Frequently Asked Questions: Electronic Health Records (EHR) Incentive Payment Program

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1 1. Where did the Electronic Health Records (EHR) Incentive Program originate? The American Recovery and Reinvestment Act (ARRA) was signed into law on February 17, 2009, and established a framework of financial incentives to stimulate growth and improve the health of the nation s economy and health care system. Two Titles in ARRA, Title XIII, Division A, Health Information Technology, and in Title IV of Division B, Medicare and Medicaid Health Information Technology, comprise the Health Information Technology for Economic and Clinical Health (HITECH) Act, which provides unprecedented opportunities for states to plan, design, and meaningfully use EHRs and health information exchange (HIE) to improve health care quality and cost efficiency. To help guide state Medicaid agency planning efforts, the Center for Medicaid and State Operations within the Centers for Medicare and Medicaid Services (CMS) issued a letter to state Medicaid Directors on September 1, The letter provided initial guidance on section 4201 of ARRA, Pub. L which requires all State Medicaid Agencies (SMAs) to develop a State Medicaid Health Information Technology Plan (SMHP) and to establish a Medicaid EHR Incentive Payment Program to provide incentives for eligible professionals and hospitals to adopt and meaningfully use EHRs to improve health, quality and efficiency. 2. What is the purpose of EHR incentive payments? EHR incentive payments have been established to encourage eligible professionals and hospitals to adopt and meaningfully use EHR technology. ARRA provides incentives for eligible professionals and hospitals to meaningfully use certified EHR technology to: Improve quality, safety, efficiency, and reduce health disparities Engage patients and their families Improve care coordination Ensure adequate privacy and security protections for personal health information Improve population and public health 3. What is Meaningful Use and how does it relate to the purchase of EHRs? For providers who have sufficient Medicaid volume to qualify for Medicaid incentives, it is not necessary to achieve meaningful use to qualify for the first year of EHR Incentives. Providers can receive the first year of incentives by: Adopting Purchasing a certified EHR, Implementing Beginning implementation of a previously purchased certified EHR, or Upgrading Purchasing or implementing a new and/or upgraded version of a certified EHR. To receive more than one year of Medicaid incentives or any Medicare incentives, providers must go beyond purchasing and installing a system and demonstrate that they are meaningfully using that system. 7/29/2010 Page 1 of 7

2 To demonstrate meaningful use, a provider must satisfy three criteria: 1. Use of certified EHR technology in a meaningful manner during the incentive period, including e prescribing; 2. Demonstrate that the certified EHR technology is connected in a manner that provides for the electronic exchange of health information to improve the quality of care; and 3. In using this technology, the provider submits clinical quality measures in a form and manner approved by the Secretary of HHS. The three stages of meaningful use criteria, as they are currently known, are described in the following table: Stage Stage 1 (2011) Focus Electronically capturing health information in a coded format Using that information to track key clinical conditions Communicating that information for care coordination purposes Initiating the reporting of clinical quality measures and public health information Meaningful Use Objectives EPs: 20 objectives (15 core and 5 others from a set of options) EHs: 19 objectives (14 core and 5 others from a set of options) Clinical Quality Measures Providers must report on 3 clinical quality measures (alternate core measures if these don t apply): 1. Blood pressure level 2. Tobacco status 3. Adult weight screening Providers must also choose 3 other measures from a list Reporting Mechanism Medicaid 2011: state via attestation Medicaid starting in 2012 (Proposed): state through certified EHR technology Stage 2 Stage 3 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 & research Bi directional communication with public health agencies Achieving improvements in quality, safety and efficiency Decision support for national high priority conditions Patient access to self management tools Access to comprehensive patient data Improving population health outcomes To be developed To be developed Medicaid Proposed: state through certified EHR technology Medicaid Proposed: state through certified EHR technology 7/29/2010 Page 2 of 7

