a 5 year period.
If an EP has completed adopting, implementing, or upgrading EHR technology prior to the first year of payments, the net allowable costs for subsequent years applies for all years up to 5, including the first year of payments to such EP.
Medicaid EHR Incentive Payments to Non Hospital-based Pediatricians with at Least 20% Medicaid Patient Volume
Medicaid incentive payments to these EPs cover up to two-thirds of 85% of the net allowable costs for EHR technology, support services, maintenance, and training for a provider to adopt and operate the EHR technology. Allowable costs for Year 1 payments are the average costs, from studying EPs, for the purchase and initial implementation or upgrade of EHR technology, including support services for training for adoption and initial operation of the technology. The net average for Year 1 cannot exceed $25,000 so if the net average cost of an EP is $25,000, they would receive a payment in Year 1 of $14,166.67 (2/3 x (85% x $25,000) = $14,166.67). Year 1 cannot be after 2016.
Allowable costs for subsequent year payments are the average cost, from studying EPs, for operation, maintenance, and use of technology. This excludes the initial purchase and implementation and training costs from Year 1. The net average for subsequent years cannot exceed $10,000 per year so if the net average cost of an EP in a subsequent year is $10,000, they would receive a payment of $5,666.67 (2/3 x (85% x $10,000) = $5,666.67). No payments are made after 2016 and subsequent year payments cannot be for more than a 5 year period.
If an EP has completed adopting, implementing, or upgrading EHR technology prior to the first year of payments, the net allowable costs for subsequent years applies for all years up to 5, including the first year of payments to such EP.
Medicaid EHR Incentive Payments to EPs who practice in a FQHC or RHC with at Least 30% Patient Volume Attributable to Needy Individuals
Needy individuals are defined as those individuals:
- Receiving Medicaid;
- Receiving assistance under Title XXI;
- Who is furnished uncompensated care by a provider; or
- Who receive reduced charges by the provider on a sliding scale basis used on the individual’s ability to pay.
Medicaid incentive payments to these EPs cover up to 85% of the net allowable costs for EHR technology, support services, maintenance, and training for a provider to adopt and operate the EHR technology. Allowable costs for Year 1 payments are the average costs, from studying EPs, for the purchase and initial implementation or upgrade of EHR technology, including support services for training for adoption and initial operation of the technology. The net average for Year 1 cannot exceed $25,000 so if the net average cost of an EP is $25,000, they would receive a payment in Year 1 of $21,250 (85% x $25,000 = $21,250). Year 1 cannot be after 2016.
Allowable costs for subsequent year payments are the average cost, from studying EPs, for operation, maintenance, and use of technology. This excludes the initial purchase and implementation and training costs from Year 1. The net average for subsequent years cannot exceed $10,000 per year so if the net average cost of an EP in a subsequent year is $10,000, they would receive a payment of $8,500 (85% x $10,000 = $8,500). No payments are made after 2016 and subsequent year payments cannot be for more than a 5 year period.
If an EP has completed adopting, implementing, or upgrading EHR technology prior to the first year of payments, the net allowable costs for subsequent years applies for all years up to 5, including the first year of payments to such EP.
Table 2: Maximum Medicaid Incentives for EPs with at least 30% volume
| Year of Adopt, Implement, Upgrade, or Meaningful Use Demonstration | |||||||
| 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | ||
|---|---|---|---|---|---|---|---|
| Calendar Year | 2011 | $21,250 | |||||
| 2012 | $8,500 | $21,250 | |||||
| 2013 | $8,500 | $8,500 | $21,250 | ||||
| 2014 | $8,500 | $8,500 | $8,500 | $21,250 | |||
| 2015 | $8,500 | $8,500 | $8,500 | $8,500 | $21,250 | ||
| 2016 | $8,500 | $8,500 | $8,500 | $8,500 | $21,250 | ||
| 2017 | $8,500 | $8,500 | $8,500 | $8,500 | $8,500 | ||
| 2018 | $8,500 | $8,500 | $8,500 | ||||
| 2019 | $8,500 | $8,500 | $8,500 | ||||
| 2020 | $8,500 | $8,500 | |||||
| 2021 | $8,500 | $8,500 | $8,500 | ||||
| Total | $63,750 | $63,750 | $63,750 | $63,750 | $63,750 | $63,750 | |
More information on Medicaid incentive payments for EPs >
Minnesota Medicaid
Health care providers and other stakeholders can receive information about Minnesota's Medicaid EHR Provider Incentive Program online at www.dhs.state.mn.us/EHRincentives. The Minnesota Department of Human Services is administering the federal program that provides incentives to eligible providers and hospitals that implement and demonstrate meaningful use of certified EHR technology. If you have questions about Minnesota Medicaid HIT issues, contact Bob Paulsen, MN Medicaid Health Information Technology Coordinator, (651) 431-5827.
