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Stimulus Basics
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President Obama signed into law the American Recovery and Reinvestment Act of 2009 (ARRA) February 17, 2009 to not only stimulate the economy but also to transform the healthcare system in an effort to improve quality, safety and efficiency of care. To help facilitate this vision, the Health Information Technology for Economic and Clinical Health Act, (HITECH) established programs under Medicare and Medicaid to provide incentive payments for the "meaningful use" of certified EHR technology. The Medicare (up to $44,000 per provider) and Medicaid (up to $63,750 per provider) EHR incentive programs will provide incentive payments to eligible professionals and eligible hospitals as they adopt, implement, and demonstrate meaningful use of certified EHR technology.

*Subsection (d) hospitals that are paid under the PPS and are located in the 50 States or Washington, DC (including Maryland)

Medicare Incentive Payment Schedule
First Calendar Year (CY) for which the EP receives an incentive payment

  • Participation can begin as early as 2011 for physicians who demonstrate meaningful use of certified EHR technology.
  • Eligible professionals (EP) who are meaningful EHR users can receive up to $44,000 over 5 years.
  • A hospital-based EP who furnishes 90% or more of their services in the hospital setting is not qualified as an EP to receive meaningful use incentives.
  • The incentive payment is equal to 75 percent of Medicare allowable charges for covered services furnished by the physician in a year, subject to a maximum payment.
  • 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.
  • 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.
  • Physicians who do not adopt and use an EHR by 2015 will be penalized by reduced Medicare payments.

Incentive Payment Schedule for EPs Participating in HPSA
First Calendar Year (CY) for which the EP receives an incentive payment


Medicaid Incentive Payment Schedule
First Calendar Year (CY) for which the EP receives an incentive payment

  • Available to non-hospital based physicians, dentists, certified nurse midwives, and physician assistants practicing in rural health clinics or FQHCs
  • Incentive payments will go to eligible professionals and eligible hospitals as they adopt, implement, upgrade, or demonstrate meaningful use of certified EHR technology in their first year of participation and demonstrate meaningful use for up to 5 remaining participation years
  • Eligible professionals can receive up to $63,750 over the 6 years that they choose to participate in the program
  • Minimum for Medicaid participation: 30% of a physician's patients must use Medicaid, with the exception of pediatricians, who only need to have 20% of their patients using Medicaid
  • Startup incentive up to $21,000 in state loan funds will be available in year one toward the purchase a certified EHR
  • After receiving startup funds, providers who can prove "meaningful use" can receive up to $8,500 annually for an additional five years
  • Physicians cannot receive an incentive under both Medicare and Medicaid in a given year.
  • No penalties for lack of adoption

Certified EHR Technology: In order to qualify for an EHR incentive payment, all eligible professionals and hospitals need to have certified EHR technology for this program. The standards for certified EHR technology are now available. These standards establish the required capabilities that certified EHR technology will need to include to support the achievement of meaningful use.

NPI, NPPES Use Account and PECOS Enrollment: All eligible hospitals and Medicare eligible professionals must have a National Provider Identifier (NPI), and be enrolled in the CMS Provider Enrollment, Chain and Ownership System (PECOS) to participate in the EHR incentive program. Most will also need an active user account in the National Plan and Provider Enumeration System (NPPES). CMS will use these systems' records to register for the program and verify Medicare enrollment prior to making Medicare EHR incentive program payments.

If you are a Medicare EP that does not have an NPI and/or an NPPES web user account. Click here where you can apply for an NPI and/or create a NPPES user account.

To meet meaningful use requirements and qualify for incentive payments in 2011 and 2012 specifics of Stage 1 meaningful use and clinical quality measure reporting must be achieved.

The Recovery Act specifies three main components of Meaningful Use:

  • The use of a certified EHR in a meaningful manner (e.g.: e-Prescribing);
  • The use of certified EHR technology for electronic exchange of health information to improve quality of health care; and
  • The use of certified EHR technology to submit clinical quality and other measures.

The Stage 1 criteria for meaningful use focuses on electronically capturing health information in a coded format, using that information to track key clinical conditions, communicating that information for care coordination purposes, and initiating the reporting of clinical quality measures and public health information.

For Stage 1, which begins in 2011, the criteria for meaningful use is based on a series of specific objectives, each of which is tied to a measure that allows EPs and hospitals to demonstrate that they are meaningful users of certified EHR technology.

  • For Eligible Professionals, there are a total of 25 meaningful use objectives. 15 are core objectives that are required, and the remaining 5 objectives may be chosen from the list of 10 menu set objectives.
  • For Hospitals, there are a total of 24 meaningful use objectives. 14 are core objectives that are required, and the remaining 5 objectives may be chosen from the list of 10 menu set objectives.
  • In 2011, EPs, eligible hospitals and CAHs seeking to demonstrate Meaningful Use are required to submit aggregate clinical quality measure numerator, denominator, and exclusion data to CMS or the States by attestation.
  • In 2012, EPs, eligible hospitals and CAHs seeking to demonstrate meaningful use must electronically submit clinical quality measures selected by CMS directly to CMS (or the States) through certified EHR technology. By using certified EHR technology to report information on clinical quality measures electronically to a health information network, a State, CMS, or a registry, the burden on providers that are gathering the data and transmitting them will be greatly reduced.

CMS intends to propose through future rulemaking two additional stages of the criteria for meaningful use.

Stage 2 would expand upon the Stage 1 criteria in the areas of disease management, clinical decision support, medication management support for patient access to their health information, transitions in care, quality measurement and research, and bi-directional communication with public health agencies. These changes will be reflected by a larger number of core objective requirements for Stage 2.

Stage 3 would focus on achieving improvements in quality, safety and efficiency, focusing on decision support for national high priority conditions, patient access to self management tools, access to comprehensive patient data, and improving population health outcomes.

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