3 4. What are the Meaningful Use Objectives? In the final CMS rule, Meaningful Use Objectives are divided into two groups: 1) A Core Set of objectives that constitute an essential starting point for meaningful use of electronic health records, and 2) A Menu Set of additional important activities from which providers will choose five to implement in the first two years. The Core Set of measures includes basic patient data including demographic information, vital signs, medications, allergies, problem list, diagnoses and smoking status, as well as using the EHR to support clinical decisions and to place clinical orders and electronic prescriptions. The Menu Set of measures includes, but is not limited to, drug formulary checks, incorporating structured clinical laboratory results, support for medication reconciliation across care settings, generating patient reminders, and others. 5. What is a certified Electronic Health Record (EHR) and who certifies it? An electronic health record (EHR) is a longitudinal electronic record of patient health information generated by one or more encounters in any care delivery setting. Included in this information are patient demographics, progress notes, problems, medications, vital signs, past medical history, immunizations, laboratory data, and radiology reports. An EHR automates and streamlines the clinician's workflow. An EHR has the ability to generate a complete record of a clinical patient encounter, as well as supporting other care related activities directly or indirectly via interface, including evidence based decision support, quality management, and outcomes reporting. To ensure that EHR systems are secure, can exchange information with other health care providers, and can perform a set of well defined functions, the Office of the National Coordinator for Health Information Technology is establishing criteria and organizations to certify EHRs that will enable providers to qualify for incentive payments. For additional information and assistance with selecting and implementing a certified EHR, please contact one of the Texas Health Information Technology Regional Extension Centers at 6. Who is eligible for EHR incentive payments? Under Medicaid, incentive payments can be paid to eligible professionals and hospitals that adopt, implement, or upgrade certified EHR technology (including support services and training for staff) in the first participation year, and meaningfully use the EHR technology in successive participation years. Health care professionals and hospitals must enroll in Texas Medicaid, and enter into a binding Medicaid provider agreement before they can be eligible for any Medicaid reimbursement, including EHR incentive payments. Eligible professionals and hospitals participating in multiple states must choose only one state from which to receive payments. 7/29/2010 Page 3 of 7

4 7. Who are eligible professionals in the Medicaid program? Eligible professionals in the Medicaid program include the following: Entity Physicians 30 % Pediatricians choosing lower incentive amount 20 % Dentists 30 % Certified nurse midwives 30 % Nurse practitioners 30 % Physician assistants who are practicing in Federally Qualified Health Centers (FQHCs) or Rural Health Clinics (RHCs) led by a physician assistant 30 % Minimum Medicaid Patient Volume Threshold Or, the Medicaid EP practices predominantly 1 in an FQHC or RHC 30% needy individual 2 patient volume threshold 1 Practices predominantly: FQHC / RHC is the clinical location for over 50% of total encounters over a period of six months in the most recent calendar year. 2 Needy individuals include: Medicaid or CHIP enrollees, patients furnished uncompensated care by the provider, or patients furnished services at either no cost or on a sliding scale. 8. What are eligible hospitals in the Medicaid program? Entity Acute care hospitals General short term stay hospitals Cancer hospitals Critical access hospitals Children s hospitals Minimum Medicaid Patient Volume Threshold 10 % No requirement Other Requirements Must have a CMS Certification Number (CCN) with the last 4 digits of or These CCN s cover short term general hospitals and cancer hospitals. Must have an average length of patient stay of 25 days or fewer Must have a CCN with the last 4 digits of Does not include children s wings of larger hospitals; must be a separately certified children s hospital, either freestanding or hospital within hospital 9. Do I qualify as an eligible professional (EP) if I work at a hospital? Eligible professionals who practice in hospital owned outpatient clinics DO qualify for incentives. Eligible professionals who are hospital based do NOT qualify for incentives. Hospital based means that more than 90% of the physician s services are conducted in an inpatient hospital or emergency room. 7/29/2010 Page 4 of 7

