CMS Offers Incentives for EMR Use

The Centers for Medicaid and Medicare Services (CMS) informed all 50 state Medicaid directors last week that the federal government will reimburse states for 100% of incentive payments made to health care providers who demonstrate "meaningful use" of electronic health records. The funds are coming from the American Recovery and Reinvestment Act (ARRA) and are part of the Obama Administration’s push for the use of electronic medical records (EMRs).

Physicians, and hospitals, who treat a yet unstated number of Medicaid patients can apply for these incentive payments based on their "meaningful use" of electronic health records.

As part of the ARRA, beginning in January 2011, financial incentives will be offered to physicians and other health care providers who are meaningful EMR users. The stick to the financial carrot is that if you’re not a "meaningful" user by 2015, there will be payment "adjustments," according to CMS. The Medicare fee schedule would be reduced by 1% in 2015, by 2% in 2016, by 3% for 2017, and by 3% to 5% in subsequent years.

Hospital-based physicians who "substantially" provide their services in a hospital setting are not eligible for this funding.

According to CMS, the incentive payment is equal to 75% of Medicare allowable charges for covered services furnished by the provider 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.

If you practice in an underserved area, incentive payments will be increased by 10%.

The September 1 letter from CMS urged states to develop a State Medicaid Health IT Plan that outlines targets for promoting interoperable electronic health systems. This would include A current assessment of the state”s health IT capabilities; an implementation plan for the incentive payment program; a road map for the state”s health IT initiatives; and a vision for the state”s health IT future.

CMS said states should plan to expand statewide and regional health information exchanges with an eventual goal of achieving nationwide interoperability.

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