MEDICARE AND MEDICAID HEALTH INFORMATION TECHNOLOGY: TITLE IV OF THE AMERICAN RECOVERY AND REINVESTMENT ACT
On Feb. 17, 2009, President Obama signed the American Recovery and Reinvestment Act of 2009 (Recovery Act), a critical measure to stimulate the economy. Among other provisions, the new law provides major opportunities for the Department of Health and Human Services (DHHS), its partner agencies, and the States to improve the nation’s health care through health information technology (HIT) by promoting the meaningful use of electronic health records (EHR) via incentives. For a copy of the full bill, go to: http://www.hhs.gov/recovery/overview/index.html
The HIT provisions of the Recovery Act are found primarily in Title XIII, Division A, Health Information Technology, and in Title IV of Division B, Medicare and Medicaid Health Information Technology. These titles together are cited as the Health Information Technology for Economic and Clinical Health Act or the HITECH Act. This fact sheet focuses on the provisions of Title IV only.
Under Title IV, funding is available to certain eligible professionals (EPs) and hospitals, as described below. Funds will be distributed through Medicare and Medicaid incentive payments to EPs, physicians, and hospitals who are “meaningful EHR users.” In addition, with regard to the Medicaid program, federal matching funds are also available to States to support their administrative costs associated with these provisions.
Criteria for Qualifying for an Incentive
The qualification criteria for incentives (i.e., meeting specified HIT standards, policies, implementation specifications, timeframes, and certification requirements) are still in development, and will be defined through regulation and additional guidance materials. However, CMS generally expects that under Medicare, “meaningful EHR users” would demonstrate each of the following: meaningful use of a certified EHR, the electronic exchange of health information to improve the quality of health care, and reporting on clinical quality and other measures using certified EHR technology. Medicaid programs will determine their own requirements in line with the Medicaid-related provisions of the Recovery Act. Funds will be distributed through Medicare and Medicaid incentive payments to EPs and hospitals who are “meaningful EHR users.” CMS intends to publish a proposed rule in late 2009 to propose a definition of meaningful use of certified Electronic Health Records (EHR) technology and establish criteria for the incentives programs. CMS is working extensively with the Office of the National Coordinator for Health Information Technology (ONC) to identify the proposed criteria.
Medicare Payment Incentives for Eligible Professionals
Medicare Payment Incentives for Hospitals
(a)The initial amount is the sum of a $2 million base year amount plus a dollar amount based on the number of discharges for each eligible hospital.
(b)The Medicare share is a fraction based on estimated Medicare fee-for-service and managed care inpatient bed days divided by estimated total inpatient bed-days and modified by charges for charity care.
(c)The transition factor phases down the incentive payments over the four-year period. The factor equals 1 for the first payment year, ¾ for the second payment year, ½ for the third payment year, and ¼ for the fourth payment year, and zero thereafter.
The Secretary has discretion to use other data if the required data to calculate the incentive payment formula does not exist.
Medicaid Payment Incentives
The Recovery Act establishes 100 percent Federal Financial Participation (FFP) for States to provide incentive payments to eligible Medicaid providers to purchase, implement, and operate (including support services and training for staff) certified EHR technology. It also establishes 90 percent FFP for State administrative expenses related to carrying out this provision.
Incentive Payments to Providers
Medicaid Incentive Program Qualifications
To be eligible for incentive payments not associated with the initial adoption/implementation/upgrade of EHR technology, the provider must demonstrate meaningful use of the EHR technology through a means approved by the State and acceptable to the Secretary. In determining what is “meaningful use,” a State must ensure that populations with unique needs, such as children, are addressed. A State may also require providers to report clinical quality measures as part of the meaningful use demonstration. In addition, to the extent specified by the Secretary, the EHR technology must be compatible with State or Federal administrative management systems.
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.
Frequently Asked Questions (FAQs)
Question: When will the Centers for Medicare & Medicaid Services (CMS) publish regulations to define certified Electronic Health Records and “meaningful use?”
Answer: CMS intends to publish a proposed rule in late 2009 to define meaningful use of certified Electronic Health Records (EHR) technology and establish criteria for the incentives programs. We are working extensively with the Office of the National Coordinator for Health Information Technology(ONC) to identify the proposed criteria.
Question: What is CMS’ overall time frame for actions and activities related to the incentive program?
Answer: Although further details will be developed, CMS can provide the following timeline based on the current implementation plan:
Question: When will the Centers for Medicare & Medicaid Services (CMS) begin to pay incentives to eligible professionals and hospitals for using certified Electronic Health Records ( EHRs)?
