Medicaid EHR incentives

June 6, 2011

The Medicaid EHR incentive program has a few outstanding features that readily distinguish it from the Medicare EHR incentive program – an incentive maximum for eligible providers of $63,750.00, a deadline for adoption in 2016, and no payment penalties for Medicaid providers if they do not adopt an EHR. (If you are dual-eligible provider this will not prevent Medicare penalties for non-adoption being placed upon you. Medicaid eligible professionals who also treat Medicare patients will have a payment adjustment to Medicare reimbursements starting in 2015 if they do not successfully demonstrate meaningful use.) At first glance, if you are an EP in both programs, the Medicaid EHR incentive is more attractive because of the difference in incentive amount alone. So, what are other considerations when choosing between federal or state-based incentive programs? There are idiosyncrasies in the Medicaid program that may help inform your decision making process.

First and foremost is the fact that not all states have implemented an EHR incentive program to date. As of today, 15 states have registered their programs with the federal government. Within this page you will find projected dates of implementation for remaining states. Here is that link as well. Before states can register their programs there are a number of steps they must take to demonstrate they are capable of administering the EHR incentive program. The Recovery Act made a financial allowance for Medicaid programs that is essentially a 100% matching “grant” from the federal government to assist states in making their EHR incentive payments. Additionally, the Federal financial participation (FFP) amendment gives states a match of 90% for all administration costs of the EHR program. Because of these federal matching funds, each state must individually demonstrate that they have the necessary infrastructure in place to administer all elements of the incentive program. Specific details about the plans and programs that states must have in place for the matching funds are listed on the first link given above under Health IT documents. The State Medicaid HIT Plan Overview is a document crafted by CMS as a guide for states in understanding the infrastructure needs to administer the plan, as well as providing insight to the reasons why the EHR incentive program exists.

In the final rule for Medicaid, there are seven items that are specifically addressed in administration needs. Those seven items are: determining eligibility, payments, adopting, implementing, or upgrading certified EHR technology, demonstrating meaningful use of EHR technology, conditions for FFP for states, and financial oversight which includes combating fraud and abuse. Within those seven elements, the eligibility requirement details the patient threshold that must be met by Medicaid EPs. Within payments, there is clarification that providers may only choose one EHR incentive program, and that states must coordinate their payment system with a national database. Adoption/implementation guidelines allow for adoption or upgrade of an EHR system only in the first year, and demonstration of meaningful use in successive years. In the demonstration of meaningful use, the federal guidelines will allow states to request CMS approval to add four public health related measures as core measures instead of menu measures for Medicaid providers and to specify some of the destination and transmission details of the health information. This is a fairly significant difference between the programs and one that could be consequential for anyone who might have a close connection with public health administration. For determining FFP eligibility, states must demonstrate that they have an established HIT program, and are able to administer the EHR incentive program. The oversight structure must include means of monitoring payments and collecting overpayments if any are made.

Greater details about the final rule for the Medicaid incentive program can be found here.

Last Updated: January 19, 2018