EHR Incentive Payments Medicare and Medicaid Indiana

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1 EHR Incentive Payments Medicare and Medicaid Indiana OPTIMIZING EHR PAYMENTS William Rees, CPA Director

2 EHR Regulations EHR Incentive Legislation: American Recovery and Reinvestment Act of 2009 which included the Health Information Technology for Economic and Clinical Health Act ("HITECH Act") Final Rules issued 7/28/10 CMS - New Part 42 C.F.R DHHS HIT Standards adds to 42 C.F.R

3 IN Medicare/Medicaid Payments

4 IN Medicare/Medicaid Payments

5 Medicare EHR Incentive Program Website

6 GENERAL PROVISIONS

7 Who is a Medicare Eligible Professional? Eligible Providers in Medicare Eligible Professionals (EPs) Doctor of Medicine or Osteopathy Doctor of Dental Surgery or Dental Medicine Doctor of Podiatric Medicine Doctor of Optometry Chiropractor EP s receive payment from 1 program either Medicaid or Medicare Definition different for Medicare/Medicaid: Medicare = doctors, but not midlevels Medicaid = doctors & midlevels Excluded: Rural Health Clinics and Federally Qualified Health Centers However, these centers may qualify for Medicaid

8 Who is a Medicare Hospital? Acute Care Hospitals Eligible Hospitals* Critical Access Hospitals (CAHs) PPS and CAH hospitals can receive Medicare AND Medicaid if they qualify Excluded: Psychiatric, Rehabilitation, ER, Children s & Cancer Hospitals Multiple, discrete campuses operating under 1 provider # would be recognized as 1 provider only Surgical and other specialty hospitals participating in IPPS are eligible for Medicaid incentives *Subsection (d) hospitals that are paid under the PPS and are located in the 50 States or DC (including Maryland hospitals)

9 Who is a Medicaid Eligible Provider? Eligible Providers in Medicaid Eligible Professionals (EPs) Physicians (Pediatricians have special eligibility & payment rules) Nurse Practitioners (NPs) Certified Nurse-Midwives (CNMs) Dentists Physician Assistants (PAs) who lead a Federally Qualified Health Center (FQHC) or rural health clinic (RHC) that is directed by a PA Eligible Hospitals Acute Care Hospitals & Cancer Hosptials (>10% Medicaid) Children s Hospitals (Medicaid not tested)

10 Medicaid Eligibility: Patient Volume Entity Minimum Medicaid patient volume threshold Physicians 30% - Pediatricians 20% Dentists 30% CNMs 30% PAs when practicing at an FQHC/RHC that is so led by a PA 50% NPs 30% Or the Medicaid EP practices predominantly in an FQHC or RHC - 30% needy individual patient volume threshold Acute care hospitals 10% Not an option for Children s hospitals No requirement hospitals

11 ELIGIBLE PROFESSIONAL PRINCIPLES

12 Incentive Payments for EPs Eligible professionals (EPs) Calendar Year calculation (Medicare) Up to $44,000 over 5 years if meaningful EHR user (Medicaid) Up to $63,750 over 6 years 2015 and later If not meaningful EHR user up to 3% payment reduction in Medicare reimbursement EPs be allowed to change their program selection only once during payment years 2012 through 2014 Significant hardship exception for up to 5 years with CMS approval E.g. rural EP without significant internet access EP can receive Medicaid incentives from only 1 State

13 Incentive Payments for Medicare EPs -Based on 75% of Medicare Payments ($24,000 x 75% cap/yr) -Group Practice x # of EP Calendar Year 2011 First Calendar Year in which the EP receives an Incentive Payment CY 2011 CY 2012 CY 2013 CY 2014 CY 2015 and later $18, $12,000 $18, $8,000 $12,000 $15, $4,000 $8,000 $12,000 $12, $2,000 $4,000 $8,000 $8,000 $ $2,000 $4,000 $4,000 $0 TOTAL $44,000 $44,000 $39,000 $24,000 $0 *Single Annual Payment