5 10. How much can eligible professionals receive through the Medicaid EHR Incentive Program? Eligible professionals may receive up to 85 percent of the net average allowable costs for certified EHR technology, including support and training, up to a maximum level of $63,750 over a six year period. There is an exception for pediatricians who have between 20 and 30 percent Medicaid patient volume. Pediatricians meeting this lower Medicaid volume standard can receive up to 2/3 of the annual amounts in the table below, a maximum of $42,500 over six years. Like other physicians, pediatricians who have 30% Medicaid volume can receive the regular amounts in the table below. While the Secretary of U.S. Health and Human Services (HHS) is directed to determine average allowable costs based upon studies of the average costs of both purchasing and using EHR technology, the net average allowable costs that set payment are capped by statute. Generally stated, these caps equal $25,000 in the first year, and $10,000 for each of 5 subsequent years (again, there is an exception for pediatricians with between 20 and 30 percent Medicaid patient volume, whose caps are two thirds of these amounts). Thus, the maximum incentive payment an EP could receive from Medicaid equals 85 percent of $75,000, or $63,750, over a period of 6 years. EPs must begin receiving incentive payments no later than CY 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, $8,500 $21, $8,500 $8,500 $21, $8,500 $8,500 $8,500 $21, $8,500 $8,500 $8,500 $8,500 $21, $8,500 $8,500 $8,500 $8,500 $8,500 $21, $8,500 $8,500 $8,500 $8,500 $8, $8,500 $8,500 $8,500 $8, $8,500 $8,500 $8, $8,500 $8, $8,500 TOTAL $63,750 $63,750 $63,750 $63,750 $63,750 $63,750 Source: Office of the National Coordinator for Health Information Technology 7/29/2010 Page 5 of 7

6 11. How much can eligible hospitals receive through the Medicaid EHR Incentive Program? Incentive payments to eligible hospitals are based on a formula in which a base incentive amount of $2,000,000 for each hospital is modified by the number of Medicaid discharges, bed days and other factors. Hospitals can receive both Medicare and Medicaid incentives if they qualify under both programs. 12. When will payments begin? According to the CMS rule, incentive payments can begin October 1, 2010 for eligible professionals and January 1, 2011 for eligible hospitals. Texas intends to begin payments in Can I participate in the Medicaid and Medicare EHR Incentive Programs? Eligible professionals may only participate in one of the programs. Eligible hospitals meeting Medicare meaningful use requirements are deemed eligible for Medicaid incentive payments and can receive payments for both Medicare and Medicaid. 14. Can I switch from one program to another? Eligible professionals may switch between the Medicare or Medicaid Incentive Program only once. The last year for switching from one incentive payment program to the other is What are the differences between the Medicare and the Medicaid Incentive Payment Programs? Topic Medicaid Medicare Who will implement the program? Penalties for not meaningfully using EHRs? Adopt, Implement, or Upgrade (AIU)? States to implement No Medicaid fee schedule reductions planned This option is for Medicaid only Feds will implement Medicare fee schedule reductions begin in 2015 for physicians who are not meaningful users Medicare must begin with clinical quality measures in Year 1 7/29/2010 Page 6 of 7

7 Topic Medicaid Medicare Maximum incentive payment for eligible professionals $63,750 $44,000 Can states expand meaningful use (MU) definitions? Eligibility requirements for Managed Care? Timelines Eligible professionals States can make adjustments to MU with approval from the HHS Secretary Medicaid managed care providers must meet regular eligibility requirements Program sunsets in 2021; last year a provider may initiate participation in the program is 2016 Five EPs, two types of hospitals (children s hospitals and acute care hospitals, including critical access hospitals) MU will be common for Medicare Medicare Advantage physicians have special eligibility accommodations Program sunsets in 2016; fee schedule and market basket update reductions begin in 2015 Only physicians, subsection(d) and critical access hospitals 16. What if I already have an EHR system? Early adopters of EHRs are eligible and can apply to receive their incentive payment when the program becomes operational. In order to receive incentive payments through this program, eligible professionals and hospitals will need to ensure that their EHR system meets the new certification requirements established by the Office of the National Coordinator (ONC) for Health Information Technology. Existing EHR technology needs to be certified by an ONC Authorized Testing and Certification Body to meet these new criteria in order to qualify for the incentive payments. Physicians and other eligible providers with existing EHR systems will also need to document costs associated with ongoing licensure, training, or upgrading of their existing system to qualify for Medicaid incentives. 17. How do I apply for incentive payments? How, and how often, will I get paid? Information and details regarding the EHR incentive programs are being developed by Texas Medicaid and will be available as the program is implemented. 7/29/2010 Page 7 of 7