North Dakota Medicaid
Health care providers and other stakeholders can receive information about Minnesota's Medicaid EHR Provider Incentive Program online at ND Medicaid HIT Website The North Dakota Medicaid HIT Office is administering the federal program that provides incentives to eligible providers and hospitals that implement and demonstrate meaningful use of certified EHR technology. If you have questions about North Dakota Medicaid HIT issues contact, Nancy R. Willis, State Medicaid HIT coordinator, (701) 328-1715.
Medicare EHR Incentives for Prospective Payment System Hospitals
The formula for the calculation of the Medicare incentive payment to prospective payment system (PPS) hospitals is as follows:
($2M + Discharge Amount) x Medicare Share x Transition %
Discharge Amount is defined as:
- 1st – 1,149th discharge = $0/discharge
- 1,150th – 23,000th discharge = $200/discharge
- 23,001st discharge or more = $0/discharge
Medicare Share is defined as:
Estimated # of inpatient-bed days with payment under Part A + Estimated # of inpatient-bed days for those enrolled in Medicare Advantage Part C
÷
Estimated total # inpatient days x % of an eligible hospital’s total charges that are not charity care
Transition Percentage is based on the payment year and the fiscal year.
Table 3: Maximum Medicare Incentives for PPS Hospitals
| 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | Incentive Payment |
|---|---|---|---|---|---|---|---|
| Stage 1 100% | Stage 1 75% | Stage 2 50% | Stage 2 25% | 100% | |||
| Stage 1 100% | Stage 1 75% | Stage 2 50% | Stage TBD 25% | 100% | |||
| Stage 1 100% | Stage 1 75% | Stage TBD 50% | Stage TBD 25% | 100% | |||
| Stage 1 75% | Stage TBD 50% | Stage TBD 25% | 60% | ||||
| Stage TBD 50% | Stage TBD 25% | 30% | |||||
| Penalty (Market basket update would be reduced by): | -25% | -50% | -75% | ||||
Payments to Medicare providers will be made to the TIN selected at the time of registration, through the same channels their claims payments are made. The form of payment (electronic funds transfer or check) will be the same as claims payments. Hospitals can receive their initial payment as early as May 2011. Final payment will be determined at the time of settling the hospital cost report.
More information on Medicare incentive payments for PPS hospitals >
Medicare EHR Incentives for Critical Access Hospitals
Critical access hospitals (CAHs) that are meaningful EHR users by 2011 are eligible for four years of enhanced Medicare payment with immediate full depreciation of certified EHR costs, including undepreciated costs from previous years.
The formula for the calculation of Medicare incentive payments for CAHs is as follows:
Total Reasonable EHR Costs x (Medicare Share + 20%)
If Medicare Share + 20% totals over 100%, the maximum amount paid will be 100%.
Medicare Share is defined as:
Estimated # of inpatient-bed days with payment under Part A + Estimated # of inpatient-bed days for those enrolled in Medicare Advantage Part C
÷
Estimated total # inpatient days x % of an eligible hospital’s total charges that are not charity care
Reasonable EHR Costs is defined as:
- Software or hardware costs during the first payment year plus the undepreciated costs less interest from previous periods as well as software and hardware costs for other payment years.
- Only the reasonable costs for the purchase of the certified EHR technology to which purchase depreciation (excluding interest) would otherwise apply are to be included in the CAH incentive payment.
- Currently, the CAH’s Medicare contractor determines if an item purchased is a depreciable asset under Medicare principles or other accounting standards.