Answer: By statute, the earliest dates that CMS will be able to pay an incentive under Medicare is October 1, 2010, for hospitals and January 1, 2011, for eligible professionals.
The statute does not define a date for the Medicaid incentives program. Given the range of regulatory and planning activities that must precede States being able to make provider incentive payments, as well as the importance of coordinating Medicaid and Medicare payments to prevent duplication, CMS does not expect that States will be able to make such payments until 2011.
Work is underway to define the meaningful EHR user criteria, as well as the requirements for applying for and receiving the EHR payment incentives, CMS expects to issue a proposed rule in late 2009.
Question: If an eligible professional uses a certified Electronic Health Record (EHR) in a meaningful way in accordance with the adopted regulations, and meets the requirements established by CMS, could that professional receive both the Medicare EHR payment incentive as well as the Medicaid EHR payment incentive?
Answer: No, an eligible professional may only receive an EHR payment under either Medicare or Medicaid. CMS expects to more fully address the issue of duplicative payments under Medicare and Medicaid through rulemaking.
Question: If I already have an Electronic Health Record (EHR) that has been certified by the Certification Commission for Healthcare Information Technology (CCHIT), will I have to buy a new system if the government mandates that only EHRs that meet a higher certification level are considered certified EHRs?
Answer: Decisions about EHR standards, implementation specifications and certification criteria have not been made yet, and are under development. Policies will be proposed in the regulation to be published in late 2009.
Question: What is the maximum incentive an eligible professional can earn for using an Electronic Health Record under Medicaid?
Answer: The statute does not define fixed amounts for the incentive payments, only ceilings that cannot be exceeded. CMS expects that the actual payment amounts will be more fully addressed through notice and comment rulemaking.
Question: What is the maximum Electronic Health Record(EHR) incentive an eligible professional can earn under Medicare?
Answer: Eligible professionals(EPs), who adopt Electronic Health Records as early as 2011 or 2012 may be eligible for up to $44,000 in Medicare incentive payments spread out over five years (increased by 10 percent for EPs who predominantly furnish services in a health professional shortage area).
Question: What if my Electronic Health Record (EHR) system costs much more than the incentive the government will pay? May I request additional funds?
Answer: The Recovery Act does not provide for incentive payments under Medicare or Medicaid beyond the limits established by the legislation, regardless of the cost of the EHR system chosen by eligible professionals or hospitals. With regard to Medicaid, the purpose of the 100 percent FFP provider incentive payments to certain eligible Medicaid providers is to encourage the adoption and meaningful use of certified EHR technology. While the incentive payments are expected to be used for certified EHR technology and support services, including maintenance and training necessary for the adoption and operation of such technology, the incentive payments are not direct reimbursement for such activities, but rather are intended to serve as an incentive for eligible professionals and hospitals to adopt and meaningfully use certified EHR technology
Question: What is the earliest date the payment adjustments will start to be imposed for eligible professionals and hospitals that are not meaningful Electronic Health Record (EHR) users under the HITECH provisions of the Recovery Act?
Answer: The HITECH provisions of the Recovery Act establish 2015 as the first year that payment adjustments will start to be imposed on Medicare eligible professionals and hospitals that are not meaningful EHR users. There are no payment adjustments associated with the Medicaid provisions under Section 4201.
Question: How will eligible providers and hospitals apply for incentives if they are using certified Electronic Health Records (EHRs) in accordance with the standards established by Health and Human Services (HHS) under the HITECH portion of the Recovery Act?
Answer: The Department of Health and Human Services (HHS) will publish a rule establishing the criteria which eligible professionals and hospitals must meet in order to qualify for the EHR incentive payments, including defining meaningful EHR users. The rule will also explain how to apply for those incentives.
Question: How will the public know who has received incentive payments under the Recovery Act?
Answer: CMS will post the names of those receiving Medicare incentives online. The list will include the elements identified in the Recovery Act: name, business addresses, and business phone number of all Medicare eligible professionals and hospitals who received incentive payments under the Recovery Act. There is no such requirement for CMS to publish the names of those receiving Medicaid incentive payments under Section 4201 though States may opt do so.
Question: What will be done to help prepare providers to take advantage of the incentive payments for the meaningful use of an Electronic Health Record (EHR)?
Answer: A set of supportive programs will be announced after CMS publishes a proposed rule in late 2009, that is, regarding a definition of meaningful use of certified EHR technology and criteria for the incentives programs. These programs are intended to educate and support providers, enable health information exchange, and build the workforce that will be needed for success. Information about these supportive efforts will be communicated to eligible providers through many channels.
For additional information, visit http://www.cms.hhs.gov/Recovery/
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