14 IN Medicaid EP Payments First Calendar year in which the EP receives an incentive payment Calendar Year CY 2011 CY 2012 CY 2013 CY 2014 CY 2015 CY $21, $ 8, $21, $ 8, $ 8, $21, $ 8, $ 8, $ 8, $21, $ 8, $ 8, $ 8, $ 8, $21, $ 8, $ 8, $ 8, $ 8, $ 8, $21, $ 8, $ 8, $ 8, $ 8, $ 8, $ 8, $ 8, $ 8, $ 8, $ 8, $ 8, $ 8, $ 8, $ 8, $ 8, Total $63, $63, $63, $63, $63, $63,750.00

15 EHR Incentives - EP HPSA Incentive Medicare Only 10% Increase in incentive (max $48,000 vs. $44,000) Provides services predominantly in HPSA Defined as >50% of covered services provided in HPSA January 1 December 31 of prior year No impact if HPSA lost during current year No impact if HPSA obtained during current year Applies ONLY to geographic HPSA Primary care, dental, mental health HPSAs NOT available to other kinds of HPSAs Population or Governor desig shortage Medically Underserved Areas (MUAs) 15

16 Hospital-Based EPs Hospital-Based EPs do not qualify for Medicare EHR incentive payments (est.. 27% of MD s are hospital based) Defined as - furnishes 90% or more of their services in a hospital setting (inpatient or emergency room) Uses place of service codes: 21 = inpatient hospital 23 = emergency room, hospital Calculation of the location percentage is based on the prior year claims submitted for the provider PIN $$$$$$$$ MOST HOSPITAL EMPLOYED PHYSICIANS SHOULD BE ELIGIBLE FOR MEDICARE EHR PAYMENTS $$$$$$$$$

17 HOSPITAL PRINCIPLES

18 Hospital Medicare EHR Payment Years Defined: PAYMENT YEAR Federal Year in which the hospital attests to meeting Meaningful Use 1 st year Continuous 90 day period within first payment year 2 nd and subsequent years entire payment year Must meet Meaningful Use by Sept 30, 2013 to receive full payments EHR INCENTIVE PAYMENTS Calculated based on hospital s cost report data Interim based on most recently submitted cost report Final based on cost report beginning in the FFY when attested

19 Medicare EHR Settlement E-1

20 Medicare C/R Questions S-2

21 Medicare Percentage Input S-3

22 Charity Care Input S-10

23 PPS Hospital Payment Example ELIGIBLE YEARS 2011/2012/ /2013/ /2014/ /2015/2016 TOTAL CHARGES $ 50,000,000 $ 50,000,000 $ 50,000,000 $ 50,000,000 CHARITY CARE CHARGES 1,000,000 1,000,000 1,000,000 1,000,000 NET CHARGES 49,000,000 49,000,000 49,000,000 49,000,000 TOTAL CHARGES 50,000,000 50,000,000 50,000,000 50,000,000 NET CHARGE FACTOR TOTAL INPATIENT DAYS 10,000 10,000 10,000 10,000 TOTAL ADJUSTED DAYS 9,800 9,800 9,800 9,800 MEDICARE INPATIENT DAYS 6,000 6,000 6,000 6,000 MEDICARE PART C DAYS (MANAGED CARE) 2,000 2,000 2,000 2,000 TOTAL MEDICARE DAYS 8,000 8,000 8,000 8,000 TOTAL ADJUSTED DAYS 9,800 9,800 9,800 9,800 MEDICARE SHARE % 81.63% 81.63% 81.63% 81.63% INITIAL AMOUNT $ 2,000,000 $ 2,000,000 $ 2,000,000 $ 2,000,000 DISCHARGE ADD ON: TOTAL DISCHARGES 2,000 2,000 2,000 2,000 AMOUNT PER DISCHARGE FOR 1,150 TO 23,000 DISCHARGES $ $ $ $ TOTAL DISCHARGE ADD ON 170, , , ,200 TOTAL INITIAL AMOUNT 2,170,200 2,170,200 2,170,200 2,170,200 MEDICARE SHARE 81.63% 81.63% 81.63% 81.63% TRANSITION FACTOR % 75.00% 50.00% 25.00% EHR INCENTIVE PAYMENT $ 1,771,592 $ 1,328,694 $ 885,796 $ 442,898 ALL DATA DERIVED FROM FILED COST REPORT

