Incentives in Stimulus Bill for Adopting EHRs
The AAPC is learning more about how the American Recovery and Reinvestment Act signed by President Barak Obama Tuesday will affect your workplace and your job. Under the $787 billion economic stimulus bill, health care providers will receive financial incentives beginning 2011 for implementing qualified electronic health records systems (EHRs).
Physicians, facilities, and other providers will receive money through Medicare or Medicaid programs for their “meaningful use” of EHRs. Payments are structured to encourage early adoption and penalties discourage procrastination.
“Meaningful use” is not specifically defined in the bill, but it gives the Secretary of Health and Human Services (HHS) — still to be named — advisory guidance regarding how to determine this. HHS is required to develop and publish universal standards for EHR systems by the end of 2010. EHR vendors will seek certification for meeting these standards, and any provider using a certified EHR system will be eligible for incentive payments.
Medicare Payments and Penalties for Physicians
Non-hospital-based physicians will be eligible for a bonus payment built upon estimates of the allowed charges. The maximum amount, which would be paid either as a lump sum or all at once, are listed by year:
- 2011 – $18,000
- 2012 – $18,000 if this is the first year for adoption and use or $12,000 if this is the second year of use
- 2013 – $12,000 if this is the second year of use or $8,000 is this is the third year of use
- 2014 – $8,000 if this is the third year of use or $4,000 if this is the fourth year of use
- 2015 – $4,000 if this is the fourth year of use or $2,000 if this is the fifth year of use
Payments will be reduced for failing to adopt by 2015:
- 2015 – 99 percent of Medicare payment the provider would have otherwise been entitled
- 2016 – 98 percent of Medicare payment the provider would have otherwise been entitled
- 2017 – 97 percent of Medicare payment the provider would have otherwise been entitled
- 2018*-96 percent of Medicare payment the provider would have otherwise been entitled
Reductions in 2018 depend upon a determination by HHS that fewer than 75 percent of all physicians have adopted and use certified EHRs. HHS is authorized to continue payment reductions if the 75 percent threshold is not achieved, but in no case will the payment reductions go below 95 percent of the Medicare payment to which the provider would have otherwise been entitled.
HHS will assume emergency physicians, anesthesiologists, and pathologists are hospital-based, and may add other specialties to this list.
Medicare Payments and Penalties for Facilities
Hospital payments beginning 2011 will be based on a $2 million base amount. Added to the base amount is an additional discharge-related payment multiplied by the hospital’s Medicare share. Critical access hospitals (CAHs) will use a different, unavailable calculation.
Before receiving the payments below, hospitals will also be required to submit quality data on measures identified by HHS. Facilities will get a chance to publically comment before they are adopted.
Hospitals will also be penalized for not meaningfully adopting certified EHR systems and the quality measures. They will see their amounts reduced by the applicable percentage for the year in which they first adopt.
- 2011 – 100 percent of the amount the incentive payment for which the hospital is eligible
- 2012 – 75 percent of the amount for which the hospital would otherwise be eligible
- 2013 – 50 percent of the amount for which the hospital would otherwise be eligible
- 2014 – 25 percent of the amount for which the hospital would otherwise be eligible
- 2015 – No incentive payments
Medicaid Payments to Assure No Double Dipping
Providers and facilities demonstrating they care for needy patients will have the option of obtaining payments through either the Medicaid or Medicare formulas, but not both. Medicaid incentives will be available for nurse practitioners, nurse midwives, rural health clinics, and federally qualified health centers in addition to physicians and hospitals.
For physicians, nurse practitioners, and nurse midwives in private practice, the Medicaid threshold is 30 percent of patients. Pediatricians seeing more than 20 percent Medicaid patients but less than the 30 percent of the threshold could receive a reduced incentive payment.
For physicians, nurse practitioners, nurse midwives, and physician assistants working in either rural health clinics or federally qualified health centers, the threshold is also 30 percent; however, they can include SCHIP enrollees, patients for whom no payment is made to the clinic for their care, or patients to whom a sliding fee scale is applied. Incentive payments are per provider.
Under Medicaid, providers would be eligible for reimbursement of 85 percent of allowable EHR costs, not to exceed a maximum per provider total over the four years of $63,750. Hospitals with at least 10 percent Medicaid patient volume would be eligible for an incentive payment. Payment formulas are similar to those available under Medicare.
The economic incentive bill is huge and complicated. The AAPC will continue to review the bill and subsequent actions and communicate with you as soon as we know more.