- The Medicare contractor also determines the CAH’s reasonable cost for acquiring depreciable assets.
Table 4: Maximum Medicare Incentives for CAHs
| 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | Payments |
|---|---|---|---|---|---|---|---|
| Payment in Stage 1 | Payment in Stage 1 | Payment in Stage 2 | Payment in Stage 2 | 4 | |||
| Payment in Stage 1 | Payment in Stage 1 | Payment in Stage 2 | Payment in Stage TBD | 4 | |||
| Payment in Stage 1 | Payment in Stage 1 | Payment in Stage TBD | 3 | ||||
| Payment in Stage 1 | Payment in Stage TBD | 2 | |||||
| Payment in Stage TBD | 1 | ||||||
| Penalty (Reasonable cost reimbursement of 101% would be reduced): | 100.66% | 100.33% | 100% | ||||
Payments to Medicare providers will be made to the TIN selected at the time of registration, through the same channels their claims payments are made. The form of payment (electronic funds transfer or check) will be the same as claims payments. Hospitals can receive their initial payment as early as May 2011. Final payment will be determined at the time of settling the hospital cost report.
More information on Medicare incentive payments for CAHs >
Medicaid EHR Incentives for Eligible Hospitals
Each state must approve the demonstration of meaningful use for their state. Eligible hospitals will qualify for Medicaid incentive payments if they adopt, implement, upgrade, or demonstrate meaningful use of certified EHR technology during the first participation year or successfully demonstrate meaningful use of certified EHR technology in subsequent participation years. Medicaid hospitals that qualify for EHR incentive payments may begin receiving payments in any year from FY 2011 to FY 2016. While the law defines a payment year in terms of federal fiscal year (FY) beginning with FY 2011, a hospital does not have to begin receiving incentive payments in FY 2011.
Hospitals eligible to receive Medicaid incentive payments include:
- Acute
care hospitals
- Including CAHs, cancer hospitals, and general short-term stay
- The average length of stay must but at most 25 days with a CCN [0001-0879; 1300-1399]
- Need to have a Medicaid patient volume of 10%
- Children’s
hospitals
- 77 children’s hospitals with CCN [3300-3399]
- Does not include children’s wings of larger hospitals
- No Medicaid patient volume threshold is required
More information on the Medicaid Incentive Payments >
Payment for eligible hospitals is calculated, then disbursed over 3-6 years. The annual payment may not exceed 50% of the total calculation and no 2-year payment may exceed 90%. Hospital cannot initiate payments after 2016 and payment years must be consecutive after 2016. State must use auditable data sources in calculating the hospital incentive (i.e., cost report).
Medicaid Eligible Hospital Incentive Formula
The formula for incentive payments for Medicaid eligible hospitals is defined as the sum of 4 years of payment using:
$2M Base + Discharge Payment x Medicaid Share x Transition %
The Medicaid Share is calculated in the same method as the Medicare Share, but with Medicaid inpatient days and including Medicaid managed care plan.
The Transition Percent is 100% for Year 1, 75% for Year 2, 50% for Year 3, and 25% for Year 4
Table 5: Maximum Medicaid Incentives for Eligible Hospitals
| Year of Adopt, Implement, Upgrade, or Meaningful Use Demonstration | |||||||
| 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | ||
|---|---|---|---|---|---|---|---|
| Calendar Year | 2011 | Y1 | |||||
| 2012 | Y2 | Y1 | |||||
| 2013 | Y3 | Y2 | Y1 | ||||
| 2014 | Y4 | Y3 | Y2 | Y1 | |||
| 2015 | Y5 | Y4 | Y3 | Y2 | Y1 | ||
| 2016 | Y6 | Y5 | Y3 | Y2 | Y1 | ||
| 2017 | Y6 | Y4 | Y4 | Y3 | Y2 | ||
| 2018 | Y5 | Y4 | Y3 | ||||
| 2019 | Y6 | Y5 | Y4 | ||||
| 2020 | Y5 | Y5 | |||||
| 2021 | Y6 | Y6 | Y6 | ||||
| Total | Calculated Medicaid Share of EHR Cost | ||||||