24 CAH Payment Example ELIGIBLE YEARS 2011 THROUGH 2015 TOTAL CHARGES $ 50,000,000 CHARITY CARE CHARGES 1,000,000 NET CHARGES 49,000,000 TOTAL CHARGES 50,000,000 NET CHARGE FACTOR 0.98 TOTAL INPATIENT DAYS 10,000 TOTAL ADJUSTED DAYS 9,800 MEDICARE INPATIENT DAYS 6,000 MEDICARE PART C DAYS (MANAGED CARE) 2,000 TOTAL MEDICARE DAYS 8,000 TOTAL ADJUSTED DAYS 9,800 MEDICARE SHARE % 81.63% CAH % ADD ON 20% CAH MEDICARE SHARE % % TOTAL COSTS OF EHR SYSTEM $ 500,000 LESS: DEPRECIAITON IN PREVIOUS YEARS 100,000 NET COSTS 400,000 MEDICARE SHARE (MAX OF 100%) % EHR INCENTIVE PAYMENT $ 400,000 CAH Reasonable Acquisition Cost = Incurred for purchase of depreciable assets Computers, associated hardware and software Excludes depreciation and interest

25 Hospital EHR Payments Medicare Share Denominator Total inpatient days (net of Hospice, LTC, SNF, Swing Beds, Nursery, Psych and Rehab) TIMES Hospital charges less charity care DIVIDED BY hospital charges Worksheet C, Part I, Line 200, Column 8 Charity Care As identified on Worksheet S-10 of the Medicare cost report $$$$ TOTAL DAYS AND CHARGES SHOULD BE NET OF EMPLOYEE SELF-INSURANCE DAYS $$$$

26 Hospital EHR Payments Medicare Share Medicare Share Based on Medicare inpatient days Numerator Medicare days + Medicare Advantage (HMO) patient days IP and Specialty Care» Excludes Psych and Rehab» Excludes Swing Bed» Excluded SNF $$$$ PERCENTAGE OF MEDICARE HMO DAYS TO TOTAL MEDICARE DAYS SHOULD BE THE SAME AS HMO PENETRATION PERCENTAGE $$$$$$$$

27 Medicare HMO Penetration Report Data-and-Systems/Statistics-Trends-and- Reports/MCRAdvPartDEnrolData/MA- State-County-Penetration.html

28 CMS Penetration Report Website

29 IN Penetration Report

30 HMO Hospital Example

31 Medicaid EHR Incentive Program Website eneral-provider-services/ehr-incentiveprogram.aspx

32 Medicaid Eligible Hospitals Acute care hospital (including CAHs) must have at least 10% Medicaid Patient Volume based on patient encounters Inpatient Discharges Emergency Room Visits Any representative continuous 90-day period in most recent fiscal year Medicaid Eligible Hospitals (including CAHs) may receive both Medicare and Medicaid EHR incentive payments $$$$$$ ON THE CMS EHR REGISTRATION, CHECK BOTH MEDICARE AND MEDICAID PAYMENTS $$$$$$$$

33 Indiana EHR Website

34 Indiana Medicaid Eligible Hospitals Medicaid EHR payments, both PPS and CAH hospitals, are calculated under same methodology as Medicare PPS Medicaid Share versus Medicaid Share Calculate 4 year payment Discharges based on hospital s experience in past three years Payment made over 3-6 years No more than 50% of payment in 1 year No more than 90% of payment in 2 years Adopt, implement or upgrade certified EHR technology No meaningful use requirement in year 1 Meaningful use required for future years

35 IN Medicaid Provider Incentive Program for Electronic Health Records EHR Payments are made over three years (50%, 40% and 10%) Do not need to meet Meaningful Use for first payment Payments are calculated based on one cost report year data No changes after base year

36 IN Medicaid Provider Incentive Program for Electronic Health Records All Hospitals will probably be Medicaid qualified Must be 10% Medicaid based on patient discharges and ER visits First Payment Year can be as late as 2016

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